Catfish standards completed

Catfish farming standards were finalized early this week by the Pangasius Aquaculture Dialogue, a network of 600-plus farmers, scientists, and conservationists from around the globe.

The standards were developed through the Aquaculture Dialogues, a series of roundtable discussions coordinated by the World Wildlife Fund to be used for global pangasius farming and trade.

“Pangasius farming is one of the fastest growing aquaculture industries in the world but, until now, there have not been any credible standards for the industry,” said Flavio Corsin, who coordinated the Dialogue for WWF.

Corsin said the standards would be the best in the marketplace because they were developed through a transparent, science-based process that involved a broad and very diverse group of people.

The standards were drafted to address key environmental and social issues related to the farming of tra (Pangasianodon hypophthalmus) and basa (Pangasius bocourti).

Representatives from the WWF expressed hopes that the final pangasius standards would help minimize water pollution, unfair labor conditions and the destruction of natural habitats to create farms.

The final certification process for these standards will be overseen by the Aquaculture Stewardship Council. Until the council is created in mid-2011, the certification will be done by Global Gap, a private sector entity that administers a variety of commodity-oriented certification programs worldwide.

Most pangasius farming is done in Vietnam, which then exports the majority of this fish to the European Union, US and Russia.

Vietnam exported US$500 million worth of catfish during the first half of this year, according to the Ministry of Agriculture and Rural Development.

The country hopes to see a $1.5 billion pangasius export in 2010, compared to $1 billion last year.

The findings of the group will be introduced in 2011.

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Catfish standards completed

Catfish farming standards were finalized early this week by the Pangasius Aquaculture Dialogue, a network of 600-plus farmers, scientists, and conservationists from around the globe.

The standards were developed through the Aquaculture Dialogues, a series of roundtable discussions coordinated by the World Wildlife Fund to be used for global pangasius farming and trade.

“Pangasius farming is one of the fastest growing aquaculture industries in the world but, until now, there have not been any credible standards for the industry,” said Flavio Corsin, who coordinated the Dialogue for WWF.

Corsin said the standards would be the best in the marketplace because they were developed through a transparent, science-based process that involved a broad and very diverse group of people.

The standards were drafted to address key environmental and social issues related to the farming of tra (Pangasianodon hypophthalmus) and basa (Pangasius bocourti).

Representatives from the WWF expressed hopes that the final pangasius standards would help minimize water pollution, unfair labor conditions and the destruction of natural habitats to create farms.

The final certification process for these standards will be overseen by the Aquaculture Stewardship Council. Until the council is created in mid-2011, the certification will be done by Global Gap, a private sector entity that administers a variety of commodity-oriented certification programs worldwide.

Most pangasius farming is done in Vietnam, which then exports the majority of this fish to the European Union, US and Russia.

Vietnam exported US$500 million worth of catfish during the first half of this year, according to the Ministry of Agriculture and Rural Development.

The country hopes to see a $1.5 billion pangasius export in 2010, compared to $1 billion last year.

The findings of the group will be introduced in 2011.

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Standard Chartered forecasts stable months ahead

Following the government’s tightening of prices for essential industrial and consumer products, inflation is expected to remain stable in the coming months, an expert at Standard Chartered say.

“Inflation in the immediate future should remain under control, especially if global food and energy prices do not surge significantly,” Tai Hui, Southeast Asia Regional Head of Research under Standard Chartered Bank, said in a statement. “However, we do not believe price controls will be effective in the event of a sustained surge in input prices.”

Vietnam’s latest economic data for August shows a continuation of the trend during the first half of 2010. Inflation is expected to remain relatively calm at 8.2 percent year-to-year, or 0.2 percent from month-to-month.

Meanwhile, the trade balance is expected to maintain an even keel. “We expect Vietnam’s trade deficit to persist in the medium term, further devaluation of the dong is on the cards for 2010 and 2011,” Tai Hui said.

On August 18, the State Bank of Vietnam devalued the dong by revising the US dollar-dong reference from 18,932 from 18,544. The bank maintained the daily trading band of 3 percent on either side of that rate.

The trade deficit has hung around $1 billion per month for much of 2010, he said. He attributes the even keel to strong export growth and cooling import growth.

Meanwhile, disbursed foreign direct investment, aids and remittance flows have been recovering steadily. Hence, the overall depreciation pressure on the dong ought to be lower than in previous years when inflows were waning on the back of the 2008 global financial crisis, Tai Hui said. Firm domestic demand is absorbing imports, he added.

Given the Vietnamese authorities’ growth bias, Hui believes that further devaluations are likely in order to support exporters. “The timing of further moves will be politically driven,” he said. “But we believe that a rise in commodity prices, which will in turn drive inflation and the trade deficit higher, could be a trigger.”

Sharp rises in gold prices and the dollar could also prompt dong depreciation to intensify. “In line with these predictions, we have adjusted our dollar-dong forecasts without altering our overall profile,” he said. “We now predict that the dollar-dong ratio will hit 19,500 at end of the third quarter; and 19,900 at the end of the fourth quarter.”

Another important implication of the dong devaluation is that the authorities will not be able to push interest rates lower, despite stable inflation. The government has, for some months, been trying to persuade commercial banks to reduce lending rates in order to promote lending and facilitate growth, Tai Hui said.

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Lending rates to drop: central bank

Short-term lending rates in Vietnam are expected to come down, thanks partly to funds the central bank has extended to banks, State Bank of Vietnam governor Nguyen Van Giau was quoted on Wednesday as saying.

Lending rates were not falling quickly at present because banks were cutting deposit rates slowly, Giau said in an interview published by the Finance Ministry-run Vietnam Financial Times newspaper.

“But credit institutions are actively raising funds in coordination with funding support from the State Bank to meet credit demand for the economy,” Giau said in the interview.

“So, short-term lending rates will fall significantly, while the reduction of medium-and longterm lending rates requires time because long-term deposits often rise very slowly and account for a low proportion of overall deposits,” Giau said.

The central bank injects funds into banks via open market operations.

Bank deposits in Vietnam as of August 17 had risen 17.44 percent from the end of 2009, while credit expanded 14.15 percent, Giau said without giving any values.

Credit demand is expected to rise as usual in the last months of the year, Giau said, pledging further steps to keep annual inflation at around 8 percent, economic growth at 6.5 percent and an annual credit growth at 25 percent, as targeted.

The average rate for one-month interbank loans dropped to 8.56 percent during the week ending August 26, from 8.67 percent a week ago, and the rate on three-month loans also eased to 9.74 percent from 9.99 percent, central bank reports said.

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Lending rates to drop: central bank

Short-term lending rates in Vietnam are expected to come down, thanks partly to funds the central bank has extended to banks, State Bank of Vietnam governor Nguyen Van Giau was quoted on Wednesday as saying.

Lending rates were not falling quickly at present because banks were cutting deposit rates slowly, Giau said in an interview published by the Finance Ministry-run Vietnam Financial Times newspaper.

“But credit institutions are actively raising funds in coordination with funding support from the State Bank to meet credit demand for the economy,” Giau said in the interview.

“So, short-term lending rates will fall significantly, while the reduction of medium-and longterm lending rates requires time because long-term deposits often rise very slowly and account for a low proportion of overall deposits,” Giau said.

The central bank injects funds into banks via open market operations.

Bank deposits in Vietnam as of August 17 had risen 17.44 percent from the end of 2009, while credit expanded 14.15 percent, Giau said without giving any values.

Credit demand is expected to rise as usual in the last months of the year, Giau said, pledging further steps to keep annual inflation at around 8 percent, economic growth at 6.5 percent and an annual credit growth at 25 percent, as targeted.

The average rate for one-month interbank loans dropped to 8.56 percent during the week ending August 26, from 8.67 percent a week ago, and the rate on three-month loans also eased to 9.74 percent from 9.99 percent, central bank reports said.

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Japanese want clear, fair retail rules

Japanese investors eager to break into the Vietnamese market have called for a reform of the country’s procedures for licensing foreign retail outlets.

Any firm wishing to open more than two retail outlets in Vietnam must apply for a license and meet a WTO criterion known as the Economic Needs Test (ENT). The ENT is a criterion that each member state may establish to prevent market overkill in the retail sectors.

But it is not clear which agency administers the test and what calculations it uses to grant permission.

Last week, members of the Japanese Business Association of Ho Chi Minh City asked local officials to issue the ENT guidelines so they would know what conditions they had to meet to develop their businesses here.

Representatives from the Japanese firms said they were interested in the Vietnamese retail market, which was fully opened to foreign investors early last year, but they were hesitant to implement their projects because they were not sure what they needed to do to pass the ENT test.

The Japanese businesses also claimed that some foreign retailers, like Korean Lotte Mart, Malaysian Parkson and German Metro Cash & Carry were allowed to open more than two outlets in the country without passing the ENT test.

Local governments licensed the outlets with support from the Ministry of Industry and Trade, they noted.

Hirota Nakanishi, senior investment advisor at the Japan External Trade Organization’s office in HCMC, said that retail outlets and convenience stores would thrive in Vietnam, if prerequisite regulations were clear to foreign investors.

Nakanishi added that the government should not only issue the ENT guidelines soon, it should also simplify licensing procedures.

These procedures have been complicated by local governments who have begun granting licenses without following any uniform guidelines, he said.

Lu Thanh Phong, deputy director of HCMC’s Planning and Investment Department, responded to Nakanishi’s claims by saying that some foreign retailers like Lotte Mart were licensed before Vietnam joined the WTO in 2007.

About 216 licenses have been granted to foreign investors to import, export and trade in the country since then, he added.

Other concerns

Shimasaki Ryuhei, deputy chairman of the association, said Japanese investors are also concerned about issues like traffic and taxi services in Vietnam that could dampen investor interest.

Upon arriving at the international airport in HCMC he said, most prospective investors run immediately into rude and fraudulent taxi drivers who demand unreasonably high fares and refuse to serve them at night.

Ryuhei said Japanese investors are also worried about illegal strikes that might affect their investments in the country. He asked what measures the local government was taking to rectify the situation.

Le Thanh Tam, director of HCMC’s Labor, War Invalids and Social Affairs Department, said no court had yet issued a ruling on the legality of strikes in Vietnam.

He said the country has seen more strikes occur in foreign firms than their local counterparts.

Moreover, Tam said the number of strikes shrank from 200 in 2008 to 70 last year in HCMC.

None of these involved Japanese businesses, he added.

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Steel producers cop power shortage blame

 

Workers at a steel plant in the northern province of Thai Nguyen. National power utility Electricity of Vietnam said many steel producers in the country use outdated technology that consumes a large amount of power.

National power utility Electricity of Vietnam, regularly criticized for frequent power shortages and blackouts nationwide, this week pointed the finger at steel producers.

According to the utility, also known as EVN, part of the responsibility for power shortages in the country lay with steel producers, many of whom use outdated technology that consumes a large amount of power.

There are 65 steel projects in the country and even though they only operate at 50 percent of their capacity on average, they already consume about 3.5 billion kilowatt-hours per year, EVN said in a report submitted to Prime Minister Nguyen Tan Dung.

In order to meet their demand, the power sector has spent an estimated VND35.5 trillion on power generation and transmission facilities. As a result, power supply to other industries as well as for domestic purposes has been affected.

EVN requested the government to tighten control over the production technology used at steel plants. In fact, large steel producers should be compelled to build their own power plants, it said.

Cheap prices

EVN said steel plants in Vietnam buy electricity at around 4.78 US cents per kilowatt-hour, compared to 8.12 cents in Thailand and 14.1 cents in Singapore.

Many foreign steel producers invest in Vietnam only because they want to take advantage of the low power prices and then export their products, the power utility said.

According to the Ministry of Industry and Trade’s Energy Institute, power demand in Ho Chi Minh City only grew 7.7 percent over the 2008-2009 period even though the southern hub generates the highest GDP in the country.

Meanwhile, some other provinces reported much higher growth rates in power use because they house many power-consuming projects, the institute said. Power demand in the northern province of Quang Ninh, for instance, where there are large steel projects, increased by more than 15 percent during the period.

Pham Chi Cuong, chairman of the Vietnam Steel Association, admitted that most steel producers in the country use outdated and energy inefficient technology.

It requires 700 kilowatt-hours to produce one ton of steel billet and 120 kilowatt-hours to make one ton of products from the billets, Cuong said. That compares to per capita electricity consumption of only 867 kilowatt-hours per year in Vietnam.

An EVN official said the use of old production technology is a reason behind Vietnam’s power shortage. “It takes between three and four years to build a power plant, so if power-consuming projects continue to be licensed like now there will never be an end to power shortage.”

Power consumption in Vietnam is expected to surge by 17.63 percent this year.

The government said in a report last month that power cuts between April and July had negative impacts on production and daily life around the country. Prime Minister Nguyen Tan Dung has asked that construction of new power projects be speeded up and measures taken to ensure enough supply in coming years.

However, there has been no indication thus far that steel producers will be told to upgrade their technology and ensure efficient operations that will help the industry consume less power.

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