Farmers in the southern province of Ben Tre, known as the country’s kingdom of coconut, have recently rushed to empty their coconut plantations for an all-too-familiar reason: supply has outgrown demand as Chinese traders have again suddenly vanished.
The coconut market in Ben Tre relies heavily on Chinese traders, and they have disappeared right as production this year rose by 25 percent, local businesses said.
And what the foreign traders left behind is a huge unsold inventory, while prices have dropped to a throwaway rate.
The provincial people’s committee on Tuesday held an urgent meeting to seek solutions to stop farmers from chopping down their trees, and assist them as well as coconut processors. But no feasible solutions have been found yet.
Tran Anh Tuan, deputy head of the committee, ordered the localities in the province to encourage farmers to stay calm and wait for the market to recover.
“Local authorities should also provide guidance for farmers to grow cocoa or grapefruit in coconut gardens to increase income,” he said.
The coconut price has dropped to a mere VND800 each, or 38 US cents. Earlier the rate was some VND10,000 a coconut.
In related news, many attendees of a conference held by the Tien Giang People’s Committee have expressed their concern over the heavy reliance of blue dragon fruit on the Chinese market.
Last year, more than 80 percent of the total production of Vietnamese blue dragon fruits was exported to China.
The provincial people’s committee said they will assist farmers in growing the fruits in accordance with the Viet GAP and Global GAP (Good Agriculture Practice) guidelines to increase exports to other markets such as Japan, Korea, the US, and the EU.
Tax relief: better late than never, lawmakers say
At a National Assembly meeting on business aid held yesterday, most lawmakers proposed to exempt personal income tax, and reduce corporate tax, to boost consumption and assist businesses.
Minister of Finance Vuong Dinh Hue said the entire package was valued at some VND29 trillion (US$1.39 billion), including both the solutions ordered by the government and those by the NA.
Nguyen Ba Thuyen, a delegate from Lam Dong Province, spoke highly of the government’s assistance package, but also added that the government had not released it on time.
“Anyway, it’s better late than never,” he said.
“Should the aid be delayed further, it’ll be much more difficult for the economy to recover.”
Phung Quoc Hien, chairman of the NA Finance and Budget Committee, said most of the members under his committee agreed on a 30 percent cut to corporate taxes.
Meanwhile, Mai Huu Tin, chairman of U&I Investment JSC, called for more assistance besides that proposed by the government.
“We should cut valued-added tax, exempt personal income tax, and reduce the corporate tax from 25 percent to 20 percent,” he said.
“Cutting VAT tax by 50 percent will reduce state budget collection by VND15 trillion, while the loss will be some VND20 trillion in case of a corporate tax cut.
“But without these tax breaks, most of our small- and medium-sized enterprises will go bankrupt or dissolve, which will cause even greater damage to the economy, and especially increase the unemployment rate,” he elaborated.
Delegate Tran Du Lich, who represents Ho Chi Minh City, concurred, saying the 5 percentage point cut on the corporate tax should be released as soon as the beginning of next year.
Also at the meeting, many delegates demanded that taxpayers at the first level of the tax ladder -- those subject to a 5 percent tax rate -- be exempted from personal income tax, while NA deputy chairwoman Nguyen Thi Kim Ngan said taxpayers at all levels should enjoy the exemption.
“The government will take the NA delegates’ proposals into consideration after the meeting today to complete the assistance package, and will continue to provide guidance to aid businesses,” said Ngan.
The NA is expected to approve a resolution on solutions to help businesses and individuals in 2012.
Cbank pledges steady 9pct depositing rate until year-end
The State Bank of Vietnam has pledged to maintain a 9 percent depositing rate for one-year term deposits from now to the end of the year.
The pledge was given after the central bank announced the lending and depositing rate reduction starting Monday.
It coincided with the speech given by SBV governor Nguyen Van Binh at a recent meeting session of the National Assembly, stating that this will be the last rate cut for 2012.
This is the fourth time in nearly three months that the SBV has cut the depositing rates, with a total reduction of up to 5 percent.
The current interest rate mechanisms have ensured a balance between the interests of depositors and borrowers, in the context that inflation tends to be lower, SBV deputy governor Le Minh Hung told newswire Vnexpress.
Since the central bank will keep the interest rates stable until the end of the year, businesses will be more proactive in mapping out their business plans, Hung said.
As a result, there will be no financial shocks to the business sector, and the central bank can prevent forex speculators from hedging on the forex rate fluctuations, he added.
According to Hung, the current interest rate is appropriate regarding the world economic situation, notably the shrinking global demand, which will have an adverse impact on export-led economies like Vietnam.
Therefore, the operating activities of the SBV must be balanced between soaring local production and ensuring compliance with the inflation target, which is expected to be 7-8 percent this year.
With such an inflation forecast, the current depositing rate will ensure positive real interest rates for depositors. In addition, the State Bank is committed to not devaluing the dong by over 3 percent this year.
The interbank interest rates have begun to pick up right after the deposit interest rate cap was lowered to 9 percent per year, from Monday (June 11, 2012),according to newswire Vneconomy.
The interest rates in the interbank market on the date of the implementation of the new deposit interest rate cap of 9 percent per year, and 1 percent reduction on other key rates, soared sharply in many terms.
Specifically, many transactions showed that the overnight interest rate was 3 percent per year, up from 1.5 percent per year last weekend; one week terms were at 3.5 percent per year, up from 1.5 percent per year; and one month terms were 5-5.5 percent per year, up from 4-4.5 percent per year, according to Reuters.
At the same time, on June 11, the State Bank of Vietnam (SBV) also lowered the interest rate on open market operations (OMO) to 10 percent per year, the lowest since January 5, 2011.
Currently, the interest rates on OMO no longer attract the attention of the market, as OMO transactions have very small value and, oftentimes there are no transactions for many days.
Also on OMO, the central bank maintained its issuing of treasury-bills for tenors of 28-days, 91-days and 182-days, with value of three trillion dong per week.
The current value of these T-bills has reached over VND70 trillion, and they have not matured yet. This amount of money will return to commercial banks in the next several months, according to Reuters’ data.
The Hong Kong and Shang Hai Banking Limited Group (HSBC) has said in a recently released report that with easing inflation pressure, the central bank will further cut interest rates by 2 percent in the coming months.
Meanwhile Le Anh Tuan, research director of Dragon Capital, told Vneconomy that : "I do not exclude the possibility that Vietnam will have to reduce interest rates by around 2-3 percentage points from now to the year-end"
In the May report sent to investors which was announced by Bao Viet Securities Co (BVSC) today, the company has also forecast that the SBV may have to cut rates once more in the remaining months of 2012.
Iranian enterprises eye Vietnamese market
Fifteen Iranian enterprises will pay a visit to Vietnam from June 17-22 to seek business opportunities.
During their stay in Vietnam, the businesses, operating in oil and gas, agriculture, pharmacy, machinery, cattle feed processing, construction, building material production, and export-import, will attend the Vietnam-Iran business meeting on June 18, which is organized by the Vietnam Chamber of Commerce and Industry (VCCI).
This event offers a chance for enterprises in two countries to promote economic, investment and trade cooperation and exchange technological knowhow.
This event is held by VCCI, in coordination with the Iranian Embassy in Vietnam.
Entrepreneur awarded Laos’ Labour Order
A Vietnamese entrepreneur has been awarded Laos’ Labour Order, third class, for supporting Laos’ National Assembly and people.
The Chairwoman of Laos’ NA, Pany Zathotou, presented the award to Le Van Kiem, Chairman of the Board of Directors of the Long Thanh-Vientiane Special Economic Zone in Vientiane on June 11.
Speaking at the ceremony, Pany Zathotou thanked Kiem for providing the Lao NA with equipment serving its 7th session, sponsoring construction of schools for poor pupils and houses for Laotian war veterans, and maintaining martyrs’ cemeteries.
Kiem has left a deep impression on the Laotian peoples, she said.
In reply, Kiem said he felt extremely honoured at receiving the noble reward and promised to continue his social and charitable activities while striving to turn Long Thanh-Vientiane into a shining example of a special economic zone that highlights Vietnamese-Laotian fraternity.
Canadian firm to build hospital in Hai Duong
Canada’s Trip EYE Company has signed an investment agreement with Dai An JSC to build an international-standard hospital in Dai An industrial zone (IZ) in the northern province of Hai Duong.
The agreement was reached during a working trip to Toronto city, Canada, last weekend by a Vietnamese delegation led by Nguyen Manh Hien, Chairman of the Hai Duong provincial People’s Committee.
Under the deal, the Canadian firm will invest US$160 million to build a 200-room hospital in the first quarter of 2013. The hospital is scheduled for completion in 2015 to provide healthcare services and treatment to more than 20,000 workers who are working in Dai An IZ and local people in Hai Duong and surrounding areas.
During their trip in Canada, the Vietnamese delegation had a working session with the Mayor of Niagara city who invited Vietnam to take part in a project to build the ASEAN-Canada trade centre.
The Mayor also pledged to create favourable conditions for Vietnamese businesses to operate in the Canadian market.
Auto sales drop in May
Around 6,870 automobile units were sold in Vietnam in May, just 2 percent less than the previous month, according to the Vietnam Auto Manufacturers Association (VAMA).
As many as 5,710 units were assembled in Vietnam, while more than 1,000 completely built units (CBUs) were imported from overseas.
Over the past five months, 29,812 automobiles were sold, a year-on-year decrease of 35 percent, of that figure, commercial vehicle sales recorded 14,692 units, down 30 percent.
The VAMA says that only two firms sold more than 1,000 units in May, with Truong Hai taking the lead with 1,898 units, followed by Toyota with 1,602 units.
Seafood exporters drop by almost half
There are only 473 companies involved in seafood exports during the first five months of this year, down significantly from 800 companies in the same period last year.
However, the Vietnam Association of Seafood Exporters and Producers (VASEP) says the falling number of exporters has not influenced the country's total export value, as those who departed had low turnovers.
The country's five-month seafood exports still experienced a 9.8 percent year-on-year increase, reaching US$2.3 billion, says VASEP Secretary General Truong Dinh Hoe, who attributes this encouraging performance to increasing export turnover of large exporters.
Despite positive increase in terms of value, seafood exporters are now facing numerous difficulties for their business, including shortage of raw materials for processing and insufficient capital for production and increasing input cost.
Slumping demand for Vietnamese seafood in the EU, the country's largest seafood importer due to eurozone debt crisis was also problematic, it said, adding that Vietnam's seafood exports to the market slipped by 7.9 percent year-on-year with shrimp and tra fish witnessing the strongest decreases.
In order to better facilitate seafood exporters in the coming months, the Ministry of Agriculture and Rural Development has recently proposed two stimulus packages of credits worth US$209.5 million.
The proposal, which will be submitted to the Prime Minister for approval, included US$95.2 million package for raw materials purchasers and US$114.3 million ones for tra fish breeders.
Steel price starts to drop
After several months, big steel enterprises have finally decided to lower the steel price by VND200,000-300,000 per ton from this week to boost the consumption, bring down the inventories and avoid the interrupted production.
Pham Chi Cuong, chairman of the Vietnam Steel Association (VSA) told the Daily on Monday that Hoa Phat, Thai Nguyen, Vina Kyoei, Thep Viet and Southern Steel have announced to reduce the price by over VND200,000 for each ton.
According to Cuong, the steel ex-factory price of big firms only fluctuates around VND15 million per ton, exclusive of VAT, which has dropped much from the price of VND15.3 million last month.
“A reason for the steel price drop is a reduction of US$15-20 per ton in price of imported input materials such as steel billet or scrap,” Cuong said.
The steel consumption last month was quite low with only around 350,000 tons, and thus enterprises have then considered lowering the price.
Besides, the steel inventories until May 31 had amounted to 315,000 tons, and many plants have had to stop operations or just produced a small amount of steel billet, he said.
According to VSA, the total steel production capacity is now too high with up to 9.2 million tons of designed capacity per year. Meanwhile, the forecast consumption nationwide this year will only reach nearly six million tons.
VSA has for many times warned of the huge supply compared to the demand in the steel industry. However, localities have still licensed many large-scale steel projects recently.
Vina Kyoei Steel Co. last Friday started work on a new plant which will have a production output of 500,000 tons per year and go into operation in June, 2014. In addition, according to VSA, Posco Special Steel Vietnam late this month will construct a plant worth US$620 million with an annual capacity of one million tons in Phu My 1 Industrial Park, Ba Ria-Vung Tau Province.
VND strengthens against dollar
Commercial banks yesterday unexpectedly lowered the US dollar/ Vietnamese dong exchange rate by up to VND50-80 against the previous day.
Vietcombank and Bank for Investment and Development of Viet Nam (BIDV) cut the rate by VND50 and VND70, listing buying and selling rates at VND20,890/ 20,960 and VND20,880/20,960, respectively. The Eximbank rate was even lower, at VND20.880/20.950, down VND80 against the previous day.
Meanwhile, the average inter-bank rate of exchange yesterday, as listed by the State Bank of Viet Nam, remained at VND20,828 per US dollar, a level it had maintained for almost all of a six-consecutive-month period since November last year. The ceiling exchange rate applied to commercial banks allowed by the SBV was VND21,036.
The move was different from that in the past week when the market saw a devaluation that peaked around VND21,000 per dollar last Tuesday. Experts attributed the event to domestic importers demanding dollar to buy products in offsetting petrol source reduction brought about by the temporary closure of the Dung Quat oil refinery.
In addition, they said, credit institutions were buying US dollar to balance over-sale and to deal with the mature debts. They claimed such adjustments were only temporary and that revaluation of the dong against the dollar yesterday proved their anticipation.
SBV representatives said the devaluation of dong vs dollar over the past week was not a concern as foreign exchange supply remained abundant and the country's balance of payments in the first quarter this year saw a surplus of US$5 billion, the highest level for the past decade.
Demand for US dollar will continue to rise after SBV Governor Nguyen Van Binh affirmed it would keep interest rates at 9 per cent until the end of the year at least.
Metro winds up project to help fish farmers
Metro Cash&Carry has wrapped up a two-year programme to help fish farmers in the Cuu Long (Mekong) Delta maintain proper records and control the use of chemicals, improve farm infrastructure, and farm in an environmentally friendly and sustainable manner.
"More than 290 fish farmers in nine provinces have been trained, with 70 of them achieving Metro's good aquaculture practices certification," Dao Viet Dzung of the Asian Development Bank, which partially funded the project through its Viet Nam Challenge Fund (VCF), said at a review workshop in Can Tho last Friday.
The US$1 million programme with $250,000 coming from VCF helped set up a sourcing system, cold chain, and distribution centre for fresh fish products in the city where it was based.
The VCF is part of the bank's "Making markets work better for the poor (Phase 2) " (M4P2) project, which receives financial support from the Department for International Development (UK).
It also helped the participants attain Metro's GAP standards for a wide range of fresh water fish species consumed in Viet Nam.
A large agricultural extension system has been created for a wide range of non-export species, the first traceability system has been developed for fish products for the domestic market, and farmers were educated in food hygiene, food safety, and sustainable fishing.
The physical core of the project is a "fish platform" that has been set up in Can Tho with a capacity of 4,500 tonnes of fish per year and 15 tonnes at any given time.
Steelmaker begins construction on $220 million plant
Steel Vina Kyoei Co started construction of one more steel production factory worth $220 million in southern Ba Ria-Vung Tau Province.
The factory, located in Phu My 1 Industrial Zone, Tan Thanh District, has three workshops. The first workshop will produce 500,000 tonnes of ingot per year to be processed into rolled steel by the second workshop with a capacity of 400,000 tonnes a year and into higher quality steel with a capacity of 100,000 tonnes per year.
The factory is expected come on line in June, 2014, bringing total capacity of Vina Kyoei two factories to nearly 1 million tonnes of steel per year. The existing factory has a capacity of 450,000 tonnes per year.
Quang Minh Group opens warehouse in Vung Tau Province
The Quang Minh Group has opened a US$25 million warehouse for agricultural products in southern Ba Ria-Vung Tau Province. The 20,000-sq.m warehouse has a capacity of more than 100,000 tonnes of goods in its first stage.
For its second act, the group will build a warehouse for farm products on an area of 10,000sq m and capacity of 50,000 tonnes, plus a cooking oil depot with a capacity of 20,000 tonnes. The total capital for the two phases will cost $250 million.-
Mobile security software makes iPhones spam-proof
The Bach Khoa Anti-virus Centre has released its Mobile Security software that keeps iPhones safe from spam messages. More than 1,000 iPhone users said they had not received spam messages since installing the software – which uses Smart Filter technology – two weeks ago.
The software also offers protection against viruses.
The centre has already updated it for the Android operating system and will release versions for the Blackberry and Symbian systems in the third quarter. The software is available for free at http://mobile.bkav.com.vn.
Vietnamese products fair opens in Binh Phuoc Province
Around 45 companies displayed their products at a three-day trade fair in southern Binh Phuoc Province that closed on Monday.
The fair showcased products like food, confectionery, textiles, household utensils, cosmetics, stationery and pesticides.
It also collected donations of gifts for poor people and needy students and offered consumer counselling and training in sales skills for small traders in traditional markets.
It was organised by the HCM City-based Business Study and Assistance Centre, the Binh Phuoc Department of Industry and Trade and the Quang Hon District People's Committee.
Rate cut may trigger property boom
The domestic real-estate market is expected to receive a new infusion of money following a deposit interest-rate cut to 9 per cent from 12-13 percent by the State Bank of Viet Nam and a subsequent fall in loan interest rates.
This was the fourth time during the last three months that the central bank has decided to reduce the dong interest-rate on deposits.
The central bank's move yesterday resulted in a decrease in interest rates on loans with various terms at commercial banks.
At Vietcombank, last week the bank decided to slash the interest rate of termed loans to 12-13 per cent.
Experts said that with such lending interest rates, enterprises' financial burdens created from high capital costs would ease significantly, thus encouraging them to invest in production.
The lower interest-rate cap of deposits also means that depositing money at banks was no longer an attractive investment channel.
These changes have prompted many people to shift from depositing their savings into the banking sector to other investment channels that they believe will bring profit in the future.
Real estate, along with other sectors, is still popular among long-term investors since property developers, who have been thirsty for capital, have cut prices by 30-40 per cent.
According to many real estate offices in HCM City, within one month, the number of clients who came to buy houses increased significantly, but the number of transactions was still modest.
Trinh Xuan Bac in Tan Phu District said that, although the real estate market remained sluggish, investment in real estate products would bring profits in the long term.
Previously, Bac had deposited money at a bank while he waited for real estate prices to drop even more.
However, he believes that the current interest rate is not attractive enough to deposit money in banks and that now is the right time to invest in property when the prices are low.
Huynh Anh Minh, director of a real estate company in District 2, said the number of people seeking to buy land plots and apartments had increased slightly in recent days, and the number of successful transactions had increased by 20 per cent compared with previous months.
Investors were especially interested in land plots in outlying districts such as Binh Chanh and Cu Chi, Minh said.
Real estate developers have said that the rapid interest-rate reduction had greatly affected investors and individuals who want to buy a home.
The lowering of the deposit interest-rate cap to 9 per cent and the banks' commitments to slash the lending interest rate to 13 or 14 per cent have led people to believe that the property sector would warm up again.
Ngo Dinh Han, director of the ACB real estate trading floor, said the recent interest-rate reduction had not yet created a significant impact on the real estate market.
But he was confident that more money would be pumped into the market, thus improving its liquidity in the future.
The market's real changes would likely take place in the third quarter of the year, Han said.
Pham Thanh Mai, general director of the Viet Nam Real Estate Association, said the domestic real estate market would continue to meet capital-related difficulties in the near future.
Thus, real estate developers should use mobilised capital resources effectively and efficiently.
Mai said that real estate companies should prepare long-term investment strategies while reducing their risks to ensure available cash flows for important projects.
‘Chinese researchers’ in Cam Ranh get modest fine
A company which illegally operates a floating fish farm on the waters of Cam Ranh Bay in the coastal province of Khanh Hoa was yesterday fined VND4 million for using fish feeders that are not included in the country’s allowed list.
Song Phong Co Ltd, which hired two Chinese nationals to work as “aquaculture researchers” at their farm, has recently come under public criticism for operating on the bay over the last ten years without a water surface leasing contract.
“The two Chinese nationals have received administrative fines and been expelled,” asserted Le Van Dung, deputy head of the provincial Department of Agriculture and Rural Development Inspectorate, after announcing the modest fine of VND4 million, or less than US$200.
Dung said his inspectorate team in May found grouper feeder cartons at the Song Phong Co farm that only bore Chinese labels, while by law labels are supposed to be in Vietnamese.
The representative of the floating farm also failed to prove the origins and provide quarantine certificates for their grouper breeds.
“We have at first fined them for the feeders, and in the next couple of days, if they still fail to clarify the origins of the groupers being raised on the farm, we will enact further penalties,” he said.
Regarding the company’s lack of a contract to hire the bay’s water surface, Dung commented that this is a difficult issue to handle.
“As far as I know, Song Phong Co has located their farm on Cam Ranh Bay for years, and they were allowed to do so,” he explained.
“Only some foreign companies licensed to raise aquatic products have been granted water surface certificates for operation, while most of the floating farms of domestic investors and local farmers have yet to receive the certificates.
“So we cannot fine them, as it’s not their fault, since the government has yet to hand the certificates to them,” he concluded.
SSC blasted for tardy penalty in Sacombank acquisition
The State Securities Commission of Vietnam (SSC) last Friday slapped penalties on three individuals and organizations for breaching regulations while buying en mass the shares of Sacombank under a power transferring plan, something they did as early as March, while the transfer was completed a fortnight ago.
Saigon-Asia Financial Investment JSC, Saigon Exim Investment JSC, and Tran Phat Minh were amongst the alliance formed to acquire power at Sacombank, or the Saigon Thuong Tin Commercial Joint Stock Bank.
According to SSC, the three investors were fined for not submitting reports on their becoming Sacombank’s major shareholders after only one transaction.
Specifically, Exim Investment JSC on January 1 purchased 42 million Sacombank shares, bringing its total stake in the bank to 50 million shares, or 5.17 percent, which declared the company a major shareholder.
Similarly, in February Minh bought more than 1.544 million shares, and also become a major shareholder with a 5.01 percent stake.
Saigon-Asia Financial Investment JSC made the same move on March 1, and now holds a 5.01 percent stake after purchasing 22 million Sacombank shares.
Last February Eximbank, which holds a 9.73 percent stake in Sacombank, initiated the move by saying it was authorized to represent the group of major shareholders (holding more than a 51 percent stake) to call for an irregular shareholder meeting and reelect the board of directors of Sacombank.
The indicated three organizations and individual have bought a number of Sacombank shares to boost the acquisition, which was materialized with the introduction of a new board on May 27.
The year-long acquisition ended with almost all the power in Sacombank being transferred to the new shareholders group, including eight additional newly elected members from other banks, and former Sacombank chairman Dang Van Thanh and his son, Dang Hong Anh.
While many insiders have called for SCC to intervene in the acquisition of the 70,000-shareholder Sacombank, the watchdog had remained silent until last week, when it suddenly announced the mere fine of VND60 million for each of the violators, angering both the public and insiders.
“It seems like SSC’s management role has been abnormally neutralized,” the director of a securities firm told Tuoi Tre.
He said SSC must not have been uninfomred of the participation of Saigon Exim, a subsidiary of Eximbank, and a major shareholder of Sacombank, in the acquisition, but the watchdog simply kept silent.
Analysts said SSC should not have neglected opinions from insiders regarding such a large deal as a Sacombank power transfer. But SSC failed to announce any checkups on the transactions related to Sacombank shares, they claimed.
SSC also did nothing when the three investors bought shares en mass to become Sacombank’s major shareholders, which insiders said is an abnormal stance.
The neutralization of the authorities’ management role is worrying listed company as they may fall into the same situation, when other investors defy regulations to buy shares with impunity to acquire them.
In an interview with Tuoi Tre Monday, SSC chairman Vu Bang said there is nothing dubious in the issue.
“It’s normal for the implementation of an administrative penalty to last for several months, as it’s stipulated that violators sign to the reports,” he said.
However, Bang admitted that he did ask Eximbank to report on its announcement to acquire Sacombank, but did not receive any response.
“I asked the SSC inspectorate to report the handling of the three investors related to the acquisition, but I believe there are no irregularities here,” he asserted.
Plan to build rice warehouses progressing slowly
Though begun in late 2009, many projects under the plan to set up a warehouse system capable of storing 4 million tons of rice in the Mekong Delta have so far gone no further than the initial stages, despite the coming summer-autumn crop.
The People’s Committee of An Giang Province has approved investment for a 623,000-ton warehouse in the locality, attracting registers from 18 businesses, which pledged to implement 66 projects to build warehouses capable of storing 489,000 tons of rice.
The Vietnam Southern Food Corporation (Vinafood 2) was also in charge of similar projects.
However, two of Vinafood 2’s subsidiaries, in charge of completing a project in the My An industrial cluster in Cho Moi District, have recently said they will not be able to implement the project, as site clearance and compensation have yet to be done.
Although the companies have compensated the local authorities VND20 billion in advance, the construction still has to be relocated, according to Vinafood 2 deputy CEO Nguyen Ngoc Nam.
As for the 18 businesses which have registered with An Giang authorities, only the An Giang Tourism JSC has finished construction on its 15,000-ton warehouse, while Phu Vinh Food Co has only completed one of its two registered projects.
“Some projects have only finished site clearance tasks, while some have never had any work done,” said Doan Ngoc Pha, deputy director of the provincial Department of Agriculture and Rural Development.
“Four businesses are waiting for bank approval to access loans for starting the projects.”
Similarly, only four out of eight local businesses have completed their warehouse projects. The newly-built warehouses can store some 54,000 tons of rice, compared to the 269,000 tons registered.
According to the Vietnam Food Administration, the total capacity of newly-constructed rice warehouses in the Mekong Delta is only 1 million tons, while the target figure is 2.5 million tons.
VFA attributed the tardy progress to the fact that many businesses, after registering for the plan, failed to access loans.
Meanwhile, many localities also delayed approval for the projects.
Currently only An Giang, Kien Giang and Soc Trang provinces have approved the construction plans and assigned projects to businesses.
Out of the 18 businesses signing up for the plan in An Giang, only the Thinh Phu Co has disbursed VND190 billion out of the VND240 billion it borrowed.
Four other firms are waiting for approval from the Bank for Agriculture and Rural Development to access loans.
“Some have had their loan applications approved, but become hesitant when they see the lending interest rate of 14.4 percent a year,” said Pha.
The government has recently accepted the proposal to delay the plan until the end of next year, VFA said.
It also urged competent agencies to assist businesses in obtaining capital to implement their projects.
“Moreover, if Vinafood 2 cannot appropriately handle its registered projects, the government should call for participations from other economic sectors,” VFA said.
Freight, catering service companies hesitate to cut prices
Though fuel prices, including gasoline and cooking gas prices, have fallen many times, freight businesses, catering service providers, and simple restaurants still hesitate to reduce their prices.
Many businesses owners were startled to receive many notices about a looming price hike for freight charges, set to take effect in July.
Every time gasoline prices rise, transport enterprises are also poised to launch price increases as soon as possible.
But after three recent fuel price cuts, freight businesses have refused to slash their prices, reasoning that lower gasoline prices cannot make up for shrinking shipping volumes, while other input costs are still higher.
The Ho Chi Minh City-based Dai Huong Viet Co said that after gasoline prices are increased, freight businesses immediately announce rate increases of 5 percent for short routes and 10-15 percent for longer routes.
“But now, with the price of gasoline being cut three times, freight charges remain unchanged. We are negotiating with multiple partners, but they all have said the price cut is still under consideration”, said Nguyen Van The, the business’s owner.
Nguyen Quoc Thang, director of food importer Kim Hieu, said: "We have negotiated with transport partners to lower the transportation cost, but their only response is that a cut is ‘under consideration’."
“It seems that the charges will never be reduced once they have been increased."
According to Duong Ngoc Minh, general director of Hung Vuong Seafood Joint Stock Co, freight charges have doubled from early this year.
The average monthly domestic and international transport costs of the Tien Giang Province-based company are around $1.6 million for $22 million in export earnings.
"While the company is preparing to negotiate with partners to reduce transportation rates due to lowered oil prices, international freight operators have informed us that they plan to add fees of 10 percent in July.”
“They are demanding higher rates to offset the expenses accumulated due to fewer goods being sold."
Many companies running north - south trucking routes claim that there cannot be reduced freight rates at this time.
A spokesperson for HL Trade Co Ltd said the firm has raised the price for its 9-ton trucking services by VND1 million against what it cost in early May. Accordingly, a one-way trip will cost VND25 million and VND23.5-24 million for full-load and partial-load trucks running the HCMC - Hanoi route.
When asked why diesel prices have decreased while freight transport costs still remain high, the company representative said that it is currently the low- season for the transport sector.
The volumes of goods are fewer, especially on long-haul routes. Most trucks running from HCMC to the Northern provinces are usually fully-loaded, but the return trip is the opposite, while the cost of drivers, car accessories, and lubricant remains unchanged.
Meanwhile, as calculated by local firms, oil costs typically account for 40-45 percent of total expenditure. So, with a VND1,400 per liter reduction of diesel oil, the transport rates would fall by about 2.8 percent.
In the case of HL Co, then, instead of increasing its price by VND1 million per trip, the transport fees ought to be reduced by VND700,000 per trip.
Sanh, the owner of a private enterprise specializing in renting 2-ton trucks for businesses in HCMC, said he will not reduce rates if other businesses in the transport industry do not.
For more than a month prices for food, cooking gas, and domestic retail gasoline have been on a downward trend, but many restaurants and food shops have yet to announce any price cuts for diners.
Some, including fast-food restaurants, are instead raising their prices.
"All the shops I often eat at had their prices increase by around 50 percent from last year, but serve less food. Just a week after the petrol price increase, prices at those shops went up. But now, when cooking gas and gasoline prices have declined, there are still no price decreases,” Phuc Long, a diner at a shop on Tran Nhat Duat Street, told Tuoi Tre.
Office worker Thai Ha, who often has a daily bowl of pho for breakfastat a shop on Le Van Sy Street in Tan Binh Dsitrict for breakfast, told Tuoi Tre that she had recently become because she has to pay VND10,000 more for the same pho bowl.
As a patron of Kieu Huong food shop in District 12, Minh Hung, a worker at Viet Hung Garment Co, was surprised at a recent VND5,000 price hike at the shop, brining the cost of a set lunch to VND22,000.
"The price increased, while less vegetables and rice are included, and thinner slices of meat are provided," Hung said.
A price increase of around VND5,000-10,000 has also been seen at a series of shops nearby. Nguyen Van Hoang, a garment worker, said the former price range at these businesses was VND15,000-17,000, but recently the shop owners said they had to raise the prices as the input costs, namely cooking gas and gasoline, have risen.
The same thing is taking place in the university area in Thu Duc District, HCMC.
The recent meal price hike there is about VND2,000-3,000 per set, Linh, a sophomore at the University of Natural Sciences, told Tuoi Tre.
At the My Son noodle shop on Phan Xich Long Street, a group of diners holding menus in their hands exclaims, "Why did the prices rise again?" The patrons said that not long ago, the minimum price was around VND30,000, but it has increased to VND45,000 per set.
A restaurant employee said: "Since early this year the shop has raised prices three times, ranging from VND13,000-15,000 per set, depending on food prices. Despite lower gas prices, prices for food and foodstuffs in the market are still increasing consistently, so we have to raise the prices."
At fast food outlets like KFC and Pizza Hut, the combo savings meals have had their prices increased by almost 40 percent.
Most restaurants pointed to the increase in cooking gas and gasoline prices and raw materials such as beef, pork and vegetables for their price hikes. However, in reality, the prices of most commodities have fallen recently, some sharply.
Specifically, the price of cooking gas, which reached VND477,000 per 12kg cylinder in the first three months of the year, has fallen to VND340,000 per 12kg cylinder recently.
Similarly, the gasoline price has been reduced three times by a total of VND1,900 per liter of A92 over the past month.
In terms of food items, the prices of fresh foods and raw materials for rice shops like vegetables, meats, and fish, are decreasing. According to Luong Hong Thanh, representative of Thu Duc market management board, said the current prices of many kinds of food are even lower than the same period last year.
Similarly, Thai Tran Thi Thanh, deputy director of the Pham Van Hai market management board in Tan Binh District, said weak purchasing power has prevented food prices from rising.
Dang Van Duc, director of City Market Management Department, said the organization would step up inspections and sanctions at shops that don’t list prices, or sell at a higher price than the listed ones.
Such occurrences still happen often, especially in the field of food service businesses, he said. In May alone, the agency examined and recorded 70 violations.