The State Bank of Vietnam (SBV) has decided to widen the trade band of USD/VND spot exchange rate from +/-3% to +/-5%, effective from October 17.

According to the SBV, between the beginning of 2022 and now, the US Federal Reserve (Fed) and many major central banks have tightened monetary policy, and raised interest rates.

Meanwhile, the Russia-Ukraine conflict has disrupted the global supply chain, pushed up gasoline and commodity prices, causing great fluctuations in the international and domestic markets.

In response, the State Bank has proactively and flexibly implemented tools, solutions and interventions to maintain stable and smooth operation of the currency and foreign exchange markets.

The bank said after the latest trading band adjustment, it will continue to closely monitor market developments, coordinate monetary policy tools, and stay ready to sell foreign currencies to stabilise the market when necessary.

Business matching event seeks to boost pepper trading with France

The Vietnam Pepper Association (VPA) recently coordinated with the French Chamber of Commerce and Industry and the Vietnamese Embassy in France to hold a business matching event in Paris to boost pepper trading.

The event on October 14, part of the national trade promotion programme of the Ministry of Industry and Trade, attracted nearly 20 major producers and exporters from Vietnam and 30 spice importers, wholesalers, and retailers from France.

France is also considered a “filter” because if major pepper exporters of Vietnam can connect with large importers and distributors of France, aside from consolidating their brands, their products can further made inroads into the potential EU market, she noted.

On this occasion, the VPA is taking part in SIAL Paris 2022 from October 15 to 19, with eight pepper and spice enterprises of Vietnam displaying their products at this international food trade show.

Customs authority urges use of rail transport for farm produce export

The General Department of Vietnam Customs has asked relevant parties to boost the exportation of agricultural products by rail, especially across the northern border, in response to overloaded land transport and soaring costs.

The Ministry of Finance said the international imposition of strict anti-COVID-19 measures since the beginning of 2020 has affected global supply chains, leading to sea and land transportation congestion and rising expenses.

In particular, China’s “zero-COVID” policy with stringent anti-pandemic measures has hampered the flows of goods, vehicles, and people across the northern border. Thousands of vehicles carrying export commodities encountered jams in border areas of both countries, which has caused considerable losses to enterprises.

Facing that fact, the Government, ministries, and sectors have been taking various measures to facilitate trade and customs clearance, particularly for farm produce, but difficulties have yet to be thoroughly addressed.

Meanwhile, railway transportation is relatively smooth, cost effective, and the pandemic has not impacted rail as much. Therefore, many businesses are switching to this type of transport for trading activities, according to Vietnam Customs.

Given enterprises’ demand and proposal, the general department has called for increasing exportation of farm produce by rail, which it said is also a policy and direction of the Government.

Earlier, the Government had instructed the Ministry of Transport to coordinate with other ministries, agencies, and localities to make plans to improve the capacity of international rail freight transport to serve export and import.

Deputy Prime Minister Le Van Thanh ordered ministries, agencies, and localities to work to optimise other means of transport such as sea and rail transport to deal with congestion at northern border gates.

Implementing those directions, the Finance Ministry requested increasing investment in railway infrastructure to meet freight transportation demand.

Removal of fishing “yellow card” an urgent task: Deputy PM

Vietnam has been doing its utmost to fight Illegal, Unreported and Unregulated (IUU) fishing in an attempt to lift the European Commission (EC)’s “yellow card” warning against its seafood exports and avoid a “red card” which could lead to a trade ban.

Removing the “yellow card” is a very urgent task, Deputy Prime Minister Le Van Thanh told a meeting of the National Steering Committee on IUU Fishing last month, given that officials from the EC are scheduled to visit Vietnam at the end of October to check measures against IUU fishing, along with fishery infrastructure.

Thanh requested the establishment of inter-disciplinary task forces at national and provincial levels to stop violations of IUU fishing rules.

Local coast guards, border guards, fishery surveillance forces and police must increase patrols and inspections at sea and fishing ports while awareness campaigns must be intensified for fishermen to better understand the risks and negative impacts of IUU fishing, he added.

According to Deputy Director General of the Directorate of Fisheries Tran Dinh Luan, vessel monitoring systems have been installed on 95.27% of Vietnamese fishing ships. Drones are now used as surveillance tools to combat illegal fishing and authorities keep records of high-risk fishing vessels that are likely to encroach foreign waters.

Vietnam adopted the Law on Fishery in 2017, setting solutions to sustainably develop the sector and act on the EC’s recommendations against IUU fishing. In mid-September, the country approved a national plan against IUU fishing, which aims to put an end to IUU fishing by 2025.

Data from the Vietnam Association of Seafood Exporters and Producers (VASEP) shows that Vietnam’s aquatic exports hit 8.5 billion USD in the first nine months of 2022, a surge of 38% from the same period last year. The best performers included shrimp (nearly 3.4 billion USD) and tra fish (nearly 2 billion USD).

Market tools help businesses export: experts
     
Businesses should look more into using market research tools to identify foreign trade opportunities amid rising challenges, experts have said.

Speaking at a conference last week on helping businesses expand export markets, Huynh Minh Vu, deputy director of the HCM City Centre of International Integration Support (CIIS), said Viet Nam’s integration and free trade agreements were providing enormous export opportunities.

But many countries were increasingly using non-tax barriers to protect their domestic markets.

Global inflation was also changing the behaviour of consumers in Viet Nam’s key markets such as the US and the EU, making them prudent with their spending and buying fewer non-essential products, he said.

This was hindering Viet Nam’s key exports such as textile and garment, footwear and wood furniture, he said.

Le Viet Dung Linh, a market research expert at the International Trade Centre (ITC) Viet Nam, said that Vietnamese businesses could use ITC’s market research tool for free.

Businesses could use the tool to analyse import and export opportunities, market sizes for various products and overseas market trends, he said.

They could also keep up to date with sanitary standards and technical barriers in various markets, and can even be notified of the latest developments, he added.

Rural tourism development to be improved to meet potential
     
Experts consider rural areas a 'gold mine' for the tourism industry to diversify products, and there is a lot of work to be done.

Statistics from the World Tourism Organisation (UNWTO) show that the number of tourists participating in rural and ecological forms of tourism accounts for about 10 per cent, with revenue of approximately US$30 billion per year. On average, each year, the proportion of rural tourists increases by 10-30 per cent.

In Viet Nam, rural destinations had received considerable attention, especially after the tourism industry opened its doors to international visitors after the pandemic, said the chairman of the Vietnam Tourism Association Vu The Binh.

With nearly 65.6 per cent of the population living in rural areas with beautiful landscapes and preserving many cultural and historical values, Viet Nam has potential and strengths in rural tourism development in three forms: community tourism, agro-tourism and ecotourism, according to the chairman.

Chairman of the Tourism Advisory Council Tran Trong Kien said that the rural tourism model had not only brought livelihoods to farmers but also contributed to preserving and promoting traditional cultural values and ecological landscape, all while supporting the diverse and sustainable development of tourism destinations.

According to information from the Vietnam National Administration of Tourism, the country currently has 365 rural tourist destinations in 37 provinces and cities and more than 2,000 traditional craft villages with potential for further development. In many localities, rural tourism is spearheading economic development.

Chairman of the Vietnam Community Tourism Association, Pham Hai Quynh, said that the drawback of rural tourism was the lack of synchronous infrastructure and quality accommodation facilities to keep guests staying longer.

Chairman of Ha Noi Travel Association, Phung Quang Thang, said that rural tourism products were still poor while the labour force, who were mostly local people, had weak knowledge and skills to perform tourism services.

Deputy Director of Ha Noi Department of Tourism Tran Trung Hieu added that the number and scale of agricultural tourism enterprises were limited, and the system of supporting infrastructure for agricultural tourism was not synchronous, making it difficult for tourists to access this type of tourism.

Tourism experts said the locality needed to plan and invest in rural tourism to overcome these inadequacies. Inviting experts to build attractive and unique tourism products that achieve high efficiency was necessary.

Chairman of the Viet Nam Tourism Association Vu The Binh pointed out that developing rural tourism required localities to have specific regulations and appropriate policies on the conversion of agricultural land use for tourism development.

Fruit and vegetable exporters urged to further diversify export markets
     
Vietnamese fruit and vegetable exporters need to further enhance deep processing and diversify their export markets to avoid risks when major export markets face difficulties, the Asia-Africa Market Department said.

Do Quoc Hung, the department’s deputy director general, said Viet Nam’s fruit and vegetable exports were worth US$3.5 billion last year, accounting for less than 1.4 per cent of the world’s total fruit import revenue.

With China tightening inspection under its Zero COVID policy, Viet Nam’s fruit exports to that market had reduced to account for 56 per cent of total exports in the first eight months of the year compared to 70-80 per cent before COVID, he said.

Businesses had sought to promote exports to other markets but not enough to offset the drop from the Chinese market, he said.

Dang Phuc Nguyen, general secretary of the Viet Nam Fruit Vegetable Association, said Viet Nam’s fruit and vegetable exports in the first nine months of the year dropped by 11 per cent year-on-year to about $2.45 billion, with exports to China down by 35 per cent.

In the context of a sharp decline in the country’s largest export market, local fruit and vegetable exporters had promoted exports to markets that the country has free trade agreements with and had witnessed a significant increase in exports in these markets, including those that require high standards such as the US, EU and Japan, he said.

He said HortEx Vietnam 2023, the largest professional exhibition for the horticultural and floricultural sector, would be a good opportunity for local businesses to meet international buyers to seek new export opportunities.

Ingrid Korving, agricultural counsellor at the Netherlands Embassy in Ha Noi, said each year, the EU imported about $120 billion of horticultural products, accounting for 40 per cent of global imports. Exports from Viet Nam to this market accounted for roughly 4 per cent of EU needs.

After more than three years of absence due to the COVID-19 pandemic, HortEx Vietnam will return to HCM City from March 1 to 3, 2023.

The fifth edition of the exhibition is expected to attract 250 exhibitors from 30 countries and about 7,000 trade visitors.

The exhibition will also feature many activities such as a series of specialised seminars, an export forum, business matching and VIP buyer programmes, and others.

According to the organisers, the exhibition aims to create a meeting place for Vietnamese and international businesses and experts in the horticulture and floriculture industry, where suppliers and buyers can meet, exchange information and seek business opportunities.

Held by the Minh Vi Exhibition and Advertisement Services Co., Ltd, and the Netherlands’ Nova Exhibitions B.V., the exhibition will take place at the Saigon Exhibition and Convention Centre. 

Vietnam should create favorable conditions to nurture businesses: experts

Former Chairman of the Vietnam Institute of Economics Tran Dinh Thien commented that a nation cannot be prosperous without healthy private businesses. These corporations  become the pillars of the national economy and make way for other companies to grow via their supplying chains. Sadly, the situation of private businesses in Vietnam is rather gloomy.

Statistics show that in the first 9 months of this year, there were over newly registered or returning 163,000 businesses, an average of 18,100 companies a month. The Ministry of Planning and Investment reveals that over 96 percent of Vietnamese enterprises are of small and medium scales.

Mr. Thien said that the average lifespan of many domestic businesses is just 4-5 years, which cannot contribute much to the national economy and might become a waste of resources. This means the business environment in Vietnam is not truly open, and there are still various barriers.

Former Chairman of the Central Institute for Economic Management Nguyen Dinh Cung said that the short lifespan of many domestic companies is because of the public awareness about the private business sector. Besides, the State still focuses mostly on the management aspect, and thus introducing several overlapping regulations, creating confusion among private businesses.

Minister of Planning and Investment Nguyen Chi Dung said that even though the private business sector has had many important contributions to the socio-economic growth of Vietnam, it is rather weak as to quantity and quality, which does not match its potential. In the upcoming time, the global geopolitical and economic context is still complicated, creating both opportunities and challenges.

In order for this sector to be healthier, the State should continue to provide a more favorable environment with transparency, safety. There must be a fair mechanism among businesses as to access the land and natural resources, capital sources. Businesses should receive sufficient support to approach potential markets, to carry out the digital transformation process.

Meanwhile, private enterprises should actively take advantage of even the smallest chance and devise suitable measures to adapt to changes and fluctuations in the future, to keep abreast of new trading trends, to switch to green sustainable business models, to improve the value of their own brands, and to promote business ethics, corporate culture.

Vietnam determinedly boosts seafood industry

The People’s Committee of Soc Trang Province has just cooperated with the Ministry of Agriculture and Rural Development, related units to organize a conference themed ‘Resolving Difficulties for the Seafood Industry to Rise to the Top of the World’.

General Secretary of the Vietnam Association of Seafood Exporters and Producers Truong Dinh Hoe informed that in the first 8 months of this year, the national seafood export turnover reached US$7.7 billion (a rise of 38 percent compared to this time last year). In particular, the shrimp, pangasius, and tuna export turnovers were $3 billion, $1.8 billion, and $729 million, respectively.

The Vietnam seafood industry is now facing the challenges of unpredictable impacts of climate change, drought and high salinity level, environmental pollution, the ‘yellow card’ from the European Commission for fishing in Vietnam, spontaneous and unstable development, over-exploitation compared to regeneration capacity, outdated working equipment, low performance and quality, high fuel prices, outdated breeding facilities and materials, dependence on foreign countries as to equipment and materials.

Minister of Agriculture and Rural Development Le Minh Hoan commented that the sea resources in Vietnam are rich but not unlimited. Hence, the reduction of exploitation and promotion of aquaculture is a better measure. To address problems in this industry, there must be close cooperation among stakeholders, be they farmers, exploiters, or seafood businesses.

According to the Directorate of Fisheries (under the Ministry of Agriculture and Rural Development), Vietnam's seafood industry from 2010 to 2021 achieved a good growth rate of over 5 percent a year. Notably, Vietnam accounts for 5.5 percent and 4.4 percent of the global import-export turnover and total output, respectively (the third in the world). The national export turnover of this industry in 2021 was $8.6 billion, contributing 3.4 percent to the agricultural GDP and providing jobs for nearly 4 million laborers.

Coastal localities see better results in fighting IUU

Vietnam’s 28 coastal localities have scored achievements in fighting illegal, unreported and undocumented (IUU) fishing towards having the  “yellow card” warning of the European Commission (EC) lifted.

Deputy Director of the Ba Ria-Vung Tau provincial Department of Agriculture and Rural Development Pham Thi Na said the provincial authorities had directed relevant forces to intensify inspections of fishing ships, especially before their departure and after their landing at ports. The province also set up a coordination mechanism with the Vietnam Coast Guards and the High Command of Military Zone II to detect  and handle vessels that commit IUU fishing.

Deputy Director of the Phu Yen provincial Department of Agriculture and Rural Development Nguyen Tri Phuong said the province has prevented violations of foreign waters by closely monitoring vessels through Vessel Monitoring Systems and by having all captains signed commitments to not violating foreign waters.

Statistics showed that Vietnam is now home to nearly 92,000 fishing vessels. As of late September, over 95% of them were equipped with monitoring devices, up nearly 5% from the previous month.

Seafood caught outside Vietnam’s waters are ensured to follow Vietnam’s law and the Agreement on Port State Measures, thus facilitating the management and licensing of aquatic products for export to the European Union.

Vice Chairwoman of the Vietnam Association of Seafood Exporters and Producers (VASEP) and head of the IUU VASEP Executive Board Nguyen Thi Thu Sac suggested that the Vietnamese Ministry of Agriculture and Rural Development (MARD) give priority to technology solutions to modern fishing management and improve the process of granting relevant papers such as fishing database and e-diary.

Leaders of ministries, agencies and 28 centrally-run coastal cities and provinces must raise their sense of responsibility for the issue, considering it an urgent and priority task.

An EC delegation will visit Vietnam at the end of October to inspect the fight of IUU fishing.

Each year, Vietnam earned 1-1.4 billion USD from exporting aquatic products to the EU, or 15-17% of the total export value of those products.

Investment proposed for expressway running through Hung Yen

The Ministry of Transport has submitted to the Government a proposal on investment in a section of the Cho Ben-Yen My expressway running through the northern province of Hung Yen.   

In reply, Deputy Prime Minister Le Van Thanh has assigned the ministry to instruct the Hung Yen People’s Committee in conducting procedures for the investment.

Under the road planning for 2021-2030 with a vision to 2050 approved in Decision 1454/QD-TTg dated September 1, 2021, the four-lane Cho Ben-Yen My expressway is 45km long with the starting point at Belt Road No 5 and the ending point at the Hanoi-Hai Phong expressway. It is scheduled to be built after 2030.

Foreign inflows influenced more by global trend

The orientation of foreign capital flows pouring into Vietnam is heavily influenced by global factors.

An investor watches stock indices on an electrical board. The capital flow into the Vietnamese stock market in September continued to be significantly influenced by the global trend.

Thái Thi Việt Trinh, an expert from SSI Securities Company, said that the capital flow into the Vietnamese stock market in September continued to be significantly influenced by the global trend.

Around the world, cash flow into financial assets continued to decline as investors reduced the proportion of risky assets in their portfolios. Market sentiment did not improve in September, with major central banks such as the US and EU emphasising the pursuit of tight monetary policy with the central goal of controlling inflation, Trinh said.

In September, foreign investors net sold on the Vietnamese stock market, with a total value of VNĐ3.5 trillion (US$144.9 million), the highest level since March this year. Foreign capital flow had been less positive since the second half of August, and was similar to the movements of foreign investors in the region; except Indonesia, thanks to the advantage of exporting raw materials. As for 9 months and excluding sudden transactions, foreign investors net bought VNĐ2.5 trillion.

Besides external risks, internal factors that have a negative impact on market sentiment were becoming more obvious, such as slowing GDP growth or the State Bank’s continuing to raise interest rates to stabilise the exchange rate environment, said SSI Securities Co.

According to Petri Deryng, Founder and Director of PYN Elite Fund, there is still demand to pour capital from investors in Thailand and other Asian countries, but it is not significant. If the market is upgraded, foreign investors can participate more in Vietnam.

He said that the Vietnamese market would still remain promising next year and be one of the most potential markets in the world. If the market is upgraded, more foreign investors could enter the market, which would be beneficial for the market in the long run.

In terms of global investment cash flows, SSI maintained a cautious view on the allocation of capital flows to financial assets, especially to equity funds, until the Fed meeting in November.

Although stock prices have reached low levels, the sentiment of the market will only become more positive if inflation decreases continuously, while the Fed's monetary policy management becomes looser in nature.

At the moment, SSI had not observed a big change in market sentiment. Similarly, equity inflows into emerging markets would be strongly influenced by the direction of the dollar, and there would be no breakthrough in inflows into emerging market for the rest of this year.

Analysts of VNDirect Securities also said that in the context of the Fed sending signals that the interest rate hike cycle might not be over soon, cash might still outflow from risky assets and markets; including the Vietnamese stock market.

Mirae Asset Vietnam Securities Company recommended investors be aware of pressures from the world that may negatively affect the growth and stability of the Vietnamese economy. In September, the USD/VNĐ exchange rate increased by approximately 1.9 per cent compared to the previous month. These external pressures might indirectly cause foreign investors to be net sellers in the near future.

Austrian firms seek opportunities in Vietnam

A delegation of enterprises from Styria, the second biggest in term of area and the fourth populous state of Austria, arrived in Vietnam last weekend to learn more about business opportunities in the Southeast Asian country.

The delegation was led by Regional Minister for Foreign Affairs Barbara Eibinger-Miedl.

An article recently published on Austria’s Kronen Zeitung newspaper said the Vietnamese economy is booming with the presence of more and more foreign firms and investors, which is a trend that firms in Styria do not want to miss.

It quoted Eibinger-Miedl as saying that there are ample opportunities for Austrian firms to invest in Vietnam in energy technology and environment, design and construction, as well as green technologies.

Chief Executive of the Internationalisation Centre Styria Robert Brugger said after 2 years of closure due to COVID-19 pandemic, now is the right time for Styria to rise again while Vietnam has also returned to its growth trajectory in a spectacular way. He quoted experts as saying that that Vietnam's economy could grow by 7% annually and Austrian businesses want to seek opportunities there.

According to the article, Vietnam’s industry is growing strongly with the emergence of new factories, especially those in Hanoi and Ho Chi Minh City. Therefore, the potential of cooperation related to infrastructure and environment solutions is huge.

Law revised to apply market-based approach in valuing land price

The draft revised Law on Land, which will be on the agenda of the National Assembly’s meeting for the first time this month, is receiving a lot of attention from the public as it will remove the Government’s land price framework to ensure market principles prices.

The change is expected to significantly help the development of the real estate market and the economy.

Currently the land price framework is promulgated by the Government every five years. From this framework, local people’s committees set their own price lists for calculating tax payments or calculating a land price for compensation for project clearance.

However, as the latest revision of the law was made in 2013, the land price bracket is currently too low when compared to the price traded directly on the market between the seller and the buyer. The real market price is always much higher than the local People’s committees’ set-up prices.

According to Dr. Nguyen Dinh Tho, general director of the Institute of Strategy and Policy on Natural Resources and Environment, the 2013 Law on Land stipulates that the land price in the framework must be equal to the market price, but in fact, is much lower. The current land price framework of most localities is 30-60% lower than market price.

Professor Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, said the big gap between the two types of land prices caused disputes, lawsuits, corruption and chaos in the real estate market.

The land market of Vietnam has long existed as a dual-price mechanism so the revised law is expected to remove the price gap.

To deal with shortcomings, the draft revised Law on Land removes the Government’s land price framework. It means the Government will no longer apply the minimum and maximum prices for each type of land. Instead, when issuing the land price list of each locality, the provincial People’s Committee will use methods of land pricing, land prices, and standards, and the fluctuations in actual land prices in the market to build price list.

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