Vietnam to host international rice congress

History’s largest international gathering of rice experts will meet in Vietnam next month to explore strategies that will help farmers feed the world’s growing population.

The third International Rice Congress will bring together international leaders in rice science, rice policy makers, rice traders, and others across the industry’s private and public sectors.

The event is being jointly organized by Vietnam’s Ministry of Agriculture and Rural Development, the International Rice Research Institute and Bangkok-based Asia Congress Events Co.

Due to mounting pressure on global food production, exaggerated by poverty and climate change, the need to find ways to ensure an affordable and abundant rice population is becoming critical.

Delegates will discuss the latest rice research, future technologies, trade issues, and policies that will define the future role of rice in supporting poor rice-dependent communities.

More than half of the world’s population, or more than three billion people, depend on rice as their main food source, including around 640 million Asians living in extreme poverty.

“Rice producers will play a more and more crucial role in preventing future food shortages,” said Dr. To Phuc Tuong, chairman of the congress.

Vietnam, the world’s second-biggest rice exporter after Thailand and the fifth-largest producer of rice, exported 5.4 million tons of rice, worth US$2.3 billion, in the first seven months of 2010, up around 8.51 percent in quantity and 12.9 percent in terms of value.

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Vietnam to host international rice congress

History’s largest international gathering of rice experts will meet in Vietnam next month to explore strategies that will help farmers feed the world’s growing population.

The third International Rice Congress will bring together international leaders in rice science, rice policy makers, rice traders, and others across the industry’s private and public sectors.

The event is being jointly organized by Vietnam’s Ministry of Agriculture and Rural Development, the International Rice Research Institute and Bangkok-based Asia Congress Events Co.

Due to mounting pressure on global food production, exaggerated by poverty and climate change, the need to find ways to ensure an affordable and abundant rice population is becoming critical.

Delegates will discuss the latest rice research, future technologies, trade issues, and policies that will define the future role of rice in supporting poor rice-dependent communities.

More than half of the world’s population, or more than three billion people, depend on rice as their main food source, including around 640 million Asians living in extreme poverty.

“Rice producers will play a more and more crucial role in preventing future food shortages,” said Dr. To Phuc Tuong, chairman of the congress.

Vietnam, the world’s second-biggest rice exporter after Thailand and the fifth-largest producer of rice, exported 5.4 million tons of rice, worth US$2.3 billion, in the first seven months of 2010, up around 8.51 percent in quantity and 12.9 percent in terms of value.

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Business briefs

* Vietnam National Coal-Mineral Industries Group, known as Vinacomin, hired Australia & New Zealand Banking Group Ltd., Credit Agricole CIB and Citigroup Inc. to help advise it on a possible dollar bond sale, according to two people familiar with the matter. Vinacomin has been seeking approval from the government to sell US$500 million of bonds overseas this year.

* Overseas remittances to Ho Chi Minh City from January to September reached $3.04 billion, up 17.94 percent from the same period last year and nearing $3.15 billion for the whole of 2009, Nguyen Hoang Minh, deputy director of the central bank branch in the city, was quoted by Dau Tu (Investment) newspaper as saying. The value for the whole of 2010 is forecast to rise 20 percent, he said.

* Power prices in Vietnam will be adjusted four times a year in accordance with changes in input prices and the exchange rate starting from March 1 next year, the Vietnam Economic Times reported, citing an Industry and Trade Ministry document on implementing a market-oriented mechanism for power prices.

* Vietnam increased its rice export forecast for this year to 6.1 million tons, higher than a previous estimate of 5.9 million tons, according to the Ministry of Agriculture and Rural Development. Shipments from the world’s second-biggest producer may be more than 1 million tons in the fourth quarter, according to the document, which was posted on the ministry’s website.

* Vietnam National Petroleum Corp., known as Petrolimex, will buy 140,000 cubic meters of gasoline and diesel from Dung Quat Oil Refinery this month, said Nguyen Hoai Giang, general director of Binh Son Refinery & PetroChemical Co., which runs the refinery. Previously a Dung Quat official said domestic petrol distributors may not be able to use up the refinery’s inventory by the end of this year and it may face an inventory of more than 720,000 tons of products.

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Recent price increases raise inflation jitters

Prices of consumer goods saw the most rapid hike in four monthsp this September, raising fears about spiking inflation late this year.

Prime Minister Nguyen Tan Dung has asked ministries and relevant authorities to “intensify” measures to stabilize commodity prices and help the country maintain its economic and inflation targets.

He ordered the Ministry of Industry and Trade to study production and distribution systems to ensure a balance between the supply and demand of essential commodities and services through the end of the year. The country will also make efforts to keep prices of electricity and coal stable.

In Hanoi, prices on some 300 items, including confectionery products, milk and sugar, rose by 3 to 10 percent in September, according to the Hanoi Supermarket Association.

The association’s chairman Vu Vinh Phu said the prices of essential food items have increased two or three times compared to those of two to three years ago. In the same period, local incomes have risen by just 25 percent.

Phu said the prices of consumer goods will see stronger increases from now until Tet in January 2011 due to holiday demand. “Prices of hundreds of consumer products increase every day,” he said.

Consumer prices climbed 8.92 percent in September from a year earlier, compared with an 8.18 percent advance in August, according to a report issued by the General Statistics Office. Prices rose 1.31 percent in September over the previous month.

Nguyen Thi Ngoc Van, head of the office’s general department, said factors such as the increase in the price of gasoline and school fees, which contributed to rising inflation last month, will continue to affect the consumer prices in the months ahead.

The devaluation of the Vietnamese dong will further drive the price of imported products higher, raising business input costs as well as consumer prices, she said.

“Most imported products have seen a price hike since the dollar increase,” said Vu Thi Hau, deputy director of Nhat Nam Company, which owns the supermarket chain, Fivimart. “But food prices experience bigger year-end increases than other products.”

Vu Dinh Anh, deputy director of the Institute of Market and Price Research, said the demand for imported products is expected to increase from now until the end of this year, while the dollar exchange rate is also expected to rise at both commercial banks and black market exchange locations.

This will only add to the inflationary pressures on the country’s economy.

Nguyen Xuan Phuc, chairman of the Government Office, said Vietnam will continue to tighten control over consumer prices through the end of the year as the country strives to keep inflation at 8 percent. He said it is necessary to keep an eye on milk and medicine prices in particular.

In a recent report, the Asian Development Bank predicted that Vietnam’s inflation would reach 8.5 percent this year and 7.5 percent next year.

These forecasts are down slightly from April’s outlook, owing to improvements in macroeconomic conditions and moderate growth in credit, the bank found. However, large swings in inflation, together with expectations of dong devaluation, suggest that even the forecasts are not firmly anchored.

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Recent price increases raise inflation jitters

Prices of consumer goods saw the most rapid hike in four monthsp this September, raising fears about spiking inflation late this year.

Prime Minister Nguyen Tan Dung has asked ministries and relevant authorities to “intensify” measures to stabilize commodity prices and help the country maintain its economic and inflation targets.

He ordered the Ministry of Industry and Trade to study production and distribution systems to ensure a balance between the supply and demand of essential commodities and services through the end of the year. The country will also make efforts to keep prices of electricity and coal stable.

In Hanoi, prices on some 300 items, including confectionery products, milk and sugar, rose by 3 to 10 percent in September, according to the Hanoi Supermarket Association.

The association’s chairman Vu Vinh Phu said the prices of essential food items have increased two or three times compared to those of two to three years ago. In the same period, local incomes have risen by just 25 percent.

Phu said the prices of consumer goods will see stronger increases from now until Tet in January 2011 due to holiday demand. “Prices of hundreds of consumer products increase every day,” he said.

Consumer prices climbed 8.92 percent in September from a year earlier, compared with an 8.18 percent advance in August, according to a report issued by the General Statistics Office. Prices rose 1.31 percent in September over the previous month.

Nguyen Thi Ngoc Van, head of the office’s general department, said factors such as the increase in the price of gasoline and school fees, which contributed to rising inflation last month, will continue to affect the consumer prices in the months ahead.

The devaluation of the Vietnamese dong will further drive the price of imported products higher, raising business input costs as well as consumer prices, she said.

“Most imported products have seen a price hike since the dollar increase,” said Vu Thi Hau, deputy director of Nhat Nam Company, which owns the supermarket chain, Fivimart. “But food prices experience bigger year-end increases than other products.”

Vu Dinh Anh, deputy director of the Institute of Market and Price Research, said the demand for imported products is expected to increase from now until the end of this year, while the dollar exchange rate is also expected to rise at both commercial banks and black market exchange locations.

This will only add to the inflationary pressures on the country’s economy.

Nguyen Xuan Phuc, chairman of the Government Office, said Vietnam will continue to tighten control over consumer prices through the end of the year as the country strives to keep inflation at 8 percent. He said it is necessary to keep an eye on milk and medicine prices in particular.

In a recent report, the Asian Development Bank predicted that Vietnam’s inflation would reach 8.5 percent this year and 7.5 percent next year.

These forecasts are down slightly from April’s outlook, owing to improvements in macroeconomic conditions and moderate growth in credit, the bank found. However, large swings in inflation, together with expectations of dong devaluation, suggest that even the forecasts are not firmly anchored.

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• Energy group asks for 50% price hike
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• Greenback firmer on signs of rising demand

Amid a flood of mall space, retail hits the skids

The retail market in Ho Chi Minh City is believed to have great potential – but that potential doesn’t always translate to success.

When it was opened last December, the Kumho Asiana Plaza in District 1 had some 30 stores selling luxury products. But after months of slow sales, many tenants decided to quit because they could no longer afford the rent.

Now there are only a few stores left in the mall – one of the biggest shopping centers in the city. The tenants continue to pay rent and management fees in the face of flagging sales.

The Kumho Asiana Plaza, operated by Colliers International Vietnam, is located in downtown Ho Chi Minh City. But store owners said even this location doesn’t translate to more customers.

Another shopping mall, Saigon Paragon in District 7, was temporarily shut down early this month.

Le Hoai Anh, general director of Kim Cuong Company, the operator of the shopping mall, admitted that the closure was caused by a failure to effectively run the mall. “We never managed a shopping mall before and that’s why there were mistakes leading to an unexpected business situation,” she told Thanh Nien.

Anh said her company has hired a management firm to run the mall, which is expected to re-open at the end of this year. Saigon Paragon cost US$30 million to build. It was opened April last year.

Analysts said while Ho Chi Minh City is considered a great potential retail market, not all of its shopping centers are successful, especially those far from the city center.

Meanwhile, high rents (from $70 to $180 per square meter) make it hard to ensure profits.

More to come

More retail centers will continue to come online in the city.

According to the Industry and Trade Department, there are 102 supermarkets and 28 shopping malls in the city. The department expected the retail area in the city to reach 740,000 square meters in 2013 - double the current figure.

UK real estate services firm Savills issued a report last week that indicated three more centers would appear before the end of the year: the Crescent Retail, Bitexco Financial Tower and Thien Son Plaza. The trio will add a total of 50,000 square meters of retail space to the market.

The firm said the city’s retail market has “strong potential” in the mid-term.

But right now, some industry insiders aren’t happy.

Tham Tuck Choy, general director of Parkson Vietnam was quoted by Tuoi Tre as saying his company posted an average growth rate of 30 percent a year, but this is lower than expected.

He said, of the customers shopping at Parkson’s outlets, 15 percent are tourists and foreigners working in Vietnam while the rest are local consumers. The purchasing power of this local customer group is rising, but not steadily, Choy said.

A toy retailer who wished to remain anonymous said the retail market depends on the growth of the middle and upper class and their demand for expensive products.

But right now there are more window-shoppers than real buyers.

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Vietnam real estate market offers more affordable options

The local residential market is undergoing a positive development: affordable housing is on the rise, according to the consulting firm CB Richard Ellis.

In a report released on Tuesday, the firm found that a wave of low-cost housing projects broke ground in Hanoi during the third quarter revealing a movement toward more affordable residential options.

The report authors also said that a new regulation (which caps the proportion of units sold via capital contribution contracts at 20 percent) is expected to help the market by enhancing transparency, placing pressure on developers with low financial capabilities, reducing the threat of price bubbles, and limiting speculative forces.

In the third quarter, the market was quieter with fewer new projects launched. Only 1,950 units were added to the market compared to last quarter’s 4,600 units, the report indicated.

The capital city expects to see the launch of 3,000 units in the fourth quarter, bringing total new supply in 2010 to nearly 16,000 units, it said. Following the opening and improvement of major infrastructure routes, western and southern districts are attracting new residents with easier access to core urban districts.

‘Pent-up demand’

Meanwhile, the fastest-growing segment of the real estate market in Ho Chi Minh City is also affordable homes.

“Twelve affordable projects were launched in the third quarter with asking prices ranging between US$563 and $923 per square meter,” CBRE said in a separate report, released on Wednesday.

“Despite the up-tick in inflation seen in the third quarter, the base of Vietnam’s economy is strong,” said Marc Townsend, managing director of CBRE Vietnam.

Commenting on the trend toward the affordable segment of the market, Rudolf Hever, associate director of Research and Consulting, said it’s clear that “as the Vietnamese economy continues to grow, and incomes increase, there is pent-up demand from people who were previously priced out of the market.”

He said the government has made a lot of effort to support the residential property market, including measures to increase transparency and increase the availability of loans.

“All these efforts work together, encouraging prospective home buyers to look at new and existing developments as a realistic option,” said Hever. “As these affordable projects achieve critical mass, the availability of facilities and amenities in these areas will increase too.”

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