The loyal Chinese market has restricted the import of Vietnam’s fruits, while exports to the US are stuck because of Covid-19.
Fruit exporters have been put on tenterhooks as they cannot export fruits to the US. In March, the US called its officials back, including those at APHIS (US Department of Agriculture Animal and Plant Health Inspection Service) which monitors the radiation process at the Son Son Radiation Plant in HCM City.
As the APHIS officers returned to the US, the US Ambassador to Vietnam was authorized to monitor the radiation process, but he worked only two hours a day there. On August 7, the US stopped receiving fruits for quarantine, resulting in delays in radiation and stagnation in export.
Ngo Tuong Vy, deputy director of Chanh Thu Fruit Import-Export Company, confirmed that the company cannot deliver products to the US clients, and finds it difficult to collect fruits from farmers.
Secretary General of the Vietnam Vegetable and Fruit Association Dang Phuc Nguyen warned that if the export deadlock lasts a long time, exporters will suffer. In particular, the companies that cannot export products still have to pay farmers because of previous commitments.
|A report from the Department of Agricultural Product Processing and Market Development showed that in the first seven months of the year, Vietnam exported only $2 billion worth of vegetables and fruits, or 12.3 percent lower than the same period last year.|
A report from the Department of Agricultural Product Processing and Market Development showed that in the first seven months of the year, Vietnam exported only $2 billion worth of vegetables and fruits, or 12.3 percent lower than the same period last year.
China was still the second largest importer of Vietnam’s vegetables and fruits in H1 which consumed 59.4 percent of total exports. However, exports to the 1.4 billion consumer market dropped by 29.3 percent in H1 compared with the same period last year.
According to Son La province’s leaders, the province could only export 1,500 tons of longan out of the total output of 75,000 tons. The growing area meeting the requirements for export through official channel is not large. Meanwhile, border trade has become stagnant because of Covid-19.
Though they have a bumper crop, Son La’s farmers are not happy because of the lack of sales. The price at times dropped to VND5,000 per kilogram.
In Hanoi, Hung Yen and Son La longan is retailed at VND15,000-30,000 per kilogram, which merchants say ‘unprecedentedly cheap’.
As for dragon fruit, gardeners in Binh Thuan province sold at VND3,000 per kilogram in early August. The price was VND15,000-16,000 per kilogram in July.
Farmers in Dong Nai also are worried as many tons of dragon fruits remain unsold. White flesh dragon fruit has seen the price drop to VND1,000 per kilogram, and red flesh dragon fruit to VND2,000-5,000.
Private enterprises lack internal strength and driving force to develop
How will Vietnam overcome challenges to realize its development plans? Nguyen Dinh Cung, former head of Central Institute for Economic Management (CIEM), shares his perspective with VietNamNet.
One of the great successes of economic reform in Vietnam since doi moi (renovation) is the establishment of a community of businesses from different economic sectors with many ownership modes. Vietnamese enterprises are operating under similar legal forms as in other market economies.
High in quantity, small in scale
In terms of quantity, enterprises in the private sector account for the overwhelming proportion, 97 percent, while SOEs (state owned enterprises) account for 0.38 percent and FIEs the remaining.
The enterprises employ 16 million workers. The workers in SOEs account for 7 percent, private enterprises nearly 60 percent and 33 percent in FIEs (foreign invested enterprises).
In terms of total assets, SOEs account for 28 percent, private enterprises 53 percent and FIEs 29 percent.
In terms of stockholder equity, SOEs account for 20 percent, non-state owned enterprises 56 percent and FIEs 24 percent.
In terms of net revenue, SOEs account for 14.5 percent, non-state owned 57 percent and FIEs 28.5 percent.
In terms of pre-tax profit, SOEs account for 21 percent. The figures are 36 percent for non-state owned enterprises and 43 percent for FIEs.
If considering financial efficiency, the ROE (return on equity) is 9 percent for SOEs, 4.5 percent for non-state owned enterprises and 15 percent for FIEs. Meanwhile, the profit to sale ratio is 5.6 percent for SOEs and FIEs, while it is just 2.4 percent for non-state enterprises.
The figures show that while private enterprises account for the overwhelming proportion, they mostly have small and micro scale, with very few enterprises having medium scale. They have low technology and low competitiveness.
Lacking inner strength and driving force to develop
This is attributed to several reasons:
First, the ratio of profit to revenue and to assets is too low. Stockholder equity is not high enough for re-investment and development. Therefore, most private enterprises have to rely on working capital from relatives and friends. Only a small part of the enterprises can access bank loans.
Most private enterprises lack capability to innovate and receive technology transfer, and lack the driving force to research, develop and renovate technology. In other words, private enterprises lack inner strength and motivation for development.
Second, one part of private enterprises doesn’t want to expand investment to become large enterprises.
This is attributed to unclear and overlapping laws which can be understood and implemented in different ways by different state management agencies. The bigger that enterprises become and the more business fields they cover, the higher legal risks they face, which may cause big losses or loss of all of their assets that had been created over decades.
|While private enterprises account for the overwhelming proportion, they mostly have small and micro scale, with very few enterprises having medium scale. They have low technology and low competitiveness.|
In this situation, there is no reliable and effective tool and institution, especially independent courts, capable of protecting their rights and benefits.
Third, another part of private enterprises wants to grow but cannot, because they cannot access resources for investment and development. Surveys have found that capital costs are too high. The inability to get enough capital and access land are the big barriers for private enterprises in this group.
Fourth, some of the hundreds of thousands of private enterprises are crony enterprises. The number of these enterprises is not high if compared with the total number of operating enterprises, but they appropriate significant resources and deprive business opportunities from authentic investors and businesses.
The enterprises of this kind contribute to creating an unfair business environment which lacks transparency; distort the allocation of national resources; and distort the value and constrict the business motivation of genuine businesses.
It is the enterprises of this kind that make it difficult for other enterprises to access resources and business opportunities. This is a major obstacle for the development of private enterprises.
Large private groups vulnerable
Vietnam now has some large-scale private enterprises, called economic groups. There are some similarities and differences between the economic groups and groups in some Asian economies prior to 1979 as follows:
The similarities include investment in multi business fields; reliance on bank loans; lack of transparency in administration and business; and relatively friendly relations with the government. They are big if compared with the size of the economies, and so they are not allowed to collapse.
Regarding differences, some foreign economic groups specialized in manufacturing, developed strong R&D (research and development), and expanded their business across the region and the world. They have had specific products and strong brands. Meanwhile, Vietnamese private economic groups mostly target the domestic market, focusing on real estate and consumer services. They still cannot develop and master technologies in their fields and don’t have global competitiveness.
It is obvious that Vietnam’s private economic groups are not as powerful as Asian private economic groups before 1979, and they are vulnerable. If the businesses collapse, it will take a longer time to recover them and the collapse may cause bigger losses to the national economy.
Therefore, developing the private sector, including economic groups, in a balanced, effective and sustainable manner must be a top priority task in the coming time.
It is necessary to amend unreasonable policies to help private enterprises increase their strength and overcome obstacles so they can feel secure to expand investment for development.
The 13th Party Congress Resolution has set specific goals for Vietnam’s socio-economic development.
By 2025, Vietnam would become a developing country with industry going towards modernization and income surpassing the lower average level.
By 2030, Vietnam would become a developing country with a modern industry and higher than average income.
By 2045, it would become a developed country with high income.
Nguyen Dinh Cung
Excited but anxious: Hanoi business owners reopen
Though they eagerly reopen after being closed for 27 days due to the Covid-19 outbreak, many Hanoi businesses are also worried about changing consumer behaviors.
Closed restaurants inside a shopping mall in Ha Dong District, Hanoi, June 20. Photo by VnExpress/Duc Minh.
After Hanoi authorities announced that indoor dining and hairdressing can resume on Tuesday, Bui Quang Hung, co-founder of barber shop chain 30Shine, showed his excitement with a post on social media saying, “see you Hanoians on Tuesday morning.”
He said the shops would open from 7.30 a.m. until late night to clear a backlog of almost a month.
“Men have to visit the barber once every three weeks on average because they feel irritated if their hair is one to two centimeters too long.”
There would be two or three times the usual number of customers for two weeks, he said based on his experience from previous waves.
But some other businesses are less hopeful.
Trieu Nguyen Quan, owner of the Goofoo Gelato chain of ice cream shops, does not expect many customers for 10 days after reopening since people are afraid of the pandemic.
Hoang Tung, CEO of fast-food restaurant chain Pizza Home, said the outbreak could cause him to lose a number of customers since people have adopted a new habit of eating at home.
To survive the stop-start nature of their business amid the pandemic, many have sought to improve their business model. Tung said Pizza Home has closed some stores that were not doing well but has expanded into home delivery and apps.
“The restaurants have to operate both online and offline, and must be prepared for the worst, which is closure, amid the pandemic.”
Goofoo Gelato too has managed to pull on thanks to online sales.
Quan said he plans to increase the number of outlets but only after vaccination. He said vaccination is the only way to make him feel secure and the ultimate solution for businesses to open and the economy to revive.
Around 2 percent of the population has received the first shot, and 0.1 percent has received both.
Vietnam has received delivery of around three million vaccine doses so far, and is expected to get over 120 million this year.
It seeks around 150 million in all to cover 70 percent of its population.
Market falls on strong selling forces
HÀ NỘI — Shares inched down on Wednesday, weighed by strong selling pressure across most sectors despite gains in some large-cap stocks.
The market benchmark VN-Index on the Hồ Chí Minh Stock Exchange (HoSE) declined by 0.22 per cent to 1,376.87 points. The market’s breath stayed negative with 298 stocks falling, while 94 stocks rose and 51 ended flat.
The liquidity was high as more than 710.77 million shares were traded on the market, worth over VNĐ21.1 trillion (US$528.6 million).
The market was weighed by selling forces despite rallies in large-cap stocks, especially bank stocks.
The VN30-Index, which tracks 30 biggest stocks in market capitalisation on HoSE, climbed slightly 0.02 per cent to 1,489.53 points. Twenty stocks of the VN30 basket plummeted, while only nine jumped and one stayed unchanged.
Stocks in many sectors posted negative performance yesterday with material stocks leading the market’s trend. Vietnam Rubber Group (GVR) witnessed the biggest losses, down 2.47 per cent, followed by No Va Land Investment Group Corporation (Novaland, NVL), Vingroup JSC (VIC) and Mansan Group (MSN), down 0.5 – 1.57 per cent.
However, the losses were limited by gains in bank stocks. Of which, Vietcombank (VCB) was the biggest gainer in the market, up 1.95 per cent. Other stocks witnessing big increases were Vietinbank (CTG), VPBank (VPB) and Saigon Beer – Alcohol – Beverage Corporation (SAB), up more than 1.5 per cent.
The market has fluctuated since the beginning of the week with alternative up and down sessions.
Analysts from Saigon – Hanoi Securities JSC (SHS) said that based on Elliot Theory, there is still room for an upward trend with a resistance level of around 1,400 points.
Investors who took profits last week should refrain from opening long positions at the current price and wait until the market corrects deeper to come back, SHS added.
On the Hà Nội Stock Exchange (HNX), the HNX-Index plunged 0.41 per cent to 315.8 points.
During the trading session, more than 126.2 million shares were traded on the northern bourse, worth nearly VNĐ3 trillion.
Meanwhile, foreign investors returned to the market as they net bought a value of VNĐ159.5 billion on both exchanges. Of which, they net bought a value of VNĐ144.44 billion on HoSE, and a value of VNĐ15.06 billion on HNX. —
Private enterprises lack internal strength and driving force to develop
National population database project to be implemented on July 1
Transmission sources unknown for many HCMC Covid-19 patients
Vietnam has 85 new Covid-19 cases
Massive ring selling smuggled goods via livestreaming in northern region busted
Hanoi pauses near 100 BT projects
Health Ministry allows 36 companies to import Covid-19 vaccines
U.S. imposes antidumping duty on certain Vietnamese tire makers
Hoa Phat acquires Australia’s Roper Valley iron ore mine
How technology changes traditional books
Da Nang museums attracting domestic visitors with free entry policy
Nom, nom, Việt Nam – Episode 76: Fried cheese sticks
In Sa Pa, ethnic children forced to peddle on streets in bitterly cold night
Nom, nom, Việt Nam – Episode 74: Huế beef noodle soup
New pedestrian mall to become new hotspot in HCM City
Business2 weeks ago
Hanoi pauses near 100 BT projects
Society1 week ago
Sanctuary receives last bears from Hanoi circus
Society2 weeks ago
Shirts made of leaves of 200-year-old tree in Ha Tinh
Business2 days ago
SJM Holdings rejects rumor of planning $6 billion casino in Vietnam province
Entertainment-Sports2 weeks ago
Vietnam captain says pressured by Malaysia players to miss penalty
Sci-tech-environment2 weeks ago
Nearly 600 nominations submitted for Vietnam’s first-ever global sci-tech prize
Politics2 weeks ago
Việt Nam wants Cambodia to ensure welfare for people of Vietnamese origin
Business1 week ago
VIETNAM BUSINESS NEWS JUNE 12