Banks earmark big credit lines for fishermen

The Bank for Investment and Development of Vietnam (BIDV) said it will offer a credit line of VND15 trillion with preferential interest rates for fishermen in the 2014-2017 period, in line with a Government decree to support aquaculture development.

It has set aside VND3 trillion for projects to build boats providing logistics services for fishermen. Part of this sum will be lent to fishermen to build high-capacity fishing vessels in the 2014-2017 period in Binh Dinh Province under an agreement the bank has signed with the provincial government.

It also signed contracts with an enterprise and nine fishermen in the province to help them build new steel ships.

The bank has received 98 loan applications from fishermen aimed to build new vessels or upgrade old ones.

It also lent fishermen living from Nghe An to Binh Dinh Province who operate in the fishing grounds around Hoang Sa (Paracel) and Truong Sa (Spratly) archipelagos.

Until now, the amount of disbursement has reached over VND106 billion.

Under the Government’s Decree 67/2014/ND-CP on aquaculture development issued last month, fishermen will be given financial support from local banks and insurance companies from August 25.

In fact, other banks have also joined the scheme.

Bank for Foreign Trade of Vietnam (Vietcombank) said this year it will put aside VND1,000 billion to support individuals and organizations to build new vessels, and maintain and repair used ones.

Owners of ships could borrow a maximum of 70% of costs used to build wooden vessels at an interest rate of 7% per year while those wanting to build steel ships could be given a maximum of 95% at the same interest rate by Vietcombank.

In addition, the bank can lend a maximum of 70% of costs for logistics services that fishermen needed for each fishing trip at the interest rate of 7% a year.

Following the Government’s Decree 67, the Ministry of Finance said that from August 25 said it will pay insurance fees for fishermen under its insurance and credit policies.

Beneficiaries include owners of vessels catching fish offshore and of ships supplying logistics services with a capacity of over 90CV.

The Government will pay 100% of insurance fees for each crew member and subsidize 70% of insurance fees for hull, equipment and fishing net of vessels with a capacity of 90CV– 400CV and 90% for those with capacity of over 400CV.

Vietnam fails at Philippine rice tender despite low bid

Vietnam has not been able to win the Philippines’ tender to supply 500,000 tons of rice in spite of offering the lowest price, around US$460 per ton.

The Philippines’ state grain agency, the National Food Authority (NFA), had rejected all bids proposed at its tender on Wednesday because they were higher than the Philippine budget planned for the rice tender.

According to Oryza, a website on the international rice market, the Philippine government allocated around 10.27 billion pesos, or US$234.5 million, to the rice import of 500,000 tons. It had set an undisclosed budget of US$456.6 per ton but bids ranged from US$460 to US$496.75 per ton.

This year, the Philippines is expected to import 1.3 million tons of rice due to impacts of natural disasters. In May, Vietnam won a tender to ship 800,000 tons of rice to the Philippines at a lower bid than that of Thailand and Cambodia.

Oryza statistics show that Vietnam’s 25% broken rice is currently offered at US$400-410 per ton, US$10-20 a ton higher than the price of Pakistan but US$50-60 per ton lower than that of Cambodia.

Vietnam’s 5% broken rice prices are US$445-455 per ton, higher than India’s and Pakistan’s by US$10 and lower than Cambodia’s by US$20 per ton.

After NFA turned down all the bids, rice and paddy prices in the Mekong Delta have slid amid quiet trading.

Ngo Ngoc Yen, director of Yen Ngoc rice firm in HCMC, told the Daily on August 28 that IR50404 material rice prices at Ba Dac Wholesale Market in Tien Giang Province have dropped by VND50 per kilo from the previous day to VND7,400-7,500 per kilo.

Rice prices in An Giang and Dong Thap provinces have declined slightly to VND7,450-7,500 per kilo. Paddy prices in several provinces have also slid VND50-150 a kilo to VND4,850-5,000 per kilo.

Yen explained that demands of rice exporters have been weak since early this week while the nation was unable to win the rice tender of the Philippines.

Yen, however, forecast that rice prices may not drop further as supply is running dry.

According to the Vietnam Food Association (VFA), Vietnam had exported over 3.8 million tons of rice as of August 21, generating a free-on-board (FOB) value of over US$1.6 billion.

A source from the Can Tho City Department of Agriculture and Rural Development said VFA member enterprises have signed contracts to export around six million tons of rice. So, they have to ship over 2.1 million more tons to partners.

Given a stockpile of over one million tons, VFA member firms still have to buy an additional one million tons to fulfill the contracts with their partners, the source said.

Ministries yet to decide sugar import quota

The Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development (MARD) have not decided a sugar import quota for this year as usual, and the delay is attributable to high sugar inventories.

In previous years, the two ministries often announced the allowable volume of sugar imported into Vietnam in August.

A source from the Agro-Forestry-Aquatic Processing Department, which aids MARD in sugar and sugarcane policies, said prices of sugar sold at refineries decrease by VND500 per kilo a month. Accordingly, refined sugar sells for VND12,300-12,700 per kilo this month but sales volume is lower than the same period last year.  

Thirty-nine members of the Vietnam Sugar and Sugarcane Association (VSSA) sold 93,000 tons of sugar from July 15 to August 15, 21,500 tons lower than a year ago. This was one of the reasons why sugar inventories at factories had soared to 269,000 tons as of mid-August, 54,000 higher than that of the same period last year.

In addition, some mills have started producing sugar of the 2014-2015 sugarcane crop, adding a combined volume of 4,900 tons of sugar to the inventories.

The output of domestically-produced sugar is estimated to be 300,000 tons higher than demand, but the country has to import 77,000 tons this year as part of its commitment to the World Trade Organization.

The source assumed the ministries may allow local firms to import 77,000 tons of crude sugar for processing this year rather than importing both refined and crude sugar like the previous years.

VSSA has proposed the two ministries assign 41 sugar mills nationwide to process the planned sugar imports for sale on the local market.

VRG halts rubber latex exploitation to avoid further losses

The Vietnam Rubber Group (VRG) said it has halted exploiting rubber latex to avoid further losses due to a strong price fall but will keep growing new rubber trees.

Tran Ngoc Thuan, VRG general director, told a conference on rubber consumption in the local market held by the Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade last week in HCMC that export prices of latex are hovering around VND40 million a ton, equivalent to production cost.

“With that price, companies of the group cannot earn profit. The best solution is to halt exploitation and wait for the price to improve and raise production,” Thuan said. He did not reveal how long the halt will last.

The VRG leader also said the supply of natural rubber in the world market is now redundant by around 600,000 tons. Therefore, not only Vietnam but other rubber suppliers in the region such as Thailand have stopped exploiting latex to prevent the price from crashing further.

The move, however, will affect earnings of VRG this year, but Thuan said rubber is a perennial tree and that the one-year business cycle may not exactly tell the business efficiency of certain rubber companies. Usually it takes up to five years to say whether such companies make gains or losses.

Apart from Vietnam, VRG invests in rubber farms in Laos and Cambodia, where the group has faced certain woes.

In the middle of last year, UK-based organization Global Witness accused VRG and Hoang Anh Gia Lai Joint Stock Company of harming the environment and putting households around their rubber farms in a difficult position as they did not have land for cultivation.

However, in a statement issued on August 21, Global Witness highly evaluated VRG’s effort in fulfilling requirements of the organization and local residents, which requested the rubber manufacturer to respect international law and the interests of people around its rubber farms in Laos and Cambodia.

Speaking with the Daily, Thuan said the VRG has recently cooperated with Global Witness to deal with all problems and will continue that cooperation in the coming time to solve all issues related to local residents living near the group’s rubber farms.

The group has targeted to finish growing 50,000 hectares of rubber in Laos and 150,000 hectares in Cambodia by the end of next year.

Saigon Square welcomes vendors from Saigon Tax Trade Center

The operator of Saigon Square Shopping Center No. 2 in HCMC said the center is able to accommodate all vendors from the Saigon Tax Trade Center when the latter is closed on October 1 to make room for construction of a metro line.

In a meeting on Monday held by the city’s Department of Industry and Trade to solve problems related to the business premises of vendors who have to move out of the Saigon Tax Trade Center, a representative of the Saigon Square said the center could accommodate all 230 booths of vendors from the center.

Vendors moving in from the Saigon Tax Trade Center, owned by the Saigon Trading Group (Satra), will be charged the same for leasing spaces as those operating in the Saigon Square Shopping Center No. 2 but rent rates have not been revealed.

Other shopping centers in the city such as Vincom or Parkson are 90% full but if vendors from the Saigon Tax Trade Center want to move in, they would open their doors, said Tran Sy Quy, sales director at the Saigon Tax Trade Center.

Previously, a representative of Satra said it has to hand over an area of around 500 square meters of the Saigon Tax Trade Center on the Le Loi Boulevard side to make room for construction of a ventilation system for the Metro Line No. 1 project.

When that part is demolished, vendors in the trade center cannot run business as fencing around the metro construction site will be close to the façade of the shopping center, not to mention the close gap between the construction site and the center that will seriously affect the latter, especially in fire prevention and fighting.

As a result, Satra has decided to shut down its trade center and required all vendors there to move out before September 30.

Meanwhile, shop owners at 39 Le Loi Boulevard next to the shopping center have to leave the site before September 15.

The Satra representative also said the group has supported vendors of the Saigon Tax Trade Center to sell their inventories and exempted them from rents for August and September.

It has also suggested the city government to offer tax exemptions for vendors during the time they have to move from the center to new places.

Axe to fall on ineffective public projects

Municipal authorities will review 178 public investment projects already approved by the city People’s Council for execution in the 2016-2020 period, and will remove those deemed as not cost-effective, the Department of Planning and Investment said.

Thai Van Re, director of the department, told a conference on Tuesday on building the social-economic development plan for 2016-2020 as well as the medium-term plan for public projects in the same period that the review would take place in the next months.

“From now until the end of the year, authorities of districts and departments in the city will have to reassess all projects” in accordance with the Law on Public Investment, which will come into force next January, Re said.

The common spirit is that public projects must be cost-effective, so heads of district governments, departments and project management units will be held responsible if they approve projects that lead to debts or shortage of funds for implementation, Re said. In addition, these people must not allow for new projects that have not been approved for the medium term.

The city now has 1,096 public investment projects underway and 178 others that have been approved but have yet received finances, he said.

According to the department, capital for public investment projects in the 2016-2020 period will be disbursed in order of priority. Capital will be first disbursed for projects due to be finished before the year’s end, then for those expected for completion next year, and counterpart capital for ODA (official development assistance) projects or projects using foreign preferential loans.

The city has planned to put aside 15% of total capital for public projects in the five-year period to deal with unexpected situations such as changes of prices, investment for urgent projects and other issues which may arise, in accordance with the Law on Public Investment.

HCMC Chairman Le Hoang Quan said the city welcomes the initiative to make five-year plans for public invesment projects. In the past time, the plan is prepared every year and it takes two or even three years to finish procedures for one project and therefore, when the investment arrives, the project has become outdated, he explained.

He took Hoang Hoa Tham Bridge crossing the Nhieu Loc-Thi Nghe Canal for example, saying the project took 11 years to be finished. Investment approved for the project was VND16 billion initially but then increased to VND156 billion when work started on the bridge.

On August 5, 2014, the Government issued Directive 23/CT-TTg as guidelines for building medium-term plans for public investment projects, requiring localities across the country to evaluate their public investment results in the 2011-2015 period and set up the plan for the five-year period of 2016-2020.

According to the directive, localities and deparments have to settle all debts arising from public investment projects by the end of this year and from next year, they have to strictly follow regulations of the Law on Public Investment and allow no more debt to arise.

HCM City to establish new chemicals wholesale market

HCMC authorities will order chemicals trading enterprises and households to relocate out of the city’s residential areas and gather in a new chemicals wholesale market that will be set up soon.

The separate market will help ensure fire safety and allow for authorities to strictly monitor this business, the website of the HCMC People’s Committee reported on Tuesday.

Accordingly, the city government will map out a scheme to establish the chemicals wholesale market after its relevant departments carry out a survey about the number and demands of chemicals traders in the city.

Besides, the city’s Department of Health and the People’s Committee of District 5 will draw up a plan to move all chemicals stores out of Kim Bien Market and surrounding roads in the district.

Earlier, the city authorities asked its agencies to examine kinds of chemicals being traded in the city as well as the number of households trading in these products, and establish a market monitoring unit well-equipped with proper facilities.

Kim Bien is a major wholesale market with nearly 117 stores selling various kinds of chemicals used in various fields, especially in garment and food.

Jan-Aug farm exports put at US$20 billion

The Ministry of Agriculture and Rural Development has announced agro-forestry-aquatic export revenue in August is estimated at US$2.47 billion, taking to US$20.22 billion the total in the first eight months of the year, up nearly 12% year-on-year.

Of this figure, the export value of agricultural products has increased 5.7% to US$9.49 billion, seafood 25.4% to US$4.95 billion and forestry products 12.5% to US$4.06 billion over the same period last year.

Such products as coffee, pepper, cashew nut, seafood, wood and furniture have maintained export growth in both volume and value. However, rice, rubber, tea and cassava significantly decreased against the same period.

The first eight months has seen Vietnam exporting around 1.22 million tons of coffee worth some US$2.53 billion, rising 26.8% in volume and 22.3% in value. Wood and furniture exports in this period have fetched US$3.87 billion, up 12.7% compared to the year-ago period.

Remarkably, seafood shipments have brought US$679 million revenue in August, raising its eight-month total to US$4.95 billion, up 25.4% year-on-year.

Meanwhile, rubber exports have slid 9.8% in volume and 31.9% in value; the decrease is 6.9% and 1.4% respectively for tea against the same period of 2013.

Rice exports are down by 9% in volume and 5.3% in value in the period.

Support industries to receive funding, infrastructure help

Two banks and an industry association have joined hands with a concerned government agency to boost Viet Nam's support industries with much-needed financial and infrastructure assistance.

This was the commitment made by Viet Nam Development Bank (VDB), Tien Phong Bank (TP Bank), the Ha Noi Support Industry Businesses Association (HANSIBA), and the Small- and Medium-Sized Enterprise Assistance Centre – Ha Noi (SMESTAC-Ha Noi) under the Ministry of Planning and Investment, at yesterday's Workshop on Finance and Infrastructure Development for Support Industries.

Doan Xuan Anh, VDB Vice President, said his bank would provide credit for a maximum of 70 per cent of project value for qualified enterprises. The rest of the capital will be coming from the company's equity and funds from other financial organisations.

The term of the loans to be offered will be 12 years, at an interest rate of 10.5 per cent. According to Anh, the interest rate could be adjusted to the rate set by the government.

For its part, TP Bank is offering VND1 trillion (US$47.17 million) in credit to support industries on the condition that the companies guarantee the loans with their account receivables and open accounts at the bank. The bank is offering an interest rate of eight per cent for dong loans and 3.2 per cent for US dollar loans and is reducing transaction fees by 40 per cent.

Dang Huy Dong, Deputy Minister of Planning and Investment, also said government organisations such as SMESTAC would also be providing assistance that would enable support industries to resolve their problems.

The Deputy Minister said the ministry has been implementing support programmes for companies, including the Support Industry Assistance Fund, to meet the financial demands of support businesses.

He added that the ministry would also be offering appropriate service packages related to human resources management, as well as business administration, finance management, technology and exporting.

The ministry would also take advantage of its relationship with foreign partners to help domestic enterprises gain access to modern technologies and overseas markets.

However, a number of companies at the workshop said they would still have difficulties even if the terms of payment for bank loans was 12 years.

A representative of the Viet Nam International Vision (VIV) said: "The problems cannot be solved completely if the term of the loan remains five to 10 years, as it is now."

"The capital for those operating in the support industries is huge, and it will take them around five years to make profits," the representative added.

A representative of Vinaxuki Automobile Company said support industries were mostly small- and medium-scale, limited in financial capability and short on guarantee assets, so it would be difficult for them to meet the standards set by commercial banks.

Barroso: More economic reforms sustain Vietnam growth

President of the European Commission (EC) Jose Manuel Barroso stressed the importance of more economic reforms and more openness to support Vietnam’s growth.

Barroso raised the point at a business luncheon organized by the European Chamber of Commerce in Vietnam (EuroCham) on August 26 as part of his two-day visit to Vietnam. The special dialogue with the EC president on European Union (EU) and Vietnam relations in HCMC attracted participation of around 80 diplomats and high-profile business leaders.

Barroso took Vietnam’s socio-economic achievements after adopting a doi moi (renovation) policy less than three decades ago as a typical example of what the nation could gain from opening up the market.

“Through the policy of doi moi, Vietnam has moved from rigidity and control to openness and flexibility - allowing room first for domestic private enterprises, then for foreign investors and gradually a greater role for market forces in more and more parts of the economy,” he said.

Barroso said openness has fueled Vietnam’s economic growth of more than 6% on average in 2006-2013. “This has meant huge falls in poverty and the rise of Vietnam up the ranks of global economies.”

More European companies have invested in Vietnam and Barroso said the country attracted 656 million euros (around US$880 million) from Europe last year alone. “This investment is spurring further growth - more than half of exports are carried out by companies which have benefited from foreign investment,” he said.

The EU is amongst the leading foreign investors in Vietnam with over US$17 billion pledged for more than 1,300 projects here in the country, according to the EU-funded Multilateral Trade Assistance Project (EU-Mutrap).

Barroso said the EU represents the number one export destination of Vietnam. Figures of the Ministry of Industry and Trade supported his view, showing Vietnam posted merchandise export revenue of more than US$132 billion last year, increasing 15.4% year-on-year. The EU contributed US$24.3 billion of the figure and the United States US$23.9 billion.

“For Vietnam’s spectacular success to continue, more economic reforms and more openness will be needed,” Barroso said. “We need sound fiscal policy, good regulation and supervision of the financial sector and structural reform to increase competitiveness and seize the opportunities of the global economy.”

He said fighting corruption and ensuring an efficient judicial system are key to improving the business environment in any countries, including Vietnam.

A FTA will elevate EU-Vietnam ties to a higher plane and it will lead Vietnam to a new stage of development. “It will help Vietnam move forward on the path of openness in a broad range of ways and will contribute to modernization of this country. I believe this country has a great potential,” Barroso said.

The FTA will require both sides to eliminate tariffs and look at the broader range of trade and investment barriers that their companies face.

Two-way trade between the EU and Vietnam, according to Barroso, reaches 27 billion euros (some US$36 billion) a year. “… this is just a fraction of the EU’s total trade, meaning that we are still only scratching the surface of this relationship. What we need is a partnership for the long term.”

Talking about the process of the FTA, Barroso said the negotiations have reached a decisive stage but some difficult decisions and more ambitions will be needed for it to be concluded. “We need to reach a solid result, one that serves the interests of our stakeholders. And some of the most important European stakeholders are represented here in this room.”

EuroCham chairwoman Nicola Connolly said EuroCham has witnessed a phase of stable recovery and growth in Vietnam and strong efforts from the Government to implement policies to regain macro-economic stability.

Connolly said the European business community in Vietnam agreed that the FTA negotiations offer an excellent opportunity for the future, with estimates showing a substantial GDP rise and an increase of 35% in exports to the EU market.

“The success of the agreement will not only have a significant impact on our members but also on potential European investors, particularly SMEs (small- and medium-sized enterprises),” Connolly said.

Asked when the EU and Vietnam conclude their FTA talks, Barroso said it is expected that Vietnam will make some concessions on its side and negotiations will end soon.   

Vietnam has taken part in negotiations over a wide range of new agreements, including the Trans-Pacific Partnership (TPP). “In light of this, the status quo is not an option,” Barroso said. “We need to move forward in order to avoid falling behind.”

BR-VT says no to new steel projects

The southern coast province of Ba Ria-Vung Tau (BR-VT) has stopped licensing new steel manufacturing projects, especially those making construction steel and steel ingots, in a bid to protect the environment and natural resources.

The Party Standing Committee of Ba Ria-Vung Tau Province has issued Directive 43-CT/TU on foreign investment attraction with an aim to sustain economic development of the province while protecting the environment and water resources, and preserving land and energy.

Ba Ria-Vung Tau is considered a steel manufacturing hub of Vietnam with five operational plants able to turn out 3.25 million tons of steel ingots a year. Each day, the plants discard over 800 tons of dust, steel cinder and soil scrap.

Two more plants are expected to come online next year, raising the total steel ingot output produced by seven mills to 4.75 million tons a year.

Steel production has made a great contribution to the province’s economic development. However, the industry has caused negative impacts on the environment as the steel projects consume much electric power and water, and discard huge volumes of waste.

In addition, the steel industry has been growing too fast in recent years while investors have yet to pay enough attention to environmental protection and waste management.

The local government is now looking for capable investors to treat dust from the steel plants. Initially, the province has plans to move dust to a treatment place.

Given the difficulties, some industry insiders said the province should have banned steel mill projects a long time ago.

The committee’s directive also clarifies a licensing halt to seven other sectors such as cassava starch production, rubber latex processing, basic chemical production (with industrial wastewater discharged), dyeing, tanning, paper and fish powder production. The reason is that the projects in these areas pose pollution threats to the upstream and clean water reservoirs in the province.

The directive also limits investments in areas such as seafood, plant protection chemical, fertilizer, garment, leather shoe, labor-intensive projects and those occupying much land, using outdated technologies or generating low added value.

The province will only give the nod to projects in those sectors on a case-by-case basis.

As of July, the province had attracted 290 foreign direct investment (FDI) projects with combined registered capital of US$26.7 billion and 422 domestic projects capitalized at over VND233 trillion.

According to the committee, the province has yet to attract many important projects in high technology and supporting industries while some seafood and tanning projects have heavily polluted the environment.

Hotel room shortage on Phu Quoc Island to ease soon

The current undersupply of hotel rooms on Phu Quoc Island off mainland Kien Giang Province can be partly addressed late this year or early 2015.

Le Minh Hoang, director of the Kien Giang Department of Culture, Sports and Tourism, said it is difficult for tourists to book hotel rooms on the island on weekends or public holidays. However, a number of hotel projects will be put into operation early next year.

As planned, 700 new hotel rooms of five-star Vinpearl and 200 rooms of other projects will be put into service by the end of this year, taking the total number of hotel rooms on the island to nearly 4,000.

“There are more hotel rooms and service quality will be improved as most of the new hotels are of good quality and five-star rating,” Hoang said.

New hotels have been up and running on Phu Quoc in recent times as the island now has access to the national grid through a subsea power cable line and more infrastructure.  

"Though the national power grid has not stretched all over the island, it encourages investors to speed up work on their projects,” Hoang said. “A number of hotels using electricity from the grid are considering room tariff reductions."

Hoang said many investors are pressing on with their projects on Phu Quoc Island, and the biggest one invested by two Singaporean firms to develop an environmentally friendly urban, commercial, trading and tourism complex covering up to 1,500 hectares in Cua Can Commune.

Local authorities are now working on a zoning plan and land allocation for the complex. “As everything is now in the process of preparation, the investors have yet to unveil total investment capital and further details of the complex,” Hoang said.

Phu Quoc has attracted 400,000 visitors in the year to date, a year-on-year rise of 37%, according to the Kien Giang Department of Culture, Sports and Tourism.

Sugar price drops to three-year low

The wholesale price of white sugar has tumbled to a three-year low of VND12,500 a kilo, which has pushed several sugar factories into losses, said an expert.

Ha Huu Phai, a sugar expert and representative of the Vietnam Sugar and Sugarcane Association in Hanoi, told the Daily that as the sugar price has slid, factories had to lower prices of sugarcane purchased from farmers. As such, many farmers have stopped sugarcane cultivation, as input costs like fertilizer, pesticides and labor have surged.

According to the association’s survey, the rate of return on production costs has shrunk from 50.4% in the 2011-2012 crop to 33.4% in the 2012-2013 crop.

Statistics on the profit ratio of the 2013-2014 crop are not available but it is easily noticed that input costs have kept rising while the sugarcane selling price is in decline. Therefore, growers in some areas are no longer interested in farming sugarcane, according to Phai.

However, according to a report of the Ministry of Agriculture and Rural Development, in the 2014-2015 crop, the area under sugarcane cultivation nationwide narrows down by only 9,400 hectares, reaching 300,000 hectares. Sugar production, as such, is still estimated at 1.6 million tons, equivalent to that of the previous crop.

With the global sugar demand forecast to be balanced with supply, the sugar price may recover, Phai said.

According to him, high production costs make home-produced sugar unable to compete with sugar imported from Thailand via formal channels, let alone sugar smuggled into the country. While only 70,000 tons of sugar is imported via official channels each year, the volume of smuggled sugar is up to 300,000-500,000 tons per year.

The price of quality sugarcane in Vietnam is US$45 per ton compared to only US$30-32 per ton in Thailand. That is because Vietnam’s fertilizer price is at least 15% higher than Thailand’s, and the interest rate in Vietnam is also higher, at around 9% compared to only 3.5-4% in Thailand.

Besides, transport costs in Vietnam are quite high and it costs US$6-7 to transport one ton of sugarcane along a 60-kilometer distance compared to less than US$3 in Thailand. It is because roads in Thailand are in good condition and can handle heavy vehicles.

According Phai, in order to survive and grow, two big problems needing to be solved are to increase the competitiveness of local sugar products and to prevent sugar smuggling.

As a result, sugar factories need to upgrade technology to increase production efficiency and sugar quality as well as find ways to lower production costs. In addition, they need to invest in sustainable sugarcane farming areas.

Regarding anti-smuggling measures, there needs to be a strong determination of management agencies, Phai added.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR