VIETNAM BUSINESS NEWS AUGUST 14
15:43
Shares recover on large-cap stocks
Shares recovered in the last trading
session of the week on improved liquidity as cash flow came back to support
large-cap stocks. The
benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) increased by 0.3
per cent, to 1,357.05 points. The market breadth was neutral as 205 stocks
climbed while 166 declined. The southern
index had decreased by 0.35 per cent, to close Thursday at 1,353.05 points. More than
744 million shares were traded on the southern exchange, worth VND24.6
trillion (US$1 billion). The
VN30-Index, which tracks the 30 biggest stocks in market capitalisation on
the southern market, gained 0.49 per cent to 1,484.25 points. Of the VN30
basket, 12 stocks jumped while 15 slid, and three stayed unchanged. The most
notable gainers in the VN-30 basket were Khang Dien House (KDH), rising 3 per
cent, VPBank (VPB), Vinhomes (VHM) and SSI Securities Inc (SSI) all gaining 2
per cent, the Viet Nam Rubber Group (GVR) and FPT Corporation (FPT) gaining
more than 1 per cent. In contrast,
PetroVietnam Gas JSC (GAS), Bao Viet Holdings (BVH) and Phat Dat Real Estate
(PDR) all dropped more than 1 per cent. If in the
morning session, most banking stocks lost ground, they reversed to rebound
towards the end of the afternoon session as the demand increased strongly,
with gainers such as Techcombank (TCB), Military Bank (MBB), Asia Commercial
Bank (ACB), Sacombank (STB) and Lien Viet Post Bank (LPB). Fertiliser
and shipping and seaport stocks also outperformed. Notably,
Petro Viet Nam Ca Mau Fertiliser JSC (DCM) and Petrovietnam Fertilizer &
Chemicals Corporation (DPM) reached the ceiling prices. In the
shipping and seaport group, Southern Logistics JSC (STG) and Viet Nam Ocean
Shipping (VOS) both hit the ceiling prices, Tan Cang Logistic JSC (TCL)
increased by 1.8 per cent, Gemadept Corporation (GMD) rose by 4 per cent. On a sector
basis, 16 out of 25 sector indices on the market made gains, including real
estate, securities, IT, retail, healthcare, banking, rubber production,
seafood production, logistics, construction and construction materials. The losers
were wholesale, insurance, oil and gas, and agriculture. The
HNX-Index on the Ha Noi Stock Exchange (HNX) also rose 0.79 per cent to
336.96 points. The index
had lost 0.36 per cent to close Thursday at 334.33 points. More than
152 million shares were traded on the northern exchange, worth VND3.6
trillion. Vietnam urged to fine-tune legal system to attract greater FDI
from Europe Vietnam must
pay closer attention to legal transparency and stability whilst striving to
improve the quality of the local workforce, to seize upon opportunities to
attract additional FDI inflows from Europe. This
statement was made by Nguyen Van Toan, vice president of the Vietnam Association
of Foreign Invested Enterprises (VAFIE). Despite the
fact that several European enterprises recently came to Vietnam to conduct
surveys about the local business climate, FDI inflows from Europe continue to
remain modest, Toan told Cong Thuong (Commerce) newspaper. According to
data released by the Foreign Investment Agency under the Ministry of Planning
and Investment, the Republic of Korea, Japan, and Singapore represent the
three largest investors in Vietnam, pouring in over US$72 billion, US$63
billion, and US$62.2 billion, respectively. However, FDI
inflows from various European countries into the nation over recent years
have been underwhelming. Currently,
the Netherlands makes up the largest investor among European member states
with 626 projects capitalised at more than US$10 billion, ranking 10th out of
140 countries and territories injecting money into Vietnam. It was
followed by the United Kingdom with 424 worth over US$5 billion, France with
628 projects capitalised at US$3.6 billion, and Germany with US$2.3 billion. Overall,
European firms have invested in 18 out of 21 major Vietnamese industries,
mostly through small-scale projects. In his role
as vice president of VAFIE, Toan revealed that European businesses pay close
attention to consistent policies, legal stability, and intellectual property
when making decisions on investment in large or high-tech projects. If these
matters addressed, FDI inflows from Europe will be increased considerably in
the coming time, he said. Toan added
that the recent enforcement of the EU-Vietnam Free Trade Agreement (EVFTA)
and the pending EU-Vietnam Investment Protection Agreement (EVIPA) is likely
to provide a solid foundation in which international legal support can
protect the interests of European enterprises when doing business in Vietnam. Vietnam spends US$2 billion on car imports in seven months Vietnam
imported 95,525 completely built-up (CBU) vehicles valued at US$2.13 billion
during the opening seven months of the year, according to the General
Department of Vietnam Customs. This
information represents a surge of 111% in volume and 107% in value compared
to the same period from last year. July alone
saw the country import 14,407 CBU cars of all kinds worth approximately
US$291 million. Thailand,
Indonesia, and China made up the top suppliers of imported cars to Vietnam,
with the total volume reaching 1,000 units. Thailand
alone led the way with 7,008 cars worth roughly US$132.8 million, raising the
total number of its cars imported into Vietnam over seven months to 47,493
valued at US$890.7 million. Vietnam also
imported CBU vehicles from other markets, including Japan, the Republic of
Korea, the United States, and Germany. Meanwhile,
CBU imported cars from China had an average price of US$37,263 a unit, double
that of Thailand and triple that of Indonesia. This
increase in the price of vehicles from the Chinese market can largely be
attributed to the fact that vehicles imported from the neighbouring country
are specialised cars and trucks, while Thailand and Indonesia primarily focus
on passenger cars and pickup trucks. Enterprises allowed to decide production models during pandemic The Ministry
of Health has allowed enterprises to decide their production and business
models during the Covid-19 pandemic, making the stay-at-work mode optional. The ministry
on August 12 sent a document on Covid-19 infection prevention and control at
production and business units to localities, the local media reported. Accordingly,
enterprises can take the initiative to deploy anti-pandemic measures while
maintaining their normal operations. The ministry
asked the governments of cities and provinces to instruct enterprises to
develop anti-pandemic plans in line with the situation in their localities
and the directives of the national steering committee for Covid-19 infection
prevention and control and the Ministry of Health. Local
authorities must also inspect and supervise the development of the plan and
its implementation but must avoid an overlap in inspection. The
city/provincial Departments of Health must conduct regular testing for at
least 20% of workers of enterprises reporting no Covid cases and at least
half of the employees of firms which have had Covid cases. According to
the Ministry of Health, some northern provinces, such as Bac Giang and Bac
Ninh, have successfully applied the stay-at-work mode. However, the mode has
not proved effective in some southern provinces. At a press
briefing after the regular Cabinet meeting on August 11, Deputy Minister of
Industry and Trade Do Thang Hai also admitted that the solution was not
effective in the south and should be applied for a short period only. In addition,
the number of workers in industrial parks in Bac Ninh and Bac Giang is not
too high, while enterprises in the south have thousands to tens of thousands
of workers each. They come from many other parts of the country, so it is
hard to ask them to stay at their factories after work for a long time. Moreover,
the cost of letting workers stay at factories after work is high, so some
enterprises can afford seven to 20 days. Therefore,
many enterprises have proposed allowing workers to travel between work and
home. Global demand geared up to rise Despite
massive challenges, Vietnam’s trade landscape is slowly gaining momentum
thanks to a bit-by-bit recovery in local production and gradual reopening of
many foreign markets, promising a brighter export-import picture for the
country until the year’s end. “We earned
an export turnover of about $11 million in the first seven months of 2021, up
from $10 billion in the corresponding period last year,” Hung said. “Our
exports were boosted during the first quarter. However, since April the
exports have slowed down due to COVID-19. But we expect that with new orders
we will be able to increase shipments thanks to South Korea and Japan
gradually reopening their markets to import activities.” In the last
four years, the firm has been centring on manufacturing and exporting LED
products, besides its traditional items like lighting equipment and electric
lights for motorbikes. The company
has also imported electronic items from foreign markets for its production.
The import turnover since early this year has climbed about 5 per cent
on-year. “It is expected that if COVID-19 is brought under control in the
foreign markets in the third or fourth quarter, the firm’s export and import
turnover will ascend 5 and 6 per cent in 2021, respectively,” Hung said. Hung’s
company has contributed to an expansion in the electronics industry’s
performance in the first seven months of 2021, when the industry’s
export-import turnover hit $27.4 billion and $39.4 billion, up 16.5 and 20.3
per cent on-year, respectively. South
Korea’s Samsung holds more than 90 per cent of Vietnam’s total electronics
export turnover in the period. The Ministry
of Industry and Trade (MoIT) reported that while many items witnessed a slash
in export-import turnover in the first seven months, electronics is among
several key export items with an on-year rise in export turnover in the
period, such as rubber ($1.5 billion, up 73.6 per cent), machinery and
equipment ($19.7 billion, 55.4 per cent), textiles and garments ($18.6
billion, 14.1 per cent), footwear ($12.1 billion, 27.7 per cent), wood and
wooden products ($9.5 billion, 53.7 per cent), and transport means and
components ($6.5 billion, 48.5 per cent). In the first
seven months of this year, Vietnam’s total export turnover hit $185.33
billion, up 25.5 per cent on-year, with local businesses raking in $48.52
billion – up 14.6 per cent on-year and accounting for 26.2 per cent of the
country’s total export turnover; and foreign-invested enterprises (FIEs)
fetching $136.81 billion including crude oil exports, up 29.9 per cent
on-year, and holding 73.8 per cent of total export revenue. Meanwhile,
the total import turnover sat at over $188 billion, an on-year expansion of
35.3 per cent, with domestic enterprises earning $66.31 billion, up 29.8 per
cent as compared to the same period last year, and FIEs harvesting $121.72
billion, an on-year rise of 38.5 per cent. Thus in the
first seven months of this year, Vietnam saw a trade deficit of $2.7 billion,
in which local enterprises witnessed a shortfall of $17.8 billion while FIEs
enjoyed a trade surplus of $15.1 billion, including crude oil exports. “In general,
Vietnam’s seven-month export picture remains optimistic. However, the export
growth is showing a signal of slowdown due to COVID-19 hurting performance of
enterprises,” said an MoIT report released last week. “It is expected that in
the coming time, growth of exports and imports will largely depend on how
Vietnam can well control the pandemic and boost vaccination.” The MoIT
forecasted that the world’s demands for goods will continue staying at a high
level because many nations are increasing their vaccinations drives and
reopening their markets, which “will raise their demands for textiles and
garments, footwear, wooden products, and electronics items from Vietnam.” Moreover,
many economies have also been expanding stimulus packages via direct support
for their citizens, accordingly boosting consumption of goods including those
imported from Vietnam. The
International Monetary Fund late last month estimated that the global
economic growth rate will be 6 per cent this year. Meanwhile, according to
the World Bank’s latest report on the global economic outlook released in
June, the world’s economy will climb 5.6 per cent in 2021, instead of the
previous forecast of 4.1 per cent made in January. The reason is that many
nations have been increasing their vaccine programmes and stimulus packages. In addition,
the MoIT also said that Vietnam and its partner nations are actively
implementing commitments under inked free trade agreements, which will help
boost Vietnam’s exports into these nations with preferential tariffs. The MoIT
forecast that this year, the total export turnover will be $308 billion, up 9
per cent on-year, and the total import turnover will be $306 billion, up 16.5
per cent on-year, meaning a trade surplus of about $2 billion. Pandemic measures placing strain on inflation goals Although
Vietnam plans to keep inflation below 4 per cent in 2021, it remains a
significant challenge as the government juggles the fight against the
pandemic and socioeconomic development. The CPI in
July only increased by 0.62 per cent on-month, showing that the waves of
people hoarding goods did not have much impact on this important index. In
consumer goods and services, seven out of groups increased their prices,
while three groups saw price decreases, and one remained stable compared to the
previous month. The slow
increase in Vietnam’s CPI is directly attributable to the prices of petrol
following global prices. The GSO’s report showed that the traffic group had
the highest price increase in July with 2.36 per cent, causing the general
CPI to increase by 0.23 percentage points. Core
inflation, which is the change in the costs of goods and services but does
not include those from the food and energy sectors, in July and the first
seven months of 2021 compared to the same period last year were the lowest
since 2011, and decreased by 0.06 per cent in July compared to the previous
month thanks to price stabilisation solutions in the whole market. On
average, core inflation climbed 0.89 per cent over the same period in 2020 in
the first seven months of 2021, lower than the overall average CPI, which
increased by 1.64 per cent. Meanwhile,
the foreign currency reserves of the State Bank of Vietnam still ensure to
meet the needs of importing enterprises, also affecting the price of gold
which averaged at $1,803 per ounce, down 1.78 per cent in June Price
pressure is growing throughout Vietnam’s economy as businesses struggle more
to meet consumer demand amid shortages in raw materials and labour. In
addition, limited transport capabilities due to anti-pandemic measures in
some localities, together with higher input costs, are also causing issues
for businesses trying to maintain production and exports. Consumer
demand will likely increase when Vietnam’s ongoing vaccination programme
makes further significant progress, and restrictions on travel are eased,
along with government support packages. GDP growth
in the first half of the year reached 5.64 per cent. Standard Chartered Bank
predicted that the economy may recover slightly in 2021. However, food prices
increased after cooling down last year, an opposite trend compared to the
previous year, paired with recent low core inflation rate. Standard Chartered
warned that rising food prices are a risk that could put pressure on
inflation because the food group accounts for nearly 40 per cent of the goods
in the CPI baskets. Pham The
Anh, chief economist of the Vietnam Institute for Economic and Policy
Research, found that inflationary pressure is increasing, especially in
recent months when the consumer market was recovering. According to
Anh, pressure on inflation may come from strong money supply growth. In the
last 10 years, the growth rate of cash and credit supply remained very high
compared to regional countries, similar to the growth of the economy. The recovery
of consumer demand may increase inflationary pressure into 2022, said Anh.
“This recovery comes from two main factors. Firstly, price appreciation of
real estate and stocks may spread to consumer prices, especially
post-pandemic. Secondly, recovery of the global economy will cause price
hikes for all kinds of raw materials, higher than the average level of 2020,”
he explained. Vietnamese coconut conquering Belgian market
Canned
pure fresh coconut water Cocoxim of Ben Tre Import-Export Joint Stock Company
(Betrimex) has become popular among consumers in Belgium for several years.
This product is imported directly from Vietnam by the Belgian start-up
company South Export Alliance and distributed in Belgium, France and the
Czech Republic. EVFTA has
opened new opportunities for South Export Alliance that also sells Cocoxim to
France and the Czech Republic. Vietnamese
agricultural products have affirmed its foothold in the EU - a vivid
illustration for Vietnam’s ability to produce high-quality goods./. Vingroup tests self-driving electric vehicle in Nha Trang Conglomerate
Vingroup recently posted a video on the trial run of its level 4 self-driving
electric cars on Hon Tre island, Nha Trang city, the south central province
of Khanh Hoa, which is developed by the Vingroup Big Data Institute
(VinBigdata) Research Institute. The vehicle
features a map with high resolution for areas of up to 10 sq.km and optimal
positioning for navigation with an error of only 5cm in the active area. It applies
artificial intelligence (AI) combining data collected from two lidars and six
102-degree wide-angle cameras. The solution
is capable of identifying obstacles on the road such as pedestrians,
vehicles, and traffic signs with a high rate of accuracy. Meanwhile,
the vehicle has the ability to automatically decelerate from a distance of 30
m or change lanes from a distance of 10 m when detecting immobile obstacles. The average
speed can be up to a maximum of 30 km per hour, which is an impressive speed
for electric passenger vehicles with a large payload of up to 23 seats. Automatic
parking feature is also integrated into the smart vehicle. Vingroup
said this is one of VinBigdata’s latest research outcomes, making it the next
Vietnamese firm to develop a level 4 self-driving electric vehicle. In March,
Phenikaa Group, a multi-sectoral corporation, introduced its prototype of a
level-4 autonomous vehicle, the first smart self-driving vehicle in
Vietnam./. Oil and gas companies post mixed business results despite higher
oil prices
Oil prices
have continuously increased since the beginning of the year on the production
cut agreement of OPEC+ and the global recovery in fuel demand. This has been
reflected in the market price of oil and gas stocks, however not all
businesses benefited. In the
international market, oil prices had risen more than 47 per cent in the first
half of the year, resulting in higher prices of refined products. In June,
Brent crude even broke over US$76 per barrel over rising concerns of a supply
shortage. OPEC and its allies, led by Russia, then agreed to loosen
production caps starting in July. From the end
of 2020 to the first quarter of 2021, oil demand in the Asia-Pacific region
hit a peak on COVID-19 control measures. However, the outbreak since the
beginning of the second quarter of the year has affected oil demand in this
region. Mixed
results Despite the
higher oil price, not all oil and gas enterprises in Viet Nam benefited, the
latest report of Viet Dragon Securities Corporation (VDSC) said. Of which,
for upstream companies, business results were not very positive in the first
six months of the year due to the impact of COVID-19 and the stagnation of
domestic oil and gas projects. PetroVietnam
Drilling & Well Services Corporation (PVD), which operates in the
upstream sector, involving oil and gas exploitation, providing most of the
drilling services at Petrolimex’s oil fields and also participating in
international activities, reported a drop of 47 per cent year-on-year in net
revenue to over VND1.66 trillion in the first half of the year. The big fall
in revenue along with large provision costs caused PVD to record a net loss
of VND95 billion. Similarly,
PetroVietnam Technical Services Corporation (PVS)’s net revenue also declined
by 35 per cent to nearly VND5.7 trillion during the period, resulting in a
fall of 16 per cent over last year in profit after tax to VND347 billion. Even in the
same upstream sector, PVS will be less affected by oil prices than PVD
because of its diversity in operations including ships, ports, floating
warehouses and petroleum engineering. However, the
bright oil price outlook due to the supply-demand gap has helped the prices
of PVD and PVS shares increase significantly. On the Ho
Chi Minh Stock Exchange (HoSE), PVS shares had risen 53.2 per cent in the
first six months of the year, while PVD shares climbed 27.2 per cent. Meanwhile,
for the midstream and downstream sector, companies witnessed positive
business results, boosted by sustainable rallies of oil prices which
translated into higher selling prices or improved gross profit margins. Accordingly,
PetroVietnam Gas JSC (PVGas, GAS) finished the first six months with net
revenue of VND40.27 trillion and profit after tax of nearly VND4.4 trillion,
up 23.2 per cent and 4.1 per cent respectively. PVGas
operates in the midstream sector, specialising in gas collection and
redistribution to other firms in the market. Particularly in the second
quarter, the sharp increase in oil prices boosted the company’s revenue by 45
per cent, while gross profit climbed 57.5 per cent year-on-year. In the same
segment, Petrovietnam Transportation Corporation (PV Trans, PVT) also earned
VND256.5 billion in profit after tax in the second quarter, up more than 8
per cent. PV Trans
said that the gain was driven by higher freight rates, new ships, cost
savings and asset liquidations. In the first
half of the year, PV Trans recorded net revenue of more than VND3.58
trillion, up 5.5 per cent, with profit after tax rising 30 per cent to VND439
billion. Binh Son Refining
and Petrochemical Company Limited (BRS), the unit that manages and operates
production and business activities of Dung Quat Oil Refinery, posted
significant growth on high oil prices. As it had to
continuously produce and process products, Binh Son Refinery always has to
maintain a quantity of crude oil and it takes time to process crude oil to
products for sale. In the first
six months, Binh Son Refinery’s net revenue reached over VND48.9 trillion, up
54 per cent over last year. Its profit after tax was VND3.58 trillion during
the period, compared to a loss of more than VND4.23 billion in the same
period last year. Accordingly, the company has achieved 53 per cent of the
output plan, 70 per cent of the revenue plan, and quadrupled the profit plan. PetroVietnam
Oil Corporation (PV OIL, OIL) which is also in the downstream sector,
recorded an increase of 15 per cent year-on-year in net revenue in the second
quarter of 2021 to VND13.4 trillion. Deducting expenses, PV OIL’s after-tax
profit was nearly VND272 billion, up 45 per cent. As of June
30, the company’s net revenue reached nearly VND25.2 billion, down 14 per
cent over last year. But it posted a net profit of VND359 billion, while it
lost VND241 billion in the same period last year. In its
explanation, the company stated that the high profit was due to the
fluctuations of gasoline prices in the international market, with the average
Brent crude oil prices surging 133 per cent year-on-year in the second
quarter of 2021, from $29.56 per barrel to $68.97. Kien Giang develops marine aquaculture towards sustainable
development The Mekong
Delta province of Kien Giang will develop sea aquaculture, focusing on
breeding fish in floating cages and bivalve
mollusc farming effectively and safely, thereby contributing to
enhancing agricultural economic growth in the context of the COVID-19
pandemic, according to the provincial Department of Agriculture and Rural
Development. The
province's number of fish cages at sea will rise to 5,500 with an
expected output of 5,200 tonnes in the remaining months of the year. The bivalve
mollusc farming area will cover 25,560 hectares and is hoped to produce
nearly 75,000 tones while clam breeding area will account for 250 ha with an
projected output of 150,000 pearls, the department said. Regarding
fish cage farming at sea, the province will raise fish in a concentrated area
and promote sustainable production linkages in the communes of Hon Nghe (Kien
Luong district), Lai Son (Kien Hai district), Tien Hai (Ha Tien city) and
Ganh Dau (Phu Quoc city) with such species as grouper, pompano and snapper. It will also
breed bivalve molluscs in coastal areas in the districts of Kien Luong, Hon
Dat, An Bien, and An Minh with species like sea mussels and blood cockle,
while raising clams for pearls in Phu Quoc. To achieve
the goal, relevant agencies were assigned to coordinate with districts and
cities which engage in marine aquaculture to provide training and disseminate
information relating to regulations on licensing marine aquaculture and
issuance of identification codes for cage farming to residents. They would
also receive and processe applications for licences for marine
aquaculture, field trip surveys, and allocation of marine areas for
aquaculture. Organisations
and households who take part in marine aquaculture will undergo training and
be supplied with technical guidances on the fish cage and bivalve molluscs
farming. A network of environmental monitoring and disease prevention and
control relating to marine aquaculture will be built within areas approved by
competent agencies. Fish
breeders will receive support in the application of scientific and
technological advances with such new materials as plastic cage structures or
lighting on rafts with solar energy./. Measures sought to promote cooperation between Japan’s Niigata,
Vietnamese localities Vietnamese
Ambassador to Japan Vu Hong Nam has paid a working visit to Niigata to seek
measures to foster economic partnership between the Japanese prefecture and
Vietnamese localities. During the
August 10 visit, Ambassador Nam had a meeting with Niigata Governor Hideyo
Hanazumi, during which the Vietnamese diplomat expressed his hope that
COVID-19 will be controlled soon, so that businesses of both sides can
promote their cooperation activities. Hideyo
Hanazumi said that the Niigata administration and other localities highly
value the Vietnamese Embassy's role in connecting firms of Niigata and
Vietnam, and pledged to create optimal conditions for improving investment
efficiency of Niigata businesses in Vietnam. At a talk
with leaders of Sanjo city of Niigata and a number of local firms investing
in Vietnam, Nam said that Vietnamese consumers are interested in steel
products of Japan, expressing his hope that the city will continue to support
businesses investing in Vietnam, especially in overcoming the pandemic. Sanjo Mayor
Ryo Takizawa said that the city is pleased to become the major unit to
implement cooperation projects using the Japanese government's ODA in Ba
Ria-Vung Tau province through the Japan International Cooperation Agency
(JICA). Takizawa
said that the Sanjor Chamber of Commerce and Industry signed a cooperation
document on human resources training with the Ba Ria-Vung Tau Department of
Industry and Trade in 2017. Local firms
in Sanjo spoke highly of online exchange events between business communities
of Sanjo and Ba Ria-Vung Tau in May. The embassy
is working with relevant agencies to report the difficulties facing Niigata
firms in cooperating with Vietnam, especially those caused by COVID-19, to
the Prime Minister, thus seeking timely solutions, Ambassador Nam told
Vietnam News Agency correspondents in Tokyo after the visit. As part of
the trip, Ambassador Nam visited a number of economic and cultural facilities
of Niigata./. Anti-pandemic efforts should be made alongside EVFTA enforcement The
EU-Vietnam Free Trade Agreement (EVFTA) is becoming more important than ever,
especially when the national vaccination campaign is being launched to bring
the COVID-19 pandemic under control and move towards economic recovery. One year on
from its official enforcement, the EVFTA has brought about a range of
positive impacts to boost export activities, especially in the context that
the national economy is facing a range of difficulties caused by the COVID-19
pandemic. According to
data provided by the Ministry of Industry and Trade, two-way trade turnover
between Vietnam and the EU reached US$27.67 billion during the first half of
the year, marking a rise of 18.4% over the same period from last year. Of the
figure, the turnover of Vietnamese exports to the EU hit US$19.4 billion,
representing a rise of 18.3%. Luong Hoang
Thai, head of the Multilateral Trade Policy Department under the Ministry of
Industry and Trade, stated that the EVFTA offers many opportunities for the
country to expand exports, attract greater investment, and become more deeply
involved in the global value chain. Key
Vietnamese key products such as footwear, garments and textiles, along with
agro-forestry products such as rice and rubber products, still maintain their
performance and have made good use of this agreement, he added. Despite
these positives, preferential commitments are not utilised to their full
potential as enterprises are not particularly interested in learning about
and taking advantage of the various opportunities that the trade deal
presents. In addition, publicity activities to promote the agreement have yet
to achieve the results as expected. One of the
primary reasons why the utilisation of the EVFTA has not gone as expected is
due to the complicated nature of developments regarding the COVID-19 pandemic
spreading on a global scale, a factor that has negatively impacted both the
world and Vietnamese economy. Furthermore,
the forecasting, attention, and proper assessment of the impact scope of FTA
integration, along with the implementation of some agencies and localities,
reveals some limitations and are not conducted in a systematic and timely
manner. Alain Cany,
president of the European Chamber of Commerce in Vietnam (EuroCham), said
that currently, countries around the world are mainly focusing all of their resources
on fighting the COVID-19 pandemic. The EVFTA will therefore not be successful
without a concerted effort between the Government and the private business
community. Moving
forward, the pandemic situation is likely to develop in a prolonged and complicated
manner, with social distancing measures still being enforced, thereby
seriously reducing the resources of enterprises. This will have an impact on
technology innovation, product quality improvement, and labour productivity,
therefore making it more difficult to make effective use of EVFTA
commitments. Amid this
context, many experts believe that, in order to effectively implement the
EVFTA, various ministries, sectors, and localities, as well as businesses,
should stay united in the process for the purpose of mutual benefits. Moreover, it
remains necessary to outline a more favourable mechanism for businesses in
terms of accessing credit in order to improve their ability to take advantage
of the opportunities from FTAs. Drastic measures applied to ensure fast customs clearance amid
COVID-19 Right after
receiving reports on the congestion of shipments in Cat Lai port, the agency
issued Official Letter No. 3847/TCHQ-GSQL directing the Customs Department of
HCM City and the Saigon Newport Corporation to apply temporary customs
clearance procedures during COVID-19 pandemic to ease congestion. Under the
document, imported goods kept in Cat Lai port are to be transported
to other ports in HCM City and other localities to free up space for
newly arriving goods. Vice
Director of the General Department of Vietnam Customs Mai Xuan
Thanh directed relevant agencies to intensify coordination to reduce the
congestion in the port, with working teams set up to connect the agencies. Alongside,
the general department has promptly built a draft circular on customs
supervision in case imported goods at seaports in localities applying social
distancing measures have to be moved to other seaports. The
application of social distancing measures due to complicated COVID-19
developments in HCM City and 18 southern localities has affected the
transport of goods out of a number of seaports, especially Cat Lai. In order to
ensure fast customs clearance, the general department directed the Customs
Departments of Hanoi and HCM City to require the Customs Sub-Departments in
Noi Bai and Tan Son Nhat International Airports to create favourable for
customs clearance process for medical supplies, medicine, vaccine and
bioproducts serving COVID-19 testing. Arising
problems have been reported to the general departments quickly via Zalo and
email for timely settlement. Port backlogs force alternative actions With
unreceived containers piling up and hampering the work of much-reduced
personnel, Cat Lai Port in Ho Chi Minh City has thrown in the towel and
requested that importers readjust the shipping routes to alternative
destinations. A key
international seaport of the Southern Key Economic Region, Cat Lai Port
temporarily suspended receiving imported goods from enterprises that are
suspending operations due to COVID-19 as well as goods that occupy large yard
space. Shipping lines and agents have been directed to adjust the destination
of their shipments to Tan Cang-Cai Mep International Port, Tan Cang-Cai Mep
Thi Vai Port, or Tan Cang Hiep Phuoc Port and inland container depots. According to
the Ministry of Industry and Trade, Cat Lai Port made the announcement after
reaching its full capacity to clear up its immense backlog amid a critical
shortage of workers as due to sporadic F0 and F1 cases, port personnel has
been slashed by half. Prior to the
suspension, cargo capacity has dropped from 13-14 to 5-7 containers a day due
to the congestion and freight transport businesses have been complaining of
traffic jams outside the port that makes it impossible to deliver and pick up
goods on their contracted times. In a July
market update, Maersk said that due to the escalating situation, containers
are only allowed to gate-in 72 hours prior to the estimated departure time of
the vessel, often resulting in workloads exceeding trucking capacity. At
certain checkpoints, drivers are required to present a negative COVID-19
certificate, racking up costs and waiting times. Meanwhile, a
customer notice by SEKO Logistics also warned of delays in releasing import
shipments at Cat Lai and Cai Mep ports because many factories have had to
temporarily close and are unable to receive their shipments. This has led to
a lack of empty containers to be reused for exports. Trucks moving in and out
of lockdown areas also need to strictly follow government health rules and
drivers need to show negative test results from the past three or seven days,
depending on whether they get a fast test or a PCR test. Commenting
on the current situation, Jan Segers, Vietnam country manager at Noatum
Logistics, told VIR, “For the moment, imports due to dock at Cat Lai have
been rescheduled to to other ports and inland container depots. Containers
for export can still be delivered to Cat Lai. There may be some delays due to
checkpoints and road blocks, but all exports can be arranged. We cannot tell
if the delays of ocean vessels are due to delays at previous ports – which is
the reason most shipping lines cited – or if it is due to reduced
productivity in undermanned Vietnamese ports.” Over the
past few days, businesses have been rushing to find alternative ports for
their imported goods after Cat Lai Port announced to temporarily stop
receiving imported containers. A
representative of one furniture chain said that the company was waiting for
several containers to dock at the port when they received the news. The
announcement forced the company to transfer the containers to other ports,
affecting delivery and production schedule as well as incurring additional
costs for transport and storage. Another company
from the southern province of Binh Duong currently has nearly 60 import
containers at Cat Lai Port which they cannot move due to a shortage of
drivers amid the pandemic. According to
Stephen Olson, research fellow at the Hinrich Foundation, disruptions at
major ports are inevitable amid the spike in COVID-19 infections. While the
local authorities and businesses are taking the steps they find necessary to
ensure public safety, there will undoubtedly be significant and unavoidable
economic costs. Even when infection rates start to ease, it will take quite
some time to clear up the backlogs. “Businesses
will have no choice but to try their best to adjust to the port disruptions,”
he said. “Some companies are beginning to increasingly rely on air freight
but obviously that is an expensive option that will not always be feasible.
These headaches will be compounded for labour-intensive industries which are
finding their workforces disrupted by the pandemic and lockdown restrictions.
Companies might also struggle to find available warehouses to store their
products which cannot be shipped at the present time. The labour and port
disruptions will have a ripple effect across the business environment.” Continent’s automobile production stutters yet again Automakers
are being forced to suspend production and suffer from sales dips again due
to pandemic disruptions across Asia. Honda
suspended operations of three facilities in China’s Wuhan city last week and
has yet to announce a time to resume, with workers unable to travel to work
due to area blockades. Last year Honda operations were suspended for 76 days
in Wuhan due to the original outbreak. The carmaker
last month was also forced to close one of its Japanese plants while it has
also just resumed three facilities in Vietnam in early August after a
three-day suspension. Another
competitor, Toyota, announced that it will suspend three assembly lines in
Japan for several days in August due to supply chain disruptions caused by
the spread of infections in Vietnam. The latest
suspensions will affect the production of around 5,000 vehicles, bringing the
total production cut to about 8,000 vehicles following Toyota’s earlier
announcement that a line would be suspended due to issues in Vietnam, as
reported by Japan Times. Three Toyota
assembly plants in Thailand have also been recently shuttered after local
suppliers stopped making parts due to surging infections. The three plants
are Toyota’s key factories in Southeast Asia, and can produce a total of
about 750,000 passenger cars and commercial vehicles annually. This is not
the first time that carmakers have suspended work at facilities because of
supply chain disruption. In this sector, just one missing part can lead to
shutting down an entire production line, and the damaging ripple effect of a
material or parts shortage quickly spreads throughout the supply chain. Ford and
General Motors paused assembly lines where they have failed to secure
chipsets to power their cars’ onboard computers, in which GM cut production by
278,000 units through May, and Ford had to reduce global production by 50 per
cent in the second quarter. Other automakers are in the same boat. The analysis
warned that it takes time for semiconductor chips or auto parts to increase
in output, while carmakers cannot easily replace any particular part of a
car. According to
Goldman Sachs estimates, as the demand for chips continues to exceed supply,
the auto industry is forecast to be the biggest loser in 2021, with up to $20
billion wiped off global carmakers’ operating profit this year. “The virus
is an issue that has the potential to affect all Toyota locations and we are
continuously working to further enhance our communication and health checks
with staff at all locations,” noted a Toyota statement released last week.
“Toyota is actively implementing measures to prevent the further spread of
the virus and remain committed to providing timely updates as the situation
requires.” The
situation is still unpredictable due to expansion of COVID-19 in emerging
countries, semiconductor shortages, and soaring material prices, according to
the statement. In Vietnam,
car dealers have complained that not much revenue has been recorded for July
and some dealers have suffered from zero sales. They do not see much chance
of an obvious recovery in August. Hirai
Shinji, chief representative of the Japan Trade Promotion Organization in Ho
Chi Minh City, said Japanese companies are ready to cooperate with the
Vietnamese government to contain the pandemic and to fully and strictly
comply with the regulations. “It seems
very challenging for Japanese companies to comply with the unprecedented
three-on-spot plan, but one company after another has been doing its best,
supported by instruction of the local authorities, to realise the dual goal
of achieving socioeconomic development as well as containing the pandemic. In
addition, Japanese companies have been helping each other through sharing the
experiences with each other,” Shinji said. “Some
employees are prepared to work, eat, and stay in the factory, but others are
not because they have to take care of their own families,” he added. “Even if
the companies can secure a certain amount of workers and can continue
operations, the amount of production would not be enough to meet the large
demand by the manufacturers, but it is better to actually continue operation
than to completely disrupt the global supply chain.” Barriers to lending rates and VAT refunds in BOT projects soon
to be resolved Investors of
build-operate-transfer projects are expected to rejoice over upcoming
solutions related to issues surrounding lending rates and VAT refunds in
August, enabling them to make the next steps. The move
follows the urge of the Vietnamese Association of Road Systems Investors
(VARSI) on these issues. Accordingly,
the DPM asked the Ministry of Finance to work with relevant agencies to soon
consider the proposal of the VARSI and come up with solutions for these
problems, before replying to the association and reporting to the prime
minister about the results within August. Build-operate-transfer
(BOT) – a type of public-private partnership – is the most popular model in
Vietnam. However, banks still hesitate to lend to BOT initiatives for fear of
capital increase, long investments, and high risks. Previously,
a number of BOT transport initiatives have hit the rocks, including Dau
Giay-Phan Thiet Expressway – the first pilot transport project in this
format, despite the strong interest of international investors. Meanwhile,
other BOT initiatives were credit stuck, such as at Huu Nghi-Chi Lang, Van
Don-Mong Cai, and Trung Luong-My Thuan. Many of them halted construction for
a number of years due to loan access problems. State-owned lenders maintain positive run Four
state-owned commercial banks in Vietnam have revealed their upbeat business
performance and are fully committed to deploying all resources possible to
ease the current economic stress, thereby reflecting their influence on the
country’s financial landscape. Regarding
pre-tax profit growth rate, BIDV led the pack with a rise of 82 per cent,
Vietcombank came last in the “big four” group with a profit growth rate of
only 24 per cent. BIDV’s
profit increased sharply by 86.3 per cent thanks to its tough approach on
handling non-performing loans while taking advantage of cheap mobilised
capital and expanding revenue from a variety of banking services. Moreover,
BIDV and Agribank spent a larger number on risk provision compared to
VietinBank and Vietcombank. However, in
terms of absolute numbers, the individual commercial banking arm of
Vietcombank (compared to its group scale) is the largest beneficiary, with
VND13.57 trillion ($590 million) in pre-tax profit. VietinBank,
Agribank, and BIDV ranked second, third, and fourth respectively, while
BIDV’s individual banking unit recorded VND7.581 billion ($379.1 million).
Overall, BIDV ranks sixth in terms of profit in the whole banking system in
Vietnam. BIDV is also one of the least efficient lenders in terms of return
on assets ratio. Among the
big four, Agribank and BIDV are the leaders in terms of credit market share.
However, in terms of total assets, Agribank is currently the largest bank in
the system thanks to its largest customer deposits pie. VietinBank and
Vietcombank ranked third and fourth, respectively. According to
Mirae Asset Securities, the bank credit to the private sector as per cent of
GDP remained at approximately 140 per cent, said to be a warning level of the
economy’s high dependence on credit. However, GDP growth will slow down in H2
due to the impact of more widely applied social distancing measures,
especially in key major cities. Thus, credit growth for the whole industry in
2021 is predicted to be in the range of 9–10 per cent, higher than the SBV’s
expected growth rate in the worst-case scenario of 7–8 per cent. Asset
quality is not expected to see significant changes, as banks are still
allowed to restructure debts for customers affected by the ongoing pandemic
until the end of 2021. “The banking
sector is still a bright spot in terms of profitability amid the pandemic,
with sector profits generally expected to maintain double-digit growth in
2021, thanks to positive business results in H1,” Mirae Asset Securities
noted. “With banks starting to cut interest rates to support customers in the
last five months of 2021, as requested by the State Bank of Vietnam, we
expect to see strong divergence between banks, with small and medium-sized
commercial banks with good asset quality forecast to have more impressive
profit growth.” Among the
four state-owned banks, BIDV’s asset quality is predicted to be significantly
improved. Due to the low Tier 1 ratio, more capital would have been useful
and the capital calls will enable the bank to lower the average funding cost.
Additionally, BIDV is among the most active issuers in the primary bond
market, and its relatively high long-term debt also facilitates low funding
cost visibility. Notwithstanding,
the four state-owned banks are facing fierce competition from both private
lenders and foreign banks. Emerging bad debts due to the prolonged pandemic
could also hurt banks’ benefits. Given their state root, their significant
task at the moment is to support vulnerable government-prioritised sectors,
which will consequently impede their revenue from lower lending yields. VietinBank
said that it is expected that the total amount of the bank’s income reduction
to assist customers affected by COVID-19 this year could be more than VND6
trillion ($260.9 million). BIDV also
said that this bank has lowered its income by VND2.5 trillion ($108.7
million) in H1 to support customers by a number of relief measures, such as
interest rate reduction. In the second half of the year, BIDV plans to
continue to support customers facing difficulties due to the impact of the
pandemic, with a total support resource of up to VND3.6 trillion ($156.5
million). “BIDV is
committed to address the much-needed multifaceted demands of businesses
across all sectors and contribute to the spectacular growth story of
Vietnam’s economy. We are also rolling out relief measures such as rates
reduction and debt rescheduling as the crisis continues to take its toll on
the country,” a representative of BIDV told VIR. Some major
foreign investors are also looking for further collaboration with state-owned
banks. Mizuho Bank, the largest strategic foreign investor holding more than
a 15 per cent stake in Vietcombank, is closely monitoring the latest
initiatives from state equitisation. “We would
like to focus on business opportunities through mergers and acquisitions. We
are also capturing the latest trends in the banking sector through
Vietcombank, which we invest in,” explained Motokatsu Ban, manager and head
of Japanese Corporate Department No.2 at Mizuho Bank Vietnam in Hanoi. Vietravel Airlines seeks PM’s support Vietravel
Airlines has written to the prime minister, proposing borrowing VND1 trillion
with low interest rates, at 4%-5% per year, within five years to survive
during the pandemic and resume its operations once the pandemic is brought
under control. Vietravel
Airlines Chairman Nguyen Quoc Ky said Vietravel Airlines, like other tourism
and aviation enterprises, had been hit hard by the pandemic and needed
support to survive and develop. Tourism and
aviation firms have been affected by the pandemic but their bank loans are
subject to annual interest rates of 5.5%-9%. The
Government should issue support policies for all aviation enterprises, Ky
noted. Besides
offering preferential loans, he suggested extending the loan payment
deadlines, supporting laborers, increasing access to Covid-19 vaccines and
gradually reopening the tourism market. The
Government and the National Assembly should reduce the value added tax to 5%
and the corporate income tax to 16% for three years. In reality,
many banks have committed to lowering their lending rates but only some have
fulfilled their commitments. The policy to reduce land rentals has yet to be
employed due to the lack of instructions. Ky added
that the implementation of support packages should involve the participation
of enterprises to increase their effectiveness. Enterprises paying the social
and health insurance premiums of their employees can help hand over the
Government support directly to the laborers. To resume
tourism activities, Ky said the Covid-19 vaccine passport program should be
piloted in Phu Quoc, Hoi An, Nha Trang, Quy Nhon, Hue, Van Don and Halong. He
also proposed vaccinating the employees of tourism and aviation firms. Nguyen Thi
Khanh, chairwoman of the HCMC Tourism Association, said the current pandemic
wave had frozen tourism activities in the city. To resume
these activities, enterprises need capital and vaccines. However, the
proportion of tourism staff vaccinated against Covid-19 remains small. Domestic trading floor for agricultural products should be
established soon Congestion
of goods circulation in many localities has been disrupting domestic
logistics chains, as well as the export to foreign countries. How to deal
with this problem has become more urgent than ever. There are no
official statistics, but besides major trading floors in Vietnam, such as
Lazada and Sendo, most supermarkets, trade centers, and even manufacturers
open websites to sell goods. In
particular, in the context that people have to implement social distancing
under Directive No.16, the volume of goods traded at supermarkets and
commercial centers has increased drastically. The demand for online shopping
during the pandemic has been too high that many supermarkets and large trade
centers could not timely fulfill orders for people. Therefore, many
spontaneous sales pages have been active trading channels during this time. However,
consumers have been warned about the quality of goods on these spontaneous
sales pages. It is no coincidence that on some sales groups, which attract
hundreds of thousands of people, there are constantly reports to denounce
Facebook account holders for selling low-quality products or receiving money
transfers and then disappeared. Recently, at
a talk show within the framework of the Vietnam Agriculture Digital Transformation
Forum 2021 and the Virtual Reality Agriculture Exhibition, leaders of many
local agricultural sectors said that difficult transportation and supply of
goods had been negatively affecting manufacturers, especially farmers because
agricultural products must be harvested in time. Overmatured agricultural
products not only cost farmers more money for raising and growing but also
make the quality worse. At present,
in many localities, agricultural, aquatic, and seafood products are in the
harvest season, and farmers are longing to sell their produce. In this
context, one of the solutions that can help remove obstacles in goods
circulation, allowing buyers and sellers to learn to buy or sell better, is
the Ministry of Industry and Trade to build an e-commerce trading floor for
Vietnamese agricultural products. Mr. Chu Tien
Dung, Deputy Director of the Global Logistics Management Institute, suggested
that the e-commerce platform must meet all three factors of purchase,
transportation, and payment. The State manages this trading floor while
creating a full, transparent legal corridor for enterprises and households to
conduct transactions through the floor. Currently,
many ministries and sectors have been developing the e-commerce trading
floors, taking into account the global connection factor. However, they seem
to have not paid much attention to e-commerce transactions for the domestic
market. This should be adjusted because, with more than 100 million people,
this is an attractive large-scale market for enterprises. In addition, for
enterprises and farmers to be able to connect to buy or sell their
agricultural products on the e-commerce platform, the authorities need to do
better at market orientation, thereby clearly defining production and farming
standards. Only then, agricultural products are eligible to participate in
the online market. For instance, as for lychee, right from the stage of
cultivation, farmers have been guided to standardize the VietGAP or GlobalGAP
standards, so they are able to not only sell their produce at high prices in
the domestic market but also export well. According to
many experts, only by developing well in both domestic and foreign markets,
production and business activities of Vietnam's agricultural, aquatic, and
seafood industries can develop sustainably. SBV requests banks to ensure capital for temporary stockpiling
of paddy The Governor
of the State Bank of Vietnam (SBV) Nguyen Thi Hong, on August 10, sent an
official dispatch requesting commercial banks to fully and timely meet
capital needs and expand the credit limit granted to traders and enterprises
so that they have enough capital to purchase paddy for temporary stockpiling
and improve the area and quality of warehouses, preservation, and processing
of paddy and rice, contributing to minimizing traffic congestion and the
current paddy backlog in the Mekong Delta. Commercial
banks should promote reform, simplify internal processes and procedures,
shorten loan approval time. At the same time, they should diversify
appropriate credit products, proactively work directly with traders and
enterprises to have solutions to remove difficulties, and create favorable
conditions for enterprises and traders to access capital for the purchase and
temporary storage of paddy. The lending must ensure current credit
principles, cash flow management, and debt recovery. Along with
that, banks continue to deploy solutions to remove difficulties for
customers, including traders, enterprises, and rice producers and traders,
affected by the Covid-19 pandemic, such as restructuring the repayment term,
keeping the debt group unchanged, exempting and reducing interest, and fees,
and lending new loans to restore production and business. The Governor
of the SBV also requested its branches in provinces and cities in the Mekong
Delta to direct the branches of commercial banks in the area to implement the
above instructions, closely monitor developments, market situation, and loans
given to purchase and temporarily store paddy by local commercial banks to
promptly report to the People's Committees of provinces and cities and the
Governor on solutions to overcome difficulties and obstacles in the implementation
process. Engineering construction corporation partners with Japanese firm The Civil
Engineering Construction Corporation No. 4 (CIENCO4) on August 13 announced
that it has partnered with Japan’s G.K World Business Investment to set up
the CIENCO4 Japan Bridge (C4JB). A
representative of the corporation said the C4JB will start by contributing
capital and offering more engineering construction services. The
newly-established company has an initial capital investment of 12.3 billion
VND (540,000 USD), with G.K World Business Investment and CIENCO4 each
holding 49.67 percent of its shares. CIENCO4 has
been the constructor of major infrastructure projects of Vietnam, including
the Cam Lo-La Son and Phan Thiet-Dau Giay sections of the North-South
Expressway, along with the My Thuan-Can Tho and Noi Bai-Lao Cai expressways. Hanoi’s website on OCOP programme debuts A website
featuring One Commune, One Product (OCOP) products of Hanoi has been
launched, announced the city’s Coordination Office for New-style Rural Area
Building on August 12. The site
https://nongthonmoihanoi.gov.vn/ aims to further promote the city's OCOP
programme to domestic and foreign consumers. After two
years of assessment and classification, Hanoi has a total of 1,054 products
receiving at least three-star ratings produced by 74 firms, 82 cooperatives,
and 99 household businesses which create jobs for over 5,000 rural workers. Four-star
products account for a lion’s share of 69.36 percent with 731, while 306 are
rated three stars. The majority
of the OCOP products (65.56 percent) are foods while souvenirs, furniture and
décor products account for 28.37 percent of the total. The remainders are
beverages, herbal medicine, fabrics and apparel. Products
that have received recognition will be reviewed regularly. The
first-ever livestream promoting products of Hanoi’s OCOP programme was held
early June by the Hanoi Coordination Office for New-style Rural Area Building
together with the ASEAN Digital Conversion Research Institute (ASEAN
Academy). This event
aimed to support stakeholders in the production, sale and marketing of OCOP
products through digital technologies and e-commerce platforms, especially
against the backdrop of COVID-19. The Hanoi
Department of Industry and Trade will organise five Vietnamese Goods Weeks in
Hanoi this year to stimulate domestic demand and increase total retail sales,
thereby helping businesses and farmers consume products. Specifically,
the five weeks will have a scale of about 100 standard booths each week. Notably, Hanoi
will support 50 percent of booth costs for participating units with a maximum
of two booths per unit; similar support will be provided to each locality. In
which, the city will pay attention to support localities and businesses of
Hanoi and other localities in consuming agricultural products, aquatic
products, and fruit, which face difficulties in consumption due to the impact
of the COVID-19 pandemic. At the same
time, it will also strengthen communication and promotion, create the best
conditions for businesses to reach consumers and expand the market. In 2020, 14
OCOP showrooms were put into operation in the capital city. Hanoi
targets building new-style rural areas in all districts and communes, 40
percent of enhanced-criteria rural communes, and 20 percent of model rural
communes, while turning five suburban districts into urban districts. The OCOP was
initiated by the Ministry of Agriculture and Rural Development in 2008, based
on Japan’s “One Village, One Product” and Thailand’s “One Town, One Product”
programmes. It is an economic development programme for rural areas and
focuses on increasing internal power and values, and is also to help with the
national target programme on new-style rural area building. Hanoi’s six
districts have been recognised as new-style rural areas by the Prime
Minister, together with 355 communes, or 92.9 percent of the total, and 13
others that meet enhanced criteria for new-style rural area development. Vietnam
verified, rated, and recognised a total of 3,200 products as OCOP goods last
year, 800 higher than planned, according to the Ministry of Agriculture and
Rural Development. The national
OCOP council is reviewing 43 products for five-star ratings, the ministry
said. OCOP
products are made from a combination of local resources, traditional culture,
and advanced technology, which facilitates the development of diverse
products with better quality and packaging, and the ability to trace product
origin. The
programme has provided farmers with the chance to come together to form
cooperatives, which now account for 38 percent of 1,400 OCOP producers
nationwide. The establishment of these cooperatives has allowed farmers to
create products with better quality, design, and packaging as well as higher
standards, and made products more relevant to market demand./. Concerted efforts needed to ease barriers to Vietnam-China
agricultural trade Deputy Minister
of Agriculture and Rural Development Phung Duc Tien has asked for concerted
efforts by Vietnamese authorities and Chinese diplomats to remove barriers to
Vietnam’s agricultural exports to China during a virtual meeting. The meeting
was held among the Ministry of Agriculture and Rural Development, leaders of
four northern provinces of Lang Son, Quang Ninh, Lao Cai and Cao Bang which
border China, and the Embassy of China in Vietnam on August 11. Tien
requested his ministry’s units to regularly get updates from the Chinese side
as the neighbouring country plans to apply a number of new policies for
agro-forestry-fishery products originated from Vietnam. He urged
domestic agri-businesses and cooperatives to boost exports of goods to China
via official channels and strictly comply with requirements from Chinese
importers. The official
called for collective efforts from ministries, agencies, and local
administrations of Vietnam and the Chinese Embassy to bring down barriers to
bilateral trade, saying “we must thoroughly prepare from granting cultivation
area codes, sanitary and phytosanitary measures (SPS), farming process, to
packaging and transport.” “To do so,
we have no choice but to keep in touch with each other,” he noted. Vietnam now
has nine products exported to China via official channels, including dragon
fruit, watermelon, lychee, longan, banana, mango, jackfruit, rambutan and
mangosteen. The Ministry of Agriculture and Rural Development (MARD) is
seeking authorisation for eight more agricultural products to be shipped to
China via official channels. The ministry expects the current COVID-19
outbreak is soon stamped out so the two sides can ink a protocol on this
matter. Given that
road and waterway transport restrictions have been put in place to prevent
the spread of the virus, To Ngoc Son, Deputy Director General of the Ministry
of Industry and Trade (MoIT)’s Asia-Africa Market Department, suggested
Vietnamese exporters shift to railway transport. A train can
carry dozens of containers, meaning the same number of vehicles on road can
be reduced, he said. The MoIT is
developing a quarantine protocol for rail transport based on those for road
and waterway, Son said, adding that if problems of track gauge
incompatibility and refrigerated containers are solved, this will be a game
changer for trade between Vietnam and China. Vice
Chairman of the Lang Son People’s Committee Luong Trong Quynh voiced concerns
over slow customs clearance at border gates, causing long queues of loaded
container trucks. Some container trucks had even been in line near the border
gates for up to a week, severely affecting quality of agriculture products,
he said. Agreeing
with Quynh, Vice Chairman of the Quang Ninh People’s Committee Bui Van Khang
added that China tightening rules on cross-border trade has also led to
delays in customs clearance for Vietnamese farm produce shipments. Khang
proposed the MARD adopt policies facilitating exports under contracts to
reduce dependence on cross-border trade. He also unveiled that Quang Ninh is
considering opening more warehouses and container yards and building an
agricultural trade centre enabling long storage of fresh food. The province
also plans to upgrade its border gates and build more ports and expressways,
he said. Data from
the MARD shows that Vietnam’s import and export value of agricultural,
forestry and fisheries products reached 53.2 billion USD in the first seven
months of 2021, of which exports stood at 28.6 billion USD, up 26.7 percent
from the same period last year. The country’s
trade of the products with China rose by 38.8 percent year on year to 8.67
billion USD in the first half of the year, with exports hitting over 6.17
billion USD, up 35.8 percent. The
strongest growth was seen in shipment of cattle feed (124.3 percent),
followed by cashew nut (85.3 percent), and rubber (82.4 percent)./. Source:
VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Hanoitimes |
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