Demand for essential goods to increase

Demand for 12 essential goods items is forecast to increase next year, including for steel, cement, oil products and coal.

Based on Vietnam 's economic growth expectations from 2011-15, the
Ministry of Industry and Trade estimated demand for steel products to
increase 8-10 percent to 12.5-12.8 million tonnes in 2011.

The demand for cement next year was predicted to go up by 10 percent to
55-56 million tonnes while total output to reach 60 million, thus
meeting demand and keep price stable.

Demand for petrol
and oil products was forecast to be 17 million tonnes next year, to be
met by 6 million tonnes of domestic production and 11.6 million tonnes
of imports.

The nation would balance the demand for 44 million tonnes of coal by producing 47.3 million tonnes, the ministry said.

Paper demand would increase to 2.35 million tonnes next year, to be met
by 1.77 million produced locally and 700,000 tonnes from imported.

The nation's consumption of 28 million tonnes of rice in next year
would be supplied by the expected harvest of 31.6 million tonnes.

The demand on medicine, food and fertiliser was also expected to increase next year.

Meanwhile, Prime Minister Nguyen Tan Dung has called on ministries,
agencies and municipal and provincial authorities to implement
strategies to stabilise the market and boost production.

Directive No1875/CT-TTg, released last week was designed to ensure the
country's growth rate reaches 6.5 percent, while the consumer price
index did not rise above 8 percent.

Dung said the economy,
which typically suffers during the final months of the year, would also
have to weather capital shortages, rises in the price of essential
goods, power shortages and potential animal epidemics/.

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Enterpirses urge fertiliser development strategy

Fertiliser prices have increased following the appreciation of the US dollar against the Vietnamese dong as well as higher prices on the global market

There has been no clear development strategy for the fertiliser industry and that demand is unpredictable, has said the industry association.

 The control of fertiliser production and distribution systems, to be approved this month, is expected to benefit both farmers and businesses.

At a recent conference outlining fertiliser production development for the next 10 years, the Deputy Minister of Industry and Trade (MIT), Nguyen Hai Nam , said fertiliser is a strategic product that helps ensure national food security.

Although the Government has cooperated closely with the Vietnam Fertiliser Association in planning fertiliser production and quality, farmers are still faced with shortages and "price fever" when demand soars before planting, said Phung Ha, head of MIT's Department of Chemicals.

Secretary of the association Nguyen Hac Thuy said there has been no clear development strategy for the fertiliser industry and that demand is unpredictable.

According to the association, farmers lose VND1.2 trillion (US$60 million) each year due to the low-quality and fake fertiliser products.

This year, the nation's demand for fertiliser is forecast to reach 9.1 million tonnes, but domestic production can satisfy only 60 percent of this.

A report from An Giang University's Economics Faculty claims farmers have to buy fertilisers at prices 30-40 percent higher than those offered by producers. They often have to buy low-quality products from small firms because State authorities can only supervise large fertiliser companies.

Ha said one of the reasons fertiliser prices are often unstable was that distribution systems develop spontaneously. Products come to farmers through many middlemen.

Ha said when planning is approved, fertiliser distribution systems will develop based on the establishment of agricultural economic areas, demand in each area, the characteristics of local economic activities and farmers' purchasing practices.

Under the plan, from now to 2015, fertiliser distribution centres will be set up in Lao Cai, Phu Tho, Bac Giang, Hai Duong, Ninh Binh, Nghe An, Da Nang, Binh Dinh, Dac Lac, Lam Dong, Long An, An Giang, Can Tho and Kien Giang.

Ha said to make planning more efficient, State agencies should change their ways of management.

 He added that producers must be granted certificates setting out conditions for business required by the Ministry of Industry and Trade. Otherwise they should not be allowed to trade.

He said this would help weed out small-scale companies using old technology and those producing low-quality fertiliser.

 

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Savills predicts good future for HCMC property market

Ho Chi Minh City’s property market has bright prospects ahead as demand for apartments and business space will grow alongside the economy, UK-based real estate service provider Savills said on Thursday.

The company both evaluates and trades in the market.

A positive demand trend remains in the city’s apartment segment, “fueled by increasing disposable income and growing migration,” Savills found in its quarterly report. During the 2004 to 2009 period, approximately one million people moved to HCMC.

The company forecast that apartment demand will be strong in the smaller-sized and reasonably priced (US$42,000- 79,000) apartment segment.

Savills said the third quarter witnessed the highest number of apartments absorbed into the primary market, at approximately 4,400 units, equal to total absorption over the first six months of the year. Supply also surged, reaching a record of approximately 16,600 units – nearly triple last year’s figure.

HCMC will see the construction of 10,000 new units in the next two quarters, the company said.

The city’s economy expanded by 11.2 percent in the first nine months with a gross domestic product of around $16 billion, official statistics showed.

Savills said in the mid and long-term, the economy is expected to continue growing rapidly. For this reason, demand for office space will also rise.

“Grade A office buildings are waiting for a new wave of foreign direct investment inflow; while Grade B and Grade C buildings depend much on the health of domestic investment,” according to the report.

By the end of 2010, 14 new office buildings will be completed and will add approximately 100,000 square meters net area to the market.

As for the retail segment, Savills observed that both occupancy and rental rates tended to decrease during the third quarter. Average occupancy fell around 2 percent compared to the previous quarter, to 94 percent. The average rent was $75.2 per square meter per month.

“Along with the rapidly growing economy of HCMC, the demand for daily products has been growing substantially as well as diversifying,” the report said. “This leads to a high demand for retail centres of a big population in HCMC.”

Savills said the retail market has strong potential in the mid-term as Vietnamese consumers are beginning to gravitate towards luxury brands, international franchises and domestic goods of high quality.

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Savills predicts good future for HCMC property market

Ho Chi Minh City’s property market has bright prospects ahead as demand for apartments and business space will grow alongside the economy, UK-based real estate service provider Savills said on Thursday.

The company both evaluates and trades in the market.

A positive demand trend remains in the city’s apartment segment, “fueled by increasing disposable income and growing migration,” Savills found in its quarterly report. During the 2004 to 2009 period, approximately one million people moved to HCMC.

The company forecast that apartment demand will be strong in the smaller-sized and reasonably priced (US$42,000- 79,000) apartment segment.

Savills said the third quarter witnessed the highest number of apartments absorbed into the primary market, at approximately 4,400 units, equal to total absorption over the first six months of the year. Supply also surged, reaching a record of approximately 16,600 units – nearly triple last year’s figure.

HCMC will see the construction of 10,000 new units in the next two quarters, the company said.

The city’s economy expanded by 11.2 percent in the first nine months with a gross domestic product of around $16 billion, official statistics showed.

Savills said in the mid and long-term, the economy is expected to continue growing rapidly. For this reason, demand for office space will also rise.

“Grade A office buildings are waiting for a new wave of foreign direct investment inflow; while Grade B and Grade C buildings depend much on the health of domestic investment,” according to the report.

By the end of 2010, 14 new office buildings will be completed and will add approximately 100,000 square meters net area to the market.

As for the retail segment, Savills observed that both occupancy and rental rates tended to decrease during the third quarter. Average occupancy fell around 2 percent compared to the previous quarter, to 94 percent. The average rent was $75.2 per square meter per month.

“Along with the rapidly growing economy of HCMC, the demand for daily products has been growing substantially as well as diversifying,” the report said. “This leads to a high demand for retail centres of a big population in HCMC.”

Savills said the retail market has strong potential in the mid-term as Vietnamese consumers are beginning to gravitate towards luxury brands, international franchises and domestic goods of high quality.

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Dollar lending rises post-devaluation

Companies in Vietnam may be finding it harder to repay dollar debt in the wake of its latest dong devaluation but demand for greenback loans is rising on speculation that the exchange rate will be stable in the short term, bankers said.

The State Bank of Vietnam cut the interbank reference rate to 18,932 dong per dollar on Aug 18 from 18,544 previously, aiming to help control the trade deficit.

The move took some pressure off the dong and helped stabilise the foreign exchange market, traders said, but bids offered by banks were hovering near the ceiling allowed within the dong’s 3 percent trading band.

It also put an expected squeeze on certain businesses, including importers and those with dollar loans coming due, state media reported.

Nevertheless, demand to borrow dollars has risen since the move, bankers said on Monday.

A treasury manager at a Hanoi-based lender, who declined to be identified, said the demand for dollar loans at his bank started to edge up again following two months on a downward path.

“After the latest devaluation, borrowers seem to think that the exchange rate will stay unchanged for three to four months. This makes them feel confident enough to take loans in the short term,” he said.

“There is also speculation there may be future changes in the rate and that this latest devaluation is a sign of that. In such a case, it would be beneficial to borrow now and settle the loans before the next change.”

A currency trader in another Vietnamese bank confirmed the rising demand for dollar loans, saying most of loans were short term and would be due in a few months.

Dollar credit jumped 34.4 percent in the first seven months from the end of last year, the Vietnam Economic Times said on Aug. 25, quoting the central bank data.

The central bank in June tried to slow dollar lending by requesting lenders monitor their dollar loans. In June and July, dollar loan demand was falling as the gap between dong and dollar rates narrowed, bankers said.

With dollar loan demand increasing, banks recently announced they would raise the interest rates on dollar deposits to as high as 5.5 percent from around 4 percent, state media reported.

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Dollar lending rises post-devaluation

Companies in Vietnam may be finding it harder to repay dollar debt in the wake of its latest dong devaluation but demand for greenback loans is rising on speculation that the exchange rate will be stable in the short term, bankers said.

The State Bank of Vietnam cut the interbank reference rate to 18,932 dong per dollar on Aug 18 from 18,544 previously, aiming to help control the trade deficit.

The move took some pressure off the dong and helped stabilise the foreign exchange market, traders said, but bids offered by banks were hovering near the ceiling allowed within the dong’s 3 percent trading band.

It also put an expected squeeze on certain businesses, including importers and those with dollar loans coming due, state media reported.

Nevertheless, demand to borrow dollars has risen since the move, bankers said on Monday.

A treasury manager at a Hanoi-based lender, who declined to be identified, said the demand for dollar loans at his bank started to edge up again following two months on a downward path.

“After the latest devaluation, borrowers seem to think that the exchange rate will stay unchanged for three to four months. This makes them feel confident enough to take loans in the short term,” he said.

“There is also speculation there may be future changes in the rate and that this latest devaluation is a sign of that. In such a case, it would be beneficial to borrow now and settle the loans before the next change.”

A currency trader in another Vietnamese bank confirmed the rising demand for dollar loans, saying most of loans were short term and would be due in a few months.

Dollar credit jumped 34.4 percent in the first seven months from the end of last year, the Vietnam Economic Times said on Aug. 25, quoting the central bank data.

The central bank in June tried to slow dollar lending by requesting lenders monitor their dollar loans. In June and July, dollar loan demand was falling as the gap between dong and dollar rates narrowed, bankers said.

With dollar loan demand increasing, banks recently announced they would raise the interest rates on dollar deposits to as high as 5.5 percent from around 4 percent, state media reported.

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Dollar lending rises post-devaluation

Companies in Vietnam may be finding it harder to repay dollar debt in the wake of its latest dong devaluation but demand for greenback loans is rising on speculation that the exchange rate will be stable in the short term, bankers said.

The State Bank of Vietnam cut the interbank reference rate to VND18,932 per dollar on August 18 from VND18,544 previously, aiming to help control the trade deficit.

The move took some pressure off the dong and helped stabilize the foreign exchange market, traders said, but bids offered by banks were hovering near the ceiling allowed within the dong's 3 percent trading band.

It also put an expected squeeze on certain businesses, including importers and those with dollar loans coming due, state media reported.

Nevertheless, demand to borrow dollars has risen since the move, bankers said on Monday.

A treasury manager at a Hanoi-based lender, who declined to be identified, said the demand for dollar loans at his bank started to edge up again following two months on a downward path.

"After the latest devaluation, borrowers seem to think that the exchange rate will stay unchanged for three to four months. This makes them feel confident enough to take loans in the short term," he said.

"There is also speculation there may be future changes in the rate and that this latest devaluation is a sign of that. In such a case, it would be beneficial to borrow now and settle the loans before the next change."

A currency trader in another Vietnamese bank confirmed the rising demand for dollar loans, saying most of loans were short term and would be due in a few months.

Dollar credit jumped 34.4 percent in the first seven months from the end of last year, the Vietnam Economic Times said last Wednesday, quoting the central bank data.

Total credit was up just 12.97 percent, the central bank said in its July monthly report.

The central bank in June tried to slow dollar lending by requesting lenders monitor their dollar loans. In June and July, dollar loan demand was falling as the gap between dong and dollar rates narrowed, bankers said.

With dollar loan demand increasing, banks recently announced they would raise the interest rates on dollar deposits to as high as 5.5 percent from around 4 percent, state media reported.

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