Vietnam’s trade deficit widens in first 11 months

HANOI, Vietnam (AP) — Vietnam’s trade deficit has widened to $16.9 billion in the first 11 months of this year, the government said Monday.

That’s already well beyond last year’s $14.1 billion deficit, or the amount by which imports exceed exports.

From January to November, imports surged 38.4 percent from a year ago to $75.4 billion while exports in the period totaled $58.5 billion, a jump of 34 percent, the General Statistics Office said in a statement.

The GSO often issues trade data ahead of the month’s end based on estimates.

Vietnam’s exports were boosted by shipments of crude oil, textile, seafood and rice while import surges were driven by machinery, refined gasoline and construction steel.

The government has said it aims to keep the trade gap for the whole year at $19 billion.

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Vietnam starts building new resort island airport

HANOI, Vietnam (AP) — Vietnam has begun construction of a new international airport on a popular tourist island off the country’s southern coast, aiming to boost passenger capacity to the destination by 10 fold, officials said Monday.

The $1 billion airport will help accommodate the influx of tourists to Phu Quoc, where several luxury hotels have opened recently and several more are under construction.

When the first phase is finished in four years, the new Phu Quoc International Airport will be able to handle 3 million travelers a year — 10 times the current airport’s capacity, said Nguyen Tien Viet of Vietnam’s Southern Airport Corp.

Eventually, the airport would be able to handle 7 million passengers a year, Viet said.

Speaking at a ground breaking ceremony on Sunday, Prime Minister Nguyen Tan Dung said the new airport will help boost the country’s economic growth.

“The island will be one of the country’s major transportation and commercial centers once the new airport is put into operation, contributing to the regional and national economic growth,” Dung was quoted as saying on the government Web site.

During peak times, travelers to the Phu Quoc’s white sand beaches often have trouble booking flights to and from the island.

Currently, there are six flights a day between the island and the southern commercial hub of Ho Chi Minh City.

Travelers also can get to the island by speed boat.

Last year, Vietnam received an estimated 4 million travelers.

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Vietnam Money-Banks cut deposit rates to reduce costs

HANOI, Nov 24 (Reuters) – Vietnamese banks have cut dong deposit rates by up to 3.5 percentage point in the past week as they seek to cut borrowing costs and beef up lending, bankers said on Monday.

The Hanoi-based Military Bank said it had slashed dong deposits rates by 3.5 percentage point to 12 percent per year on its one-year dong deposits from Monday, from 15.5 percent per year previously.

Ho Chi Minh City-based Sacombank STB.HM also said it had cut the yield on its one-year dong deposit to 11.04 percent from last Friday.

“The lower interest on dong deposits would enable banks to reduce lending rates further in line with the central bank’s policy to help prevent an economic slowdown,” a banker at Military Bank said.

She said her bank had also lowered dong loan rates to about 14-16 percent per year and resumed consumer finance loans after several months of suspension as part of the central bank’s credit-tightening policy to battle double-digit inflation.

State-run banks, the market’s major lenders, have also cut dong loan rates in the past week with top lender Agribank now offered 12-14 percent per year to its prime clients.

Last Friday the central bank slashed three benchmark dong interest rates, its third rate cut in four weeks, and lowered bank reserve requirements.

The Southeast Asian country has battled double-digit inflation and a widening trade deficit for much of the year by tightening monetary policy, but officials appear increasingly concerned the global credit crisis could drag down growth.

Vietnam should keep lowering interest rates next year and manage the exchange rate flexibly in the face of a worsening global economy, Prime Minister Nguyen Tan Dung said earlier this month. (Reporting by Nguyen Nhat Lam; Editing by Kim Coghill)

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSHAN2380120081124

USDA Attache: Vietnam 2008-09 Coffee Output To Rise 17%

Vietnam’s total coffee production for 2008/2009 is expected to increase by 17%, according to a U.S. Department of Agriculture attache report posted on the Foreign Agricultural Services Web site.

Coffee production in 2007/2008 was about 13.7% less than the previous crop year. Consequently, export volumes were also down 10% from the previous market year.

Vietnam produced 1.1 million metric tons or 18.33 million 60-kilogram bags of coffee in market year (MY) 2007/2008. This represents a 13.7 percent decline in production from the previous crop year, though still 5 percent higher than our earlier forecast. Post maintains its earlier estimate for MY 2008/2009 coffee production at about 21.5 million 60 kg bags or 1.29 million metric tons, which is 17 percent more than the current market year. This improved outlook takes into account an anticipated small increase in the growing area as well as improved weather conditions and better yields.

Even with a 10 percent reduction in coffee export volume in MY 2007/2008, Vietnam remains the world’s top Robusta exporter. This market year also marks the first time exports reached a value of over $2 billion. This 20 percent increase in value over the previous market year was largely due to higher coffee prices. It should be noted, however, that coffee prices are expected to fall during the first months of MY 2008/2009 due to effects from the global financial crisis on commodity markets, including coffee, despite the fact that, as International Coffee Organization (ICO) reports, coffee supply and demand fundamentals remain unchanged. The effects of falling coffee prices are already being felt by Vietnam’s coffee growers, some of which have already started holding more stock as prices continue the sharp decline since July. Post has therefore revised upwards its earlier estimate for ending stocks for market year 2007/2008. PRODUCTION Vietnam’s 2007/2008 Coffee Crop

Post revises Vietnam’s 2007/2008 coffee production estimate to 1.1 million metric tons or 18.3 million 60kg bags. This represents a decrease of 13.7 percent from the previous crop which is largely attributable to loss of coffee blossoming during heavy rainfall as well as unseasonable frost in several key planting areas (Graph 1). Coffee yields for the 2007/2008 crop year was down 14.8 percent from the previous crop year.

Coffee growers continued to expand their production area in the face of high export coffee prices despite of government efforts urging growers to focus on sustainable production techniques and better harvesting practices in order to improve coffee quality. Farmers reportedly spend an average of VND20 million to grow one hectare of coffee. Application of such sustainable cultivation techniques as reasonable use of fertilizer (i.e. correct amt.) and sufficient water, the expense is reduced to VND15-16 million per hectare, a 25 percent cost savings.

The Ministry of Agriculture and Rural Development (MARD) reports that coffee is currently planted in 20 provinces across Vietnam, but the primary plantation areas are in Dak Lak, Lam Dong, Gia Lai, and Daknong provinces in the Central Highlands (picture 1). All but about 2.2 percent of Vietnam’s coffee production is Robusta coffee. Coffee growers note the difficulty in developing Arabica plantation areas, which need to be at an appropriate elevation. Farmers must also change their farming and harvesting/handling techniques to one requiring more intensive labor, which can be quite costly as is the investment needed for processors’ equipment and the higher processing standards required for Arabica beans.

Moreover, all of these factors/requirements have to be in place at the same time in order to have a good marketable Arabica product.

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