New records have continuously been set in the prices of coffee in Central Highlands localities recently, now standing at over 90,000 VND (3.65 USD) per kilo.

On March 13, they ranged from 91,000-92,000 VND per kilo, which doubled those in the same period last year, and rose 30% over late 2023.

According to insiders, strong growth in exports has been a major factor leading to the domestic price hikes.

The Ministry of Agriculture and Rural Development (MARD) said that Vietnam exported 438,000 tonnes of coffee in the first two months of this year for 1.38 billion USD, a rise of 27.9% in volume and 85% in value over the same period last year.

In the first five months of the 2023-2024 coffee crop, Vietnam has shipped abroad 764,802 tonnes of coffee with a revenue of 2.36 billion USD, up 1.5% in volume and 39.4% in value compared to the same period of last crop.

Largest markets of Vietnamese coffee include Germany, Italy, Japan, and Spain.

Le Duc Huy, General Director of Simexco Daklak, said that the world's demand for Vietnamese Robusta coffee is high, while the domestic supply is lower than in previous years.

The Vietnam Coffee Cocoa Association (Vicofa) estimated that the coffee output in the 2024-2024 crop drops about 10% compared to the previous crop due to shrunken farming area, while inventories from the previous crop is at the lowest in many years and equivalent to one-third of that in the previous crop. This has led to a supply shortage, it said.

The MARD said that ICE-monitored Robusta coffee inventories as of the end of February continued to decline to a record low of 19,600 tonnes (326,667 sacks of 60 kilos), the lowest since 2014.

The International Coffee Organisation predicted that the coffee production of Indonesia will fall 16.6% in the 2023-2024 crop due to prolonged rains.

Meanwhile, Brazil’s coffee output in the 2024-2025 crop (from July 2024 to June 2025) is forecast to rise 4.2%.

Despite the high prices, experts warned farmers to carefully choose the appropriate time to sell their coffee as it is tough to give any forecast in coffee price fluctuations, which means coffee prices may continue to set new records or slump./.

Roundtable connects Vietnam with businesses of Italy’s Basilicata region

A roundtable meeting took place in Potenza city, the capital of Italy’s Basilicata region, on March 13 to introduce Vietnam to local businesses and explore economic cooperation potential.

Opening the event, Vietnamese Ambassador to Italy Duong Hai Hung gave a brief introduction of Vietnam’s socio-economic achievements and favourable policies for businesses and investors. He said Basilicata region boasts many important industries such as mechanics, automobile, agricultural processing, and oil and gas exploitation.

Vietnam expects the dynamic policies being implemented will help further tap into the region’s potential; open up new economic cooperation chances for the two sides; create optimal conditions for Basilicata businesses to learn more about Vietnam, especially the country’s aquatic and agricultural products; and invest in or cooperate with Vietnamese partners in mechanical, food processing, furniture, and support industries, he went on.

The ambassador affirmed the readiness to assist the region and local businesses to boost partnerships with Vietnam.

Francesco Somma, Chairman of the Basilicata Confederation of Industry (Confindustria), said his region exported 2.8 billion EUR (3 billion USD) worth of goods in 2022, mainly products of textile - garment, machinery, pharmaceutical, automobiles, and oil and gas industries.

He emphasised the countries’ similar structures of small- and medium-sized enterprises along with Basilicata firms’ international cooperation capacity, calling them the factors for stepping up trade and investment ties between Vietnam and Basilicata.
         
Talking to Vietnam News Agency, Francesco stressed the importance of deeper understanding of the potential of Vietnam, which has strong growth and political stability. Meanwhile, Basilicata holds investment potential in terms of automobile, agricultural processing, chemical, or transportation industries.

Aside from providing information, Confindustria hopes to promote initiatives for further enhancing trade and investment chances for Basilicata businesses in Vietnam and for Vietnamese businesses in the southern region of Italy, he added.

Antonio Braia, head of the chamber of small industry at Confindustria Basilicata, said local businesses can supply Made-in-Italy products for Vietnam and also attract Vietnamese investment to strong industries of the region such as automobile, farm produce, tourism, and culture.
         
Cirillo Giovanni, Director of Ciesse Tendaggi – a curtain producing and exporting company, held that businesses in both Italy and Vietnam should increase exchanges and meetings to meet each other’s diverse demand, adding that his company is boosting contact with Vietnamese partners to expand export and also planning to import many products of its specialised field.

Insurance premium revenue rebounds in the first 2 months

Total insurance premium revenue in the first two months of 2024 was estimated at 33.9 trillion VND (1.4 billion USD), up 1.6% over the same period last year, the Ministry of Finance’s latest data showed.

Investment reinjected into the economy by the enterprises was projected at 780.7 trillion VND, up 12.7% during this period.

As of the end of February, the collective assets of insurance enterprises were anticipated to hit 934.8 trillion VND, up 11% year-on-year and 2.4% compared to the end of last year.

These figures indicated a rebound in insurance operations, notably amid poor results in 2023, when total revenue from insurance premiums decreased by 8% compared to 2022. Specifically, the total new premium revenue generated in the life insurance sector declined 44.5% in 2023 to 140 trillion VND.

In 2023, insurance companies disbursed nearly 81 trillion VND to settle insurance benefits for clients, up 32% year-on-year.

According to the Insurance Association of Vietnam, the insurance market has 82 businesses, including 31 non-life insurance companies, one branch of a foreign non-life insurance companies, 19 foreign life insurance firms, two reinsurance enterprises and 29 insurance brokerage companies.

Vegetable, fruit exports see large potential in Southeast Asia, Middle East: forum

The Asian markets, especially Southeast Asia and Middle East, still hold vast potential for Vietnamese vegetable and fruit exports, experts said at a forum regarding the goods held in Ho Chi Minh City on March 13.

Le Thi Mai Anh from the Ministry of Industry and Trade’s Asia-Pacific Market Department – the organiser of the forum – elaborated on the point by noting that in the Association of Southeast Asian Nations (ASEAN) region, Vietnam holds a geographical advantage with convenient transport time, minimising risks that could affect the quality of vegetables and fruits. This is also a large and open market, with import duties ranging from 0 to 5%.

Nevertheless, the region presents intense competition due to the similarity in farming product structures and numerous trade barriers. Focusing solely on exporting fresh fruits will pose challenges for Vietnam, she assessed, suggesting export firms concentrate on quality, price, and design to enhance competitiveness and expand market share.

Truong Xuan Trung, head of the Vietnam Trade Office in the UAE, said that despite being a small country with a sparse population, the UAE boasts one of the highest per capita incomes globally. Due to its unique natural conditions, the nation primarily focuses on industrial and service development, while heavily relying on imported food and grains. It also serves as a transshipment point for re-exporting goods to other markets.

He held that Vietnamese vegetable and fruit exporters can leverage this market to access larger consumer areas.

According to him, this is an open market with virtually no trade barriers, but is highly competitive. The expert recommended Vietnamese export enterprises work on understanding the business culture and practices of the Muslim population, as well as negotiating and applying the safest payment terms when dealing with UAE businesses to avoid risks in international trade.

Le Thanh Hoa, Deputy Director of the Ministry of Agriculture and Rural Development’s Department of Quality, Processing and Market Development, stressed that in addition to production capacity, Vietnam also benefits from dozens of free trade agreements, facilitating negotiations for various vegetable and fruit products to enter different markets.

It is necessary to organise production according to good agricultural practices suitable for each type of fruit and vegetable to meet customer requirements and to standardise the planting process to ensure the monitoring of food safety risks from planting, caring, harvesting to processing, said the official.

Supply chains building, mechanisation, and advanced technique application are also important, Hoa noted.

Vietnam’s fruit-vegetable export turnover reached a new record high of 5.6 billion USD last year, an annual rise of 66.7%. The figure is predicted to continue to witness year-on-year two-digit growth this year to hit around 6.5-7 billion USD./.

Second Vietnam int’l logistics expo to open in HCM City in August

The second Vietnam International Logistics Exhibition (VILOG) will be held in Ho Chi Minh City from August 1 to 3, said the Vietnam Logistics Business Association (VLA).

The exhibition, to be co-organised by the VLA and VINEXAD Company, will bring together domestic and international logistics firms, representatives from government agencies, and other stakeholders, and display the most cutting-edge technologies and trends in the sector.

It will focus on transport and forwarding, warehouse system, cold chain, packaging, and logistics IT and relevant services.

The Vietnam Medi-Pharm Expo will be held simultaneously with VILOG 2024, expected to attract the participation of more than 450 businesses from 35 countries and territories.

Organisers said VILOG 2023 lured 256 firms with 354 booths from 22 countries and territories, and more than 25,000 visitors.

Logistics is one of the fastest growing and most stable industries in Vietnam, with an average growth rate of 14–16% a year and a scale of 40-42 billion USD per year. According to Agility's assessment in 2022. Vietnam is ranked 11th in the group of 50 global emerging logistics markets./.

Kien Giang takes action in IUU fishing combat

The Mekong Delta province of Kien Giang will take drastic measures from now until the end of April to fight illegal, unreported and unregulated (IUU) fishing in anticipation of the fifth working round with the inspection delegation from the European Commission (EC) in May.

Accordingly, the provincial border guard force is tasked with inspecting, verifying and dealing with fishing vessels caught encroaching upon foreign waters before April 30. The controlling of vessels entering and leaving border checkpoints should be tightened.

The province asked the Coast Guard Region 4 High Command to coordinate with competent forces to launch peak campaigns on patrolling in the offshore area of Kien Giang as well as overlapping and undefined sea areas between Vietnam and other countries such as Thailand, Cambodia, Malaysia and Indonesia until April and strictly handle violations, thus putting an end to illegal fishing in foreign waters in the locality.

Relevant agencies are assigned to work with localities to step up inspections to prevent vessels without registration and fishing licences or those without certificates that prove their seaworthiness (vessels with 3 NOs) from operating at sea. They must ensure that fishing boats are monitored around the clock via the monitoring system and thoroughly deal with those that violate vessel monitoring system requirement and infringement of foreign waters.

Chairman of provincial People’s Committee Lam Minh Thanh has asked local relevant agencies to ramp up the fight against IUU fishing in an effort to have the EC’s “yellow card” warning against Vietnam’s seafood exports lifted, considering it an important task./.

Van Phong 1 BOT Thermal Power Plant becomes operational

The Van Phong 1 BOT Thermal Power Plant in the Van Phong Economic Zone of the south-central province of Khanh Hoa was inaugurated on March 13, supplying an additional 8.5 billion kWh per year, accounting for approximately 3% of the total electricity output nationwide.

The project is the largest project invested by Sumitomo Corporation of Japan in Khanh Hoa. The plant uses ultra-supercritical technology, with modern equipment, ensuring high efficiency while meeting strict environmental standards.

Addressing the inauguration ceremony, Chairman of the provincial People’s Committee Nguyen Tan Tuan highlighted the significance of the plant, saying that it will help attract investment into the Van Phong EZ, promote local industrial development, create momentum for the economy of Khanh Hoa and the south-central region, generate numerous job opportunities and contribute around 1 trillion VND (over 40.5 million USD) to the local budget a year.

He expressed his hope that Sumitomo Corporation and domestic and foreign enterprises will continue researching, proposing, and implementing new industrial, infrastructure, and service projects in the locality.

The provincial authorities commit to accompanying and providing comprehensive support to investors to achieve common goals, he affirmed.  

Hirokazu Tsuru, General Director of Van Phong Power Company Limited, highly valued the assistance of Vietnam’s authorised agencies for the project, especially the reliable support and cooperation of the Electricity of Vietnam (EVN) in completing the 500 kV Van Phong – Thuan Nam transmission line and the Van Phong transformer station within a short period, as well as close coordination of EVN subsidiaries during the construction and testing phases of the plant.

The company is confident in its ability to contribute to Vietnam's socio-economic development through the plan’s stable operation, he said.

With a total investment of nearly 2.58 billion USD, the Van Phong 1 BOT Thermal Power Plant comprises two turbines with designed capacity of 1,432 MW. The coal-fired thermal power plant was constructed under a BOT contract signed by the Ministry of Industry and Trade, and will be handed over to the Vietnamese Government after 25 years of operation.

The project is one of the works to celebrate the upgrading of the Vietnam-Japan relations to a comprehensive strategic partnership for peace and prosperity in Asia and the world.

Increasing prices benefit pepper growers

Pepper growers in the Central Highlands province of Vietnam are earning considerable profits from sharply rising  pepper prices.

Currently, pepper prices are ranging from VND93-95 million (USD3,795-USD3,877) per tonne compared to VND67-68 million last year. This is also the highest level since 2016.

Wum from Nam Yang Commune in Gia Lai Province’s Dak Doa District said her family has harvested pepper since January and the work would finish in early April.

“Thanks to the higher pepper prices, we have reaped profits which can help us to build a new house,” according to Wum.

Nam Yang Agricultural and Services Cooperative in Nam Yang Commune is home to 80,000 hectares of pepper.

Nguyen Thi Nga, deputy director of the cooperative, said that the cooperative’s pepper products were sold for VND3,000 more than the market price, and 15 hectares of certified organic pepper fields were sold at 25 percent higher than the market price.

With a total of 8,800 hectares of pepper, Gia Lai’s total pepper output is expected to reach 30,000 tonnes this harvest.

Nguyen Vu Hoang Yen, chairman of Nam Yang Commune, said that farmers have been advised not to massively expand pepper growing to avoid oversupply. Instead, they should focus on developing the sustainable organic model to improve pepper quality and productivity.

Coffee price increases in domestic market due to high demand

The price of Robusta coffee in February increased sharply in the domestic market because coffee demand has remained at a high level, according to the Import-Export Department, Ministry of Industry and Trade.

Việt Nam's average coffee export price in February reached US$3,276 per tonne, up 7.4 per cent against the price in January and up 50.6 per cent compared to the same period of last year.

In the first two months of 2024, the price stood at $3,153 per tonne, up 44.7 per cent over the same period in 2023.

According to the Việt Nam Commodity Exchange (MXV), closing the trading session on March 11, the coffee prices decreased by 0.11 per cent for Arabica and 0.35 per cent for Robusta. The fluctuation of the US Dollar and Brazilian Real (USD/BRL) exchange rate and positive signals from supply caused coffee prices to fluctuate during the session, the Công thương (Industry and Trade) newspaper reported.

The stronger increase in Brazil's Real has dragged down the USD/BRL exchange rate by 0.02 per cent, causing Brazilian farmers to limit coffee sales.

On the other hand, Arabica inventories are increasing, putting pressure on prices. At the end of the session on March 8, the total amount of Arabica coffee stored at certified warehouses of the Intercontinental Exchange (ICE) increased by 13,875 60-kg bags to 424,752 bags, the highest level in the past four months.

With Robusta, concerns about supply shortages have somewhat eased with rain forecast to reappear in Việt Nam's main coffee growing region.

Furthermore, Robusta coffee inventory on ICE at the end of the session on March 7 grew by 290 tonnes, bringing the total amount of coffee stored at certified warehouses of ICE to 24,320 tonnes.

Coffee prices in the domestic markets of Việt Nam and Indonesia reached new records last week, due to low inventories and very high demand.

The price was pushed up to very high levels at $500-550 tonne for grade-2 Robusta coffee, and at $750 - 800 per tonne for grade-4 Sumatra coffee.

The Ministry of Agriculture and Rural Development said that the main reason for the increase in Robusta coffee export prices was concern about supply shortages.

Hot weather in key coffee growing areas has made many importers worried about the prospect of a low supply of Robusta coffee for the new crop, because Việt Nam is the world's largest Robusta exporter.

It is forecast that Việt Nam's coffee output in the 2023-2024 crop year may decrease by 10 per cent to about 1.66 million tonnes, the lowest level in four years, due to drought.

In February, Việt Nam's coffee exports reached 200,000 tonnes, worth US$655 million, down 0.2 per cent in volume but up 50.3 per cent in value compared to the same period of last year.

In the first two months of 2024, Việt Nam's coffee exports were estimated to reach 438,000 tonnes, earning $1.38 billion, an increase of 27.9 per cent in volume and 85 per cent in value compared to the same period in 2023.

Regarding kinds of coffee, in January 2024, Việt Nam increased exports of Robusta and Arabica coffee compared to December 2023, but decreased exports of Excelsa and processed coffee.

According to the General Department of Customs, in January, Việt Nam exported 216,380 tonnes of Robusta coffee, worth $613.6 million, increasing 15.4 per cent in volume and 25.7 per cent in value compared to December 2023. The exports increased by 68 per cent in volume and 155.7 per cent in value year on year.

Việt Nam promoted the export of Robusta coffee to many markets, such as Italy, Spain, Russia, Indonesia, Belgium, China and the Philippines. Meanwhile, exports of Robusta coffee to some traditional markets decreased, including Germany, Japan and America.

Việt Nam's Arabica coffee exports reached 5,250 tonnes in January, earning $20.15 million, an increase of 78.5 per cent in volume and 83.1 per cent in value compared to December 2023. However, the exports fell by 27.1 per cent in volume and 25.7 per cent in value compared to the same period of last year.

The Arabica coffee exports recorded high growth to many markets, such as the US, Japan, Indonesia, the Philippines and Russia. 

Two-month wood exports to Japanese market sees slight fall

The export turnover of wood and wood products to the Japanese market in February is estimated to reach US$110 million, a drop of 32.5% compared to January and down 22.7% compared to February, 2023, according to figures released by the General Department of Customs.      

During the first two months of the year, the export turnover of wood and wood products to the Japanese market hit an estimated US$273 million, up 0.6% over the same period from last year.

During the first month of the year, although the export turnover of wood and wood products to the Far East nation showed signs of improvement, the export to this highly lucrative market in the year ahead is forecast remain unsatisfactory as consumer demand in the Japanese market has slowed, thereby driving the Japanese economy to fall into recession in the fourth quarter of 2023.

In the fourth quarter of 2023, Japanese gross domestic product (GDP) witnessed an annual decrease of 0.4%, after suffering a 3.3% decline in the third quarter of 2023.

The major cause of Japan's economic decline is that domestic demand in all sectors are falling, including private consumption.

Only external demand, expressed through the export value of goods and services, contributed to an increase in GDP growth. Furthermore, weak consumer demand has caused imports of goods, especially non-essential goods such as wood and wood products, to slow down in the Japanese market.

For wood chips and wood pellets, import demand in Japan decreased slightly in January.

Vietnam represented the second largest wooden furniture supply market for Japan in January, reaching 12.5 thousand tonnes worth YEN5.2 billion, equivalent to US$34.6 million, down 20.6% in volume and down 13.5% in value compared to January, 2023.

In contrast to the less positive factors, the export of wood and wood products to the Far East nation is also supported such as wood chips and wood pellets.

Japan is therefore focusing on developing many thermal power plants using wood chips and pellets, with this trend of increasing imports expected to continue in the near future, opening up new opportunities for the Vietnamese wood industry.

Rice sector needs stronger linkage chain

Although Việt Nam holds huge potential to boost rice export in 2024 as the world is forecast to face a shortage of about five million tonnes of the grain, limitations in linkage chain must be tackled for the industry to move forward.

According to Deputy Minister of Agriculture and Rural Development Phùng Đức Tiến, a stronger linkage chain will enable risk sharing and harmonised benefits, helping the rice sector develop sustainably.

Production linkage has an important role to play in agricultural production since it will help prevent the situation that bumper crops drag down rice prices.

Since the rice linkage remains weak, the agricultural ministry has penned a project to develop rice production chain, with the participation of 14 provinces across the nation, Tiến said, adding hi-tech farming models deployed in the chain so as to improve the competitiveness of the sector, making it better integrate in the global supply chain.

The US Department of Agriculture forecast that the global rice supply is no longer abundant in 2024 when rice output of India, accounting for more than 40 per cent of world rice export, would decline by around four million tonnes to 132 million tonnes.

Other major exporters such as the Philippines, Indonesia, Thailand and Cambodia are also predicted to see dropping rice output due to the impacts of El Nino and climate change.

The Ministry of Industry and Trade said that Việt Nam will enjoy a robust year of rice export due to great demand from Indonesia, the Philippines, Malaysia, China and several African countries for fear of El Nino which could linger till mid-2024.

Right in January, Indonesia opened a tender to import 500,000 tonnes of rice to bolster the country’s food reserve, with Vietnamese companies winning contracts to supply nearly 400,000 tonnes. This signals a positive outlook for a successful year for the rice sector.

Statistics from the agricultural industry showed that Việt Nam exported 1.02 million tonnes of rice for US$708 million in the first two months of this year, up 49.8 per cent in value year-on-year.

The country aims to ship some 6.5 million tonnes of rice abroad this year. 

Hanoi to spend US$203 million on roads to ease congestion

The Phap Van-Cau Gie highway is the main road from Hanoi to the south of the country.

Hanoi plans to spend around VND5 trillion (US$203 million) on three infrastructure projects to ease traffic at its southern gateway.

One of the three projects is the new road connecting Phap Van-Cau Gie Highway with Ring Road No.3.

The project aims to provide drivers with an additional route from the city's southern gateway into the metropolitan area, easing traffic and better linking the capital to surrounding localities.

Hanoi expects the project to boost socio-economic growth in Hoang Mai and Thanh Tri districts, as well as other areas to the south.
With a 3.4-kilometer-long and 60-meter-wide design, it has six lanes for cars and two lanes for both cars and other vehicles.

Costing VND3.24 trillion (US$131.5 million), the project is scheduled for completion in 2025.

Secondly, the city plans to complete the construction of a new 19-km cross-district road on the eastern side of the Phap Van - Cau Gie highway by 2025.

The new service road will stretch from Thuong Tin District's Van Tao Commune to Phu Xuyen District's Dai Xuyen Commune.

The project's investment is around VND1.3 trillion ($52.8 million). It is expected to improve the transport network in local areas to better connect with the highway.

Once completed, the service road will make it easier for the two suburbs to realize their socio-economic plans and pave the way for Phu Xuyen District to become a satellite city in the future.

In addition, capital authorities plan to complete the second phase of upgrading National Highway 1A in Thuong Tin District, widening a 1.6-kilometer long and 19-meter wide section.

The total cost is estimated at nearly VND500 billion ($20.3 million), including VND346 billion ($14 million) for land requisition and resettlement, and VND107 billion ($4.3 million) for construction.

The Phap Van - Cau Gie highway is 30 kilometers long and has eight lanes for cars. It is the car-only highway that connects Hanoi with provinces south of the city, such as Ninh Binh, Nam Dinh, Thai Binh, Thanh Hoa, and Nghe An. It is part of the North-South National Highway.

The road is often congested with large numbers of cars traveling between the southern provinces and Hanoi, especially during national holidays.

It is estimated that an average of 75,000 cars use the road every day. During the busiest days of the Tet (Lunar New Year) holiday, the figure reached 137,000 cars per day.

Auto manufacturers offer good discounts to boost sales

After the Tet holiday, automobile manufacturers in Vietnam have adjusted the selling prices of strategic products which are applicable from this March to prepare for the peak seasons for auto sales from the second quarter of 2024.

For instance, in March 2024, Toyota Vietnam announced new retail prices for some car models with a maximum reduction of up to VND47 million while the Hilux model was offered for sale at attractive prices. Accordingly, the price of the Japanese manufacturer Toyota-produced car model Toyota Vios was reduced from VND21 million-VND47 million depending on the version and Vios E-MT model had the lowest price with only VND458 million.

This is also a car model favored by transport businesses thanks to its reasonable price, durable operation and low maintenance costs.

Although the Toyota Veloz Cross is no longer as hot as it was in 2022, it is still in the top 3 best-selling car sales of Toyota in Vietnam after Vios and Corolla Cross. In March, this car model's price was sold from VND638 million to VND660 million or its price was reduced to VND20 million-VND38 million.

Mitsubishi Motors Vietnam dealers also maintained a 50 percent discount program on registration fees for car models including Attrage, Outlander, Pajero Sport, and Triton. At the same time, customers who buy these car models will also receive accessories such as a reversing camera, 360 camera, and shark fin antenna in March. Particularly, dealers also give a 360 camera for the Premium version of the best-selling car model in the market, Mitsubishi and buyers of the remaining 2 versions will be given gifts worth VND10 million-VND15 million.

In particular, the price of Mitsubishi Xforce car line suddenly dropped from VND19 million to VND21 million depending on the version right after its launch. The promotional program has been applicable for all customers who purchase or deposit a car from March 2024, or those who have made a deposit before.

Honda also reduced new car prices in March but did not apply to the listed price but deducted costs directly. Accordingly, those who buy all CR-V models released in 2023 will receive a cash discount of VND30 million, 100 percent registration fee support, along with a number of other incentives from Honda dealers. For their part, City RS, HR-V, Civic and Accord all receive a reduction equivalent to 50 percent in registration fees, insurance and several other incentives.

Luxury auto brand Mercedes-Benz has also just conducted a series of discounts on 2022 inventory models, including 15 car versions of the following lines such as C-Class, E-Class, GLA, GLB, GLE, and V-Class.

Dealers of Mercedes-AMG GT 53 4MATIC+ Couple FL model offered substantial discounts up to VND 719 million; hence, buyers only pay VND5.99 billion to own a car. Three other versions of the Mercedes-Benz GLE 450 also saw a discount of up to VND669 million bringing the price to VND3.89 billion - VND3.99 billion. Some other models have lower reductions from VND210 million to VND320 million.

Notably, prices of Mercedes-AMG high-performance car models this time also dropped dramatically for instance, Mercedes-AMG GLE 53 4MATIC+ Coupe was reduced by up to VND620 million and it fetches VND2.23 billion.

Generally, unlike in 2023, car manufacturers and distributors have begun to adjust their sales policies and incentive programs to sell all used cars while boosting sales of strategic car models and launching the latest products. They are also ready for all choices when the market recovers.

Over 480 businesses to attend Vietnam Expo 2024

Vietnam Expo 2024, the largest trade fair in Vietnam, will be held at the Hanoi International Exhibition Centre in the capital city from April 3-6.

According to Vinexad, the 33rd edition of Vietnam Expo will attract the participation of over 480 businesses from 16 countries and territories, including India, the Republic of Korea, Russia and China, among others, showcasing their products at 550 booths.

With achievements recorded in 2023, an India delegation, led by the India Trade Promotion Organisation (ITPO), will join the event, creating a basis for cooperation and exchange between the two countries'  business community in 2024 and following years. 

2024 is the 25th consecutive year that the Korea Trade-Investment Promotion Agency (KOTRA) has selected Vietnam Expo as a special event for promoting trade, commerce and investment. The event will continue to serve as a bridge to boost bilateral relations.

This year marks the 30th anniversary of the signing of the Treaty on Principles of Friendly Relations between Vietnam and Russia, the Russian pavilion will gather leading enterprises from Moscow who are interested in exploring the market of Southeast Asian countries in general as well as seeking business opportunities with Vietnamese partners in particular.

China is Vietnam's largest trading partner and second largest export market. The Chinese pavilion with a scale of over 100 booths will display machinery and equipment from major provinces and cities such as Fujian and Guangdong. The pavilion is expected to bring more opportunities for technology transfer and in investment cooperation.

This year’s Vietnam Expo will see the participation of nearly 50 domestic enterprises from 23 provinces and cities nationwide, including Ba Ria – Vung Tau, Bac Ninh, Ben Tre, Dak Nong, Dak Lak, Dong Thap, Hanoi, Ha Tinh, Hai Duong, Lai Chau, Lao Cai, Long An, Nghe An,  Nha Trang, Ninh Binh, Quang Binh, Quang Ninh, Quang Nam, Thanh Hoa, Tien Giang, Thai Nguyen, Son La, and Yen Bai.

Held annually in Hanoi since 1991 by the Vietnam Trade Promotion Agency and Vinexad Company, the oldest trade fair in Vietnam is currently organised in Ho Chi Minh City every December, along with the one in the capital city every April.

Over the past 33 years, the Vietnam Expo has become a prestigious venue for Vietnamese businesses to promote and introduce their products, as well as for global trade promotion organisations that favour the Vietnamese market./.

VCCI proposes zero tax rate to be maintained for exported services

The Việt Nam Chamber of Commerce and Industry has proposed a zero-value added tax (VAT) rate to be maintained for exported services, over worries that tax hikes would undermine the competitiveness of Vietnamese providers against foreign rivals.

The Ministry of Finance is drafting amendments to the Law on Value Added Tax which will be proposed to the National Assembly for consideration in the seventh meeting in May this year.

In the draft, the ministry wants to impose VAT on most exported services, instead of the zero rate as currently.

Specifically, only international transportation and vehicle rental outside Việt Nam and some related services are proposed to be maintained at zero tax rates, while others will be subject to VAT rate, commonly at 10 per cent.

The reason for the amendment is that tax authorities found it difficult to distinguish between revenues from exported services and from domestically consumed.

VCCI said that the imposition of 10 per cent VAT rate when exporting will make it difficult for Vietnamese services providers to compete with foreign rivals.

International trade of services increased strongly in the global market during the past two decades and is forecast to remain robust in coming years, along with the vibrant development of Internet and remote work solutions, VCCI said, citing statistics of the World Bank that global export of services jumped from US$400 billion in 1980s to more than $7.2 trillion in 2022, with an average annual growth rate of 6.5 per cent from 2003 to date.

The international transportation service accounts for a significant proportion but it is dropping, from 30 per cent in 1982 to 17 per cent in 2020, while telecommunications and IT services are rising.

Statistics showed that global telecommunications and IT services export is expanding at 12.3 per cent annually on average from 2004. The rate has been rising more rapidly since the COVID-19 pandemic.

According to the VCCI services export has huge potential for development. Việt Nam’s export of services reached $20 billion in 2023 with an average annual growth rate of 11 per cent, higher than the country’s gross domestic growth rate. Việt Nam is running a trade deficit of services worth more than $10 billion each year.

Providing exported services does not require huge capital like investing in manufacturing and processing industry, which is appropriate in a capital-shortage economy like Việt Nam.

In addition, Internet-based services export helps promote the country’s image and increase “soft power”, VCCI said.

Việt Nam is an export-oriented economy with export being an important growth driver with an average annual growth rate of nearly 15 per cent, VCCI said, emphasising that zero VAT on exported services plays a significant role.

According to VCCI, most countries around the world are imposing zero VAT on exported services and allow tax refunds on inputs.

Thus, VAT on exported services should be kept at zero, VCCI said.

Major exporting services of Việt Nam include manufacturing outsource, maintenance and repairing, tourism and transportation, insurance, financial services, IT and information services. 

Businesses call for greater support in face of growing challenges

Businesses are in urgent need of additional support in the face of ongoing challenges in 2024, as well as the implementation of green production and digital transformation, said industry experts and insiders. 

Many businesses have voiced concerns over a lack of information and support policies despite growing interest in the business community for the promotion of green production and digital transformation.

A survey by the Đồng Nai Business Association, home to a large number of both domestic and foreign companies in southern Việt Nam, revealed most businesses have been struggling with weak consumer demand, which has resulted in reduced working hours for workers, especially in export-oriented companies. 

They said complicated administrative procedures, regulations and implementation guidelines hindered their ability to access the Vietnamese government's various support benefits, notably the credit support package under Decree 31/2022/NĐ-CP. For example, the country's fuel market, despite experiencing severe disruption in 2023, had been operating without significant support policies, which left retailers with close to zero discounts since the beginning of 2022.

To make matters worse, regulations often overlap and create unnecessary hurdles for businesses instead of helping. For example, under Decree 136/2020/NĐ-CP on fire prevention and fighting regulation, businesses were told to implement new firefighting plans over the existing ones, which led to additional compliance costs for many. 

Nguyễn Minh Châu, vice chairman of the association, called on the Government to simplify administrative procedures and grant businesses easier access to credit. At the same time, there should be additional directives to help ministries and other governmental bodies to quickly amend and adjust regulations that are no longer suitable or beneficial to industries, especially fuel trading and retailing, to avoid and minimise market disruption. 

The business community also called for greater support from provincial governments regarding access to capital, interest rates, tax exemptions and reductions in fees, as well as additional trade and investment promotion events. They said such events could help connect businesses with potential investors, transfer technological know-how and attract much-needed capital.

Deputy chairwoman of the Đồng Nai's Provincial People's Committee Nguyễn Thị Hoàng said in 2024, businesses in the province would likely face difficulties due to input material shortages, rising fuel prices, and increased transportation costs. She said the province's top priority this year would be to provide businesses with more support mechanisms and policies, including more streamlined administrative procedures and timely assistance for all business needs. 

On the topics of green production and digital transformation, business representatives said they had not been well informed on the specific criteria, regulations and support programmes, or were not even aware of any on a local level.

"It will be difficult to get businesses moving in that direction without stronger efforts to collaborate with business associations to disseminate this information in the business community," Châu said. 

Lê Bạch Long, chairman of the Young Entrepreneurs Association of Đồng Nai, said effective two-way communication between provincial leaders, departments, local authorities and the business community would be crucial to motivate businesses to implement their production and business plans. 

Lukewarm reception for VNĐ120 trillion credit package

The VNĐ120 trillion (US$4.87 billion) credit package for social housing and workers' housing has received a lukewarm reception from potential borrowers, said participants at a conference held yesterday in Hà Nội to discuss measures to speed up its disbursement. 

According to the State Bank of Vietnam (SBV), only 68 of such projects, located in 28 out of 63 cities and provinces across the country, have been announced to date. Of these, just 30 have signed up for the fund with the remaining may not require the money at all as they have either been completed or secured funding sources. 

Commercial banks said they remained committed to providing up to VNĐ7 trillion to 15 out of the 30 mentioned-above projects including cash injection, credit to investors and to homebuyers. To date, VNĐ640 billion has been disbursed, out of a total amount of VNĐ1.9 trillion in credit to investors while VNĐ6 billion has been disbursed to homebuyers.

BIDV has disbursed funds to investors in Phú Thọ, Thanh Hóa and Bình Dương in the amount of VNĐ95.7 billion, Vietinbank to investors in An Giang in the amount of VNĐ128.6 billion and VNĐ400 million to homebuyers, Agribank to investors in Bắc Ninh, Quảng Ninh and Kiên Giang in the amount of VNĐ415.7 billion and VNĐ5.7 billion to homebuyers.

Nguyễn Tuấn Anh, director-general of the Housing and Urban Development Corporation (HUD) said the lukewarm reception of the credit package was due to many localities facing a shortage of suitable and available land resources, as well as time-consuming administrative procedures on the banks' part. 

Investors and developers have long voiced their concerns over the package's high interest rates, which ironically have not been lower than the market's rates despite being earmarked for social housing development. To make matters worse, the process of purchasing social housing units has been said to be complicated and time-consuming.

At the conference, industry insiders and experts called on commercial banks to lower interest rates to around 6 per cent a year for homebuyers and to 9-9.5 per cent a year for investors.

Meanwhile, commercial banks confirmed they have been facing difficulties in finding borrowers for the package. They said many borrowers have not shown up to collect the funds even after credit agreements were signed for significant amounts, preferring to use their own funds first. 

Lê Ngọc Lâm, director-general of BIDV, said BIDV has been working around the clock to seek out and approach potential borrowers. The bank said it has approved nearly VNĐ1 trillion in credit but only disbursed VNĐ96 billion so far, reflecting borrowers' hesitancy at the package.

Phùng Thị Bình, deputy director-general of Agribank, said the bank has signed credit agreements with eight social housing projects for an amount of VNĐ2.5 trillion but disbursed only VNĐ400 billion so far. She contributed to the package's slow disbursement pace to projects facing legal issues and the narrowly defined groups of potential buyers of social housing projects.

For example, BIDV said it provided funds to a social housing project located in Thuận Thành Town, Bắc Ninh Province. However, once the project was completed the project's investor couldn't make enough sales because the provincial authority only allowed workers residing in the province to make purchases. Hundreds of applications to buy were disqualified out of the gate, leaving the investor in a mountain of debt, the bank's money in limbo and apartment units unused. 

Representatives from BIDV called on the Ministry of Construction (MoC) and local governments to streamline legal procedures for projects and expand the target group for renting and buying social housing.

Speaking at the conference, SBV deputy governor Đào Minh Tú said all eligible projects must receive funding on time and that the package plays an important part in the country's target of building 1 million social housing units.

Regarding higher-than-expected interest rates, the banks said the source of funding in the package comes directly from the banks, unsupported by the state's budget, and therefore, must be set competitively. They called on the government to provide additional assistance to lower the rates.

Deputy minister of construction Nguyễn Văn Sinh said that the ministry has requested localities to report on the implementation of the package to identify difficulties and potential solutions. 

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