Vietnam's coffee exports up in H1
|In June, Viet Nam's coffee exports were estimated at 140,000 tonnes, worth $237 million. — Photo tapchicongthuong.vn|
Viet Nam exported 955,000 tonnes of coffere, worth US$1.6 billion, in the first six months of 2020, the Department of Import and Export under the Ministry of Industry and Trade reported.
The total exports were up 3.7 per cent in volume and 2.5 per cent in value over the same period of 2019.
In June, the coffee exports were estimated at 140,000 tonnes, worth $237 million, up 7.5 per cent in volume and up 7.4 per cent in value compared to May, but down 3 per cent in volume and 1.9 per cent in value year on year.
In the first six months, the average export price of coffee reached about $1,685 per tonne, down 1.2 per cent year-on-year.
The department said in June, domestic coffee prices continued to decrease slightly according to the world coffee price. On June 30, the coffee price fell by 0.3 per cent to VND31,000 per kilo in Eo H’leo and Buon Ho districts of Dak Lak Province and by 1 per cent to VND30,300-30,400 per kilo in Lam Dong Province.
The highest reduction was 1.6 per cent in Dak Ha District, Kon Tum Province to VND30,700 per kilo.
The lower coffee price on the domestic market meant farmers could not sell coffee, leading to difficulties for traders and exporters in purchasing coffee for export, according to the Department of Import and Export.
The Ministry of Industry and Trade has also said that coffee has been one of the key farm products exported to African countries for many years, mainly North African countries.
Therefore, the ministry is implementing many solutions to increase coffee exports, including the organisation of trade promotion activities in those markets, especially Viet Nam's processed coffee brands.
At present, Viet Nam’ coffee exports to North Africa are raw products, including 80 per cent of them being robusta coffee and 20 per cent being arabica coffee.
Africa has increasing demand for processed coffee products to boost competition among many foreign and domestic coffee producers. Meanwhile, the export volume of canned and instant coffee from Viet Nam to North African countries has so far been limited.
To expand market shares in African markets, Vietnamese coffee exporters must study market demand and the regulations of each country, especially Halal standards for Muslim consumers, according to the Viet Nam Trade Office in Algeria.
Dien Bien aims to welcome 5.4 million visitors in 2021-2025
The northwestern province of Dien Bien is striving to greet 5.4 million tourists in 2021-2025.
The tourism industry aims to gross over 8 trillion VND (345.2 million USD) in revenues in the period.
To realise this target, the provincial People’s Committee has issued a plan to restructure tourism and develop it into a spearhead economic sector.
Dien Bien has long been famous for the glorious Dien Bien Phu victory in 1954, which played a decisive role in ending Vietnam’s resistance war against the French colonialists and led to the signing of the 1954 Geneva Accord in which France agreed to withdraw its forces from the colonies in Indochina.
Tourists to the locality are attracted to various local top destinations.
Dien Bien Phu Victory Relic Site is a must-see historical location. The site covers the whole Dien Bien valley, where battles between the Vietnamese army and French army took place in 1954.
Pa Khoang Lake is located in the middle of the spectacular natural landscape of Muong Phang commune. In winter, fog covers the lake creating a fairytale landscape with high mountains hiding in clouds in the distance. In summer, the atmosphere is cool with wind from the south.
The hot mineral stream Hua Pe in Thanh Luong commune is another attraction for nature lovers. The stream runs from a mountain and flows into Nam Pe and Hua Pe streams.
A Pa Chai, the westernmost point in Vietnam, which borders China and Laos is another magnet for tourists. The point is located in Sin Thau commune, Muong Nhe district, dubbed as the place that a rooster’s call can be heard by people in three countries.
Organic agriculture project adopted
Deputy Prime Minister Trịnh Đình Dũng recently signed a decision approving the Organic Agriculture Development Project for 2020-30, aiming to help Việt Nam become a country with advanced organic agriculture production.
Per the project, by 2025, the area of organic agricultural land is hoped to reach about 1.5-2 per cent of total agricultural land area. The area of organic farming land will account for more than 1 per cent of land cultivated with major crops such as rice, vegetables, fruits, tea, pepper, coffee, cashew and coconut.
The percentage of organic livestock products is expected to reach about 1-2 per cent of the total domestic livestock products. Meanwhile, organic aquaculture looks set to account for about 0.5 – 1.5 per cent of the total aquaculture area.
The project also targets improving the efficiency of organic production with product value per hectare of organic cultivation and aquaculture land 1.3-1.5 times higher than that of non-organic production.
The main tasks under the project are to develop concentrated organic agricultural production regions, diversify forms of organic production, intensify technology application, develop certification organisations and increase the processing, consumption and export of organic products.
Moody’s maintains ratings for BIDV
The global ratings agency Moody’s has announced to maintain the local and foreign-currency deposit and long-term issuer ratings of the Joint Stock Commercial Bank for Investment and Development of Viet Nam (BIDV).
Moody's assesses that the bank’s capitalisation is strengthened following the external raise in 2019, as well as steady improvements in asset quality following the resolution of legacy problem assets and write off of Viet Nam Asset Management Company (VAMC) bonds.
Funding is a key strength for BIDV as the bank's deposit base is supported by its extensive branch network and strong relationships with large Vietnamese corporates.
BIDV's long-term local and foreign-currency deposit and long-term issuer ratings were maintained – the highest ratings among Vietnamese banks.
As of 31 March 2020, BIDV’s total assets reached VND1.4 quadrillion, maintaining the leading position among Vietnamese commercial banks. The bank has developed an extensive network, covering 63 provinces and cities nationwide, of 189 domestic branches, one foreign branch and 871 transaction offices by the end of March.
This year marks the 15th consecutive year that BIDV has been reviewed by Moody’s.
ACV revenue and profit to tumble
As the local aviation industry is suffering due to the COVID-19 pandemic, the Airports Corporation of Viet Nam (ACV) is projecting that in 2020, it will record only half of the revenue it got last year.
ACV expects to have passenger output excluding international routes from Da Nang and Cam Ranh international airports of 65.2 million, down 37 per cent from last year. It also expects fewer goods shipments at more than 1.3 million tonnes, down 13 per cent compared to 2019.
The ACV estimated it would record total revenue of VND11.3 trillion (US$489.3 million) and total profit before tax of more than VND2 trillion.
The firm chairman Vu The Phiet said financial activities exceeded goals last year with total revenue reaching more than VND20 trillion and profit after tax VND8 trillion.
As for the difficulties this year, Phiet said the firm will focus on strengthening discipline, prioritising investment in security and improving the service quality.
The firm will regularly monitor, evaluate and forecast the market recovery of COVID-19 to have appropriate solutions and adjustments to ensure production and business activities.
It will minimise operational costs and adjust investment schedules for a number of projects to meet market demand and to ensure capital efficiency.
In 2020, the ACV will focus on speeding up investment projects in key projects such as building a new passenger terminal at Tan Son Nhat International Airport, as well as expanding passenger terminals at Ha Noi's Noi Bai International Airport and Hue City's Phu Bai International Airport.
It will promote IT in management and administration in all systems. In the third quarter, it established and operated a non-stop toll system and equipped the aviation operational information management system for 21 airports.
Last year, the number of passengers through the port in 2019 maintained two-digit growth, exceeding 116 million arrivals.
Over 1,900 domestic and foreign start-up projects register for Startup Wheel 2020
The Startup Wheel 2020 contest has attracted the participation of more than 1,900 Vietnamese and international start-up projects from 20 countries.
This is the largest and most intensive start-up competition in Viet Nam, which has been running for seven consecutive years.
The contest is organised by the Business Startup Support Centre (BSSC).
The annual competition officially kicked off and allowed registration in March. The final round and awards ceremony was expected be held in August along with the Viet Nam Startup Day 2020.
However, due to the COVID-19 pandemic, it is expected that the semi-final and final round for the international group will be delayed to November.
The Viet Nam Startup Day is a two-day event that covers the final stage of Startup Wheel.
It is expected to attract more than 15,000 attendees, 500 top entrepreneurs and investors, and 200 exhibitors.
At the Startup Day event, start-ups have the opportunity to approach potential customers to verify their products and get market insights in Asia, especially the Vietnamese market.
Telecommunication revenue grows slightly due to COVID-19
Telecommunication revenue in the first six months of this year has been estimated at VND192.1 trillion (US$8.25 million), a year-on-year increase of 3.5 per cent.
The growth was lower than that of the same period last year which was 7.2 per cent.
Revenue from telecommunications activities was estimated at VND97.1 trillion in the second quarter of the year, a year-on-year jump of 4.6 per cent.
Telecommunication revenue from the beginning of the year had a low growth rate due to the impact of the COVID-19 pandemic.
The number of international visitors to Viet Nam dropped sharply, so revenue from international roaming also decreased.
In addition, the demand for telecommunications services of businesses, agencies, companies and individuals decreased during social distancing.
ACV to break ground on TSN airport’s Terminal T3 next year
The Airports Corporation of Vietnam (ACV) is set to begin construction on the T3 passenger terminal at Tan Son Nhat International Airport in the third quarter of 2021 and put it into service in 2023, thus easing the pressure on the existing Terminal T1, which has been overloaded due to a huge volume of passengers.
Earlier, under the prime minister’s decision, ACV was appointed as the investor for the project with a capacity of 20 million passengers per year.
The project will require a total investment of some VND10.99 trillion, backed by ACV's funding sources but not by the State budget. It will take 37 months to be completed.
ACV is setting up a management board to map out, appraise and approve the project’s feasibility. The State-owned airport operator is also working with the municipal government of HCMC to conduct procedures to receive land handed over by the Ministry of National Defense.
Bac Lieu power plant investor to reach electricity price contract before October
Delta Offshore Energy Company, the investor of the Bac Lieu liquefied natural gas (LNG)-fired thermal power plant, expects to arrive at a contract over the selling price of electricity before October 2020 to complete the investment procedure.
The national steering committee for electricity development led by the Ministry of Industry and Trade leaders has asked the investor to guarantee that electricity generated at the plant will be sold to the Vietnam Electricity Group for 7 U.S. cents per kilowatt hour during the lifetime of the project.
The Singaporean investor has also committed to completing the investment in December 2020 and plans to put the first phase with a capacity of 800 megawatts into operation in 2024 and complete the entire project in late 2027.
The Bac Lieu LNG-fired thermal power plant is Vietnam’s largest foreign direct investment (FDI) project in the first half of 2020, with a registered capital of some US$4 billion, accounting for over 50% of the country’s total FDI. Prime Minister Nguyen Xuan Phuc has approved adding the project to the National Power Development Plan VII.
Delta Offshore Energy Company has hired the Institute of Energy under the Ministry of Industry and Trade as a consultant for a feasibility study and picked the U.S.-based Bechtel Corporation as the engineering procurement and construction contractor.
The power plant, with a total capacity of up to 3,200 MW, will be built in Hoa Binh District and cover an area of 140 hectares, with 100 hectares of sea surface area and 40 hectares of land. It is expected to help the Mekong Delta province of Bac Lieu boost socioeconomic development. Based on preliminary calculations, the project will add VND2.5-3 trillion per year to the provincial budget.
However, the committed selling price of electricity generated at the plant has caused controversies. Under the prevailing regulations, the price of LNG sold to the plant will be US$8.37 per million British thermal units. According to the Ministry of Industry and Trade, with an operation time of 6,000 hours per year, the price of electricity generated at the plant must be 8.39 U.S. cents per kilowatt hour, without accounting for the cost of the transmission lines.
Hoi An tourism recovers after social distancing period
The tourism sector in Hoi An Province has recovered well a month after reopening on June 1 from the Covid-19 social distancing period.
Statistics from Hoi An Centre for Culture, Sports, Broadcasting and Television showed that from June 1 to July 4, 592 tickets to the old town were sold to the foreign visitors and 20,359 tickets sold to domestic tourists. From June 1 to June 22, up to 888 tickets to Thanh Ha Ceramic Village and 203 tickets to Tra Que Vegetable Village were sold. The number of tickets sold to Bay May Coconut Forest was 200 during the weekdays and 250-300 tickets during the weekends.
Truong Thi Ngoc Cam, head of the centre, said, "More people are returning to Hoi An. However, many tour agents haven't selected Hoi An as a potential destination during this time because the policy of ticket fee exemption and reduction for tourist spots managed by the state hasn't been approved yet."
Hoi An authorities have launched several stimuli and discount programmes to attract tourists. Nearly 90% of the city's accommodation facilities have reopened and received an average of 650 customers every night from Monday to Thursday and 2,500 customers from Friday to Sunday. On Saturday, the city had up to 4,700 overnight visitors. Most of the visitors are from Danang while the rest are from HCM City and Hanoi.
Nguyen Van Lanh, head of Culture and Information Department of Hoi An, "Facilities with over 20 rooms operate mostly during the weekends. Visitors often stay at homestay, villa and coastal accommodation. But the number of tourists is still not enough to pay for operational costs so many facilities may close again."
Hoi An streets have become colourful again after the social distancing period with many stores, cafe bars and lanterns along the streets. The city has been voted as one of 15 world's top cities by Travel and Leisure's readers in 2018 and ranked third among the most wonderful cities across the globe by Travel and Leisure in 2020.
Hoi An is also known for its cuisine and grand entertainment venues besides traditional villages like Kim Bong Carpentry Village and Cham Island. Nguyen Thi Anh Dao from HCM City said, "Many people don't like to travel far now. But I chose to go to Hoi An because I trust that they will keep us safe and there are many wonderful locations to explore. I think I was right."
Attracting investments to get tougher after PPP law takes effect
HCMC anticipates difficulties in calling for investments next year when the public-private partnership (PPP) law comes into force, as the build-transfer (BT) format will be eliminated and minimum investments will have to be VND200 billion.
The HCMC Department of Planning and Investment held a working session with the HCMC People’s Council on July 3.
At the session, the department stated that the city currently has 22 PPP contracts signed with investors worth over VND64.2 trillion in total. Besides, 166 projects whose combined capital is over VND324 trillion are undergoing investment procedures, while 293 projects in various fields are seeking investments.
Tran Anh Tuan, deputy director of the department, said that with the PPP law taking effect early next year, HCMC will face difficulties in seeking investments for projects such as anti-flood, tidal flood control, government office construction and relocation of households living along canals.
According to Tuan, HCMC will have fewer PPP projects and it will be hard to assign districts to call for investments in projects worth under VND200 billion.
In terms of infrastructure investments, HCMC vice chairman Vo Van Hoan said that the city is mainly investing in transport infrastructure via the build-operate-transfer and BT formats.
Hoan admitted inadequacies in the BT investment format. For instance, investors invest in a certain place but want payments in land at another place, and they always opt for land payments due to profitability. Such payments have subsequently posed difficulties in the past.
In the future, HCMC will invite tenders instead of letting investors propose projects, Hoan added.
Vice chairwoman of the HCMC People’s Council Phan Thi Thang noted that the city has issued a list of projects seeking investments, but there have been no priority investments.
According to Thang, departments have not taken an active role in calling for investments, whereas investors propose projects to the city government and await approval, failing to ensure fairness among investors.
Thang added that departments and districts are partly responsible for delayed projects and increasing investment costs. The city should thus introduce specific processes for each contract type in accordance with the PPP law.
HCMC residents spend more on food after Covid-19
After the idle time ushered in by the coronavirus pandemic, the food and beverage consumption in HCMC surged in June.
Data from the HCMC Department of Statistics indicated that revenue from the catering and lodging services, mainly from food and beverage, amounted to an estimated VND4.8 trillion last month, soaring by 42.3% month-on-month but still dipping by 47.7% year-on-year.
The surge was attributable to the successful containment of the coronavirus in the country, according to the department. Residents’ daily activities have returned to normal, leading to their consumption and purchase rising.
Apart from the launch of multiple programs to stimulate domestic tourism, the reopening of schools has also driven up the revenue in the food and beverage segment.
The data also showed that revenue from travel services reached VND96 billion in June, up a whopping 68.4% month-on-month. However, due to no international tourist arrivals, the revenue reached a mere 3.7% of the year-ago figure.
HCMC Chairman Nguyen Thanh Phong said that the city’s tourism has seen a gloomy picture in the first half of the year, as HCMC welcomed a mere 9.4 million visitors, tumbling by 54.7% year-on-year.
The drop in both international and domestic tourist arrivals, which were recorded at 1.3 million and 8.1 million, respectively, has made life difficult for HCMC-based firms active in the tourism industry, he said.
“Over the past six months, some firms saw the number of customers and their revenue plunge by 95%-100% year-on-year. The Covid-19-impacted travel industry has had a ripple effect on other segments, including transport and accommodation," Phong told a recent conference on tourism cooperation between HCMC and the 13 provinces and cities in the Mekong Delta region.
Danang survives on domestic tourism, worries about months ahead
While tourism in Danang is showing positive signs, reporting an increase by 50% in June compared to May and expected to grow further in July and August thanks to domestic tourism, the industry is concerned about the latter half of the year when domestic tourism declines and international tourism fails to reopen.
Chairman of Danang Travel Association, Doan Hai Dang, said that while most travel businesses have reopened after being shut due to the Covid-19 pandemic, their capacity was only some 20% compared to the same period last year because they are catering to only domestic tourists.
In the case of his own company, Vietravel - Danang Branch, where he is the director, Dang said it reopened from May 20, focusing mainly on domestic tours. “This year, July and August will be our golden months to attract domestic tourists. In September, companies will await international tourists,” Dang noted, adding that many tourism companies are introducing inbound and outbound tours.
Nguyen Ngoc Anh, Director of Omega Tours, specializing in the Korean market and other international markets, said that from February until now, his company has been almost completely shut.
From early June, he earned a living by leasing his cars to those organizing domestic tours. “In July and August, the demand for rental cars may increase due to a rise in domestic tourism. But the income will not be much because tour prices have reduced by 50% year-on-year. In September, when domestic tourists decline, we will shut down again,” Anh stated, adding that while awaiting international tourists, he has to find a way to manage his bank debts.
Companies running accommodation services are also on the same page.
Nguyen Duc Quynh, Deputy General Director of Furama Resort Danang, said that in the last two months, Furama opened its doors only partly to create jobs for its employees.
In June, the daily occupancy rate of the resort ranged from 10% to 40%, Quynh said, adding that in July, only two days have been fully booked.
“We can only cover salaries and other basic expenses. But this is also good news,” Quynh said, adding that they would be able to sustain the business until August. In September and October, business will drop once the number of domestic tourists declines and international visitors are unable to resume travel.
Quynh, Vice Chairman of Danang Tourism Association, said that during this time companies must change the way they make plans as well as deliver messages to customers. Accordingly, plans must be made monthly depending on the actual situation. Meanwhile, safe and clean tourism must be promoted.
Vietnam network sharing deal a positive for future telco collaborations
Experts forecast despite being relatively new in Vietnam, network sharing efforts would accelerate as the Government seeks to streamline network deployments and slash capital spending.
Vietnam’s four State-owned mobile operators – Viettel, Vinaphone, GMobile and MobiFone – this month agreed to share about 1,200 base transceiver stations (BTS). This follows a deal struck in May between Vinaphone and MobiFone, which agreed to share infrastructure for 700 new BTSs.
Network sharing is still a relatively new concept in the Vietnam telecom market. Operators have largely pursued synchronous deployments of their networks, which has led to a significant duplication of infrastructure. The trend is especially pronounced in densely-populated urban areas, where the rapid construction of mobile masts has also led to safety and environmental concerns from the Government.
The Ministry of Information and Communications (MIC) late last year published Directive No 52/CT-BTTTT, which highlighted the need for fixed and mobile operators to coordinate network construction and develop plans to share infrastructure. The sharing of BTSs will also allow operators to save on capital expenditure associated with new construction, which the MIC estimates to be roughly VND1 billion (US$43,000) per BTS.
According to experts from Fitch Solutions, in the 5G era, where networks require a significantly higher number of BTSs to operate effectively, network sharing can greatly reduce redundant investments, and allow operators to repurpose funds to develop services, which will be the key differentiator in 5G.
“Operators have previously touted a mid-2020 launch of 5G services, and the network sharing deal, which we believe will involve BTSs situated in major population centres, could boost launch prospects,” Fitch experts said in a report released recently.
According to the experts, the deal will also prove to be greatly positive for GMobile, which currently only operates a 2G network. Despite receiving 4G spectrum and licences in 2016, it appears that the operator has not made any meaningful progress in deploying LTE technology. This is surprising, given that it does not have any 3G spectrum; instead, it has been relying on offering basic 2G call, text and data services at low prices - catered primarily to lower-income and rural subscribers - to gain market share.
This strategy has caused it to steadily lose ground to its larger rivals, which were able to leverage their scale and capital resources to grow their reach. The network deal could allow GMobile to launch limited 4G or even 5G services, although it will likely need to achieve a more extensive network sharing deal if it were to boost its long-term prospects. The newly-agreed deal is relatively small in scale; data from the MIC suggests that as many as 400,000 BTSs have been installed by all five mobile operators nationwide.
Fitch said Vietnamobile, the only privately-owned operator in the country, and the market’s fourth largest by subscriber count, appears to be excluded from the deal; the Hutchison Asia Telecom–owned operator could find it increasingly difficult to compete in a market dominated by the State-owned telcos.
According to Fitch experts, the network sharing deal will pave the way for more extensive partnership deals in the future.
“The towers segment is one area which could see an increased focus; by the end of 2019, we estimate that Vietnam had close to 100,000 towers, which are mostly owned by operators. The market is highly fragmented with several private players owning hundreds of towers, suggesting that consolidation in this area is a strong possibility. Mergers and acquisitions in the towers segment could greatly streamline and allow better-coordinated construction of these assets.”
Vietnam gears up to export electric motorbikes to Cuba
Vietnamese electric motorbike manufacturer PEGA has completed the signing of contracts to export two types of electric motorbikes with a value of approximately US$3 million to Cuba after its partner in the Caribbean nation had successfully tested and assessed the product’s overall quality.
Following the agreement, PEGA now has two business contracts with Cuba worth over VND60 billion (around US$3 million), in total value.
Most notably, the first contract includes an order of 1,260 PEGA XMEN electric motorbikes with a value of roughly VND20 billion. The order is currently in the process of being completed with efforts being made to prepare to transport the products to Cuba.
The second contract stipulates the shipment of more than 2,500 PEGA XMEN and PEGA AURA electric motobikes, worth over VND40 billion in total value, with the shipment scheduled to be transported to partners based in Cuba in August.
In terms of the Vietnamese market, PEGA XMEN and PEGA AURA are viewed as popular types of electric motorbikes with their engines having a capacity of 1,200W. Each electric motorbike can carry up to three people and has the ability to climb slopes with no difficulty.
Upon discussing the deal, PEGA Vietnam said that their Cuban partners expressed a desire to exclusively distribute PEGA electric motorbikes with a minimum of 20,000 units per year.
Son La to boost export of red-flesh dragon fruits to Japan
After carrying out the export of local mangoes to the UK, Son La province in the northwest of the nation is preparing to export 20 tonnes of red-flesh dragon fruits to the Japanese market.
The shipment is scheduled to be exported to Japan on July 10.
According to Cam Van Thang, head of Mai Son district’s Department of Agriculture and Rural Development, the locality is home to 80 hectares of red-flesh dragon fruit farms. The majority of these locations are concentrated across several different communes, including Chieng Sung, Na Bo, Hat Lot, and Chieng Mung.
Authorities in Mai Son district have released informative adverts and instructed local farmers to apply organic farming models in order to work towards achieving higher levels of economic efficiency. Indeed, farmers based in the province harvest an average of 10 tonnes of dragon fruits per ha during the third year of planting.
At a current market price of VND20,000 per kg for type one, local farmers look set to earn VND200 million.
Rental land at southern IPs becoming scarce: JLL
Land for lease at industrial parks (IPs) in southern Vietnam is becoming increasingly scarce, according to data from real estate consultants Jones Lang LaSalle (JLL) on the supply of industrial land in southern IPs during the second quarter of this year.
Land for lease at industrial parks (IPs) in the south of Vietnam is becoming increasingly scarce.
Its figures show that the total area for lease in the region was 25,045 ha.
Land at some IPs in HCM City has yet to become available for lease due to difficulties in site clearance and compensation and the impact of COVID-19, in contrast to surging demand.
As of the end of June, Vietnam was among the first countries to have fully opened its economy. Land transactions, however, remain modest due to the pandemic ravaging other countries.
IP occupancy rate stood at about 84% at the end of Q2.
Notably, land rental prices in the period rose by 9.7% year-on-year despite the impact of the pandemic. Rents on ready-built factories were stable.
Negotiations on land leases will stagnate until the end of the year, JLL experts noted, adding that the market will bounce back once the pandemic is brought under control.
German paper lauds Vietnam’s economic prospects
In an article posted on securities newswire boerse-online.de on July 7, author Sven Heckle praised Vietnam’s achievements in the fight against COVID-19 and its economic prospects.
He said Vietnam overcame the COVID-19 crisis impressively, which was one of the best conditions to put its economy back to growth. The country has so far recorded about 350 infections out of a 97 million population and zero death.
As Vietnam shares a borderline with China, its Government has taken precautionary measures since the beginning of this year when there was not any infection case. When the first infection was found, Vietnam promptly took experience from acute respiratory illness SARS treatment to ward off the pandemic. Schools were shut down, infected areas were isolated and air routes were closed.
Thanks to the partial lockdown in a short duration, factories meeting hygiene requirements still operated. However, several sectors were also hit, including tourism with tourist arrivals slumping by about 40 percent in the first four months of this year compared to the same period 2019.
The article cited JP Morgan bank’s forecast as saying that the Vietnamese economy is expected to grow by nearly 3.2 percent this year before reaching 7.1 percent next year. It is similar to the International Monetary Fund (IMF)’s prediction for around 7 percent growth in 2021.
The author also hailed the medium and long-term prospects of the Vietnamese economy, partly thanks to foreign direct investment (FDI). Since the Republic of Korea’s Samsung Electronics opened the first smart mobile phone factory in Vietnam in 2014, the Southeast Asian nation has witnessed a stable flow of FDI.
Meanwhile, multinational technological giants like Apple are also planning to move to Vietnam, not to mention driving forces for the economy from the Free Trade Agreement between Vietnam and the European Union, its second largest importer, behind the US, he said.
Farming production needs reforms for higher export value
Foreign countries tightening import regulations would affect Vietnam's exports of farming products, especially fruits, forcing the local agricultural industry to re-organise production, according to experts.
China is boosting food safety inspection, quarantine and traceability for imported goods, especially on fresh, chilled and processed agricultural products, meat and seafood for prevention of the COVID-19 pandemic, according to the Ministry of Agriculture and Rural Development.
Meanwhile, the Korean Ministry of Food and Drug Safety has a list of requirements for enterprises exporting food.
This is a temporary control solution for this year due to the impacts of the COVID-19 pandemic.
If Vietnamese enterprises do not meet those requirements, they will struggle to export local farming and food products to those markets, especially fresh fruits, according to experts.
Nguyen Manh Hung, Chairman of the Board of Directors of Nafoods Joint Stock Company, a firm that exports processed fruits to 60 markets, said Vietnamese enterprises must have a strategy to overcome trade barriers.
Hung said Vietnam wanted to become an agricultural product supplier on the world market and to reach the target, the agricultural sector must build a value chain system to link all stages together, especially the processing stage. The sector also must digitise material regions for efficient traceability.
In addition, Hung said the sector should change farmers’ mindset in terms of production. Meanwhile, large enterprises needed to help farmers and co-operatives standardise agricultural production processes.
Nguyen Dinh Tung, Chairman and CEO of Vina T&T Group, said his company and others were promoting the development of material regions to produce clean farming products, aiming to improve export value and increase their domestic market shares.
Agricultural expert Dang Kim Son said there was a high demand for agricultural products at home and abroad. Therefore, during the pandemic, enterprises needed to find solutions to maintain production and to promote links with farmers. This would help them overcome the difficult period at present and be able to restore trading of farm produce once the pandemic ends in the world.
He recommended enterprises focus on building links among processing plants and raw material regions to ensure quality by using high technology in production and processing.
The Ministry of Agriculture and Rural Development aims to improve the quality of market forecast to help localities and businesses devise suitable production and business plans.
As one of the major fruit exporters, Nguyen Thi Thu Hong, Director of Chanh Thu Import Export Co, Ltd in Ben Tre province, said her company exported a small volume of dragon fruits to Australia per year because it was a demanding market.
Businesses that export fruits to this market must purchase fruits from GlobalGAP-certified farms to ensure they are free of pesticide residue according to Australian regulations, according to Hong.
Therefore, Vietnam’s fruit production industry needs to expand the material region supplying fruits meeting international standards for quality and food safety. The industry must also implement requirements of plant quarantine and traceability. The best way is to build a production chain from production to consumption.
Le Son Ha, Director of Plant Quarantine Department under the Plant Protection Department, said Vietnamese fruits had been exported to many strict markets such as the US, the Republic of Korea, Australia, Canada and Japan, accounting for more than 30% of national fruit exports.
However, local fruit faced competition from other countries. For instance, Cambodia had promoted exports of mango to the Republic of Korea while China had expanded dragon fruit production.
That had forced the Vietnamese fruit industry to work towards large-scale production and ensuring food hygiene and safety requirements on global markets, Ha said.
First half of year hit by plunging rubber exports
Vietnam exported 456,000 tonnes of rubber during the first half of the year worth a total of US$606 million, down 25.7% in volume and 27.9% in value compared to the same period last year, according to the Ministry of Industry and Trade.
In June alone, the nation shipped 110,000 tonnes of rubber abroad with a value of US$130 million, marking an increase of 46.9% in volume and 44.5% in value from the previous month, despite representing a drop of 9.8% in volume and 25% in value from June, 2019.
Moreover, the average export price endured a year-on-year fall of 16.9% to US$1,182 per tonne, causing the average price during the six-month period to drop by 2.9% to US$1,330 per tonne.
According to figures released by the General Department of Vietnam Customs, rubber exports during the course of the five-month period plummeted in comparison to last year’s corresponding period.
Simultaneously, the price of domestic rubber latex in June remained at a low level and is predicted to continue experiencing a downward trend.
This comes after the Association of Natural Rubber Producing Countries stated that global demand for natural rubber is anticipated to undergo a downward trajectory during the remainder of the year, with expected consumption of rubber volume predicted to reach 12.84 million tonnes due to the novel coronavirus causing disruption in the rubber supply chain.
Although the second quarter of the year typically marks the start of the rubber harvest season in Southeast Asian countries, the demand for natural rubber from major consumers such as China, the United States, and the EU remains low.
In addition, plunges in oil prices are forecast to exert pressure onto the prices of natural rubber, with the country is forecast to endure a drop in rubber price in the process.
Firms in HCM City shift focus towards ASEAN market
With local exports to both the United States and European markets facing plenty of difficulties as a result of the novel coronavirus (COVID-19) epidemic, many businesses based in Ho Chi Minh City are seeking opportunities to bolster exports to other ASEAN member states.
According to figures released by the Ministry of Industry and Trade (MoIT), 57.7% of domestic enterprises said that the current consumption market is experiencing a sharp downturn, with 47.2% of them affirming that they are unable to export manufactured goods. In an effort to solve difficulties faced when trying to export products, market expansion is considered a positive step for local businesses.
Previously, the ASEAN market had been of less interest for Vietnamese enterprises, especially those located in the southern metropolis, largely due to strong competition from rival exporters from Thailand and the Philippines, although there exists a wealth of opportunities for export market expansion.
Nguyen Phuc Nam, Deputy Director of the Asia-Africa Market Department under the MoIT, says that there are currently three ASEAN member states that lead in terms of importing Vietnamese goods, including Indonesia, Thailand, and the Philippines.
Pham Ngoc Hung, Vice Chairman of the Ho Chi Minh City Business Association, states, “At present, Vietnam's exports only increase in foreign-invested enterprises. As for small businesses, their exports are in a fix. In the context that exports to the US and European markets are difficult, if businesses promote the development of the ASEAN market, it is also a good plan for expansion without avoiding dependence on fixed markets.”
According to a survey jointly conducted by the Department of Industry and Trade and the Ho Chi Minh City Business Association, goods imported from Vietnam are still in demand among several ASEAN member states. For example, Thailand is keen to import dried fruits, while Indonesia and the Philippines are seeking to import generators, water pumps, electric appliances, and telecommunication equipment from Vietnam due to the poor state of their telecommunications infrastructure.
Most notably, rice exporting enterprises situated in Ho Chi Minh City are eyeing exports to other ASEAN countries, indeed, last year saw the country ship US$1 billion worth of rice to the regional bloc. Recently, the nation has been forced to limit rice exports due to the influence of the COVID-19 epidemic capturing the attention of ASEAN members, although the bloc in general is keen for the nation to resume rice exports.
Pham Ngoc Hung, Vice Chairman of the Ho Chi Minh City Business Association, says that the country’s vegetable exports to ASEAN enjoyed growth of 69% in 2019, therefore, local firms must continue to promote the export of similar products.
With Tra fish, also known as pangasius, and shrimp products, Thailand remains the largest importer of Vietnamese Tra fish in ASEAN, while in the Singaporean market, Vietnamese shrimp products dominate despite having to compete with shrimp from both Thailand and the Philippines, Hung notes.
Despite obtaining satisfactory results initially through exploiting the ASEAN market over the course of recent years, the Ho Chi Minh City Department of Industry and Trade has suggested that local businesses should pay greater attention to increasing the value of goods exported to the bloc.
Pham Thanh Kien, director of the Ho Chi Minh City Department of Industry and Trade, says that some Vietnamese goods entering ASEAN which use outdated technology are only suitable for export to Laos, Cambodia, and Myanmar. While in markets that boast large purchasing power such as Thailand and Singapore, Vietnamese goods have failed to truly dominate. In an effort to boost exports to the ASEAN market, local firms must strive to scrutinise the quality of goods, he notes.
Pham Binh An, director of the Center for Economic Integration in Ho Chi Minh City, says that whilst ASEAN is a densely populated region, and living conditions among the middle class are rising. This means that every business must try to redouble efforts in a bid to improve competitiveness, whilst staying active and creating initiatives to best meet demand among consumers.
"If businesses in the southern metropolis are not constantly changing to renew products to dominate the market, it also means being eliminated." Le Thi Mai Anh from the Asia-Africa Market Department affirms. “We incentivise businesses to carry out market expansion research, and to continue participating in trade promotion activities. As soon as the COVID-19 epidemic in ASEAN member states abates, the MoIT is set to dispatch trade promotion delegations to ASEAN countries to get deeper insights into the potential market.”
Conference looks at making full use of CPTPP
The Ministry of Industry and Trade (MoIT) and the Hanoi Department of Industry and Trade have held a two-day conference with a view of helping firms understand more about commitments in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
As part of activities within MoIT’s plan for implementation of the agreement this year, the July 9-10 event offers a chance for businesses to find solutions to the difficulties they face on the threshold of deeper integration.
According to ministry figures, less than 40 of Vietnam’s 63 cities and provinces have trade relations with CPTPP member countries.
Ngo Chung Khanh, Deputy Head of the MoIT’s Multilateral Trade Policy Department, said the CPTPP opens up huge opportunities for Vietnam’s exports but the country is yet to make full use of them.
Trade between Vietnam and CPTPP member countries hit 77.4 billion USD last year, up 3.9 percent year-on-year. Vietnam posted a surplus of 1.6 billion USD overall but a deficit of 900 million USD with these countries.
Participants at the conference have already focused on overviews of import and export taxes and instructions on how to identify and meet import and export tax commitments, rules of origin, and customs commitments in order to enjoy preferential taxes under the agreement.
Nguyen Son Tra, Deputy Head of the WTO and Trade Negotiation Division at the MoIT, told the gathering about CPTPP member countries’ import tax commitments.
Member countries have committed to eliminating tariffs on about 78-95 percent of the tax lines Vietnam is subject to. For common commodities, the roadmap will take five to ten years. At the end of the roadmap, 98-100 percent of tax lines will have been eliminated.
Many of Vietnam’s key export items to the CPTPP are entitled to zero percent tax rates right after the agreement comes into effect or after three to five years, Tra said.
Participants have also focused discussions on services and investment, especially the obligations and basic principles of market opening, removing barriers facing services and investment, and commitments concerning investment promotion and protection.
The CPTPP, one of the largest trade pacts in the world, covers 13.5 percent of global GDP and a market of about 500 million people. It gathers 11 countries, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
It officially took effect in Vietnam on January 14, 2019.
Ben Tre urged to step up public investment disbursement
Prime Minister Nguyen Xuan Phuc on July 9 urged the Mekong Delta province of Ben Tre to work hard to complete yearly targets and tasks, with local public investment disbursement rate set at at least 90 percent.
He pointed out difficulties caused by the COVID-19 pandemic and drought facing the locality, and its low disbursement rate.
Ben Tre should utilise opportunities from international integration, especially free trade agreements (FTAs) to which Vietnam is a member like the EU-Vietnam Free Trade Agreement (EVFTA), he said.
The PM praised Ben Tre for its high provincial competitiveness index and other indexes, and asked the locality to step up administrative reform and improve the local business environment.
More attention should be paid to management of climate change projects, he said, stressing that Ben Tre needs to take a step ahead in digital transformation to pave the way for digital economic development.
PM Phuc agreed in principle Ben Tre’s mobilisation of resources from different economic sectors in building a transmission line system connected to renewable energy projects in the province.
It was reported that Ben Tre’s socio-economic development has been impacted by COVID-19 and drought.
The pandemic has forced 55 businesses to dissolve and more than 130 others to suspend their operation. As of mid-June, the province had received 6,200 applications for unemployment benefits.
Meanwhile, drought has affected 5,300ha of rice, 28,00ha of fruit trees and 2,000ha of giant river prawns, with total economic losses amounting to 1.66 trillion VND (71.65 million USD).
Teleconference seeks ways to bring Vietnamese consumer goods to China
An online conference took place on July 9 to support Vietnamese businesses in exporting consumer goods to the Chinese market and seeking cooperation opportunities wiht their peers in Zhejiang province of China.
Co-organised by the Trade Promotion Department under the Vietnamese Ministry of Industry and Trade and the China Council for the Promotion of International Trade – Hangzhou branch, the event drew the participation of nearly 50 Vietnamese and Zhejiang enterprises.
Speaking at the conference, Vu Ba Phu, Director of the Trade Promotion Department, said that in recent years, China has been continously the largest export market of Vietnam among more than 200 countries and territories having import and export activities with the Southeast Asian country.
According to the statistics of Vietnam Customs, in the past two years, two-way trade turnover between Vietnam and China reached over 100 billion USD per year.
In the first five months of this year alone, in the context of the complicated developments of the COVID-19 pandemic, the two countries promptly took many measures to maintain trade as well as implemented initiatives to promote business exchanges via online platforms, bringing bilateral trade to more than 44.35 billion USD, up nearly 2 percent over the same period in 2019.
According to Phu, Vietnam has close and direct trade relations with many provinces and cities of China, with Zhejiang, with a population of 57 million, being its very important trading partner.
In order to support Vietnamese and Chinese enterprises to promote bilateral trade, Phu said his agency has opened a trade promotion office in Hangzhou, the capital of Zhejiang province.
This is Vietnam's second trade promotion office in China, established in 2018 after the first one in Chongqing, helping Zhejiang firms seek long-term business and investment collaboration opportunities with Vietnamese counterparts.
Sharing the view with Phu, Zheng Rongxin, head of the Chinese council’s Hangzhou branch, expressed his wish that the two sides will enhance their friendship and cooperation to maintain a mutually beneficiary trade environment.
After the conference, businesses of both sides engaged in an online trading session during which Vietnamese companies introduced Zhejiang importers to Vietnam’s high quality products such as fresh and dried fruits, aquatic products, beverages and natural rubber gloves.
Conference seeks to promote Japanese investment flows into Vietnam
An online conference was jointly organised in Hanoi on July 9 by the Ministry of Planning and Investment (MoPI), the Japanese Embassy in Vietnam, the Japan External Trade Organisation (JETRO) and the Japan Bank for International Cooperation (JBIC) to promote Japanese investment flows into Vietnam.
The conference saw the participation of more than 1,000 Japanese enterprises in Japan and around the world.
Addressing the event, Vietnamese Deputy Minister of Planning and Investment Vu Dai Thang said the conference provided the latest information on Vietnam's business and investment environment in the context that Vietnam has successfully controlled the COVID-19 pandemic and issued new policies, including the Law on Investment (revised), the Law on Enterprises (revised), and the Public-Private Partnership (PPP) Law.
The Vietnamese National Assembly recently has approved the European Union -Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA), he noted.
Director of the MoPI’s Foreign Investment Agency Do Nhat Hoang said Vietnam has a stable political situation, high economic growth, abundant human resources, potential market, and increasing per capital income.
Vietnam has also expanded international integration and cooperation with other economies worldwide, he stressed, adding that the Southeast Asian country has a strategic position as it takes only 3-5 hours to fly from Vietnam to Japan, Thailand, India and China – the key investment hubs in Asia.
Vietnam also has preferential policies to attract foreign investment, with priority given to new technology, environmentally-friendly and high value projects, Hoang said.
Aguin Toru, Chief Representative of JBIC’s Hanoi Office, said the bank considers Vietnam as a key area, and an important partner of Japan in many fields such as infrastructure, production and resources.
Meanwhile, Envoy Okabe Daisuke from the Japanese Embassy in Vietnam said Japanese investors are now very interested in Vietnam.
According to a survey on Japanese enterprises in Asia and Oceania conducted by JETRO in February 2020, 63.9 percent of asked Japanese businesses that are doing business in Vietnam said they will continue to expand business activities in the Southeast Asian nation, he noted.
Okabe said in order to attract more investment, Vietnam needs to speed up the disbursement of capital for public investment projects, ensure transparency, fairness, and effectiveness in implementing policies, and further foster international integration.
Indonesia’s economy forecast to contract 3.8 percent in Q2
Indonesia's economic growth in the second quarter of 2020 was projected to stay at the level of minus 3.8 percent or in the range between minus 3.5 percent and minus 5.1 percent due to the COVID-19 pandemic, Indonesian Finance Minister Sri Mulyani Indrawati has said.
The national economic growth in the first quarter, which was only able to reach 2.97 percent, was considered as a drastic drop, the minister said at a working meeting with the House of Representatives on July 9.
Indonesia’s economic growth is likely to be in the range of minus 1.1 percent and minus 0.4 percent in the first half of 2020, the minister said.
The government is stepping measures with the hope that the national economy will recover with growth of between minus 1 percent and 1.2 percent in the third quarter and between 1.6-3.2 percent in the last quarter of the year, she added.
Son La province to export 9 million USD of longan
The northwestern mountainous province of Son La is expected to export 9 million USD of longan products this year.
Longan output of the province is expected to reach more than 70,000 tonnes in 2020.
Of which, about 57,000 tonnes is for domestic consumption and 7,900 tonnes for export. The main export markets are China, Australia, the Republic of Korea, and Japan.
Son La has over 17,000ha of longan for harvest this year, mainly in the districts of Song Ma, Mai Son, Yen Chau, and Muong La.
There are 92 licensed codes of longan growing area with an area of nearly 2,500ha of the province.
Of which, there are 34 planted area codes certificated for export to the US and Australia, with an area of over 200ha.
Fifty-eight codes are for exporting to China, covering an area of over 2,200ha.
In order to do well in consumption and exports of longan products this year, thereby helping the growers raise their incomes, the province plans to organise an online conference to promote consumption and export of the product next month with China.
In the long run, the province will continue to maintain and expand the area of longan, which applies safe production processes for export, study and apply science and technology to spread crops, extend harvest time, and improve product quality and value.
At the same time, it will also create favourable conditions to attract investors to build processing factories of agricultural products in general, and longan products in particular for preliminary process, preservation, consumption and export.
Cambodia maps out new measures to revive economy
The Cambodian Government has been devising new measures and strategies to revive the economy amid the COVID-19 pandemic.
Permanent Secretary of State at the Ministry of Economy and Finance Vongsey Vissoth said at a recent press conference that the pandemic has impacted the global economy. Therefore, governments have been making every effort to support and restore their national economies.
“We have to live with COVID-19. We cannot wait until it ends,” said Vissoth.
“We have prepared measures and delivered an unprecedented response. We are spending a lot of money to maintain the economy, maintain jobs and facilitate its recovery,” he added.
According to the data from the Ministry of Economy and Finance, the government has spent 10 million USD on health, economy and social intervention as part of its master plan in the fight against the virus impacts.
Approximately 25 million USD has been spent on skills and vocational training and sponsorship for laid-off workers.
Up to 100 million USD has been spent on aid for workers and 127 million USD has been spent on poor and vulnerable households.
A further 100 million USD has been allocated to a special fund with the Agriculture Rural Development Bank and SME Bank of Cambodia.
Finally, 200 million USD has been spent on credit guarantee funding and 300 million USD financing facilities.
Thai Cabinet approves 186 economic stimulus projects
Thailand’s Cabinet has approved the first batch of 186 economic stimulus projects worth 92.4 billion baht (3 billion USD) and allocated 15.5 billion baht (500 million USD) to support job creation and tourism-related projects.
The Thai Government’s deputy spokeswoman Traisulee Traisoranakul said the Cabinet on July 8 agreed in principle to okay the first batch of economic stimulus projects under the 400-billion-baht emergency package to shore up the economy impacted by the COVID-19 pandemic.
These projects cover three areas, including 51.3 billion baht to boost the grass roots economy, 20.3 billion baht for financing sustainable development projects, and 22.4 billion baht for boosting consumption and tourism.
The Cabinet agreed to allocate15.5 billion baht to finance five projects which are designed to create employment and promote tourism. Other projects will be approved in subsequent Cabinet meetings.
Vietnam, US making strides forward in economic, trade relations
The past 25 years have witnessed strides made in economic and trade cooperation between Vietnam and the US, contributing remarkably to bolstering bilateral relations, Minister Counsellor in charge of trade affairs Bui Huy Son has said.
Their economic relations have expanded in scale since the two established diplomatic ties, he told Vietnam News Agency correspondents in the US.
Economic and trade cooperation has made important contributions to and remains one of the important pillars of Vietnam-US relations.
According to US figures, two-way trade saw a 333-fold increase in the 25-year period, rising from 233.4 million USD in 1994 to 77.5 billion USD in 2019.
Cooperation has also seen positive changes in quality, he added, as the structure of Vietnam’s exports to the US has been diversified, with the presence of industrial and processing products such as electronic components, iron and steel, rubber, and home furniture. Vietnam has primarily focused on shipping agricultural products, garments and textiles, and footwear to the US.
Another important change is that the two countries are stepping up new cooperative fields such as investment, technology research and development (R&D), and services such as transportation, telecommunications, and energy.
According to the Minister Counsellor, the two countries still hold great potential to boost cooperation in the time ahead.
Vietnamese businesses can find abundant capital and technologies in the US - the world’s largest import market at more than 2 trillion USD each year.
Vietnam is attractive to US enterprises, meanwhile, thanks to its positive growth, transparent policies, and close links with ASEAN markets and other major markets in the world, Son said.
Given the negative impact of the COVID-19 pandemic, he said both countries are facing major challenges that will have long-term consequences on the business activities of every enterprise and the global economy.
He suggested the two sides focus on tapping each other’s advantages, expand trade activities, encourage investment, boost production chain links, and develop service business in such fields of potential as tourism, aviation, education, and R&D.
The two governments should maintain their effective policy dialogues and build favourable business climates to develop harmonious, sustainable, and mutually-beneficial economic and trade relations, he added.