Does Increase Demand For Currencies Like Dong & Dinar Hellp Their Value?

makecents · February 1, 2013

they are using a program rate .. they have an agreement to do that .. im not thinking they are .. im reading it off the imf web page i provided .. if iraq is carrying 2 sets of books yes they can have a different rate than they are using under this stand by arrangement they have with the imf .. .. im not saying iraq cannot go back on their word to the agreement with the imf if they choose to ,, but it wouldnt be to iraqs benifit to do that .. make an arrangement with the imf and then just do as they want .. i dont think the imf would be extending anything to iraq if they were to do that .. they are living up to the arrangement as far as i can see .. which is to use the program rate in the arrangement with the imf .

You agree that Iraq's exchange rate is 1166. You agree that the IMF program rate is 1170, but say Iraq is using the program rate. ??

I am not implying that two sets of books are being kept. When the bank examiner comes in they don't bring their own books. When the IMF is analyzing the balance sheet of the CBI, their agreement with Iraq says that they will use the program rate of 1170 when they need to add up dinars in dollars or dollars in dinars, even though Iraq might have been, or might be using a (slightly) different rate. Pegged rates are expect to only change slightly since the parameters that limit them (our favorite players in this comedy money supply and foreign reserves) only change slightly.

Scene opens: Money Supply walks into a bar, Foreign Reserves is standing on a chair in the back of the room while the bar's dog, Prime Minister, snaps at his feet. ... oh never mind.

why iraq changed its rate from 1170 to 1166 baffles me .. > the "official" explanation is it reflects the overall weakening USD << being 1 us dollar equals one monetary unit , that explaination doesnt make sense ,, it didnt float to that it was an over night change in exchange rates ,, 1170 being the program rate set up under the standby arrangement .. who knows what that adjustment was about ..

to change the rate all the sudden by a quarter of a penny . or 4 dinars .. .. makes no sense . maybe smoke

Tiny overnight changes are exactly how pegged currencies typically are changed. What their reason was, is another matter and I don't know the answer to that either.

Edited February 1, 2013 by makecents

keepmwlknfny · February 1, 2013

Doesnt anyone think that if the demand for the dinar did rise significantly that it could affect the MARKET rate positively and in return have an effect on the official rate the CBI sets it at??

dontlop · February 1, 2013

You agree that Iraq's exchange rate is 1166. You agree that the IMF program rate is 1170, but say Iraq is using the program rate. ??

I am not implying that two sets of books are being kept. When the bank examiner comes in they don't bring their own books. When the IMF is analyzing the balance sheet of the CBI, their agreement with Iraq says that they will use the program rate of 1170 when they need to add up dinars in dollars or dollars in dinars, even though Iraq might have been, or might be using a (slightly) different rate. Pegged rates are expect to only change slightly since the parameters that limit them (our favorite players in this comedy money supply and foreign reserves) only change slightly.

Scene opens: Money Supply walks into a bar, Foreign Reserves is standing on a chair in the back of the room while the bar's dog, Prime Minister, snaps at his feet. ... oh never mind.

Tiny overnight changes are exactly how pegged currencies typically are changed. What their reason was, is another matter and I don't know the answer to that either.

well i have no more information to add ive made it clear where i stand , . i know where you stand >>>everything i post is for you to break it down and debate it . .. .. .. ok i think the guys questions have been answered by two points of view .. if not more .. so im done here . and i do understand exactly where you stand on this .. no need to reiterate

Edited February 1, 2013 by dontlop

RVPleaseToday · February 1, 2013

The kind of scary thing is that, should Iraq never RV or lop, we'll still be debating this same stuff in 20 years. :)/>

Edited February 1, 2013 by RVPleaseToday

dontlop · February 1, 2013

The kind of scary thing is that, should Iraq never RV or lop, we'll still be debating this same stuff in 20 years. :)/>/>

ya im just worn out ,, it seems like if i post my opinion i always got to debate somebody .. if ya tell em to hit the road . then they neg ya .. lol .. its kinda goofy :lol:

makecents · February 1, 2013

ya im just worn out ,, it seems like if i post my opinion i always got to debate somebody .. if ya tell em to hit the road . then they neg ya .. lol .. its kinda goofy :lol:/>/>

Saying that: A=5 and B=2 and A=B is not an opinion, its simply wrong. At least one of those statements must be incorrect. But, it is an excellent example of the sort of thinking folks use here to prop up their faith in an RV.

dontlop · February 1, 2013

Saying that: A=5 and B=2 and A=B is not an opinion, its simply wrong. At least one of those statements must be incorrect. But, it is an excellent example of the sort of thinking folks use here to prop up their faith in an RV.

dont trouble yourself , all you need to know is this >>> Iraq’s oil reserves stood at 115 billion bbl until November 2010, when the Ministry of Oil announced a revision to 143.5 billion bbl while the potential reserves stood at an estimate of around 215 billion bbl, which is in line with the only study of the ministry’s at 212 billion bbl and Petrolog & Associates’ study of proved reserves at 120 billion bbl and 216 billion bbl in the 1997 study.

Darin · February 1, 2013

There aren't two sets of books. When the IMF monitors things it does its own analysis, and in doing so the rate it uses is 1170 (presumably so year over year comparisons make more sense) even though Iraq is now using 1166.

Can I ask you a question... Do you think that within the political scene of Iraq, is there any corruption?

dontlop, the IMF is monitoring Iraq, not controlling it. You are misunderstanding what you are reading.

Why monitor something if its out of your control?

Maybe they're offering advice on what to do.... Doesn't mean the IMF has no impact on what the CBI does whatsoever.

Doesnt anyone think that if the demand for the dinar did rise significantly that it could affect the MARKET rate positively and in return have an effect on the official rate the CBI sets it at??

You would think it would!

If not, either A) no one would use the banks as they'd just exchange on the market or The market would flood with even more dinars.

makecents · February 1, 2013

dont trouble yourself , all you need to know is this >>> Iraq’s oil reserves stood at 115 billion bbl until November 2010, when the Ministry of Oil announced a revision to 143.5 billion bbl while the potential reserves stood at an estimate of around 215 billion bbl, which is in line with the only study of the ministry’s at 212 billion bbl and Petrolog & Associates’ study of proved reserves at 120 billion bbl and 216 billion bbl in the 1997 study.

What? Of course they are finding new oil deposits or getting better data about those they already knew about. What has that got to do with their currency?

Can I ask you a question... Do you think that within the political scene of Iraq, is there any corruption?

Of course you can ask! I suspect there is LOTS of corruption in Iraq. Where does that lead?

As for the IMFs monitoring, the IMF basically is a voluntary organization that works along the lines of "If you follow these rules, we can help you with this and that", they have to monitor to see if Iraq is following the rules.

Darin · February 1, 2013

What? Of course they are finding new oil deposits or getting better data about those they already knew about. What has that got to do with their currency?

Of course you can ask! I suspect there is LOTS of corruption in Iraq. Where does that lead?

As for the IMFs monitoring, the IMF basically is a voluntary organization that works along the lines of "If you follow these rules, we can help you with this and that", they have to monitor to see if Iraq is following the rules.

So if you believe a lot of corruption is evident in Iraq, what excludes the CBI? lol

Charlene · February 1, 2013

Great discussion. Thanks!

ALBUNDY · February 1, 2013

What do you think Dinar investors?

VietNamNet Bridge – A big amount of foreign currencies has been sold by people recently since they, after weighing pros and cons, decided that it would be better to keep dong than dollars

30/01/2013

The State Bank of Vietnam has never before bought foreign currencies so continually and in such a big quantities. The foreign currency reserves have reportedly reached the highest peak so far. Instead of keeping foreign currencies under the pillow, people now sell foreign currencies for dong.

Analysts recalled the days just before the 2012 Tet, when the dollar price fell sharply. Commercial banks then quoted the purchase price lower by up to VND300 per dollars than the sale price – a rarely seen gap between the sale and the purchase prices.

The market then witnessed a very big supply of foreign currencies, when people and businesses rushed to sell dollars to get dong to make payment for the deals at the end of the year.

The foreign currency supply has always been profuse over the last many months. The State Bank’s weekly updated report always showed that credit institutions purchased foreign currencies more than sold.

Thoi bao Kinh te Vietnam has quoted its sources as saying that the excess of purchase over sale has been seen since early 2012. The State Bank has never before purchased foreign currencies so continuously.

At the end of October 2012, the State Bank said it had bought $10 billion by that time. Meanwhile, the figure might have reached $15 billion, according to the newspaper. And just in the first month of 2013, the State Bank bought $2 billion already.

Vietnam once witnessed the strong supply of foreign currencies in 2007, when Vietnam officially was admitted to WTO and welcomed a new foreign investment wave. However, the foreign currency inflow to Vietnam then only lasted a short time, which ended in 2008.

And now Vietnam also is seeing a strong supply of foreign currencies, but it is from the public this time. In other words, the State Bank of Vietnam has successfully “broken the foreign currency ice” in the public, which has prompted people to sell dollars instead of keeping at their coffers.

In 2012, the general payment balance saw the record high at over $10 billion. Meanwhile, the State Bank bought $15 billion. The five billion dollars were believed to come from the public. Analysts have noted that the dollar deposits at banks have decreased sharply, while the dong deposits have increased rapidly. By the end of 2012, the foreign currency deposits from the public had reportedly decreased by 13 percent over the end of 2011, while the dong deposits increased by 36 percent.

It was obvious that people have sold dollars when they believed that it would be more profitable to keep dong. The dollar ceiling deposit interest rate had been kept at a low level of two percent, while the dong/dollar exchange rate was believed not to fluctuate by more than two or three percent.

Meanwhile, it was more profitable to deposit in dong with the interest rate of 14 percent per annum.

The policies relating to the dong/dollar exchange rate applied by the State Bank I 2012 have been praised as the biggest success of the central bank in the year. The dong/dollar exchange rate was stable, thus helping the State Bank buy more foreign currencies. Meanwhile, the foreign currencies among people have been released their coffers to be, thus helping ease the “dollarization” in the national economy.

TBKTVN

THE LINK : http://dongtalk.com/...ead.php?t=41404

Fitch reaffirms nation's B+ rating, stable outlook

31/01/2013

Fitch Ratings has affirmed Vietnam's long-term foreign and local currency-issuer default ratings (IDRs) at ‘B+', with a stable outlook.

The ratings agency also affirmed the country ceiling at ‘B+' and the short-term foreign-currency IDR at ‘B'.

"Vietnam's ratings are underpinned by its track record of strong economic growth and a favourable environment for foreign direct investment that has rendered the economy less vulnerable to external shocks and raised its potential growth rate," Fitch said in a statement.

"The ratings are also supported by favourable overall levels of external debt and debt service relative to rated peers as well as by high levels of domestic savings and investment."

The agency estimated that Vietnam's domestic savings rates have averaged 28 percent over the past five years, while its investment rates have averaged 36 percent.

Fitch lauded the State Bank of Vietnam for publicly admitting that non-performing loans (NPLs) accounted for 8.8 percent of total outstanding loans as of September last year – considerably higher than had been previously reported by banks. The agency called this official transparency a positive step toward addressing structural weaknesses in the financial sector.

"The State Bank is also reportedly considering the establishment of a State asset management company to help restructure banks," Fitch said.

"Improvements in the quality of financial reporting and governance as well as greater confidence in the size of the fiscal risk posed by the banking sector would lift a key constraint on Vietnam's ratings."

The stable outlook reflected Fitch's expectations that policymakers would remain committed to economic stability, including lower inflation, a stable currency, and avoiding an excessive current account deficit.

Vietnam has managed to increase its current account balance while avoiding recession, in contrast to some other emerging and advanced economies.

Fitch estimated the current account surplus rose to 7.2 percent of GDP in 2012, compared to just 0.2 percent in 2011. Foreign reserves, as a result, reached an estimated 24 billion USD as of the end of 2012, providing Vietnam with a larger buffer against any further capital flight.

Vietnam's economy has survived the worst of the downturn, with growth slowing considerably in response to austerity measures implemented under Resolution No 11 in February 2011.

Real GDP grew 5.5 percent year-on-year in the second half of last year, up from a 4.4 percent increase in the first half.

Fitch therefore forecast real GDP growth of 5.5 percent in 2013, up from 5 percent in 2012.-VNA

THE LINK : http://en.vietnamplu...31/31519.vnplus

Vietnam among 25 best frontier markets for investors

31/01/2013

VietNamNet Bridge – In its March edition, Bloomberg Markets Magazine ranks the top 25 frontier markets for investors. Vietnam ranks first in the list.

Frontier markets could also be termed as “pre-emerging” markets. These countries are distinguished by capital markets that are underdeveloped compared to emerging markets.

However, the scoring system the magazine used indicates that these frontier markets are more desirable investment destinations than the emerging market counterparts.

Bloomberg Markets used a variety of criteria to rank these countries, from government debt to labor force participation ratios. The countries are evaluated in each of these criteria, then the points in each category are added together to determine the total score on a scale of 0-100.

The data used by Bloomberg Markets Magazine as a basis for assessment includes data from the World Bank (WB), International Monetary Fund (IMF), Transparency International (TI), the financial news agency Bloomberg, the Wall Street Journal and Heritage Foundation, etc.

The list is dominated by African and Asian nations, though a few European and South American countries also made the cut.

The top ten countries in the list: Vietnam, Qatar, Lithuania, the UAE, Botswana, Romania, Saudi Arabia, Bulgaria, Kazakhstan and Estonia.

Compiled by S. Tung

THE LINK : http://english.vietn...-investors.html

Vietnam faces continued economic challenges in 2013, PM says

Wednesday, January 02, 2013

Vietnam will try to address economic challenges in 2013 as inflation risks persist, bad loans weigh on banks and rising inventories hurt businesses, Prime Minister Nguyen Tan Dung said.

Domestic concerns include bad debt that has crimped bank lending, “shortcomings in the government’s management” and “economic structure weaknesses,” Dung in his New Year’s message posted on the government’s website on Tuesday. Vietnam is “determined to fix weaknesses, overcome difficulties, continue to curb inflation and ensure growth, aiming for sustainable development,” he said.

Vietnam is struggling to boost an economy that expanded at the slowest pace in 13 years in 2012 as a slump in bank lending crimped domestic demand, adding pressure on the government to revamp the financial system. Dung has identified the debt overhang at banks as an obstacle to economic growth.

Government ministers and the central bank are discussing detailed plans to tackle bad debt, including the establishment of a debt asset management company, Dung said Dec. 26. Such a company may help resolve about VND100 trillion (US$4.8 billion) of non-performing loans, according to a Dec. 26 posting on the government’s website.

“Credit growth may still be slow in the first few months this year, so fiscal policy will play a decisive role in boosting demand in the economy,” Dung said. Ministries “need to quickly implement planned projects to spur demand in production and businesses” in coordination with the central bank to control inflation, he said. The restructuring of banks and state companies also need to be accelerated, he said.

The country’s inflation slowed for the first time in four months in December, with consumer prices rising 6.81 percent from a year earlier after climbing 7.08 percent in November, according to preliminary figures from the General Statistics Office.

THE LINK : http://www.thanhnien...es-in-2013.aspx

Vietnam gov’t seeks to restrict cash transactions

January 25, 2013 03:25:00

Vietnamese people will no longer be allowed to use cash to purchase cars and securities, if a draft decree suggested by the central bank is approved, Tuoi Tre reported on Friday.

For other transactions, such as the purchase of real estate and motorbikes, cash payments would be prohibited when in excess of a regulated amount, according to the draft which has been introduced by the State Bank of Vietnam for gathering public opinions.

The draft, however, does not specify what the limit would be, as the exact amount needs to be “thoroughly studied” before being discussed on a large scale, said the central bank’s Department of Payment, noting that the draft will have to be revised for many times before being submitted to the government.

Planned to be submitted to the government for approval this second quarter, and take effect in June at latest, the draft also targets organizations that transfer payments through banks on transactions of assets that require registration, such as boat sales.

Once the draft is approved, those who fail to conform to the regulation will not be allowed to register assets paid for in cash for titles and use rights, Bui Quang Tien, chief of the state bank’s Department of Payment, was quoted as saying.

According to the department, the draft is actually a replacement for the current decree, which limits cash payments for state budget-related transactions to VND30 million (US$1,434).

The original decree was issued in 2006 to improve the “health” and “transparency” of major transactions, reasoning that cash payments imply risks of corruption, money laundering, tax evasion and other illegal activities, the department said.

In addition to its initial objective, the draft, with the expansion of subjected transactions, will help modify Vietnamese people’s preference of using cash that create a big burden for the country’s automated teller machines (ATMs), it said.

The revision will also help prevent counterfeit money from changing hands, it added.

Speaking to Tuoi Tre, Nguyen Thanh Toai, deputy general director of Asia Commercial Bank said it is “reasonable” to force major transactions such as those involving land and housing to be made via banks, adding that the regulation will also increase the transactions’ “transparency.”

He also said that it will not be difficult for people to transfer money, because most of large transactions take place at the country’s economic centers like Hanoi and HCMC, where banks can be found everywhere.

Phan Thi Chinh, deputy general director of BIDV, agreed, saying that it is necessary to mandate that people present bank receipts which prove the transfer of funds before being allowed to proceed with subsequent necessary to acquire purchased assets.

On the other hand, lawyer Truong Thanh Duc from the Vietnam International Arbitration Center said some regulations of the draft failed to encourage people to stop using cash.

For example, one of its regulations says that banks are allowed to decide charges on their cash transaction services, which shows that the draft only makes it convenient for service suppliers and does not aim to deter cash payments, according to Duc.

As of April 2012, cash disbursements accounted for up to 70.2 percent of transaction values at several major banks like Vietcombank and BIDV, Tuoi Tre reported.

Meanwhile, a representative of the Vietnam Card Association was quoted in VnExpress as saying that ATM cards were first introduced 20 years ago in Vietnam, which now has tens of millions of cardholders, but who mostly use the cards to withdraw cash.

As of September 30, 2012, Vietnam’s banks had issued nearly 51 million credit and debit cards, the online newspaper quoted the central bank’s statistics as saying.

THE LINK : http://www.thanhnien...sh-payment.aspx

Vietnamese dong to remain steady, say experts

Saturday, January 26, 2013

A trade surplus and a proactive monetary policy kept the dong-US dollar exchange rate stable last year, and analysts are hopeful the situation would remain unchanged in 2013.

The State Bank of Vietnam last year fixed the rate at around VND21,000 to the dollar through the year, and the rate has stayed unchanged since the start of this year, being traded at 20,845 on January 23.

Chen Chia Ken, acting general director of the Phu Hung Securities Corp., was quoted by Dau Tu newspaper as saying the exchange rate could remain stable since Vietnam achieved a trade surplus for the first time in 20 years.

A surplus means there is a net inflow of foreign exchange, which exporters sell to buy dong, thus keeping the local currency robust.

As of the third quarter last year forex reserves more than doubled since the start of the year to US$23 billion, enough for 11 weeks’ imports.

Vo Tri Thanh, deputy head of the Central Institute for Economic Management, said the central bank could “definitely” keep the dong’s gain or loss against the dollar from exceeding 2-3 percent.

It has tightened dollar lending and set real interest rates [nominal rates less inflation] for dong deposits higher than for dollars, lessening interest in the greenback, he said.

Dong deposits at Ho Chi Minh City banks increased by 14 percent last year while dollar deposits shrank 6.7 percent.

In late November last year the central bank banned gold deposits at banks. Banks used to sell the gold deposited with them to plow back in their business, but then use dollars to import the metal when gold deposits would be closed en masse when prices rose.

Central bank governor Nguyen Van Binh has promised to keep the dong steady.

THE LINK : http://www.thanhnien...ay-experts.aspx

Vietnam gold traders call for elimination of jewelry tax

Saturday, January 26, 2013 06:00:00

The Vietnam Gold Traders Association has proposed that the Ministry of Finance eliminate the export tax imposed on jewelry, which currently stands at 10 percent, saying that it will help domestic gold traders in the current economic slowdown.

According to the association, the demand for jewelry has been slow recently due to the economic slump, causing a negative impact on domestic gold jewelry exports, news website VnExpress reported January 26.

At the moment, Thailand has imposes no export tax on jewelry and Vietnam should follow the scheme to boost domestic shipments, it added.

The Ministry of Finance has applied a 10 percent export tax to jewelry that has more than 80 percent to under 99.9 percent gold content since August 2011. Previously, the tax was put only on jewelry containing more than 99 percent gold.

The association also said the tax reduction will help Vietnam’s jewelry products compete on the international market.

It also argues that Vietnamese jewelry products at ratios of 83.3 percent and 91.6 percent gold are preferred by buyers in Turkey, China and Dubai, but Vietnamese products cannot compete with other countries’ because of the taxes.

THE LINK : http://www.thanhnien...-reduction.aspx

01/02/2013

Central bank seen intervening in gold trading

The State Bank of Vietnam (SBV) in a draft decision on gold bar trading suggests a possibility of intervening in the gold market by transacting with gold trading organizations.

The agency would decide to trade gold in either direct transaction or through auctions. The SBV governor would decide on buying and selling prices of gold bars on the domestic market.

The central bank may also open overseas accounts to import material gold and supplement the nation’s foreign exchange reserve to facilitate gold bar trading in the country.

When the central bank’s intervention is needed, the agency would set up plans to buy or sell gold bars, making clear time, volume, transaction methods and partners.

Concerning the gold market after January 10, a representative of SBV said that gold trading has slowed down.

Although gold balance arising from gold purchasing and selling activities of credit institutions at the end of the day is regulated not to exceed 2 pct of the owner’s capital, the actual figures are under 1pct.

People earlier rushed to sell gold, narrowing the gap between local and international prices. However, some banks have increased gold buying to prepare for gold account closing, making gold demand surge again and widening the price gap to over VND3 million for a tael.

The central bank will not intervene in the market now but if public demand kept increasing, the agency would sell out gold to stabilize the market, he said.

The world gold price is around VND3.3 million lower than domestic prices for a tael. A week ago, the difference was just VND2.6 million.

Farming exports jump in January

Agricultural exports in the first month of the year surged by nearly 40 per cent over the same month last year to a value of US$2.17 billion, the Ministry of Agriculture and Rural Development has estimated.

The director of the ministry's Information and Statistics Centre, Nguyen Viet Chien, said that export volume of most of the country's key cash crops increased significantly in January.

Although China was the only importer of Vietnamese rice during the month, they accepted shipments totalling 534,000 tonnes and worth $259 million, an increase of 108.5 per cent in volume and 76.4 per cent in value.

The Viet Nam Food Association had previously voiced concern about rice exports in the first quarter since few contracts had been signed, but shipments accelerated in the second half of the month.

Coffee exports also percolated in January, with a volume of 191,000 tonnes worth $387 million – increases of about 71 per cent in both volume and value.

Around 5,000 tonnes of pepper were exported during the month, fetching $40 million, a rise of 54.2 per cent in volume and 65.1 per cent in value over the same period last year.

The US and Germany remained the key markets for Vietnamese coffee and pepper.

Tea exports were estimated to reach $16 million on a volume of 10,000 tonnes, representing a year-on-year increase of 16.4 per cent in value and 10.2 per cent in volume. Pakistan remained the leading consumer of Vietnamese tea, accounting for over 20 per cent of all exports.

With the exports of cashews and cassava also rising in January – earning $88 million and $131 million, respectively – rubber was the only major cash crop which saw a decline in export value in January. Rubber exports totalled 76,000 tonnes for a value of $182 million, a drop of 5 per cent from last year.

Seafood exports rose 3.5 per cent during the period, bringing home $376 million. The US continued to be the leading market for Vietnamese seafood, accounting for 19.1 per cent of the market, followed by Japan at 17.8 per cent and South Korea at 8.3 per cent.

Bleak economic outlook but FDI offers light at end of tunnel

Although the Vietnamese economy is expected to continue to trend downward this year, the country still has untapped potential, speakers said at a meeting of the Canadian Chamber of Commerce in Viet Nam in HCM City last week.

"Huge State debt, sagging consumer confidence, more bankruptcies and unemployment, slower growth and spending and reliance on cheap exports are the major challenges for the economy this year," said Ralf Matthaes, regional managing director of TNS market research company.

However, he noted that the country continues to have a high level of global investment interest, tourist arrivals and large amount of overseas remittances.

Major reform requirements this year will include controlling inflation and devaluation of currency, restructuring the financial system, improving debt-payment ability and attracting FDI.

Andy Ho, chief investment officer at VinaCapital, said the year would be one of macroeconomic stability and better GDP growth of 5.7 per cent.

"The Vietnamese dong will be stable, with the State Bank of Viet Nam possibly lowering the official rate or widening the band, or both, to help increase exports," he said.

Annual inflation is expected to be 7-8 per cent and the cost of capital would decline substantially.

As a result, lending rates should fall in the low-teens, which would lower overall borrowing costs, reducing pressure on businesses.

"Margin lending costs will also come down to a reasonable level, allowing stock participants to borrow again for margin trading. Deposit and bond rates will decline, thus making alternative assets more interesting," he said.

Banks braced for Tet blitz on ATMs

Banks in HCM City are gearing up to meet increasing cash withdrawal demand during the Tet (Lunar New Year) holidays by ensuring all their Automatic Tellers Machines (ATMs) run smoothly.

Most ATMs in the city get very crowded ahead of the festival as scores of workers gather to withdraw wages and bonuses.

To ease the ATM congestion seen in previous years, the first action taken by local banks is to examine the machines' operations and carry out timely repairs. They are also planning to open new ATMs at busy spots.

Local banks say they have already made necessary preparations to ensure sufficient supply of cash for their ATMs before, during and after the Tet holidays.

A representative of the HCM City Export Processing Zones and Industry Parks Authority said that long queues have been spotted in front of ATM booths in industrial parks as several firms have already paid their workers wages and bonuses.

To meet this sudden surge in withdrawal demand, many ATM trucks of local banks have rushed to these places.

Vietinbank has started a general inspection of its ATMs, data transmission networks and power resources to ensure that all its 2,000 ATMs will operate stably during the Tet season.

It has also opened new ATMs at places where cash withdrawal demand is high and kept the machines supplied with more cash than normal.

It has also organised teams to watch transaction volumes as well as technical operations at ATMs so that any breakdown can be addressed quickly.

"It is not only on Tet holidays, we keep close watch over our ATM system even on normal days to ensure stable operations," said a representative of the Maritime Bank, who did not want to be named.

All Maritime Bank's ATMs are classified and a cash supply regime is maintained. The bank's machines are supplied with cash as soon as their balance reaches the minimum permissible level, he said.

Ocean Bank also foresees increased cash withdrawals at this time of year and has prepared several measures to cope with it.

The bank has increased the amount of cash in each ATM and set up a team ready to quickly address any breakdown in its network.

Most banks in the city have also paid attention to ensuring security for their customers by deploying guards at several "risky" locations and installing cameras in all booths.

They have also cooperated with the local police to intensify patrols at ATM locations adjudged more vulnerable to theft and robbery.

The State Bank of Viet Nam has also asked commercial banks to make plans to ensure smooth operations of their ATM networks during the Tet holidays.

The central bank has prioritised transfer of cash to major cities and provinces that have high usage demand and a large number of ATMs, including HCM City, Ha Noi, Da Nang, Hai Phong, Quang Ninh, Dong Nai and Binh Duong.

To ensure sufficient cash supply for ATMs nation-wide, it has directed both its own agencies and commercial banks to be on duty around the clock, since each machine needs between VND500 and 700 million at all times.

The central bank has also co-ordinated with the Ministry of Public Security in enhancing protection of the ATMs and their users.

Holiday sparks scramble for beer

Demand for beer and beer prices are on the rise as the Tet holiday approaches.

Brewing industry leaders have estimated that over 500 million litres of beer of all varieties will be consumed during the holiday season this year, with no shortages expected despite the spike in consumption.

Sai Gon Beer and Alcoholic Beverages Joint Stock Co (Sabeco) plans to ship 260 million litres during the lead-up to the holiday, Viet Nam Brewery Ltd and Ha Noi Beer and Alcoholic Beverages Corporation (Habeco) each expect to produce about 100 million litres.

Sabeco's leading brands, including Red Sai Gon, Sai Gon Special and 333 canned beer, have also seen increases in prices of about 5 per cent since mid-January. According to Sabeco, sales of Red Sai Gon beer also rose this month by about 23 per cent compared to the same period last year, while sales of 333 beer have risen by 11 per cent.

For fresh beer, prices have increased about VND15-20,000 per barrel in the past two weeks.

According to a global market research company, Viet Nam was the top beer-drinking nation in the Southeast Asia in 2011, with about 2.6 billion litres consumed. Preliminary estimates for 2012 suggest that Vietnamese drinkers guzzled nearly 3 billion litres of beer in 2012, over twice the 1.29 billion litres consumed in 2003.

According to the Ministry of Planning and Investment, there were about 350 breweries nationwide, 20 of which had an annual capacity of over 20 million litres and another 15 of which had a capacity of over 15 million litres.

Many varieties of imported beer were also now available on the domestic market, including products from Germany, Belgium, France, the Czech Republic, Russia and Japan, at prices ranging from VND450,000 ($25) to VND2 million ($95) per barrel.

Vietnamese labels given a boost by Japan association

An association aimed at promoting Vietnamese trademarks made its debut in Kisarazu city in Japan's Chiba prefecture on Sunday.

Addressing the event, the association's Chairman Ngo Hung Lam said that the aim was to improve the quality of Vietnamese products and study the Japanese market in order to supply more goods into this selective market place.

A minister of the Vietnamese Embassy in Japan, Nguyen Phuong Hong, hailed the two countries trade relations, saying that Japan is now Viet Nam's leading trade partner, investor and ODA provider.

Hiroyuki Ogawa, Secretary General and Managing Director of the Japan-Viet Nam Association said that he hoped that the association would help bring more quality Vietnamese products to Japan.-

Aims for 500 businesses to export via e-commerce

The Viet Nam Chamber of Commerce and Industry (VCCI), OSB Investment and Technology JSC and the Alibaba.com Group are joining forces in a bid to support Vietnamese exporters to seek partners and expand their market through increased e-commerce.

The project, which was launched last year, targets supporting 500 exporters in 2013.

These companies will be given a discount on the member registration fee to become a Global Gold Supplier on Alibaba.com and be given opportunities to meet large exporters, share experiences and take part in training courses on e-commerce.-

Terumo to build $98.9 million factory in Dong Nai

The Japanese Terumo Medical Corporation has been granted an investment license allowing it to build a medical equipment manufacturing factory in Long Duc Industrial Park in southern Dong Nai Province.

Covering an area of 10 ha, the US$98.9 million factory is expected to open its doors in the second quarter of 2015.

The factory will mainly produce products for blood preservation, with the aim of developing its market in Southeast Asia, Europe and America.

This is the second Terumo-invested project in Viet Nam, after the $19.5 million medical equipment factory in Ha Noi, which has been put into operation.

Firms embark on search wars

Search Engine Optimisation (SEO) played an important role in digital marketing and would experience an increase this year.

The statement was made by Nguyen Lam Thanh, general secretary of the Viet Nam Digital Media Association under the Ministry of Information and Communications, at the SEO Congress 2013 held in Ha Noi on Sunday.

The congress, themed SEO Integrated-Digital Marketing, gathered more than 500 experts and business representatives. It provided participants updated information on the SEO sector in Viet Nam and methods for businesses to apply SEO-marketing. SEO workers at the conference urged the establishment of the SEO Viet Nam Association under the management of the Viet Nam Digital Media Association.

Giving a general view of SEO activities in 2012, Vinalink CEO and SEO Viet Nam Club president Ha Anh Tuan showed an image of a rollercoaster, implying that workers were taking part in an adventurous game. "As you can see, Google updated its algorithm 37 times last year and there is also a website called Mozcast to monitor search activities weather," he said.

Tuan added that 2012 saw eight changes on Google that included content and influence, privacy and terms, SEO jobs (the growth of in-house SEO) and devices (the rise of smartphones).

Statistics from online market research company Vinalink showed that around 20,000 staff worked in the domestic SEO sector with a monthly salary of VND5-10 million (US$240-480), and 30 enterprises provided SEO services.

"There were three main positions defined clearly in Viet Nam last year, comprising of SEO manager (in charge of outlining strategies), SEO copywriter (public relations) and SEO technical (information technology). The SEO community has looked at specialised topics on stratagies and copywriting," Tuan said.

In a survey of internet users' behaviour (attention-interest-search-action-share), SEO lies in the three last steps. Companies had to focus on ensuring they came out on top of any search results related to their business.

Guest speakers also pointed out the potential for SEO on social media and mobile phones.

Tran Tuan Viet, CEO of V&A, emphasised the importance of social media optimisation (SMO), a method to display images of products or brands on social media. He said that the population of Viet Nam had reached nearly 90 million people, and 11 million of them had a Facebook account. "If you want to know how much social media affects SEO, just search on Google with the key words ‘Vietnam Travel'. The first result is its fan page on Facebook," he said. Viet then listed some successes of international brands such as English football club Manchester United, with more than 120,000 people using the ‘Join ManUtd' application on Facebook.

With more than half of mobile users accessing the internet via their devices, the market is prime for SEO development. According to a report published by the Ministry of Information and Communications last July, the number of 3G subscribers doubled from 2010 to 16 million in 2012, accounting for 18 per cent of the population. Attending the congress, marketing expert Tran Anh Tu gave a product model with four units: product development (coder, designer), content development (content creator, copywriter), marketing/ PR branding and development community.

"To have a good product strategy, you should have the latest unique content. Remember that content is king. People are an important part of success so it's vital to identify your customer."

Search Engine Optimisation (SEO) is the process of putting businesses' products and services at the top of search engine results, and helping them to increase their conversion rate at a lower cost.

According to Vinalink, it first appeared in Viet Nam during the 1999-2003 period with the establishment of www.quangbaweb.com. At that time, companies that specialised in travel and import/export paid attention to SEO but other businesses did not. The SEO Viet Nam Club was founded in 2009 and has become a leading organisation that provides training on SEO.

Vinalink also reported that SEO has been on the rise since 2010, three to five years later than the rest of the world.

Domestic banks see rising assets

Domestic banks are recovering thanks to an increase in assets, according to a report from the State Bank of Viet Nam.

The total assets of the banking system reached VND4,906 trillion (US$233 billion) as of November 30 last year with an increase of VND 67.3 trillion ($3.2 billion) or 1.39 per cent compared to the previous month.

The assets of State-owned commercial banks rose by VND27.743 trillion ($1.3 billion) in one month to VND2,108 trillion ($100 billion)

Total assets of commercial joint stock banks were up by VND25.277 trillion ($1.2 billion) to VND2,106 trillion ($99 billion).

The equity of the whole banking system by late November 2012 was VND421 trillion ($20 billion), a year-on-year increase of 7.89 per cent. The equity of commercial banks rose sharply in November by VND9.512 trillion ($452million), with the emergence of finance companies and finance leasing companies.

In November last year, the assets of this group of credit institutions had increased by VND5.019 trillion ($239 million), or 82.8 increase to VND11. 078 trillion ($527 million).

The equity of commercial joint-stock banks and credit institutions remained unchanged compared to late October 2012, while the equity of State-run commercial banks rose by VND1.3 trillion and foreign and joint-venture banks by VND3,156 billion compared to the end of the previous month.

Charter capital of the whole banking system did not fluctuate significantly in November. The total capital of the entire banking system rose 9.68 per cent to VND386.620 trillion , of which the State-run commercial joint stock banks saw VND111.550 trillion , up 28.08 per cent while commercial banks saw an increase of VND172.854 trillion, up 5.24 per cent.

The minimum capital adequacy ratio (CAR) of the entire banking system now stood at 14 per cent, with credit institutions taking the lead with 37.94 per cent, followed by the joint-venture and foreign banks with 30.36 per cent.

The minimum ratio of CAR of commercial joint stock banks was 13.93 per cent and the State-owned commercial joint stock banks was 10.45 per cent.

Hanoi to probe diverted tax collections

The Ha Noi Tax Department will conduct inspections on 13,393 companies located in the capital city, according to the department.

The inspections aim to reduce unpaid tax and force businesses to comply with tax laws, thus avoiding losses for the State budget.

Business sectors to be inspected include pharmaceuticals, tourism services, advertising, television, gold and silver trading, real estate, electricity, oil and gas, telecoms, online business, video games, medical equipment, hospitals and schools.

The inspections will focus particularly on businesses suspected of transfer pricing, as well as foreign-invested enterprises and businesses which have not been inspected for many years.

The city Tax Department will also focus on enterprises enjoying preferential tax arrangements and businesses enjoying incentives in industrial parks and export processing zones.

Tax refunds of property developers are also inspected.

According to the city Tax Department, as of 2012 the inspection performance has been reformed significantly. For instance, tax declaration at the tax offices has been effectively revamped by focusing on key businesses perceived to be ‘high risk'.

By doing so, the Department of Taxation has found many shortcomings under the current tax policy, which have been reported to the General Department of Taxation under the Ministry of Finance to handle promptly.

City tax inspectors are said to have checked and adjusted 18,000 tax records to retrieve tax.

Particularly, the city tax department last year retrieved VND110 billion from over 6,000 inspections to boost the State budget.

Under inspections, 33 businesses were found violating the law and were fined VND287 million, according to the department.

Tra output, exports forecast to plunge

Viet Nam's tra fish output will drop strongly this year to less than one million tonnes as farmers continue to turn away from breeding, according to the Viet Nam Association of Seafood Exporters and Producers (VASEP).

Production could actually drop to as much as 800,000 tonnes, VASEP said at a meeting held in Can Tho City last Friday to review 2012's performance and set plans for this year.

Revenues from tra fish export would also decrease to about US$1.5-1.6 billion, VASEP general secretary Truong Dinh Hoe told the meeting.

According to the General Department of Fisheries, Viet Nam produced more than 1.28 million tonnes of tra fish and earned $1.74 billion from tra fish exports last year. This marked a 3.4 per cent reduction in export revenues over 2011.

The tra fish sector has never had such a difficult time as it did last year, with prices of the fish dropping strongly while feed prices and other input costs increased sharply.

As a result, farmers incurred losses of VND2,000-4,000 per kilogramme last year, the meeting heard.

Tra fish exports to key markets including the EU, the US and China reduced strongly last year since consumers in these markets continued to tighten their belts amidst the ongoing economic slowdown.

Delegates at the meeting felt there were too many companies involved in tra fish exports, with some engaging in unhealthy competition, including slashing prices and increasing the ice-ratio up to 30-40 per cent in their tra fish products, giving Viet Nam's tra fish industry "a bad name".

Nguyen Huu Dung, VASEP deputy chairman, said there are only 70 tra fish processing firms in the country, but up to 300 firms are involved in exporting the fish.

He asked relevant agencies to enhance inspections and strictly punish violations.

To facilitate tra fish production and consumption this year, delegates at the meeting asked the Government to quickly issue regulations on tra fish export, help reduce difficulties faced by the sector, especially in accessing credit, and upgrade infrastructure in breeding areas.

Many participants agreed that this year will be one for the tra fish sector to analyse all its shortcomings and make plans to restructure and improve performance, and in so doing, create a momentum for the sector to develop in a sustainable manner from 2014 onwards.

Demand for packaged gold rings spikes

More than 10 days after Decree No 24/2012/ND-CP on the management of gold business activities took effect the domestic market has seen some significant changes.

Under the decree, the purchase or sale of gold bars by organisations and individuals shall be done only at credit institutions and enterprises licensed by the central bank to trade in gold bullion.

Since this regulation took effect on January 10, the number of gold bar transaction points fell from 8,000 to 2,500 nationwide. More significantly, the gap between local and global gold prices narrowed from over VND5 million to about VND3 million per tael at present.

However, one of the market's biggest changes has been that packaged gold rings have replaced gold bars, with transactions increasing manifold at gold shops.

The gold rings carry 24-carat certification, the enterprise's seal and are packaged like gold bars. The packaged gold rings are priced slightly lower than the rate of SJC gold bars.

A gold shop in Tan Binh District' Pham Van Hai Market sells between 30 and 35 gold rings, equivalent to 3 or 3.5 gold taels, every day. This is nearly double the sales before Decree 24 took effect.

The Phu Nhuan Jewellery Company sells about 300 packaged gold rings a day, five or six times higher than earlier.

It can be seen that demand for packaged gold rings has risen sharply in areas that do not have establishments licensed by the central bank to trade in gold bars.

The main explanation being given by market observers for this change is that trading in gold bars now has become very difficult, particularly for those living in rural and remote areas, so many people are deciding to buy the gold rings to keep as assets. It has been a long-standing habit for Vietnamese households to store gold as a safe asset that will not get devalued, unlike currencies.

Major gold traders including Sai Gon Jewelleries Company (SIC), Phu Nhuan Jewelleries Company and Bao Tin Minh Chau Gold and Silver Company have begun selling packaged gold rings to meet customers' demand.

Soon after the spike in demand for packaged gold rings, the central bank has asked enterprises with large sales volumes to report on production and sales as required.

The shift from gold bars to gold rings can be considered the market's reaction over the central bank's gold business management policies. These new polices have made trading of gold bars more complicated and people still want to keep gold as a safe asset.

Under current laws, the purchase and sales of packaged gold rings is still legal, since it is considered jewelry and not bullion.

However, a central bank official has said that the bank would closely watch this phenomenon (of trading in packaged gold rings) and issue "warnings" as it finds necessary.

For now, it advises individuals who want to purchase packaged gold rings to exercise caution as their quality as well as weight cannot be fully guaranteed.

Egg prices take off

Between January 4 and 11, Thailand's CP Vietnam Corp, one of the country's biggest poultry suppliers, suddenly hiked egg prices by 37 per cent from VND21,500 to VND29,000 (US$1.4) for a carton of 10 eggs.

Earlier, between December and January 11, Malaysia's Emivest had hiked their egg prices by 30 per cent from VND19,200 to VND25,600 ($1.2)

The companies explained their sharp price hikes by saying it was due to a supply shortage of poultry eggs on the market.

The price hikes destabilised the market and worried customers at a time they were facing many difficulties due to the prolonged economic crisis. There were strong protests against the companies' actions from the public as well as authorised agencies.

Market management agencies in HCM City showed that egg supply had not reduced but had even increased in the market, hence the price hike was unjustified. The Ministry of Industry and Trade has also rejected the companies' explanations and provided statistics indicating normal supply.

Saigon CoopMart as well as some other major retailers had to stop selling eggs supplied by CP as they were selling the essential commodity under the city's price stabilisation programme.

Faced with a barrage of criticism, the companies have backtracked and admitted their actions have been unreasonable. They have also been forced to lower their prices.

On January 16, CP admitted to wrongfully increasing the egg prices and cut them to VND21,000 per (10-egg) carton. The same day, Emivest lowered its prices to VND23,200 for a 10-pack and to VND20,200 by January 19.

Although CP and Emivest have already adjusted their egg prices in line with the market rates, they still face penalties for violating the Law on Competition.

CP has written to the HCM City Department of Industry and Trade, saying that it only holds a 16 per cent share in the local egg market in an attempt to avoid being sanctioned under the Competition Law.

The Viet Nam Competition Authority under the Ministry of Industry and Trade has decided to conduct an investigation to estimate the actual market share of these two firms.

Under the Competition Law, the authorities only need to collect sales invoices of CP and Emivest at a local tax department or a supermarket to determine the percentage of its sales revenue in the local market compared to other companies. The inspectors in this case will be the tax departments in localities where factories of both companies are based.

After the investigation, it will take a few months until the official conclusions come out. However, if proven guilty, CP and Emivest would be subject to penalties of up to 10 per cent of their total revenues in the previous financial year (2011). The most severe punishment for CP and Emivest would be deprivation of the right to do business for a certain time.

Quick and strong reactions from authorised agencies, the media and active boycott by retailers forced CP and Emivest to give up on their plan to make bulky profits from egg price hikes, and also prevented the possibility of increasing the price of other products.

At present 20 foreign invested companies account for 70 per cent of the local animal feed market and three foreign firms cover 30 per cent of the poultry breeds market. As a result, over the last several years, these two markets have seen continuous price increases, causing many difficulties for both breeders and consumers.

There is deep concern that if the domination of foreign firms is not tackled by effective, timely measures, it is not only the prices of eggs, animal feed and poultry breeds that will rise uncontrollably, but also that of several other livestock and dairy products like meat and milk. Some local experts have called for policies to support the development of domestic livestock breeding companies to reduce the market's reliance on foreign firms.

More major IPOs on the way

Dozens of corporations under the control of the ministries of Transport and Construction will hold their IPOs (Initial Public Offering) this year to restructure them into shareholding companies.

Vietnam Airlines Corporation, Viet Nam National Textile and Garment Group (Vintex), and Vietnam Glass and Ceramics for Construction Corporation (Viglacera) are among the big names that will go public this year.

Under its recently approved restructuring plan, Vietnam Airlines will make an initial public offering (IPO) this year and offload stakes in 10 businesses from now through 2015. The Government will own 65-75 per cent of the airline after the IPO, less than the initially estimated percentage of between 70 and 80 per cent.

After being equitised, Vietnam Airlines will have a parent company and nine dependent companies and 26 independent units. It will continue to fully own the Vietnam Airlines Engineering Company. It hopes to become Southeast Asia's third largest airline, providing four-star services by 2015.

It expects to achieve a turnover of about $43.5 billion from air transportation and pre-tax profits of $1.08 billion by 2020.

Vinatex's IPO is predicted to be carried out in June this year. However, information about what percentage of its stock will be held by the Government has not been released.

The equitisation of Vinatex's subsidiaries such as Phong Phu Corp, Viet Tien, Nha Be and Hoa Tho is almost complete. As planned, Vinatex will offload all capital from non-core investments before 2015. The capital withdrawn will be used to develop its key areas such as production and trading of cotton, fiber, woven fabric, knitted fabric, garments and fashion accessories.

Vinatex's dividend of between 12 and 15 per cent is considered to be higher than State-owned enterprises in other industries.

Viglacera has planned to make its IPO in September this year with 20 per cent of its stake to be sold to the public. In 2012, its pre-tax profit was VND121 billion ($5.81 million).

With such attractive bottom-line figures, the company's equitation is expected to happen smoothly.

The IPOs of Vietnam Airlines, Vinatex and Viglacera are also expected to bring in new and attractive commodities to the domestic securities market, thus making it more attractive to both domestic and overseas investors.

However, many local economists are concerned about the IPOs of major state-owned corporations being held this year since Viet Nam's economy is yet to show signs of recovering from the ongoing slump. Therefore, the economists are worried that the State assets, which are public property, will be sold off at cheap prices.

Private investments in agriculture lauded

The international community has applauded Viet Nam's implementation of pubic-private partnership (PPP) models in the agricultural sector in the last two years, according to Minister for Agriculture and Rural Development Cao Duc Phat.

Phat, who led Viet Nam's delegation to the World Economic Forum (WEF) held in the Swiss resort of Davos-Klosters in the last four days, said that PPP models implemented in Vietnamese agriculture had achieved fruitful results.

At present the country is among 11 nations participating in a WEF initiative called The New Vision for Agriculture which is engaging leaders of businesses, governments, civil societies, farm organisations, development partners and other groups to work together to achieve sustainable agricultural growth. The plan is a reaction to population growth, which is expected to reach nine billion in 2050, and the subsequently rising food demand.

"Viet Nam's agriculture ministry has worked with 20 world-leading agricultural groups and companies to carry out a programme for the country's sustainable development," Phat revealed.

Six PPP groups were established in the country, responsible for vegetables, fruit, coffee, tea, aqua-culture products and other forms of agriculture.

The results have been very positive since the models were implemented. In the tea business, local farmers sold companies 10,000 tonnes of tea meeting international quality standards. The volume is expected to increase further in the future.

Coffee production and trade has increased its productivity by 5 per cent and growers' income has risen 15 per cent.

Closer co-operation between farmers and enterprises has also boosted new and higher yields of vegetable crops, Phat said.

Last year, a documentary about Viet Nam's agricultural PPP projects was made by WEF staff which shared the country's experiences and promoted its sector growth

"Having seen the effectiveness of PPP projects in agriculture and received support from the international community, the ministry is reviewing the models further to develop a truly successful mechanism that will continue to attract more resources to the sector," Phat promised.

During their time at the World Economic Forum, now in its 43rd year, the Vietnamese delegation contributed to discussions about the implementation of PPP models to boost production, measures to stabilise the market of key products and further ways to expand the New Vision for Agriculture initiative.

This year, the forum was themed "Resilient Dynamism" and focused on leading through adversity, restoring economic dynamism and strengthening society.

Pepper farms lack sustainability

Pepper farmers in Viet Nam have to pay more attention to sustainable farming as they face falling productivity, disease threats and an oversupply situation that will reduce prices and incomes, an expert has warned.

Do Ha Nam, head of the Viet Nam Pepper Association, said uncontrolled expansion of pepper farms in the country would lead to a sharp fall in prices as supply exceeds demand, the Viet Nam Financial Times (VFT) reports.

The sector has had a good year in 2012 with a bumper crop, export revenues up nearly 10 percent and prices up nearly 16 percent over the previous year, despite falling productivity.

Pepper yield will continue to fall this year and the coming years because of "inappropriate expansion of pepper farms," Nam said.

Rising pepper export prices for the past six consecutive years has motivated pepper farmers to expand cultivation, but poor cultivation methods and epidemics have affected productivity.

According to statistics compiled by the Viet Nam Pepper Association, Viet Nam harvested 125,000 tonnes of pepper in 2011, but this decreased to 115,000 tonnes last year.

The Ministry of Agriculture and Rural Development says the country exported 118,000 tonnes of pepper last year, earning US$802 million. This marked a decrease of 4.3 percent in volume, but an increase of 9.6 percent in value over the previous year.

The area under pepper cultivation, however, increased from 55,400ha in 2011 to 57,500ha last year. In 1995, the country had just 7,000ha under pepper cultivation. Zoning plans prepared by the Government envisaged the maximum area under pepper cultivation at 50,000ha.

The high prices pushed farmers to ignore the advice of local experts and focus on expanding their farms. This factor, and the fact that some of the pepper varieties used had no clear origins made the farms more susceptible to diseases.

The VFT cited a report prepared by the Ministry of Agriculture and Rural Development that said average pepper productivity last year fell to 2.4 tonnes per hectare from 3.5 tonnes in 2010.

Another problem is that Viet Nam has set a target of producing 150,000 tonnes of pepper by 2020. International experts are worried that consumption in the global market will be a problem.

The amount of pepper consumed annually in Viet Nam is around 4,700 tonnes. The rest must be exported, but pepper demand in the global market is only around 200,000 tonnes each year.

Nam said that in order to meet the future target of earning $1 billion from pepper exports, the agriculture ministry should set limits for pepper cultivation for the next five and ten years.

Viet Nam has been the largest pepper exporter in the world for several years now, contributing 50 percent of the spice consumed in the global market.

Major buyers of Vietnamese pepper are the US, Germany and the United Arab Emirates.

Viet Nam expects to harvest about 100,000 tonnes of pepper in 2013, lower than in the previous two years despite the increase in cultivation area, the VFT report said.

Pirate gold mining threatens livelihoods

Illegal gold mining in Pi Toong Commune is causing pollution in the northern province of Son La's Muong La District, and using up water resources necessary for local agriculture.

The lack of water for rice fields was threatening the livelihoods of many families in villages close to the mining area.

Witnesses said that more than 10 teams of gold miners were working illegally along Toong Stream, which runs through Lua, Hua Na and Na Phia villages in Pi Toong Commune.

Each mining team included about four or five people who used rudimentary tools, such as soil picks, shovels and sieves to search for gold, while some have moved in excavators and pumps.

One resident said the miners were residents who had taken to gold mining because they were unemployed, setting up tent accommodation around their activities.

In fact, illegal gold mining has put people in 90 households in Lua Village out of work because water supplies necessary for agricultural production have became exhausted.

The village's rice field used to be the biggest in the commune and in Muong La District, but this year its land was barren and dry.

The main water source for the field, the Toong Stream, is running low and muddy.

Head of the village Lo Van An said the stream was exhausted due to water running into holes being dug by miners, several metres deep.

They then pump out the water which had been mixed with mud, thus making the water in Toong Stream polluted and unusable, he said.

"Local residents' lives mostly depends on the rice field, and they cannot produce without water. Except for those living along the Toong Stream, who have an income from gold mining, the remainder did not have a job," An said.

Meanwhile, Pi Toong People's Committee chairman Quang Van Tam said local authorities had confiscated residents' machines and tools used for gold mining, but they replaced them.

Tam said the commune also could impose a fine of VND2 million ($95) which wasn't strict enough, he said.

Muong La District's Division of Natural Resources and Environment head Phan Tien Dien said the district had set up an inspection team to deal with illegal gold mining in the commune, but it had not been effective as residents warned each other to stop work when the inspectors came.

Hotline launched to report illegal mining

A hotline to report any illegal exploitation, transportation, processing and consumption of coal has recently been launched by the People's Committee of northeastern Quang Ninh Province.

Customers can report cases via mobile on 0915280628.

According to the report of the provincial Department of Natural Resources and Environment, the police closed illegal coal mines in the districts of Dong Trieu, Hoanh Bo, and Ha Long last year. They also confiscated 10,972 tonnes of coal being illegally exploited.

Import of wild specimens prohibited

Prime Minister Nguyen Tan Dung has prohibited the import, export and trade of white rhinos, black rhinos and African elephants in Viet Nam.

The three wild specimens are noted as being endangered in the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

From now, the animals and any products made from them may only be imported for legitimate purposes such as scientific research and the preservation of biological diversity.

The decision regulates that violations will be treated in line with current rules.

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