BUSINESS IN BRIEF 8/5 Bitter-sweet honey exports The EU’s strict ban on honey imports from Vietnam has caused huge losses for domestic businesses. In 2007, the EU decided not to import honey from Vietnam as it was not up to food hygiene and safety standards. In late 2011, the US refused to import nearly 600 tons of Vietnamese honey after detecting some Carbendazim residue in the product. Throughout 2012, Vietnam’s honey exports to the US market almost grounded to a halt. The US is too strict on Carbendazim-a fungicide-in honey and its associated products while global standards accept a maximum Carbendazim content of 0.01 mg/kg as having no harmful effects on human health. In order to approach the EU and US markets all honey suppliers have to meet residue control requirements. After a country’s plan is approved by the EU, there will be constant monitoring of its whole residue control system and exporters will have to report to the EU annually. The criteria for exports to the EU market are related to safety, quality, a system for tracing origins, and the requirements of the Hazard Analysis and Critical Control Point (HACCP) standards. If any problem is detected, the offending exporter’s honey products will be immediately removed from the EU supply chain. General Statistics Office (GSO) figures show Vietnam’s honey output has gradually increased from 9,960 tonnes in 2008 to 11,549 tonnes in 2009, 11,944 tonnes in 2010, and 11,904 in 2011. Vietnam is now the world’s sixth largest honey exporter but ranks second in Asia. In 2011, the country produced more than 30,000 tonnes of apicultural products like honey and pollen, mostly for export, and earned as much as US$80 million. Confronted with major market trade barriers like those in the US, Vietnamese businesses are seeking new export markets in Asia, the Middle East and Eastern Africa. Under Decision No 2011/163/EU issued in March 2013 which covers the residue control systems for plant and animal products imported into the EU from third-party countries, Vietnam needs to ensure all honey products exported to the EU market meet EU safety and hygiene standards. While the latest decision is considered a boon for the domestic apicultural sector, honey exporters have yet to overcome US barriers. Apart from its ban on Carbendazim residue, the US recently warned China against exporting honey through a third country to the US in an attempt to conceal its genuine product origins and evade taxes. As many honey products sold in the US market are found to contain poisonous impurities such as lead, heavy metals, Chloraphenicol, and antibiotics, it is imperative to strictly control honey import- export deals with China to protect the reputation of Vietnamese honey trademarks. Myanmar attracts Vietnamese investors So far this year Vietnamese businesses have been licensed to invest US$460 million in seven projects in Myanmar. The information was released at a HCM City seminar on May 3 introducing business opportunities in Myanmar and the 2013 Vietnam-Myanmar Trade Service and Tourism Fair (HCM City Expo 2013). The Ministry of Planning and Investment’s Foreign Investment Agency currently ranks Myanmar sixth among the 60 countries and territories in which Vietnamese investors are operating. Last year, two-way trade turnover between Vietnam and Myanmar exceeded US$227 million, with more than US$117 million contributed by Vietnamese exports. The two countries aim to raise bilateral trade turnover to US$500 million and Vietnamese investment in Myanmar to US$1 billion by 2015. Dam Trung Bac, Honorary Consul General of Myanmar in HCM City, suggested Vietnamese businesses take advantage of the many incentive policies his country is currently offering foreign businesses.  He advised them to undertake comprehensive market research to grasp the full extent of these preferential opportunities. Many Vietnamese firms have enjoyed initial success in Myanmar’s market, particularly in the fields of information technology, wood processing, agriculture, mineral exploration, and real estate. Call for expanded Delta transport system Business leaders in the Mekong Delta are urging authorities to dredge waterways and upgrade roads so that major ports in the region can accommodate larger vessels that now re-route their goods to better-equipped ports in HCM City. The Cai Cui Port, the biggest in the Mekong Delta, which can receive vessels of 200,000 tonnes, is used at only 10-20 per cent of its capacity because huge vessels get stranded at Dinh An Passage before they enter the port. The insufficiency of area ports, and the lack of roads and bridges, has led to underexploitation of the region's potential, Vo Hung Dung, director of the Viet Nam Chamber of Commerce and Industry's Can Tho chapter, was quoted recently as saying in the Sai Gon Giai Phong (Liberated Sai Gon) newspaper. He said that more than 70 per cent of exported commodities from the Mekong Delta must be transported to HCM City. Every year, a huge volume of fertiliser and raw materials have to be shipped to the Delta via ports in HCM City, leading to higher production expenses. They said that construction of transport projects in the area had been done in a haphazard way, and that key projects that could increase growth in the region, such as Vam Cong Bridge, Trung Luong – Can Tho Freeway and HCM City – My Tho Railway, have yet to receive capital investments. In addition, the Can Tho and Phu Quoc International Airports have not been fully exploited. In the past, the Delta had one of the poorest transport systems in the country, but new highways, freeways and ports built in recent years have allowed more businesses to transport commodities. Tourism and socio-economic development in the region has also increased as a result of the new transport projects, including the widening of National Highway No.1 from HCM City to the southernmost province of Ca Mau Province's Nam Can and construction of the HCM City – Trung Luong Freeway. The Can Tho and Phu Quoc International Airports have also been put into use, and Rach Gia and Ca Mau Airports have been upgraded. In addition, several waterway projects were built to boost links between HCM City and the Mekong Delta, and provinces within the Delta. In response to the challenges, in April 2011, the Prime Minister issued a decision outlining tasks and providing directions on the development of transport infrastructure in the region through 2015, with orientation towards 2020. The decision calls for sound plans that would ensure the "building of an interconnected system for multimodal transportation that meets the requirements of and boosts socio-economic development." Multi-billion projects kindle hope for recovery A number multi-billion dollar projects have been approved to start in 2013. Leading South Korean electronics giant LG is expected to invest in an electronics factory in Haiphong City this year with investment for the first stage amounting to USD300 million. There are also rumours that Samsung is planning to build a second hi-tech complex in Thai Nguyen Province worth USD1.2 billion. Meanwhile, deputy director of Vung Ro Petroleum Company Nghiem Xuan Cai confirmed that the capital for Vung Ro Oil Refinery would be raised from USD1.7 billion to USD3.6 billion in May or June. "We'll start the construction once we receive the permit and land," Cai said. Binh Dinh Province has also just approved a Russian-invested bus assembly project by Buscenter Met Company. The USD1 billion factory to manufacture and assemble bus spare parts will be constructed in Nhon Hoa Industrial Zone this year. The capital of Nghi Son Oil Refinery, a joint Vietnam Oil and Gas Group, Kuwait Petroleum Group, Idemitsu Kosan Petroleum Group and Mitsui Chemical project has been raised from USD2.8 billion to USD9 billion in the first months of 2013. Foreign investment has picked up this year, after a slow down in interest. In 2011, only two major projects were approved and in 2012 there was only one. Furthermore, many large capital projects had their permits revoked or were still unable to complete construction. However, most of the new projects are primarily focused on manufacturing industry rather than real estate and hospitality as previously. Many projects have already started construction. Vietnam’s economy remains sluggish A total of 16,000 enterprises across Vietnam had filed for bankruptcy in the first four months of this year, up 16.9% from a year earlier, a report said. The National Financial Supervisory Committee issued a report on Vietnam’s economic situation during the four-month period on May 2. The report lists the usual obstacles facing companies, such as access to capital, increased input costs, slow sales and high inventories. “Corporate weakening would not only affect state budget revenues for this year but slow down the economy’s rebound next year,” the committee warned. According to the committee, demand in the entire economy is still rather weak as the USD1-billion trade deficit in April just simply depicted a sharp fall in export revenues. Credit growth rates in the banking system showed positive signs compared to the same period last year. The credit growth rate in the first three weeks of April this year was up 1.14% against the end of last year. However, the growth rate is still much lower than the demand of the national economy, the committee noted. In order to ensure enough capital for targeted investment projects, the credit growth rate should reach at least 1.5% in the first quarter of this year compared to late 2012. Meanwhile, by mid-April this year, the credit growth rate had edged up to only 1.44% from the beginning of this year. The committee attributed the low credit growth rate to high lending rates and the level of bad debts. The speed of the economy’s recovery and total demand in the time to come would heavily depend on economic restructuring and the settlement of bad debts, the committee added. Construction on HOSE data centre begins The construction of a data backup centre for the Ho Chi Minh Stock Exchange (HOSE) in Quang Trung Software Park got underway in the city on May 3. The 9-storey centre will cover an area of 5,000 square metres and cost VND300 billion ($14.3 million). When operational, its total floor space will be 16,000 square metres. According to Chairman of the HOSE’s Board of Directors Tran Dac Sinh, this will be the largest and most up-to-date data backup centre in Vietnam, to help the stock market operate stably, and build domestic and foreign investors’ confidence, making the HOSE a modern stock exchange in the region and the world. Nguyen Thi Hong, Vice Chairman of HCM City People’s Committee, said that the centre will be an architectural highlight in Quang Trung Software Park, contributing to the image of the city’s modern high-tech zone. Sustaining the marine economy a must Vietnam is urgently seeking ways of sustaining its marine economy as climate change warms and raises sea levels and, together with massive pollution, continues to destroy the nation’s 110,000 hectares of coral reefs. he marine economy now contributes about 48 percent of the nation’s Gross Domestic Product (GDP) and there are plans to raise this to 53-55 percent by 2020. It includes industries related to trade and investment in seafood products, ship and boat building, water way transport and tourism. Climate change, overfishing and pollution is blamed for a reduction in fish species and their retreat to deeper-sea regions, says the president of the Vietnam Institute of Meteorology, Hydrology and Environment, Tran Thuc. There appeares to be a connection between a decrease in the income of local fishermen and the more frequent appearance of tropical storms caused by the changes, he adds. Thuc points to the fact that coral reefs have been rapidly dying for 20 years, largely because of increasing sea-surface temperatures. According to the National Strategy on Environmental Protection approved by the Government last year, only 14.5 percent of coral reefs, equal to nearly 16,000 hectares, are at present in good condition nationwide. At least 44 percent, equal to 48,000hectares, are reported to be in poor shape. Statistics from the Ministry of Natural Resources and Environment show that the country had about 110,000 hectares of coral reefs in 2007. Extreme weather and rising sea levels, damage to urban infrastructure, especially in coastal regions, says Thuc. Erosion and the intrusion of saline water also complicate the development of the country’s coastline, including about 16 kilometers of coastline in northern Haiphong city. The Vietnam Institute for Tourism development Research says extreme weather phenomena brought by climate change might lessen revenue from this type of tourism accounting for 70 percent of the total revenue of the marine economy. The increase in storms is also expected to temporarily force the closure of seaports or cause traffic congestion in sea transport, leading to losses of commercial ventures. Central bank to stabilise gold market The primary goal of the State Bank of Vietnam is to control the domestic gold market to stop price manipulation, Governor Nguyen Van Binh has said. Binh was speaking in an online Q&A session on May 5, responding to readers’ questions about the recent sharp fluctuations in gold prices and the central bank’s move to address the issue. Domestic gold prices tumbled dramatically from around VND45-46 million/tael to below the surprising VND40 million/tael in just a few days in mid April, causing great public concern. Central Bank governor Nguyen Van Binh vows to control the gold market Despite the fluctuations, there was a broad difference in the domestic and global gold prices, creating a plenty of opportunity for traders to corner the market. In early April, the government issued a decree to tighten the State management of gold trading and gold import-export activity. The central bank began gold auction sales in late March in an attempt to cool down the domestic gold market and narrow the price gap. To date 13 sessions have been conducted.  The domestic gold market is normally adjusted shortly after global gold dips dramatically, sparking a buying spree among residents. However, the promulgation of the government’s decree and subsequent gold bullion sales stopped market manipulation, keeping domestic gold prices comparatively stable despite sharp fluctuations in early April, said the governor. The domestic and global gold prices will come closer together in the mid- and long-term if Vietnam stabilises its domestic gold market, plus constant macro-economic stabilisation efforts, Binh concluded.  Can Tho pulls US$1.8 bln in investment Export processing zones (EPZs) and industrial zones (IZs) in the Mekong Delta city of Can Tho have attracted 204 investment projects, capitalised at more than US$1.84 billion, according to the Can Tho EPZs and IZs Authority. Of the total, up to US$810 million has been disbursed, accounting for 44 percent of the total. Among these projects, 23 are from foreign investors, valued at US$181.4 million. The remainder, worth more than US$1.66 billion, have been funded domestically. The encouraging results were attributed to great efforts by local authorities in speeding up administrative reforms, improving infrastructure facilities and providing investors with incentives. These include reductions in land-rental fees and corporate income tax as well as assistance in training unqualified workers. Apart from five existing zones, Can Tho plans to build another three with a total area of 1,400ha. They are O Mon (600ha), O Mon Bac (400ha), and Thot Not (400ha). Land clearance is also underway to expand Hung Phu I and II industrial zones, and two other zones in O Mon district. The work also involves investment in communication infrastructure, drainage, electricity supplies and accommodation for residents forced to resettle. During the past four months, businesses in the city's industrial zones have posted US$528 million in turnover, an increase of 1 percent year-on-year.  No market surge expected in May Market prices are forecast to remain unchanged in May despite the constant downtrend in the prices of essential products such as oil and food. The Domestic Market Department under the Ministry of Industry and Trade (MoIT) attributed the stabilized market prices in recent months to the balance between supply and demand. However, there’s growing concern about the surging prices of dairy and nutrition products, posing challenges to State management agencies. The MoIT is working with the Ministry of Agriculture and Rural Development (MARD) to conduct a survey on animal feed in southern provinces, as the husbandry sector is facing a rising cost of production. In the meantime, the MoIT is cooperating with the Ministry of Finance to adjust petrol prices in line with global fluctuations to help local businesses ease difficulties. Brazil-Vietnam trade to hit US$2 billion in 2013 As the world’s sixth biggest economy with a population of 195 million, the Brazilian market offers great potential for penetration by Vietnamese products, says the Vietnam Trade Office (VTO) in the South American country. The market share of imported consumer goods rose from 19.5 percent in 2011 to 21.6 percent in 2012. The country’s total volume of products surpasses US$1 trillion, with imported goods accounting for US$225 billion. Its imports have increased by a remarkable 15 percent annually for the past ten years. The total import value of consumer goods has grown continuously and  soared 23 percent last April alone. In addition,  Imported cosmetics increased 55 percent, followed by garments (35 percent) and pharmaceuticals (24 percent) compared to the same period last year. Vietnam’s exports to Brazil still remains very modest at 0.32 percent of the country’s global imports and many supermarkets and wholesalers in remote areas have no access to Vietnamese goods. At the end of 2012, rising taxes levied by Brazil on hundreds of imported items, including many raw materials for domestic industrial production, had driven the cost of inputs for Brazilian products up, making them more expensive and less competitive both at home and in international markets. The Brazilian Association of Structural Engineering and Consulting (Acebe) has disagreed with the government’s measures to limit imports of essential goods for production. The group stressed that imports allow the purchase of cutting-edge technologies and goods for more efficient manufacturing, lower product prices and greater competitiveness for Brazilian exports. These factors offer good opportunities for Vietnamese products to achieve greater penetration to the Brazilian market and this year’s bilateral trade turnover is estimated to reach US$2 billion. According to the General Department of Vietnam Customs,  two-way trade reached US$422 million in the first quarter of this year, including US$207.7 million worth of Vietnamese exports to Brazil, up 41.9 percent, and US$214.3 million for imports from the country, down only 1.4 percent from last year’s same period. Vietnam’s key exports to Brazil include footwear, seafood, machinery, equipment, and computers, as well as electronic parts, telephones, garments, bags, hats, umbrellas, steel products and transport vehicles. From Brazil, it imports steel, cotton, automobile parts, tobacco, wood products, apparel and footwear materials. Vietnam attends ADB’s 2013 annual meeting A Vietnamese delegation led by Dao Minh Tu, Deputy Governor of the State Bank of Vietnam, is attending the 46th Annual Meeting of the Board of Governors of the Asia Bank for Development (ADB), which is underway in New Delhi, India from May 2-5.  The meeting also draws the participation of about 5,000 delegates who are leading policy makers and representatives from ADB member countries, international economic and financial organisations, non-governmental organisations, commercial banks and businesses.  In addition to this year’s theme of “Beyond Factory Asia: Fueling Growth in a Changing World”, participants also focus on the theme of “Development through Empowerment”, chosen by the host country, including issues on comprehensive and sustainable development in Asia as well as seeking ways to help vulnerable groups gain better access to health, education and other social services.  Addressing the event, the ADB’s new President Takehiko Nakao said that despite recording high growth in the past decades, Asia still faces numerous development challenges with over 800 million people living in absolute poverty and growing inequality.  He revealed that in the ABD’ 2020 strategy, promoting comprehensive and sustainable development and strengthening regional connectivity and cooperation remain “key” to overcome the challenges.  The strategy also emphasised the importance of boosting the development of the private sector, an important factor for maintaining a high economic growth, he said.  In his opening remark, Indian Minister of Finance Chidambaram called on the ADB and other international financial institutions to invest more in Asian infrastructure.  Set up in 1966 with 31 members, the ADB has grown to 67 - of which 48 are from Asia and the Pacific. Vietnam, Japan strengthen agricultural cooperation Vietnam and Japan have signed an agreement to boost bilateral cooperation in agriculture. The agreement was reached at a meeting in Hanoi on May 4 between Vietnamese Minister of Agriculture and Rural Development, Cao Duc Phat, and Japanese Minister of Agriculture, Forestry and Fisheries,Yoshimasa Hayashi. The two ministers, highlighted the results of cooperation between the two countries in agriculture, forestry and fisheries, saying that both nations should maintain cooperation to  foster  economic relations and ensure food security. Minister Phat said agricultural cooperation between Vietnam and Japan has been strongly promoted and benefited both sides. Japan has provided non-refundable aid for more than 25 technical projects to develop Vietnam’s agriculture and rural areas, and four major irrigation projects valued at US$450 million. Hyashi Yoshimasa said Vietnam and Japan both have great potential and different advantages for developing agriculture. Japan is  an industrialized nation that has been very successful in applying hi-tech to agricultural production. Japan’s agricultural sector currently meets just over 45 percent of the domestic demand, making it import farm produce every year. This presents an opportunity for Vietnam to export its farm produce to this lucrative market. In the future, Vietnam hopes to apply advanced Japanese technology toits livestock breeding, farming and aquaculture, improve animal quarantine procedures and enhance irrigation management to increase productivity and raise the quality of its agricultural products in order to boost exports and expand to outlets in other nations. Vietnam proposed strengthening cooperation with Japan in forestry and boosting official development assistance (ODA) investment in irrigation, forestry, seafood and rural development projects. Petrolimex seeks bigger share in Sri Lanka market The Vietnam National Petroleum Group (Petrolimex) has proposed upgrading the commercial relations between Petrolimex and Sri Lanka’s Ceylon Petroleum Corporation (CPC) by signing a long-term oil and gas supply contract between Petrolimex Singapore and CPC. According to Petrolimex website, Bui Ngoc Bao, Chairman of Petrolimex Board of Management, made the suggestion to Sri Lankan Minister of Petroleum Industries Anura Priyadharshana Yapa during the minister’s May 3 working visit to Petrolimex headquarters in Hanoi. At the meeting, the two sides informed each other of their respective capacities, development orientations, requirements and desire for cooperation in the fields of petroleum and related goods and services. Petrolimex also hopes to increase the supply of goods produced by the group’s affiliates to Sri Lanka such as lubricants, petrochemical products, paints and specialised petroleum equipment, as well as services such as petroleum installation and transport.  Vietnamese firms to go to int’l ICT exhibitions Vietnamese businesses will enjoy an opportunity to showcase their products and gain visibility into foreign markets at three international IT exhibitions to be held in Singapore in June. The CommunicAsia, EnterpriseIT and Broadcast Asia exhibitions will feature a wide array of the latest technology innovations and business updates across the ICT and broadcast industries on June 18-21.  Organised by the Singapore Exhibition Services Pte. Ltd., the event allows business leaders to gain insights into the latest issues and challenges facing the international ICT industry.  Last year's event attracted nearly 2,000 exhibitors and more than 50,000 professional attendees from around the globe. According to the Vietnam 2012 ICT White Book issued by the Ministry of Information and Communications, the country's ICT sector saw total turnover of US$13.7 billion in 2011. The figure was a year-on-year increase of 79 percent.  By the end of 2011, mobilephone subscribers reached 127.3 million and internet users 30.5 million.  In 2011, more than 16 million people used 3G mobile networks in Vietnam, accounting for more than 80 percent of all broadband internet users.  Footwear sector’s efforts to maintain growth The footwear industry is targeting an export turnover of US$8 billion and a 10.7 percent growth rate in 2013. Footwear ranks fifth in the list of export commodities with the highest contributions to total export earnings, behind garments and textiles, telephones, components, crude oil, and electronics. According to the Vietnam Leather & Footwear Association (Lafaso), footwear export turnover reached US$7.246 billion in 2012, 10.6 percent higher than 2011. FDI businesses accounted for a high proportion of the industry’s export growth (77 percent), pushing revenue to US$5.6 billion. Vietnam’s footwear exports are second only to China in serving the US, the UK, Germany, Belgium, Canada, Chile, Finland, the Republic of Korea, Malaysia, New Zealand, Norway, and South Africa. The country has not yet penetrated other major markets such as Russia, Eastern Europe, the Middle East, and Africa despite their low design and quality requirements. Due to shrinking consumer demand, last year’s European footwear export turnover fell by 1.56 percent from 2011, earning US$2.65 billion and adding 36.5 percent to the whole sector’s total export revenue. Footwear exports to the US totaled US$2.243 billion, up 17.6 percent on 2011 and constituting 30.9 percent of the overall export turnover. Vietnamese footwear exports to the demanding Japanese market remained low, amounting to just US$328 million. Lien Phat Company Ltd Director Truong Thi Thuy Lien said many women shoes producers suffered losses last year with some even scaling down or suspending production. To achieve the 2013 export target of US$8 billion, footwear businesses need to boost exports to traditional markets—EU market exports should increase by 5–6 percent, the US by 15–20 percent, and Japan by 30 percent. The industry should redouble their efforts to expand market share in emerging markets—Eastern Europe, Australia, the Republic of Korea, Turkey, and South America—in order to limit major market dependence. It is essential to investigate and promote exports to the Chinese market, capitalising on its massive consumer demand. Sports and canvas shoes are key products that deserve renewed focus in 2013. Vietnamese businesses have started receiving orders for large volumes of high-quality shoe production from brand names such as Nosew, Laser, Fuse, Hotknife and Dynamic Flywire, providing Vietnamese footwear producers a great opportunity to increase productivity and improve skills and product quality. Many domestic footwear producers have developed closed production lines and shifted from manufacturing for exports to other production models like FOB (Free-on Board) and ODM (Original Designed Manufacturers). The footwear sector’s current FOB and ODM rates are 30 percent and 5 percent respectively and the figures are expected to increase to 40 percent and 10 percent this year, with localisation climbing to 50–60 percent. Around 80 businesses currently operate in the footwear sector’s support industries, supplying leatherette materials and decorative accessories. Their products fail to meet export demands because of quality that can only cater to the domestic market. Lafaso has targeted increasing this year’s domestic consumption growth by 30–50 percent. Nearly 70–75 million pairs were sold over 2012, accounting for 55 percent of domestic consumption. The remainder was claimed by Chinese footwear products imported through unofficial trade channels. Annual domestic purchasing power is estimated at 140–150 million pairs of shoes. The footwear sector needs to focus on producing high-quality products, developing trademarks, and raising general footwear standards. Other priorities include expanding human resource and management training, improving the use of technology and design, and promoting investment in its support industries. Anti-dumping tax on Vietnamese packaging Malaysia has levied anti-dumping taxes on Vietnam's Biaxially Oriented Polypropylene (BOPP) film, a kind of polypropylene film used for packaging processed foods, according to the Vietnam Competition Agency (VCA) under the Ministry of Industry and Trade. The taxes, which range from 2.59 percent to 12.37 percent, were imposed by Malaysia 's Ministry of International Trade and Industry (MITI) and are effective between April 23, 2013 and April 23, 2018.  Anti-dumping duties were also imposed on BOPP imports from Taiwan , Thailand , Indonesia and mainland China . Malaysia initiated an anti-dumping investigation into imported BOPP in 2011 after San Miguel Yamamura Plastic Films complained that foreign dumping was hurting the Malaysian BOPP industry. Vietnam’s seafood quality appreciated: VASEP Vietnam Association of Seafood Exporters and Producers informed on May 4 that foreign importers from the EU, the US and Japan have highly appreciated Vietnam’s seafood quality. Statistics from the three largest import markets in the EU, Japan and the US show that quality of Vietnamese seafood exports has improved a lot compared to previous years, despite undergoing several difficulties since the beginning of this year, causing even export turnover to fall marginally. At present, 130 Pangasius breeding farms on more than 2,800 hectares in the Mekong Delta have the ‘Certificate for Sustainability’, and account for nearly 40 percent of the region’s total breeding area. More than 50 percent of the fish processing plants have got quality certificates like Global Gap and ASC (Agriculture Stewardship Council). The seafood farming area meeting food hygiene and safety standards of Europe, the US and Japan has also increased. According to the Fisheries General Department, Vietnam is one among five top seafood export countries in the world. In 2012, Vietnamese seafood was exported to 160 nations and territories with total export turnover at US$6.13 billion. Vietnam covers 99 percent of the world’s pangasius exports. Rice exports target reducing inventory in May, June Truong Thanh Phong, chairman of Vietnam Food Association, said that rice exports must reach 1.5 million tons in May and June to clear stocks, before purchase of summer-autumn rice crop begins for stockpiling. Businesses have got contracts to export more than two million tons in the next few months, but about 230,000 tons to the Philippines is unlikely to be delivered as per schedule because the country has not yet issued an import quota. Meantime, several rice export contracts to China and Africa have been canceled due to price reduction. Null and void contracts now could total 280,000 tons. World rice prices in April fell by US$10-15 per ton compared to March because supply was higher than demand. At the current rates, Vietnamese businesses, who bought winter-spring rice for stockpiling, stand to lose $20-25 a ton. Vietnam Food Association has thus proposed to the Government to allow businesses to extend stockpiling time limit of three months. Stockpiling of summer-autumn rice should be assigned to province and city authorities. Since the beginning of the year, businesses have exported more than 2.1 million tons of rice. Exports exceed US$39 billion in first four months According to the General Statistics Office, Vietnam’s export turnover hit US$9.7 billion, a decrease of 12.1 percent compared to previous month but up 9.1 percent year-on-year. Export items which saw high increase include garment and textiles with $5.1 billion, up 20.3 percent; electronic products, computers, and accessories with $3.2 billion, up 46.1 percent; gemstones, precious metal, and jewelry with $694 million, up 342.7 percent; handbags, purses, suitcase, hats, and umbrellas with $561 million, up 20.1 percent. Export turnover of mobile phones and accessories hit $5.8 billion, up 92.3 percent. In the first four months of this year, the country’s exports touched $39.4 billion, up 16.9 percent year-on-year, of which local companies contributed $13.9 billion, an increase of 7 percent, while foreign direct investment enterprises contributed $25.5 billion, an increase of 23.2 percent. In order to promote exports in the future, the Ministry of Industry and Trade will step up investments for industrial sector and help simplify administrative procedures to issue certificates of origin. At the same time, it will try to improve effectiveness of forecasts for local and international markets and timely inform market news to enterprises. Ministry issues strict food safety regulations to agro exporters The Ministry of Agriculture and Rural Development has issued a new circular warning agencies of temporary ban on agricultural exports if food hygiene and safety norms are violated, amounting to freeze in exports for one year. Enterprises found to violate food hygiene and safety regulations of importers will be ordered to stop export of agricultural products into that particular country or firms that have three batches of products that fail to meet the food safety regulations of importers will have to stop exporting for one year, said the ministry warning. This is one of the most important contents in the ministry circular, which also stated that exporting companies of any batches of products which receive warnings of food hygiene violations of importers must produce certificate of origin, and such products will be seized or destroyed as per ministry rules. The circular also regulates that vegetable, fruit and flavoring vegetables must have food hygiene and safety certificates issued by responsible agencies. These produces should be processed by units that meet Viet Gap or Global Gap standards for export. HCM City banks asked to step up support for businesses The State Bank of Viet Nam's HCMC branch has urged commercial banks in the city to take further measures to help firms revive production and increase their own credit portfolio. Four city districts in particular have been asked to prepare credit support packages and commit to implementing them, a Sai Gon Giai Phong report said on Saturday. It quoted To Duy Lam, director of the central bank's HCM City branch, as saying commercial banks in districts 9, Thu Duc, Nha Be and Cu Chi will have to submit their credit support packages by June. In the first four months of the year, credit institutions in the city mobilised VND1,000 trillion (US$49.6 billion), up by 4 per cent compared with the figure recorded late last year while they lent only VND868.7 trillion (US$41.7 billion), Lam said. The credit growth rate for the five prioritised sectors - agricultural production, rural development, exports, small and medium enterprises (SMES) and supporting industries - was not much better, he said. These sectors account for only 10 per cent of total loans. This meant that although the city administration had taken several measures to connect the banks with enterprises, the former were not able to push up their lending, Lam said. However, it is not for lack of trying that the banks have failed to improve their credit growth in the last few months, the report said. It said local banks have vied with each other to offer preferential credit packages with lending rates of just six to seven per cent per year (for prioritised sectors), with some even offering zero per cent for the first month as an added incentive. For instance, the HCM City Development Joint Stock Commercial Bank (HDB) in April launched a VND1 trillion preferential credit programme with priority given to individual customers who need capital for production and business development. Under the scheme, which will last until late September, individual customers including household businesses and private enterprises will be offered zero per cent interest for the first month of a 12-month credit contract and 11.86 per cent in the 11 remaining months. For its part, Vietinbank has launched a preferential credit package worth VND5 trillion in short-term loans to support small and medium-sized enterprises. Eligible borrowers would be offered lending interest rates three per cent lower than the current ordinary rates, depending on the terms of the loan. The bank has also launched another credit package to support SMEs involved in import and export. The US$50 million package offers loans at an interest rate of just 3.8 per cent per year, the report said. It cited banks as saying that lending rates were not preventing enterprises from borrowing capital. The enterprises are troubled by low consumption and demand, the banks said. Eximbank general director Truong Van Phuoc said his bank prepared credit packages with interest rates of between 8 and 9 per cent per year, but there had been no takers. His bank had also launched a VND5 trillion credit package with an interest rate of 10 per cent for individual customers since late 2012, but very little of this had been disbursed to date, Phuoc said. A DongABank representative also revealed that his bank had plenty of capital on hand, but is not able to lend much because customers are not looking to borrow funds now. He said that his bank's most important task now is to settle bad debts and closely manage credit quality. The Sai Gon Giai Phong report cited an unnamed representative of another commercial bank, which recorded minus credit growth in the first three months of the year, as saying they were applying strict lending criteria to control bad debts.  Agricultural commitment made with Japan Viet Nam and Japan have agreed to promote bilateral co-operation in the field of agriculture. The agreement was reached at a meeting in Ha Noi on Saturday between Minister of Agriculture and Rural Development Cao Duc Phat and his Japanese counterpart, Yoshimasa Hyashi, who is on a working visit to Viet Nam. Under the agreement, the two sides will co-operate to increase agricultural production and productivity and promote agricultural diversification. They also agreed to boost rural development, enhance farmer capacity and production, strengthen forest management and aquaculture development in a sustainable manner and use sea resources effectively. At their meeting, the ministers said they highly valued the bilateral co-operation so far and said that it should be strengthened.  Food exporters from Germany eye market German food and drink exporters see Viet Nam as an ideal export destination and an increasingly important market. "Viet Nam, especially in the south, is developing quickly and so we are optimistic about the future," Jan de Graaf, general director of German Food Asia Company Ltd, said. In recent years, German food and drink exports had grown faster in Viet Nam than in other countries, he told Viet Nam News. In 2012, export value in Viet Nam doubled to 85 million euros ($111.8 million), compared to 2010, when it was 44 million euros (US$57.9 million). German food and drink exports grew only 20 per cent in China during the same period. "The biggest part of the increase was due to the rise in products of animal origin," Jan de Graaf said. "In terms of absolute export volume in 2012, malt, beer, milk and potato products topped the list. But in terms of absolute export value, milk products, baking seeds, malt and potato products were the top four product categories," he added. In the future, exports might increase further as Viet Nam still cannot produce all of what it needs, according to de Graaf. Milk, for example, is in high demand in Viet Nam, while there is an oversupply of milk products in Germany. In addition, because Viet Nam is developing quickly and the standard of living is rising, the country wants to diversify its food imports to include products from other countries, such as Thai and Western food. Germany's food industry is the largest in Europe.  Android flaws allow attackers to take control of smartphones Internet security firm BKAV last Friday warned about a security bug in the so-called Viber application for Android phones that lets attackers bypass screen locks and take control of a smartphone. BKAV said the flaw works in different ways depending on which Android phone. The attack revolved around sending several messages to a victim via Viber. The free Viber app works like Skype and lets Android phone users send messages and talk for free. BKAV discovered that sending pop-up messages and using some other parts of the Viber app let them circumvent the lock screens that many people use to secure their phones. "The way Viber handles pop-up messages on smartphones' lock screen is unusual, resulting in its failure to control programming logic, causing the flaw to appear," said Nguyen Minh Duc, head of BKAV security division. He advised people not to let anyone else use their phone until the bug was fixed. The app has been downloaded more than 50 million times from Google's Play store, according to statistics from the search giant. Viber said it was aware of the flaw and was preparing to release a fix that would close the loophole. The discovery of the bug is the latest in a series of security flaws that have struck apps in Google's Android store. Many cyber thieves are aiming their efforts at the phones in a bid to steal saleable information or generate revenue by getting handsets to call or send messages to premium rate numbers. Viber is a propriety cross-platform instant messaging voiceover internet protocol application for smartphones developed by Viber Media. In addition to text messaging, users can exchange images, video and audio media messages. The client software is available for Android, BlackBerry OS, iOS, Series 40, Symbian, Bada and Windows Phone. Viber works on both 3G and Wifi networks. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR