Kon Tum - Ngoc Linh Ginseng Festival will be held in the Central Highlands province of Kon Tum biennially from 2024, according to a decision recently approved by the provincial People's Committee.

The event will feature a variety of activities, including domestic and international seminars on the value of Ngoc Linh ginseng, an exhibition showcasing Ngoc Linh ginseng plants and other medicinal herbs related to tourism development and lives of local ethnic communities.

It will also include a writing and short video competition about the plant, and displays of unique tourism products associated with Ngoc Linh ginseng and other One Commune One Product (OCOP) items, and various cultural and sport events.

Ngoc Linh ginseng (Panax vietnamensis, or Vietnamese ginseng), a rare medical root containing 52 saponin compounds helpful to health, was found on Ngoc Linh Mountain on the boundary between Kon Tum and Quang Nam provinces in the late 1960s.

Besides saponin, Ngoc Linh ginseng contains 17 amino acids, 20 trace minerals and 0.1 percent of attar. Ginseng promotes anti-stress and anti-aging. It also helps improve immunity, enhances liver functions, and lowers cholesterol. It also works well with antibiotics and diabetes medications.

One of the world’s most precious, ginseng was approved as a national product under the Prime Minister’s Decision 787/QD-TTg dated June 5, 2017.

By 2030, Kon Tum is expected to become one of the three provinces with the biggest Ngoc Linh ginseng cultivation area.

Aquatic product exports see slight increase in September

The export value of aquatic products is estimated at 862 million USD in September, equal to that in the same period last year, and 16 million USD higher than that of August, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

In the January-September period, the revenue reached 6.6 billion USD, down 22% year-on-year.

VASEP's Communications Director Le Hang said that in September, some key exports like shrimp and tuna have seen good recovery to the levels of the same month last year. Notably, tra fish exports recorded a year-on-year growth rate of 9%.

Hang said that in the first nine months of this year, shrimp exports fetched 2.55 billion USD, 25% lower than that of the same period of 2022.

However, in recent months, exports to the two key markets of the US and China have increased, and some main markets in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) such as Japan, Australia, and Canada are also increasing shrimp imports from Vietnam.

Similarly, tra fish exports are seeing recovery in such markets as China, Mexico, Brazil, the Netherlands, the UK and the US.

In the first three quarters, the value of exports to the three biggest importers of Vietnamese aquatic products, namely the US, China and Japan, all exceeded the 1 billion USD mark, of which the US was at the top with nearly 1.2 billion USD, followed by China with 1.15 billion USD, and Japan nearly 1.1 billion USD, down 33%, 15% and 14% year-on-year, respectively.

Ho Quoc Luc, former Chairman of VASEP, Chairman of Sao Ta Food Joint Stock Company, said that exports in the last months of the year will be difficult to make a breakthrough even though the decline has gradually narrowed over the months. He forecast that shrimp exports in 2023 would reach only about 85-90% of that last year.

VASEP expected that the country’s aquatic export revenue would be around 9.2 – 9.3 billion USD this year if there are no unexpected fluctuations in the market and the raw material source does not decline sharply.

Hung Yen looks to become "promising land" for foreign investors

The northern province of Hung Yen has focused on creating a safe, effective and competitive investment environment to turn the locality into a “promising land” for enterprises, particularly foreign investors.

Secretary of the provincial Party Committee Nguyen Huu Nghia affirmed that the province has set a goal to become an industrial hub and an attractive, safe, competent investment destination in its development strategy from now to 2023 with a vision to 2045. 

Under the strategy, Hung Yen pursues the strategic goal of developing modern industry and efficient agriculture towards rapid and sustainable growth on the basis of three pillars of high economic growth, harmonious society and well protected environment and ecology. 

According to the secretary, the province is an enticing investment destination due to several outstanding factors, including a convenient geographical location with a central position in the rapidly developing Red River Delta region and adjacent to the capital of Hanoi. 

He noted that the province attracts investors thanks to a convenient geographical location in the centre of the fast-growing Red River Delta and adjacent to Hanoi capital, developed trade and transportation infrastructure with convenient linkage to Noi Bai international airport, Hai Phong international port and major economic, commercial and industrial centres of the country.

Besides, Hung Yen boasts a rich network of tangible and intangible cultural heritages and was once a major economic centre. Lastly, the province has an abundant, highly skilled, and hard-working workforce.

The province currently has 17 industrial parks with total area of nearly 4,395 hectares, and has and will continue to invest in building modern, standard and synchronous technical infrastructure for the IPs so as to meet the demand of foreign investors and high-tech industrial projects.

The number of industrial parks in the province is expected to increase in the coming time, reaching 30 industrial parks with 9,540 hectares by 2030.

In addition, there are 25 industrial clusters with total area of over 1,200 hectares. The number is expected to increase to 52 with an area of 3,000 hectares by 2030.

Currently, the province is focusing on developing a synchronous industrial ecosystem, with priority given to specialised industrial, eco-industrial, high-tech industrial and supporting industrial parks, industry clusters. It is also shaping a complete living ecosystem including new urban areas, housing areas, medical and educational as well as cultural, sports, entertainment facilities to meet living and working needs of experts, leaders, business managers and workers. 

The secretary affirmed that Hung Yen provincial government remains committed to creating a safe, open, effective investment environment and continuously improving provincial competitiveness so that the province can become a safe destination and an ideal choice for investors.

Recently, Hung Yen has awarded investment certificates to 14 projects in the province, with total capital amounting to 732 million USD. Among them, the new Nitto Vietnam factory project in Thang Long Industrial Park II has the largest investment capital with 132 million USD. The factory specialises in producing LCD polarised films used for smartphones and cars, with a capacity of 176 tonnes or 48 million products a year.

According to the province's Management Board of Industrial Parks, in recent years, Hung Yen has promoted foreign investment attraction while creating favourable conditions for foreign investors investing in the province.  

The province is now home to 516 valid foreign-invested projects worth over 6.3 billion USD. Foreign investors come from many countries and territories, including the US, Japan, the Republic of Korea, among others. Japan leads in the number of projects with 173 with total registered capital of more than 4 billion USD, 169 of them have become operation, creating jobs for about 45,000 workers, contributing over 1.4 trillion VND (58 million USD) to the state budget in 2022 and about 880 billion VND in the first half year of 2023.

Construction businesses expect recovery thanks to public investment

Public investment is expected to become a momentum for the economy, especially for construction and transportation businesses, to recover and develop in 2023 and the following years.

Economic experts said the Government is accelerating the disbursement of public investment in the remaining months of 2023.

The groundbreaking of Long Thanh international airport project in late August is said to have positive impacts on various aspects, showing the determination of the Government, localities, and related businesses in speeding up the disbursement of public investment.

As a firm joining Package No. 4.6 within component project No. 3 of the project, Cienco4 Group (C4G) stated that this contract, with total investment of over 8.1 trillion VND (over 332 million USD), is hoped to serve as a significant boost for Cienco4's recovery and robust growth in the near future.

Apart from the project, Cienco4 has consecutively secured contracts for various significant projects, including the second phase of the North-South Expressway, Bung - Van Ninh section with a contract value of over 1.8 trillion VND, and Hau Giang – Ca Mau section with a value of over 1.7 trillion VND; package XL03 of component project 2 of Khanh Hoa - Buon Ma Thuot Highway project worth over 2.99 trillion VND; Ring Road No.4 - Hanoi Capital Region project worth nearly 900 billion VND, and Ho Chi Minh City's Ring Road No. 3 project worth over 1.41 trillion VND.

The group is expected to achieve revenue of over 3.24 trillion VND in 2024, representing a 15% increase compared to 2023, with main contributions by key projects such as the North-South Expressway Phase 2, Long Thanh international airport and Ring Road No.3 projects.

According to Mirae Asset Securities company, with several ongoing projects, companies, including Cienco4, are in a position to establish stability in their revenue streams, along with opportunities for growth and profitability in the coming years.

In addition to Cienco4, Deo Ca Traffic Infrastructure Investment JSC has recently announced a plan to issue shares for existing shareholders.

The capital mobilisation through issuing additional shares is taking place in the context that the firm has won numerous large construction contracts with a total value of more than 17 trillion VND in the first half of this year.

Deo Ca is carrying out construction work on contracts associated with five key projects, which include Quang Ngai – Hoai Nhon Expressway, coastal road to Da Nang's Lien Chieu Port, Cam Lam – Vinh Hao Expressway, a project to upgrade and expand Prenn Pass in Lam Dong province, and a coastal road project in Binh Dinh province.

Deposit interest rates anchored at low levels

Going against the usual rule of gradual increases in the last months of a year, deposit interest rates in most banks are anchored at low levels, and even some continue to decrease.

On the first day of October, deposit interest rates at some banks such as Vietnam Prosperity Joint Stock Commercial Bank (VPBank), Asia Commercial Joint Stock Bank (ACB), Bac A Commercial Joint Stock Bank (Bac A Bank) continued to be cut by 0.15 - 0.3 percentage point for various terms.

The highest rate at VPBank dropped to only 5.5% per year for 12-month and 13-month terms from the previous 5.8%. Those for terms from 6-9 months decreased from 5.3% to 5.1% a year. This interest rate is also applied for long terms of 15, 18, 24 and 36 months.

At ACB, the interest rate for deposits under 200 million VND (8,205 USD), with 6-9 month terms, has been cut from 5-2-5.3% to 5-5.1% a year. The bank has kept the 12-month term interest rate unchanged at 5.5% a year.

Meanwhile, the highest deposit interest rate at Bac A Bank decreased from 6.4% to 6.25% a year applicable to deposits of over 1 billion VND for 18 months or more.

Earlier, the Big 4, including the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank), and the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and the Vietnam Bank for Agriculture and Rural Development (Agribank), lowered their deposit interest rates to the lowest levels recorded during the COVID-19 pandemic.

The highest interest rate at these banks is only 5.5% a year, applicable for terms of 12 months or more.

At the same time last year, the interest rate of 8% a year was quite popular, applicable to terms of 6 months or more.

Joint efforts needed for sustainable development of rice farming in Mekong Delta

The Vietnamese agricultural sector is calling on all parties to join in the sustainable development of 1 million ha of low-emission high-quality rice production in the Mekong Delta so as to improve the quality and efficiency of the rice industry.

So said Le Thanh Tung, Deputy Director of the Crop Production Department under the Ministry of Agriculture and Rural Development, at a workshop held in Ho Chi Minh City on October 2 to discuss the role of the public - private partnership in the implementation of a project on sustainably developing 1 million ha of low-emission high-quality rice production in association with green growth in the Mekong Delta by 2030.

Tung said that as the rice bowl of Vietnam, the Mekong Delta not only helps guarantee national food security but also substantially contributes to annual rice exports.

The project was built amid the fact that over the past years, the agricultural sector has carried out the Government’s Decree No 120/NQ-CP on the sustainable development of this region, but there remain certain shortcomings in rice production.

Production efficiency, farmers’ income, and the quality and competitiveness of export rice are still modest. While rice cultivation has yet to be truly sustainable amid climate change, the reduction of greenhouse gas emissions has fallen short of expectations, Tung pointed out.

The project looks to cut production costs by 20% (equivalent to 9.5 trillion VND, or 389.4 million USD, over an output of 13 million tonnes of unmilled rice by 2030) and raise unmilled rice prices by 10% compared to the grain produced by traditional methods. With an average price of 5.1 million VND per tonne of unmilled rice, the 10% price increase will boost annual revenue from 1 million ha or 13 million tonnes by 7 trillion VND, thus raising profit from 1 million ha to over 16 trillion VND.

However, the official added there are numerous difficulties in the project implementation, and one of the challenges is how to attract investment.

The agricultural sector is calling on all parties, from cooperatives and businesses to international organisations, domestic and foreign experts, to engage in this project so as to mobilise all resources in society, including experience, technique and finance, for improving the quality and efficiency of the rice industry, he went on.

Tran Thanh Nam, Deputy Minister of Agriculture and Rural Development, said forming specialised zones of low-emission and high-quality rice in the Mekong Delta is a breakthrough project expected to help promote the added value throughout the entire rice production chain, raise farmers’ income, ensure sustainable development amid worsening climate change, contribute to green growth, and realise the Government’s commitments made at the 26th UN Climate Change Conference (COP26), including the target of net zero emissions by 2050.

The project will help production in high-quality rice farming zones be reorganised in value chains that better connect farmers, cooperatives, input suppliers, and rice purchasing companies. As a result, farmers will not only benefit from rice’s added value but also create sustainable cultivation processes, cut greenhouse gas emissions, save resources, recycle by-products of rice farming, raise the value of the Vietnamese rice brand in the market, according to the Deputy Minister.

Appropriate use of stabilisation fund important to restrain petroleum prices increases

The Ministry of Industry and Trade believes that the appropriate use of the stabilisation fund would be important to restrain increases in petroleum prices and reduce the impacts of these increases on the country’s socio-economic development.

From the beginning of this year, petrol prices have been raised 16 times with a total increase of VNĐ3,500 per litre. The latest increase was on September 21, which brought the petrol price to nearly VNĐ26,000 per litre.

Petrol prices are forecast to continue to increase towards the end of the year due to moves by major world producers to tighten supply.

According to the Mercantile Exchange of Việt Nam (MXV), Russia, the world's third-largest oil producer with a market share of 13 per cent globally, after the US' 16 per cent and Saudi Arabia's 13.5 per cent, has put a squeeze on the oil market with a diesel export ban, threatening to aggravate a global shortage.

Countries that imported fuel from Russia have been forced to look for supplies from other markets, and oil refineries around the world need to increase capacity to meet demand.

Phạm Quang Anh, director of MXV’s Information Centre, said that the move to tighten oil exports would increase petroleum prices in the last four months of this year. Brent oil prices are forecast to increase to $90-95 per barrel, while the price range of $100 per barrel would largely depend on the economic situation, especially the growth of the US and Chinese economies.

The continued increase in fuel prices might heavily weigh on the consumer price index (CPI), Anh said, adding that it was important to seek measures to stabilise petroleum prices.

The Ministry of Industry and Trade said that domestic petroleum prices had increased continuously due to fluctuations in the global oil market and the world economy over concerns about moves to tighten supplies by major producers.

According to a joint decision of the Ministry of Industry and Trade and the Ministry of Finance, in the recent adjustments of petroleum prices on September 21, VNĐ300 was used from the petrol price stabilisation fund for each litre of petrol, diesel oil, and kerosene, a very modest level compared to the fund’s balance of more than VNĐ7.4 trillion.

Regarding the use of the stabilisation fund, the Ministry of Industry and Trade said that the use of the fund was implemented in accordance with the finance ministry’s circular 103/TT-BTC, which states that the fund is used when the increases in petrol prices are from 7 per cent.

Seven recent increases in petrol prices were all below 7 per cent, meaning that the fund had not been used in these adjustments, the ministry stated.

Expert Nguyễn Tiến Thoả said that it was necessary to amend regulations about the use of the petrol price stabilisation fund to ensure it works to stabilise petrol prices.

Expert Vũ Vinh Phú said that the existing taxes and fees on petrol remained at high levels, an important factor pushing up domestic retail petrol prices.

Reducing taxes and fees related to petrol imports could help lower petrol prices, Phú stated.

Việt Nam also needed to build a transparent oil and petrol market in line with regional and global markets, which would help better harmonise benefits between the State, enterprises, and residents, he stated.

The Ministry of Industry and Trade said that in order to restrain increases in petrol prices, the ministry proposed solutions to the Prime Minister, including the efficient use of the stabilisation fund.

A representative from the Ministry of Finance’s Price Management Department said that petrol was among essential goods and its price increase would significantly affect prices of other goods and services.

The Ministry of Finance would enhance cooperation with other ministries, agencies, and localities to tighten price management, to prevent unreasonable increases in prices, and to strictly handle speculation.

FTSE keeps VN on watch for reclassification to secondary emerging market

Việt Nam is still on the watch list of FTSE Russel for a possible reclassification from frontier to secondary emerging market status, the global index provider FTSE Russel said in its September report. However, the opportunity for the stock market’s upgrade may become clearer next year.

The country has been on the watch since 2018.

FTSE Russel said that Việt Nam’s reform progress is slower than expected, partly due to the COVID-19 pandemic.

Việt Nam has yet to meet the delivery versus payment (DvP) criterion, which is currently rated as ‘Restricted’ due to the market practice of conducting a pre-trading check to ensure the availability of funds prior to trade execution, FTSE Russel said.

Meanwhile, as the market does not experience failed trades, the ‘settlement - costs associated with failed trades’ criterion is unrated.

It added that Việt Nam would need to improve the process for the registration of new accounts and the introduction of an efficient mechanism to facilitate trading among foreign investors in securities that have reached, or are approaching, their foreign ownership limit.

FTSE also highlighted the role of the Vietnamese Government in accelerating the progress.

“Even though the reform progress is still slow, the Government’s commitments in boosting the upgrade is clearly showed. Moreover, the State Securities Commission (SSC) is working hard to seek a workable solution to the issue of prefunding,” FTSE said.

FTSE Russell said it continued to maintain a constructive relationship with the SSC, the World Bank Group and E&Y who were supporting the wider market reform programme, and other key market authorities.

According to SSI Securities Corporation, authorities are using a lot of resources to ensure satisfaction of criteria from rating organisations such as FTSE Russell and MSCI.

In fact, quantitative criteria are not a major obstacle for Việt Nam as the stock market already has a sufficient number of representative stocks, the securities said.

It also noted that among barriers set by major international rating agencies and financial institutions, the prefunding requirement is the main obstacle hindering the upgrade of the stock market.

Regarding short-term solutions, many proposals are currently discussed such as amending Circular 120 to remove the regulation that foreign investors need to have 100 per cent of money in their accounts to make orders.

In addition, the maximum foreign room depends on the decision of each company, as long as it complies with regulations, according to SSI Research said that. Therefore, in the long term, it is necessary to maximise foreign room for most industries and limit it to only a few truly necessary sectors.

On the other hand, the implementation of the KRX system is a necessary condition while the presence of a central counterparty clearing house (CCP) mechanism is a sufficient condition for transactions to be performed and payment risks to be controlled.

According to the plan, the preparation of KRX is expected to be completed by the end of this year.

SSI Research believes that this period is the right time for upgrading the ranking of the Vietnamese market, creating a path to welcome large capital from other professional foreign investment funds.

The opportunity to be upgraded by FTSE Russell may become clearer in 2024 and the possibility of being upgraded by MSCI in the following years will require more efforts and determination of all market participants. 

Agriculture sector achieves trade surplus of $8b in nine months

Việt Nam's agriculture sector achieved a trade surplus of US$8.04 billion in the first nine months of 2023, an increase of 22.5 per cent over the same period last year, according to the Ministry of Agriculture and Rural Development.

However, the total export and import turnover in the first nine months decreased by 7.5 per cent year-on-year to $68.92 billion.

Deputy Minister of Agriculture and Rural Development Phùng Đức Tiến said that during the nine months, the total export turnover was estimated at $38.48 billion, down 5.1 per cent over the same period last year because the export value of several main export products decreased sharply. Of which, the value dropped by 21.7 per cent to $6.67 billion for seafood exports and 20.6 per cent to $10.44 billion for forest product exports.

The sector saw growth in exports of 16.7 per cent to $19.54 billion for agricultural products and 26.4 per cent to $369 million for livestock products.

The increase in agricultural exports was contributed by a value of $4.2 billion from fruit and vegetable exports, an increase of 71.8 per cent; $3.66 billion from rice, up 40.4 per cent; $2.61 billion from cashew nuts, up 14.3 per cent; and $3.16 billion from coffee, up 1.9 per cent.

The average export price of some main agricultural products also decreased, such as rubber (down 18.7 per cent to $1,335 per tonne); tea (down 2.3 per cent to $1,711); cashew nuts (down 4.5 per cent to $5,722); pepper (down 25.1 per cent to $3,309); and cassava and products made from cassava (down 4.8 per cent to $420).

Meanwhile, the rice export price surged by 14 per cent year-on-year to $553 per tonne, and coffee increased by 9.9 per cent to $2,499.

Regarding the market in the first nine months, the export value of agricultural, forestry, and fishery products rose by 4.9 per cent to $18.71 billion to Asian markets, and by 18.8 per cent to $809 million to Africa.

Other export markets witnessed a significant value reduction: 22.5 per cent to $8.73 billion for the Americas, 11.2 per cent to $4.17 billion for Europe, and 18.6 per cent to $570 million for Oceania.

China, the US, and Japan continued to be the three largest export markets.

Despite many challenges, Deputy Minister Tiến affirmed that in 2023, the agriculture sector aimed for a GDP growth rate of 3-3.5 per cent and a total export turnover of $53-54 billion.

Tiến requested the Department of Crop Production and the Department of Plant Protection to coordinate effectively in controlling product quality and increasing the number of official export products.

At the same time, they needed to provide market forecasts and address challenges to create favourable conditions for the export of agricultural and aquatic products, especially concerning markets in China, the US, the EU, and the Eurasian Economic Union.

The ministry would capitalise on free trade agreements (FTAs), especially the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Việt Nam Free Trade Agreement (EVFTA), to boost the exports of key forestry and fishery products and support businesses in signing new export contracts.

The ministry also predicted that from now until the end of 2023, Việt Nam's fruit and vegetable exports would continue to grow substantially because major markets such as China, Japan, and the US would import large quantities of vegetables and fruits from Việt Nam for year-end festivities. The fruit and vegetable exports in 2023 could exceed $5 billion.

Wood exports to the US see bullish trend

Despite a significant decrease in the first eight months of the year, Việt Nam’s export of wood and wood products to the US market has seen many positive signals.

In August, the export value of wood and wood products to the US declined 1.4 per cent year-on-year to US$674.6 million, according to the General Department of Vietnam Customs. The decline was narrowed compared to the loss in the previous month, showing signs of the recovery of the industry.

The export value was down 10.8 per cent from 2022 in July.

However, in the first eight months of the year, the export value of wood and wood products to the US reached $24.6 billion, a fall of 27.1 per cent from the same period last year.

The decreases were driven by weaker demand, high inflation, tight monetary policies and high inventories.

However, inventories in the US have dropped to 10 per cent as of August and are expected to fall to 0 per cent by the end of this year.

This is an opportunity for Việt Nam to boost export of goods, such as wood and wood products, in the near future.

Nguyễn Sỹ Hoè, President of the Board of Directors of Phú Tài JSC, said that even though sales improved as we were in sales season and the consumer market grew from last year, it was not possible to assess the situation because of the lack of data.

"Depending on the customer segment, revenue may increase or decrease in the near future, but overall, the US market trend is positive, although not as strong as expected," he added.

Phú Tài JSC specialises in exporting wooden furniture to the US market.

Moreover, there are requirements for green production and clean, and sustainable supply chains. Thus, Vietnamese enterprises must continuously engage in research, market development, and manufacturing capacity enhancement to fulfil technological requirements and ensure effective management and customer care, according to experts.

Businesses also need to participate in trade promotion programmes and wood industry exhibitions to cooperate with distribution channels, develop a reputation, apply customer diversification strategies.

Recently, the US has implemented numerous trade protection policies to safeguard the interests of domestic businesses and enhance the frequency of trade defence investigations against Vietnamese wood products. Therefore, wood processing enterprises must raise awareness and adherence to the legal policies of both nations. 

Vietnamese coffee exports plummet in September

Vietnam exported 65,000 tonnes of coffee in September worth US$205 million, representing a sharp fall of 32.7% in volume and 12.8% in value compared to the same period from last year, according to figures given by the Ministry of Industry and Trade.

During the initial nine months of the year, the country shipped 1,266 million tonnes of coffee abroad worth US$3.16 billion, down 7.3% in volume, but up 1.9% in value on-year.
  
The average export price of Vietnamese coffee in September surged by 3.2% compared to the previous month to reach US$3,151 per tonne and was up 29.6% against September last year. Meanwhile, the average coffee export price was estimated at US$2,499 per tonne, up 9.9% on-year.

Most notably, Robusta and Arabica coffee exports decreased against the same period from last year, while Excelsa and processed coffee exports experienced an upward trajectory.

With regard to the further sustainable development of the coffee industry, Minister of Agriculture and Rural Development Le Minh Hoan revealed that the Ministry of Agriculture and Rural Development has submitted an action plan to the Prime Minister as part of efforts to meet the new regulations the EU Deforestation Regulation (EUDR).

Accordingly, the Ministry is keen to partner with the Sustainable Trade Initiative (IDH) and JDE Peet's Group in order to map out a roadmap that is in compliance with the EU’s new regulations.

Laurent Alexandre Sagarra, vice president in charge of Sustainability Programs of JDE Group Peet, expressed his hope that Vietnam can become a pioneering country in building a coffee industry that fully meets EUDR regulations in the future.

He underscored the need to standardise processes, public-private co-operation mechanisms, and business models, improve production capacity for farmers and cooperatives, strengthen chain linkage and origin traceability, as well as promoting digital transformation and applying science and technology in production as a means of meeting new market requirements.

Freeze-dried instant coffee factory inaugurated in Binh Duong

Louis Dreyfus Company (LDC) and Instanta have recently inaugurated ILD Coffee Vietnam, a joint venture freeze-dried instant coffee facility, in the southern province of Binh Duong.

With an annual capacity of 5,600 metric tons, the facility is expected to meet rising global demand for instant coffee, particularly premium types.

ILD Coffee Vietnam is equipped with the latest extraction and freeze-drying technology. Its equipment system is also designed to minimize the plant’s environmental footprint.

The facility’s products are aimed at coffee consumers in Europe and Asia, according to an official release.

Ben Clarkson, LDC’s Global head of Coffee, said, “This venture with Instanta supports our global strategy to diversify through more value-added products, reflects our ongoing commitment to Vietnam as a key market for LDC, and complements our existing global Robusta green coffee business, expanding our product portfolio to meet customers’ needs.”

The firm, founded in 1851, is a leading merchant and processor of agricultural goods. It operates in over 100 countries and employs around 17,000 people globally.

Jacek Szymczyk, chairman at Instanta, said, “ILD Coffee Vietnam marks a significant milestone in our journey at Instanta. This state-of-the-art facility in Binh Duong Province demonstrates our passion for coffee.”

Established in 2001, Instanta specializes in the production of coffee under clients’ brand names. The company currently runs seven factories in Poland, Turkey, Colombia and Vietnam.

Hoang Anh Gia Lai plans to sell hotel to settle debt

Hoang Anh Gia Lai JSC (HAGL) is considering selling its hotel in the Central Highlands province of Gia Lai as part of its broader asset liquidation strategy aimed at meeting its financial obligations.

Hoang Anh Gia Lai JSC has announced to delay bond coupon payments. The company had been overdue on VND2.87 trillion in coupon and over VND1.15 trillion in principal for its HAGLBOND16.26 bonds as of September 30, 2023.

HAGL disclosed that it paid VND380 billion in principal on September 29 and would settle the remaining amount in the fourth quarter of this year. The company cited pending payments from its subsidiary, International Agriculture Hoang Anh Gia Lai, and the liquidation of non-profitable assets as reasons for the delay.

Meanwhile, HAGL extended the maturity date of another bond issue, initially set for September 30, 2023. The new maturity date of the bond, with a face value of VND300 billion, is September 30, 2025.

HoREA wants new rule on short-term capital use delayed

The HCMC Real Estate Association (HoREA) has proposed the prime minister delay the enforcement of the State Bank of Vietnam’s new circular that lowers the percentage of short-term capital used by commercial banks to make medium and long-term loans.

Circular 08/2020, which was issued by the State Bank of Vietnam (SBV) to amend Circular 22/2019, regulates that the proportion of short-term capital used for medium and long-term loans falls to 30% from the previous 34%, with effect from October 1, 2023.

But HoREA has proposed reinstating the 34% ratio for a period of 12 months, from October 1, 2023 to October 1, 2024.

HoREA argued that the new restrictive regulation of the central bank would significantly affect the dormant real estate sector as the sector will find it more difficult to obtain bank loans for recovery.

The SBV said lowering the proportion of short-term capital used to make medium and long-term loans would ensure the safety of the banking system in line with international standards.

In the past, the ratio was even higher, at 40% until September 30, 2021, but it fell to 37% from October 1, 2021 to September 30, 2022, and 34% from October 1, 2022 to September 30, 2023.

The reduction to 30% is in the final stage of a roadmap established by the central bank.

Lang Son suspends cargo trucks’ entry into bonded zone

Lang Son, the northern province of Vietnam, has halted the entry of cargo trucks into its bonded zone in Tan My Commune, according to authorities of the Dong Dang-Lang Son border gate’s economic zone.

Cargo trucks heading for China are now advised to proceed directly to the border gates for customs clearance, instead of waiting in the bonded area.

This decision comes in response to a recent decline in the number of vehicles transporting goods to the Huu Nghi international border gate. As a result, there is ample room at the border gate for vehicles awaiting customs clearance.

The bonded zone in Tan My Commune, six kilometers from Tan Thanh border gate and eight kilometers from Huu Nghi border gate, serves as a facility to organize and categorize vehicles transporting exports from various regions of the country to China via Tan Thanh and Huu Nghi border gates.

As of the end of September, Huu Nghi international border gate had witnessed the highest number of vehicles undergoing customs clearance procedures, with about 800 vehicles per day, including 230 carrying export goods.

In related news, the economic authorities of Dong Dang-Lang Son border gate announced the temporary closure of Coc Nam and Na Hinh border gates from October 1 to 6, 2023, due to the Chinese National Day holiday. However, Huu Nghi, Tan Thanh, and Chi Ma border gates will maintain their normal operations.

Additionally, Chi Ma border gate will enhance its customs clearance capacity by operating normally on weekends and public holidays starting this month, foregoing previous days off.

Vietnam to face long-term shortage in pepper-farming areas

The harsh climate and shrinking farming area may lead to the steepest ever decline in pepper output in the next three years.
 
On September 28, Vietnam's pepper prices levelled off after two consecutive sessions of decreases. The price hovered around VND69,000–72,000 per kg in the southeast region and VND69,000–70,000 per kg in the Central Highlands.

"The pepper price will increase if farmers continue to replace pepper trees with fruit trees, leading to a shortage of supply," Hoang Thi Lien, chairman of the Vietnam Pepper and Spice Association (VPSA), said. "Output may decline sharply in the next three years because the wave of crop shifting is taking place strongly."

According to the VPSA, there is very little inventory of pepper held by farmers. The majority belongs to wholesalers and speculators. Meanwhile, some processing companies have enough goods to process by year-end, so they don't need to buy pepper at this time.

In September, the Foreign Trade Agency under the Ministry of Industry and Trade also predicted the possibility of pepper exports remaining at a low level due to a lack of domestic supply and dampening demand in the EU and US markets. Currently, Vietnam has run out of pepper for export.

The General Department of Customs (GDC) reported that Vietnam exported 20,137 tonnes of pepper and had an export turnover of $75.3 million in August, up 9 per cent in quantity and 0.2 per cent in value compared with the same period in 2022. The average export price in August was $3,741 per tonne, the highest price since November 2022.

In the last months of this year, businesses will export imported goods and pre-existing inventory. It is estimated that the total amount of inventory and imports is about 80,000 tonnes, while domestic consumption is about 10,000 tonnes. The amount of inventory transferred to next year is about 30,000 tonnes, leaving about 50,000 tonnes for export in the last months of the year, according to the Foreign Trade Agency.

Pepper is the main crop in Vietnam. Currently, the total area of pepper cultivation in the whole country is more than 130,000 hectares. They are mainly concentrated in the southeast region and the Central Highlands, accounting for over 95 per cent of the pepper area nationwide; the rest are scattered in the north central and central provinces.

Agricultural sector sees mixed results

Due to the ongoing economic effects caused by rising raw material prices and decreasing demand, the business results of many large agricultural and livestock producers for the first six months of 2023 have been mixed.

Masan MEATLife (HSX:MML) saw the strongest growth in the first half of the year, with an increase of 70 per cent to just under than $140 million. According to a recent financial statement, MML has just added the revenue of sausage and canned pork processor Masan Jinju ((HSX:MSJ). However, due to rising costs, MML reported $14.7 million in after-tax losses, 10.5 times the amount reported for the same period last year.

The business results of Hoang Anh Gia Lai JSC (HSX:HAG) were also much better than others. In August, HAG gained $27.8 million in net revenue, including $14.3 million from fruits, $7.7 million from livestock, and others.

HAG chairman Doan Nguyen Duc thanked three core areas for the results, breeding pigs and growing bananas and durian. "We are fiercely reviving the company for the sake of personal honour and for our shareholders," said Duc.

In the first half of the year, HAG generated about $132.5 million in revenue, an increase of 55 per cent on-year, of this, pig breeding contributed more than $42.2 million. Despite significant growth in revenue, the heavy costs dragged its after-tax profits to $17.1 million, down 24 per cent on-year. HAG is still facing accumulated losses of more than $124 million to date, although total assets have increased slightly compared to the beginning of the year to more than $900 million.

Hoang Anh Gia Lai Agricultural JSC (HSX:HNG) earned $11.7 million in revenue for the same period, a decrease of 23 per cent on-year, and lost $10.1 million in after-tax profit, according to the latest financial statement of the company.

This year, HNG expects the total volume of banana, pineapple, mango, and grapefruit output to approach 129,000 tonnes, and rubber touch 10,300 tonnes. The total assets of HNG saw a sight increase to $553 million for mid-2023, however, there were $434.6 million in debts payable and $305.5 million in accumulated losses.

In addition to steel manufacturing, Hoa Phat Group (HSX:HPG) entered the market for breeding pigs and selling Australian beef. In the second quarter, HPG reported $1.26 billion in revenue, a decrease of 21 per cent on-year. Of this, agriculture contributed $62.4 million – the worst outcome over the last four years.

After-tax profit was VND1.45 trillion ($61.2 million), a drop of 64 per cent on-year. In the first half of this year, HPG generated $2.4 billion in revenue, and $77.2 million in after-tax profit, quite far from yearly targets, according to HPG's financial statement.

Specialising in producing animal feed, breeding, and food processing, Dabaco Group (HSX:DBC) reported an impressive $146.4 million in net revenue, and just under $14 million in net profit in the second quarter. However, due to heavy losses in the first quarter, DBC gained just $253,000 in profit, a decrease of 73 per cent on-year.

BAF Vietnam Agriculture JSC (HSX:BAF) reported a decrease in agricultural product revenue by 21 per cent, while livestock revenue decreased by 5 per cent and for the first time, the company generated revenue from selling real estate investments of nearly $1 million. However, total revenue still decreased by 17 per cent on-year to nearly $105.5 million, and after-tax profit reduced by 88 per cent on-year to $675,000.

Although the results of the leading domestic livestock businesses were not as bad as could be expected, mainly due to the efforts of management, they were paled in comparison to the performance of the foreign-invested livestock giant C.P. Vietnam.

According to the financial statement from the Thai parent company C.P. Group, the contribution of its subsidiary in Vietnam decreased by 6 per cent on-year for the first quarter of 2023. Of this, breeding generated the largest revenue at $1.05 billion, down 9 per cent; animal feed at $527.4 million, down 3 per cent; and food at $111.8 million, an increase of 7 per cent on-year.

In the second quarter, C.P. Vietnam saw a decrease of 7 per cent in total revenue to $890 million, including $553 million from breeding, $287 million from animal feed, and $55 million from food processing.

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