The Vietnam - Laos trade turnover in January increased by 75.8% over the same period in 2023, reaching 174.4 million USD.

Specifically, Vietnam's exports to Laos were valued at 56.8 million USD, surging 104.4% year-on-year, with h increases seen for most main export items. Among them petrol and oil product earned 11.6 million USD, up 276%, iron and steel products brought home 5.44 million USD, up 176.6%, transport vehicles and spare parts 4.3 million USD, up 118.7%.

Meanwhile, imports from Laos were worth 117.6 million USD, an increase of 64.7% over the same period in 2023. The country spent 27.4 million USD to buy rubber from Laos (up 107.2%), 11.2 million USD on wood and wood products (up 62.2%), 9.2 million USD on minerals, and 8.5 million USD on maize (up 19%), among others.

With the strong trade growth in January, Vietnam - Laos trade in 2024 is expected to reach or exceed the target growth rate of 10 - 15% that the leaders of the two countries set at the 46th meeting of the Vietnam-Laos Intergovernmental Committee in early January. 

Last year, their bilateral trade turnover reached 1.6 billion USD.

Petrol prices now 300 VND higher per litre

The ceiling retail petrol prices have been revised up by the Ministry of Industry and Trade and the Ministry of Finance.

Starting from 3:00pm on February 29, the ceiling price of E5RON92 went up 277 VND to 22,752 VND (0.92 USD) per litre, while that of RON95-III was raised 330 VND to 23,929 VND per litre.

The prices of diesel oil 0.05S and kerosene were capped at 20,773 VND and 20,785 VND per litre, down 137 VND and 136 VND, respectively.

At this price adjustment, the two ministries decided to take 300 VND for the petrol and oil price stabilisation fund for each kg of mazut.

Chinese daily affirms attractiveness of Vietnam’s investment environment

The International Business Daily, the mouthpiece of the Chinese Ministry of Commerce, recently posted an article highly valuing Vietnam’s investment and business environment, especially its efforts in and results of attracting foreign investment in recent times and future prospects.

The article wrote that over recent years, with the stable development of the economy, Vietnam has attracted an increasing attention of investors, and always leads Southeast Asia in terms of foreign direct investment (FDI) attraction.

Compared to other Southeast Asian countries, Vietnam is more attractive to foreign investors because of its advantages - a stable political institution and an abundant and skilled workforce. Over recent years, Vietnam's semiconductor and high-tech industries have grabbed much attention from the world.

It cited data from the Vietnamese Ministry of Planning and Investment’s Foreign Investment Agency as saying that by January 20, Vietnam had attracted more than 2.36 billion USD in foreign investment, up 40.2% year-on-year.

The author forecast that Vietnam's FDI attraction will maintain good growth momentum this year and the next period, given the fact that the Vietnamese Government always creates favourable conditions for investors for mutual development and benefit, with a lot of incentives on tax, factories, labour, raw material supply, and infrastructure.

According to the author, Vietnam boasts rich natural resources, a rapidly growing consumer market, and a continuously improving policy environment, thus creating huge market potential that investors can exploit.

HCM City works on facilitating foreign capital influx

Ho Chi Minh City authorities have freshly assigned tasks of stimulating foreign investment attraction, with the municipal Department of Information and Communications asked to suggest measures drawing tech firms into local software and semiconductors sectors.

The Department of Planning and Investment, meanwhile, is tasked with joining the implementation of steps to attract direct foreign capital and making recommendations of selective criteria for foreign-funded projects in the southern economic hub.

The Department of Industry and Trade is set to propose policies assisting the development of potential supporting industries, while the Department of Natural Resources and Environment comes up with ways to tackle shortcomings for effective use of land sources.

Human resources preparations, tax policy recommendations, trade promotion, and business climate improvement are also among the key tasks assigned to relevant departments, agencies, and units.

In 2023, the metropolis posted nearly 5.9 billion USD worth of foreign direct investment, up nearly 50% year-on-year.

Businesses urged to seize opportunities to boost rice exports to Indonesia

Vietnamese enterprises should seize the opportunities to increase rice exports to Indonesia which has allocated an additional rice import quota of 1.6 million tonnes for 2024 as dryness linked to the El Nino delayed harvest in the country, according to the Vietnam Trade Office in Indonesia.

The Indonesian Ministry of Trade has granted approval for the import of 2 million tonnes of rice, and it will soon issue import certificate for an additional 1.6 million tonnes after completing related administrative procedures.

Vietnamese Trade Counsellor Pham The Cuong said that rice prices in Indonesia have increased significantly in recent days due to supply shortage.

Rice production in Indonesia has experienced a deficit as compared to consumption in the past eight months, he said, adding supermarkets have suffered rice scarcity.

According to the Statistics Indonesia (BPS), the country splashed out 279.2 million USD on importing over 441,930 tonnes of rice in January, including 41,610 tonnes from Thailand, 32,340 tonnes from Vietnam and 2,500 tonnes from Cambodia.

Last year, Indonesia was the second largest rice importer of Vietnam as it purchased 1.1 million tonnes of grain, up 878% year-on-year.

Demand for rice in the country will increase as Muslims will celebrate their month-long Ramadan festival in March, while it is not time for the main crop to be harvested.

The Indonesian Government will issue a tender to purchase rice soon after the one on January 17 when Vietnamese enterprises won bid to supply more than 300,000 tonnes to this market.

The Vietnam Trade Office recommended Vietnamese rice exporters to keep a close watch on the market information and capitalise on all opportunities to enhance rice shipments to Indonesia right from the beginning of the year.

Last year, Vietnam shipped more than 8.13 million tonnes of rice worth 4.7 billion USD abroad in 2023, up 14.4% in volume and 35.3% in value year-on-year. Since the outset of the year, the country has gained 466.6 million USD from exporting more than 663,200 tonnes of rice, rising 14.4% in volume and 53% in value from the same period last year.

VCCI hosts 14 international investors to study Vietnam's potential

A group of 14 international investors from six countries, led by Malaysian investment firm Maybank Group, visited Vietnam last week to study the market, according to the Vietnam Chamber of Commerce and Industry (VCCI).

During the meeting between the VCCI and the group of investors, the potential developments in the Vietnamese market were discussed, in particular, the financial environment and the opportunity for growth of small and medium-sized enterprises (SMEs) and start-ups.

Nguyen Manh Dung, Director of Institutional Clients at Maybank Vietnam, said the Malaysian bank has been providing a wide range of financial, banking and securities services in Vietnam since 1996.

The bank has been the strategic shareholder of An Binh Commercial Joint Stock Bank (ABBank) since 2008 and an important partner of many domestic enterprises such as Vingroup, Hoa Phat and Thaco, he said.

Maybank Group is the largest financial and banking corporation in Malaysia and the fourth largest in ASEAN with total assets of more than US$200 billion.  

Other companies looking to expand their investment portfolios in Vietnam include Malaysia's state-backed investment funds LTH Group and KWAP, and Thailand's asset management firm SCBAM, Dung added.

Notably, the consortium includes Asset Plus, a Thai investment fund with total assets of $1.2 billion and large stakes in several ASEAN enterprises. Other investors are Nomura Asset Management of Japan, which has more than $500 billion in assets under management, and Haitong International of Hong Kong, which manages about $125 billion in assets worldwide.

VCCI Vice President Nguyen Quang Vinh appreciated that international investors find Vietnam a very attractive market.

He said that VCCI, as the representative of all Vietnamese enterprises and businessmen, will provide investors with the necessary information about the domestic market and help them to do well here.

With a population of 100 million, a young workforce, a stable political system and attractive policies, Vietnam has attracted the interest of many global companies, he said.

Major investments have focused on the semiconductor, high-tech and energy sectors, he added.

HCMC to develop 35,000 social homes by 2025

 The HCMC Department of Construction has said that it will work with relevant units to develop 35,000 social housing units in the 2021-2025 period.

Since 2021, the city has completed and inaugurated two social housing projects, comprising a total of 623 apartment units. Six additional social housing projects, totaling 3,956 apartment units, are currently underway.

A dormitory project in the industrial cluster of Thanh My Loi Ward, Thu Duc City, with a scale of 1,040 units is being carried out to serve the housing demand of workers living there.

The city is intensifying efforts to expedite the social housing development plan for 2021-2025, aiming to build around 35,000 social housing units covering a combined floor area of 2.5 million square meters.

Other provinces are also prioritizing the implementation of social housing projects. Haiphong City, for instance, targets the completion of around 6,400 social homes in 2024, with a broader objective of 16,500 units by 2025.

In Dong Nai Province, local authorities have submitted proposals for 11 social housing projects, totaling roughly 20,000 units. Of these, five projects comprising 9,000 social housing units have received preliminary investment approval.

Viet Nam pockets US$21 million from tea exports in January

Viet Nam earned over US$21 million from exporting 13,398 tons of tea in January, up 85 percent in both value and volume against the same period last year, the General Department of Viet Nam Customs reported.

Pakistan was the largest importer of Vietnamese tea during the reviewed period by purchasing over 4,500 tons worth US$9.2 million. It was followed by Taiwan, the U.S., and Poland.

The average export prices to some key markets in January reached US$1,300 to US$1,600 per ton. However, in several markets, such as Germany, the average export price reached US$7,579 per ton.

The Vietnamese Tea Association (VITAS) encouraged Vietnamese businesses to facilitate the application of advanced technology and trade promotion activities by increasing direct meetings with foreign buyers and diversifying the types of Vietnamese tea booths at international exhibitions.

The whole country has 120,000 hectares of land for tea cultivation, and 257 tea processing enterprises with a total designed capacity of 5,200 tons of fresh buds per day.

Last year, Vietnamese exporters shipped 121,000 tons of tea worth US$211 million, down 16.9 percent in volume and 10.9 percent in value year-on-year.

Government urges control of cryptocurrencies

In a bid to address concerns over money laundering and terrorist financing linked to virtual assets, the Government has tasked the Ministry of Finance with drafting a legal framework to either ban or regulate cryptocurrencies.

This decision follows a meeting where the State Bank of Vietnam (SBV) was urged to evaluate risks associated with businesses involved in casinos, gaming rewards, and virtual assets.

Despite the passage of the amended Law on anti-money laundering in late 2022, cryptocurrencies are not recognized as legal tender in Vietnam. Currently, virtual asset trading in the country predominantly occurs through international exchanges or direct negotiations, potentially leading to money laundering.

To mitigate these risks, the National Assembly two years ago urged the Government to establish a legal framework for these assets.

According to a report released by the Vietnam Blockchain Association in September 2023, Vietnam received nearly US$91 billion worth of virtual currencies in a year from October 2021 to October 2022, with around US$956 million associated with illegal activities.

This regulatory initiative is part of the Government’s broader effort to remove Vietnam from the Financial Action Task Force (FATF) grey list by May 2025. Countries on this list are subject to stringent FATF supervision regarding money laundering and terrorist financing.

Indonesia ramps up rice import

Indonesia’s decision to increase rice imports by an additional 1.6 million tons this year will give Vietnamese rice exporters an opportunity to step up outbound sales.

Indonesia’s Ministry of Trade said on February 26 that the move would help cope with lower domestic rice production induced in 2023 by the El Nino phenomenon, said local news reports.

With Indonesia’s total rice import quota for 2024 set at 3.6 million tons, Vietnamese rice exporters will have the opportunity to sell more to Indonesia, said the Vietnam Trade Office in Indonesia.

So far, import licenses have been issued for two million tons, with the additional 1.6 million tons expected to be authorized after administrative procedures are completed. Vietnamese rice exporters are urged to closely monitor the market.

Vietnam was Indonesia’s second largest rice supplier in 2023, with over 1.1 million tons worth more than US$640 million exported to Indonesia. Vietnamese exporters secured contracts for over 300,000 tons in the Indonesian Ministry of Trade’s recent tender for 500,000 tons of rice.

In January 2024 alone, Indonesia imported 441,930 tons of rice, an 82.19% increase from January 2023, with a value of US$279.2 million.

The surge in rice prices in Indonesia, reaching 80,000 rupiah (US$5.17) per five kilograms, compared to the government-set ceiling of 69,500 rupiah (US$4.45) per five kilograms, underscores the urgent need for more rice imports.

Indonesia braces for heightened food demand during the upcoming Ramadan festivities.

Experts said rice prices could rise further this year due to supply constraints exacerbated by India’s rice export restrictions and concerns over El Nino’s impact on rice production.

The General Department of Vietnam Customs reported that the country exported 512,265 tons of rice in January this year, with a total value of US$362.26 million. The Philippines remained the top importer, followed by France and Indonesia.

With ASEAN being the largest export market, accounting for 61% of Vietnam’s total exports in 2023, Vietnamese rice exporters are well-positioned to leverage Indonesia’s import increase and sustain their export momentum.

Lam Dong targets 9.7 million tourists this year
 
The Central Highlands province of Lam Dong has set a goal to welcome 9.7 million tourists this year, including 550,000 international visitors.

According to the provincial Department of Culture, Sports and Tourism, Lam Dong has 3,070 tourist accommodation establishments with a total of over 43,600 rooms. Among those, 450 1 to 5 star hotels provide 13,200 rooms.  

Many hotels have secured top rankings in the polls conducted by the ASEAN Travel Forum or reputable newspapers and well-known online booking platforms.

The biennial Da Lat Flower Festival is one of several key events to help attract travellers. With the favourable climate, Da Lat is home to a wide variety of beautiful flowers from around the world.

Besides traditional tourism products, the province is focusing on adventure activities, community-based tourism, medical tourism and health care tourism.

Da Lat is also the top choice for adventure tourism enthusiasts with waterfall rappelling, canyoning and high rope courses.

Coming to Tuyen Lam Lake, tourists can enjoy trekking and kayaking to enjoy sunset and sunrise on the water. Da Teh District is among rare places in Vietnam where paragliding is permitted to be held.

Falling rice price is only short-term, upward trend to continue: experts

The recent falls in rice prices are only short-term; the upward trend will continue in 2024 on limited supply, providing significant opportunities for Việt Nam’s rice export, analysts have said.

According to data from Việt Nam Food Association, export rice prices of Việt Nam are moving sideways after sharp decreases. The price of 25 per cent broken rice dropped by $20 per tonne in the past week to US$584 per tonne and 5 per cent broken by $19 to $609, slightly lower than Thailand’s. Meanwhile, 100 per cent broken rice is at $508 per tonne, $25 per tonne higher than Thailand’s.

Rice prices are dropping on the psychology of waiting for clearer market trends from rice import plans of importing countries.

In addition, the main Winter-Spring crop, typically with good rice quality and output, is coming in two weeks, which will significantly impact the trend of rice prices, according to agriculture expert Hoàng Trọng Thuỷ.

Enterprises are waiting for the coming harvest season to prepare for their signed contracts and set price frames for their export contracts in the second half of the year.

Farmers also tend to wait for better points of time to sell their rice with expectation for higher prices, while the El Nino is increasing worries about global rice support.

The US Department of Agriculture has lowered its forecast for global rice supply in 2023-24 crop by 4.5 million tonnes from the previous forecast of 518 million tonnes. Meanwhile, the demand is estimated at 522 million, meaning a shortage of around 4 million which will keep rice prices at high levels in 2024.

Thuỷ also said rice importers know that Việt Nam was entering the largest rice harvest of the year so they were not in a hurry to buy, but waiting for good prices.

The psychology of waiting would continue for a short time. However, the upward trend of rice prices would continue in 2024 on limited supply from India’s rice export restrictions and the impacts of El Nino on farming.

"The important thing is how to harmonise benefits among farmers, exporters and the nation,” Thuỷ said, pointing out that the roles of exporters were critical.

In fact, few enterprises are capable in terms of capital to stock rice. It’s necessary to increase lending and create favourable conditions for enterprises to access credit at reasonable rates for rice purchases, which will help them to be more active in ensuring supply sources for exports and in establishing relationships with farmers, according to Thủy.

Farmers should also be provided with support in terms of payments for fertilisers and pesticides for production in the context of rising input costs.

A combination of solutions would help the rice industry to develop sustainably, Thuỷ said.

Nguyễn Như Cường, Director of Department of Crop Production under the Ministry of Agriculture and Rural Development, said Việt Nam targeted to maintain 7.1 million ha of rice cultivation in 2024 with a total output of 43 million tonnes and export at least 8 million tonnes.

According to Seasia Stats, Việt Nam is the third largest rice exporter in the world with an export volume of 7.6 million in 2023-24, coming after India with an export of 16.5 million tonnes and Thailand with 8.2 million tonnes.

Latest updates of the General Department of Customs showed that Việt Nam had exported 663,209 tonnes of rice as of February 15 to earn a total of $466.6 million.

The average rice export price was $703.50 per tonne, 33.65 per cent higher than the same period last year.

In 2023, Việt Nam earned $4.68 billion from exporting 8.1 million tonnes of rice in 2023, representing increases by 35.3 per cent and 14.4 per cent against 2022.

Indonesia to import more rice, an opportunity for Việt NamHÀ NỘI – The Indonesian Government on Monday decided to increase the rice import quota for 2024 by 1.6 million tonnes to make up for the shortage due to the impact of El Nino on the rice yield in 2023, bringing the total rice import volume to 3.6 million tonnes, according to the Việt Nam Trade Office in Indonesia.It is expected that Indonesia will continue to open more rice tenders besides the 500,000-tonne tender on January 17, in which Vietnamese companies won approximately two-thirds of the quantity.

Vietnamese firms should keep a close watch on these moves to take advantage of the chance to expand rice exports to this market, the trade office said.In January, Indonesia was the third largest rice export market of Việt Nam with a volume of 27,250 tonnes worth $18.08 million at the average price of $663.3 per tonne.In 2023, Indonesia imported 1.17 million tonnes of rice from Việt Nam, worth $640.25 million, representing a rise of 878 per cent and 992 per cent, respectively.

Multiple businesses delay dividend payments, disappointing investors

Multiple businesses have been continuously delaying dividend payments, some even for a decade, leaving shareholders disappointed.

One notable company is Sudico Investment and Industrial Development Corporation (Sudico or SJS). Most recently, the company's Board of Directors approved the extension of dividend payments for the years 2016 and 2017, totalling 20 per cent in cash, from June 30, 2023, to December 31, 2024. This marks the 9th time the company has deferred the payment of dividends for 2016 and the 5th time for 2017.

The given explanations continue to sound familiar, attributing the situation to persistent financial challenges and the company's inability to secure funds. Shareholders of SJS have been eagerly anticipating dividends for almost seven years, but unfortunately, they have yet to materialise.

However, this is not the most extreme case.

Construction firm Sông Đà 3 Corporation (SD3) recently announced the postponement of dividend payments for the year 2015 until December 31, 2024. The dividend rate is 5 per cent, equivalent to approximately VNĐ8 billion. In the initial announcement, SD3 planned to distribute dividends by August 31, 2015, but the timeline has now been extended by an additional nine years and four months.

Similarly, at construction firm Lilama 45.4 Corporation (L44), shareholders have faced a delay of nearly 9.5 years and still have not received dividends for the years 2012 (14 per cent) and 2013 (3 per cent), totalling approximately VNĐ7 billion. The company has changed the dividend payment timeline nine times. The main reasons were the company's suspension of production and business activities for corporate restructuring and significant financial difficulties, including outstanding salary payments and large amounts owed in taxes and insurance. Consequently, the company has been unable to arrange funding for dividend payments.

Construction enterprise Licogi Quảng Ngãi (LQN) recently announced a further delay of dividend payments for an additional 2 years, from September 29, 2023, to September 30, 2025. The company has changed the dividend payment timeline over a dozen times, resulting in a total delay of more than eight years since the initial dividend announcement.

In the latest document, LQN stated that they had tried to work with partners to secure funds. However, due to prolonged difficulties, the expected receivables from partners did not materialise as anticipated, requiring more time to balance the cash flow.

Several other companies have also been relatively slow in paying dividends to shareholders, such as Cầu 12 Joint Stock Company (almost seven years), Licogi 9 (over four years), and Thuận An Coffee (five months). There is even a unique case of dividend cancellation recorded at Bình Định Food Corporation (Bidifood or BLT).

Initially, BLT planned to distribute dividends for the year 2022 at a rate of 170.5 per cent, equivalent to VNĐ17,050 for each share owned by shareholders, with a total expenditure of over VNĐ68 billion. BLT made a payment to shareholders at a rate of 30 per cent in cash, corresponding to VNĐ12 billion in June 2023. However, they subsequently halted the payment of the remaining dividends, which amounted to 140.5 per cent, leaving shareholders disappointed.

BLT stated that the company's financial situation was very difficult, with no capital available to pay the remaining dividends. The reason was the significant increase in the cost of goods, with rice prices rising by over 50 per cent since July, averaging above VNĐ15,500 per kilogramme. BLT had to maintain a reserve of over 3,000 tonnes of rice worth VNĐ46 billion, leading to capital constraints, reduced capital utilisation efficiency and increased interest expenses.

Overall, the delay in dividend payments to shareholders by businesses is related to their difficult financial situation and insufficient cash flow. For example, SD3, despite a net profit of nearly VNĐ8 billion in 2023, still accumulates losses of nearly VNĐ231 billion.

L44 also accumulated losses of nearly VNĐ196 billion by the end of 2022, and its shares are restricted from trading due to late submission of the audited financial statements for 2022 and negative owner's equity in the audited financial statements for 2021.

At Licogi Quảng Ngãi, in addition to the delayed dividend payments, the company also owes salaries and insurance to employees for a prolonged period. Since being listed on UPCoM, Licogi Quảng Ngãi has incurred losses for three consecutive years from 2020 to 2022. As of December 31, 2022, the accumulated loss of Licogi Quảng Ngãi exceeded VNĐ29 billion, resulting in negative contributed capital of over VNĐ7 billion.

Fall in rice price hurts farmers in Mekong Delta

After the Tet holiday (the Lunar New Year), rice prices dropped sharply hurting farmers in the Mekong Delta who had no choice but to sell rice at low prices.

In some places, rice prices were down more than VND1,500 per kg. Farmers in the region are going to harvest hundreds of thousands of hectares of winter-spring rice but because of the decline in price, traders have abandoned stakes in many places, making it difficult for farmers to find buyers. To avoid further risk and loss, many farmers are forced to sell rice at low prices.

In recent days, Ms. Le Kim Mai in My Thanh Trung Commune of Vinh Long Province’s Tam Binh District and her family members have been running around looking for traders to buy and transport nearly 2 hectares of rice which was harvested in nearly one week.

Ms. Mai said that in mid-December 2023, a trader agreed to buy rice at VND8,700 a kg and even put down a deposit. However, after the Tet holiday, the buyer said he could only buy it for VND7,400 per kg for many unacceptable reasons. Ms. Mai shared that despite efforts to negotiate with the buyer but all to no avail, my family resorted to harvesting and drying rice to wait for better prices.

Similarly, many farmers in Mekong Delta localities are currently falling into difficulties as traders abandon their stakes while rice is about to be harvested. Many farmers said they had to accept selling rice at low prices because prolonging the harvest time would incur risks, and losses sometimes greater than the deposit.

Farmer Quach Minh Khoa in Soc Trang Province said that he had just sold ST25 rice on an area of 4 hectares for VND9,400 a kg, even though the price in contract with traders before the Tet holiday was VND9,800 a kg.

Traders decided to give up their stakes at the time of harvest; therefore, his family was impossible to do but sell at low prices, farmer Khoa said. He added that to avoid risks, he decided to sell rice at a price lower than the deposit price of VND400 per kg and lost about VND20 million for nearly 50 tons of rice.

In the winter-spring crop of 2023-2024, farmers in Tien Giang Province have sown more than 45,000 hectares and currently, nearly 2,000 hectares have been harvested, with an average yield of 71 quintals a ha.

Mr. Nguyen Hai Nam in Cai Lay District said that his family grew 1.6 hectares of rice. Before the Tet holiday, traders made a deposit to buy at VND9,000 per kg. However, when the farmer harvested his agricultural product, traders only bought at VND8,100 a kg. He said that though the profit was low, but he still accepted to sell explaining that the rice price has recently been unstable.

In Long An, Chairman Luu Van Nga of the Management Board of Hung Phu Agricultural Cooperative in Vinh Hung District informed that a household in the cooperative had just harvested 30 acres of fields, selling more than 200 tons of rice at VND 8,300 a kg for traders, a reduction of VND250 a kg compared to the initial deposit price.

The majority of farmers in Vinh Long, Soc Trang, Bac Lieu, Tien Giang, and Long An provinces accepted to sell rice at the new price offered by traders which is VND1,000-VND1,500 a kg lower than the initial deposit price, which means farmers lose about VND1 million (US$40.58)-VND1.5 million a ton of rice compared to the prices in their contracts.

Rice trader Truong Thuy Hien in Tam Binh District of Vinh Long Province affirmed traders didn’t want to put down deposits or force farmers to sell at low prices. However, because rice prices have continuously dropped sharply since the Tet holiday until now, traders have continuously suffered heavy losses; thus, traders have to give up their deposits to cut further losses.

According to Ms. Hien, the current sharp decline in rice prices is because processing enterprises have been restraining purchases while they have no new contracts for export.

Deputy Director Nguyen Van Thich of Tan Long Cooperative in Hau Giang Province said that rice prices increased to VND9,000-VND10,000 a kg and ST25 rice price slid to VND12,000 a kg in the days before the Tet holiday because traders offered high prices compared to real prices. However, during the main season, rice prices stabilize based on the actual needs of exporters.

Along with that, after the national holiday, drought comes early, and the cost of transportation from rice fields to gathering points is high. Consequently, it is difficult for traders to buy at a high price as the deposit.

According to Departments of Agriculture and Rural Development of many localities in the Mekong Delta, farmers still make a profit of VND25 million-VND35 million a hectare at the prices of VND7,000-VND8,000 per kg. However, abnormal increases and decreases in rice prices in a short period of time are a problem, local administrations need to take measures to clarify whether or not businesses and traders are manipulating prices to stabilize the market and protect farmers’ rights.

Vietnam Food Association reported that the current price of 5-percent broken rice fetches US$628 a ton which some rice exporting enterprises in the Mekong Delta are offering. Specifically the export price of 5-percent broken rice is $620 a ton, fragrant rice $700 a ton, Japanese rice $750 a ton.

Mixed trends of using short-term capital for medium- and long-term loans among bank groups

The ratio of short-term capital for medium- and long-term loans of the entire banking system at the end of December 2023 decreased to 27.74 per cent from 28.39 per cent at the end of September, the latest data from the State Bank of Vietnam (SBV) showed.

In particular, this ratio in the group of State-owned commercial banks (Agribank, BIDV, VietinBank, Vietcombank, CBBank, GP Bank and Oceanbank) decreased from 24.31 per cent to 22.77 per cent; while in the group of joint stock commercial banks it increased from 39 per cent to 39.87 per cent.

As SBV regulations cap this ratio at 30 per cent, the group of joint stock commercial banks has been under great pressure to restructure their capital sources and outstanding loans to meet the SBV’s prescribed ratio.

According to analysts, the high ratio has pushed the group of joint stock commercial banks to promote the raising of medium- and long-term capital sources through the issuance of valuable papers, especially bonds, to reduce this ratio since last year.

Data from the Vietnam Bond Market Association (VBMA) showed up to 44 out of 55 batches of bonds issued in December 2023 belonged to commercial banks. For the whole year 2023, banks were the largest bond issuers with issued bonds worth more than VNĐ176 trillion, equivalent to 56.5 per cent of the total issuance value of the entire market.

Statistics from MB Securities Company also showed the price of bonds issued by banks in 2023 increased by 31 per cent compared to 2022, with an estimated weighted average interest rate of 6.5 per cent per year and an average term of 4.7 years. The five largest bond issuers in 2023 were all joint stock commercial banks, including Techcombank with VNĐ23.5 trillion, OCB with VNĐ22.35 trillion, LPBank with VNĐ19.64 trillion, ACB with VNĐ18.9 trillion and TPBank with more than VNĐ15.33 trillion.

SBV data also showed by the end of 2023, the ratio of outstanding loans to total deposits of the entire banking system was 76.04 per cent. Of which, the ratio in the group of State-owned commercial banks was 80.85 per cent, in joint stock commercial banks was 77.9 per cent, and in joint venture and foreign banks was 41.79 per cent. 

Banks expect credit growth from Q2

Banks are expecting an improvement in credit growth from the second quarter of 2024, especially now that loan interest rates have decreased, exports gradually recovered, and domestic consumption increased.

The State Bank of Vietnam said that as of January 31, deposit and loan interest rates had been cut down by 0.15% and 0.25% per year, respectively, compared to the end of 2023.

However, the central bank noted that credit growth in early 2024 was quite low compared to that in recent years. In January, credit decreased by 0.6% against the end of 2023.

Leaders of Agribank, Vietcombank, and LPBank said that this is a normal phenomenon in the first months of the year as customer psychology and economic activities are not vibrant because this is the New Year holiday season.

They forecast that credit growth may gradually improve in the remaining quarters of this year as the economy recovers.

To promote credit growth, ministries, sectors, and localities were recommended to roll out measures to stimulate domestic consumption, issue more incentives to attract foreign investment, create an open and convenient legal corridor for businesses' operations, and support them in increasing their competitiveness and participating in the global value chain.

Fertiliser producers grapple with lower prices and higher costs

2023 was not a favourable year for fertiliser producers, with many companies experiencing significant declines in profits due to lower prices and the high cost of input materials. 

In the fourth quarter of 2023, PetroVietnam Fertiliser and Chemicals Corporation (PVFCCo), a leading producer of urea fertilisers, posted a net revenue of over VNĐ3.38 trillion (US$137.4 million), down VNĐ500 billion from the same period in 2022. 

An increase in financial revenue and cuts in operational expenses were insufficient to offset the profit decline. As a result, PVFCCo's profit after tax plummeted to just VNĐ107 billion, a decrease of nearly 95 per cent year -on-year. 

For the whole of 2023, PVFCCo's net revenue amounted to nearly VNĐ13.6 trillion, representing a fall of over VNĐ5 trillion over the previous year. This only fulfilled 78 per cent of the company's planned target. Its profit after tax also dropped by more than 90 per cent to VNĐ543 billion, meeting only 24.1 per cent of the set target.

Similarly, PetroVietnam Cà Mau Fertiliser JSC (PVCFC)’s revenue fell 21 per cent to over VNĐ12.6 trillion year-on-year. The company’s profit after tax plunged by 74 per cent on-year to VNĐ1.1 trillion.

In 2023, PVCFC achieved a total consumption of over 1.3 million tonnes of various fertilisers, up 20 per cent from 2022. Notably, urea comprised the largest portion, accounting for 866,000 tonnes. 

The company successfully entered and expanded its presence in the NPK fertiliser market, with a remarkable 92 per cent growth in consumption volume.

Đức Giang Chemicals, a major player in the chemical industry, faced a decline in its financial performance. In the fourth quarter of 2023, their net revenue reached nearly VNĐ2.4 trillion, a 23 per cent decrease from the same period of the previous year. Their profit after tax also saw a significant drop of 34 per cent to VNĐ746 billion, the lowest level in nine quarters.

For the entire year 2023, Đức Giang Chemicals recorded a net revenue of over VNĐ9.7 trillion and a profit after tax of VNĐ3.35 trillion, down 33 per cent and 46 per cent over the previous year, respectively.

The company attributes the poor business results primarily to the decrease in market prices, which resulted in a 38 per cent decline in revenue from their key products, such as phosphoric acid and H3PO4. Revenue from phosphoric acid decreased by 28 per cent, while revenue from various types of fertilisers dropped by 12 per cent.

In contrast, DAP - Vinachem JSC experienced positive performance in the last quarter of 2023. They posted a net revenue of over VNĐ835 billion, a 3.45 per cent increase from the same period in 2022. Profit after tax was 8.8 per cent higher, at nearly VNĐ62.5 billion.

It said that the significant increase was attributed to higher DAP consumption of over 61,600 tonnes, representing a nearly 20 per cent increase. However, despite the rise in consumption, the average selling price experienced a decline of over VNĐ2 million per tonne, down 13.5 per cent year-on-year.

Despite the positive results in the fourth quarter, DAP - Vinachem’s performance for the entire year 2023 was lower. The company achieved a revenue of VNĐ3.2 trillion and a profit of over VNĐ70 billion, marking a 2 per cent and over 80 per cent decrease from last year, respectively. These figures represent the lowest performance in the past three years for the company.

In 2023, the company had set a revenue target of VNĐ3.24 trillion and a profit after tax target of VNĐ92.2 billion. With the achieved results, the company reached 99 per cent of the revenue target and 70.5 per cent of the profit after tax target.

Another company specialising in urea production, Hà Bắc Nitrogenous Fertiliser and Chemicals JSC, said that the unexpected profit in the fourth quarter of 2023 contributed to its full-year profit of VNĐ860.8 billion, with a net revenue of VNĐ4.4 trillion. These figures were down 51 per cent and 31 per cent on-year, respectively. 

Nevertheless, this marks the third consecutive profitable year for the company since 2021.

It has also made significant progress in reducing its accumulated losses over the years. As of December 31, 2023, the accumulated losses amounted to over VNĐ2.1 trillion, and the equity capital improved from a negative VNĐ252 billion to a positive VNĐ614 billion.

On the contrary, there are still companies that reported year-on-year growth in net profits for the whole year, although their size is relatively small. These include Lâm Thao Fertilisers and Chemicals JSC with a 68 per cent increase in net profit to VNĐ149 billion, Southern Fertiliser JSC with a gain of 26 per cent to VNĐ57 billion, and Bình Điền Fertiliser JSC with a 5 per cent increase to VNĐ148 billion. 

These positive results were mainly driven by stricter management of debts and operational costs.

According to Vietcombank Securities (VCBS), global fertiliser prices this year are expected to rise slightly from 2023 due to tighter supply conditions.

In the domestic market, fertiliser consumption is seen to grow at a slower rate than in 2023. Anticipated domestic consumption during the fourth quarter of 2023 and the first quarter of 2024, coinciding with the winter-spring crop season, has, however, been delayed with this year's crop season starting in late November.

Meanwhile, the global fertiliser consumption growth rate will decelerate in the medium term, dropping from 4 per cent in the fiscal year 2023 to 1.3 per cent in the fiscal year 2027, said the International Fertiliser Association.

VCBS highlights that the price of input gas is a challenging factor to predict, as a fluctuation in oil prices and the allocation of gas sources would significantly impact the gross profit margin of businesses. 

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes