Vietnam likely to import 250,000 tonnes of sugar in 2011

Viet Nam will import about 250,000 tonnes of sugar next year, forecasts the Agriculture and Rural Development Ministry.

The estimate is based on a domestic 2010-11 crop of only 1 million tonnes.

"Although the harvest will match previous crops, demand is about 1.2 million tonnes per year," said Viet Nam Sugar Association general secretary Ha Huu Phai.

So 50,000 tonnes would be imported to ensure supply.

"Yearly sugar production is limited to only five or six months but the resulting volume is consumed over the entire year," he explained .

This created the need for extra supplies.

The Industry and Trade Ministry's Import-Export Department reports that Viet Nam had imported 210,000 tonnes of sugar to the end of October – 90,000 tonnes short of this year's quota.

"The domestic sugar price has been below that on the world market so companies did not import but instead bought their sugar from domestic producers," said general secretary Phai.

More than 21,300 tonnes is stockpiled, about 1,300 tonnes higher than last year's figure.

The excess means that anticipated demand for sugar during February's Lunar New Year Festival can be met.

Sixteen-manufacturers were operation as of the middle of last month and have produced 52,900 tonnes of sugar.

The price of white sugar was at VND20-25 million (US$1,000-1,250) per tonne but has trended down to less than VND20 million because of lower world-market prices.

Shares advance on soaring volume

Shares extended their gains to three successive days when the stock markets opened for a new week this morning.

Both indices advanced strongly.

The combined volume of trades totalled more than 184 million shares worth VND4.15 trillion (US$197.6 million).

In HCM City, the VN-Index rose 0.26 per cent to close at 465.56.

Almost 96.8 million shares worth VND2.39 trillion ($113.8 million) changed hands.

Advances tripled declines.

More than 40 per cent of the 168 codes to post gains hit their ceiling prices. Most were property developers or seafood and rubber companies.

They included Long An Food Processing Export (LAF); Dat Xanh Real Estate Service and Construction (DXG); Da Nang Rubber (DRC); the Southern Rubber Industry (CSM) and Investment and Trading of Real Estate (ITC).

Saigon Securities Inc (SSI) was the most active with more than 7 million changing hands. SSI rose to the ceiling price to close at VND29,200 ($1.39).

In Ha Noi, the HNX-Index advanced 0.35 per cent to close at 117.07.

More than 87.7 million shares worth VND1.76 trillion ($83.8 million) were exchanged.

Advances outnumbered declines 194-115 and 54 codes hit their ceiling prices.

Kim Long brokerage firm (KLS), with a volume of more than 10.6 million, was the most heavily-traded shares nation-wide.

It rose 5.8 per cent to close at VND16,400 ($0.78).

Dong Nai draws foreign investors

Foreign direct investment (FDI) registered in the southern province of Dong Nai was estimated at over US$1.5 billion this year, half of which would be implemented, said the provincial Department of Planning and Investment director, Bo Ngoc Thu.

By the year-end, the province would have 980 foreign-invested projects, worth a combined $18.68 billion, she said, adding that the service sector accounted for only 5 per cent of the province's total projects, with the majority involved in the support industry and machinery manufacturing.

The number of projects employing large workforces had fallen while hi-tech projects were on the increase, she noted.

Industrial zones (IZs), which contributed the majority of provincial FDI, attracted $950.78 million in the past 11 months, a year-on-year increase of 75 per cent, according to the provincial IZs Management Board.

The figure included $867 million of additional capital for 55 existing projects and $82.9 million for 32 newly-licensed projects.

The recovery of the world economy created ideal conditions for foreign investors to expand in the province, said deputy head of the board Nguyen Phuong Lan.

FDI in Dong Nai had been important to its socio-economic development in the past, said chairman of the provincial People's Committee Vo Van Mot.

We were seeking investors with sufficient capital and advanced technologies to invest here, he said, outlining machinery, electronics, new materials, infrastructure, construction, finance, IT and telecommunications as important areas that needed investment.

The province pledged to speed up administrative reform and perfect its "one-door" policy to better facilitate investors. Frequent dialogue between local authorities and investors would also be included, he concluded.

Located in one of the southern region's main economic zones, the province benefits from its proximity to maritime ports and international airports, and from progressive policies. Dong Nai haws so far lured investment from 32 countries and territories.

Association hikes rice export price

The Viet Nam Food Association (VFA) announced last week that 5 per cent broken rice will have to be sold at a minimum of US$540 a tonne instead of the earlier $475, and 25 per cent broken price at $485 instead of $445.

It is the sixth hike it has made since August.

According to the UN's Food and Agriculture Organization, global output of the grain this year will be just 697.9 million tonnes, nearly 6.5 per cent lower than forecast, due to unfavourable weather.

The prices of Thai rice, a favourite in the Asian region, have risen by 20 per cent since July.

The VFA said the higher floor prices are aimed at limiting contracts for immediate delivery to preclude a surge in domestic prices.

By November end, exports had already reached 6.11 million tonnes, or more than the volume exported in the whole of last year, it added.

Bank credit rate hits dizzy 20%

Banks are still reluctant to lend to businesses although interest rates have already climbed to 19 and 20 per cent, putting the latter in a tight spot.

Dam Quang Hung, deputy director of the Son Ha International Joint Stock Company, said his company had planned to borrow VND500 billion (US$25.6 million) to fund its operations for the whole year.

"Many credit institutions promised to lend to us. However, in the last two months some have refused to lend or delayed it until the next year, saying their credit growth has already reached the central bank's limit of 25 per cent," he said.

Fortunately, a few banks lent some money to maintain production but at significantly higher interest rates, he added.

But despite the dwindling credit sources and high costs, many firms were forced to seek bank loans since they could not stop their production activities, Pham Chi Cuong, chairman of the Viet Nam Steel Association, said.

Most of the association's members now paid 19 per cent interest on average while the cost of feedstock had also increased, he said.

"With the 8 per cent fall in the value of the dong on top of this, steel production costs have been 10 per cent to 15 per cent higher in the last month."

Exporters too face a cash crunch. Banks offer them loans at just 14 per cent but they are required to sell their dollars to the banks at the official rate.

"Credit now meets only 50 per cent of the needs of small- and medium-sized enterprises," Cao Sy Kiem, chairman of the Small- and Medium-sized Enterprises Association, said.

An official from Viet A Joint Stock Commercial Bank said his bank gave priority to long-standing customers and lent at 16-17 per cent.

"We however carefully appraise borrowers' business plans before lending," he said.

"Businesses' demand for loans remains huge but my bank is not keen to lend because both deposit and loan interest rates are too high, causing high risk for both lenders and businesses," the head of a major city-based bank said.

Even if businesses were ready to borrow at any cost, his bank would carefully scrutinise the borrowers' requirements to ensure safety.

Le Xuan Nghia, vice chairman of the National Financial Supervision Committee, said interest rates were relatively high now but they must be accepted for some time to contain inflation.

He admitted, however, that keeping interest rates high to combat inflation should not be a long-term solution.

Bedding maker to list in HCM City

The Ha Noi-headquartered bedding firm Everpia has received listing approval from the HCM City Stock Exchange and plans its first trading session this month.

Established in 1993 as the first wholly South Korean-owned firm in Viet Nam, it became a joint stock company in 2007. It has a charter capital of over VND153 billion (US$7.6 million).

Last year, Everpia netted a profit of VND85 billion from a turnover of VND424 billion, up from 2007's VND21 billion and VND241 billion, respectively.

This year it targets to earn VND 97 billion from a turnover of VND570 billion, although the first six months brought in just VND28 billion in net profits. The final months of the year, when demand typically increases, are expected to make up the annual target.

The company also plans to develop a new factory in the north and acquire another new one in Dong Nai Province to expand production.

Fisheries sector opposes WWF tra-fish decision

There was no scientific evidence to justify naming the tra-fish on the World Wide Fund for Nature's Red List, said Deputy Director of the Directorate of Fisheries, Pham Anh Tuan

Tuan disagreed with the fund's 2010 seafood consumption report in which the fish is listed in several European countries and said that the announcement would cause many difficulties for Viet Nam's tra raising industry and would adversely affect global consumer trends.

"The WWF's information is insufficient as the fund used one sided and incorrect standards and scientific bases," he said, adding that this would also impact on international trade relations.

He also said that the information was only released by the fund's branches in European countries such as Germany, Austria, Switzerland, Belgium, Norway and Denmark, not the global WWF.

This week, the Directorate of Fisheries would arrange a conference to clarify the problem with the WWF's representative in Viet Nam, Tuan said.

Tra-fish were added to the Red List of Threatened Species due to the threat of pollution and a shortage of food.

Regarding this matter, the Viet Nam Association of Seafood Exporters and Producers (VASEP) also said that no concrete evidence had been given to that effect.

In some EU countries such as Belgium and Germany, the fish had been put into different categories, according to the association.

The association also said that in the past year, tra-fish had become one of the most popular seafood products chosen by European consumers for family meals due to its safe quality and reasonable price.

VASEP confirmed that most processing and exporting companies in Viet Nam had adopted a system to ensure the quality of products "from farm to fork." Some plants and fish breeding areas in Viet Nam had also been certified as Global GAP.

VASEP's General Secretary Nguyen Huu Dung said Viet Nam's catfish products were exported to over 120 countries and territories around the world, and met the stringent standards of the EU.

"VASEP has sent a letter to the head of the WWF to oppose its decision and invite representatives to visit Viet Nam and inspect tra-fish processing, preservative, and export processes," Dung said, adding that the association was urging the WWF to give an explanation or correct the matter as soon as possible.

Chairman of Khanh Hoa's Fisheries Association Vo Thien Lang said the addition of tra-fish to the WWF's Red List would mean Viet Nam would lose one of three key export seafood products, which in turn, would affect adversely the Mekong Delta's farming and processing industry."

PV