Rice and fish exporters across Vietnam’s Mekong Delta are ramping up production in order to meet the demands of European partners, particularly those from the UK.
The influx of orders from Europe is the result of a disruption in Russia’s seafood supply, as well as record inflation in European countries which has severely limited their consumption of high priced food productions.
Fish orders on the rise
Tran Van Lat, a representative of Loc Kim Chi Seafood JSC in Vinh Long Province, said that the company exports a whopping 200-240 metric tons of tra fish (pangasius) fillets to the UK each month, but expected orders to continue rising in the near future.
“The company currently exports tra fish to the UK at US$2.8-2.85 per kilogram,” Lat said.
Similarly, a representative of a leading tra fish exporter in Vietnam said that the UK is a loyal buyer of Vietnamese tra fish, so the increase in tra fish exports is not a major surprise.
“However, we are surprised at the large export volume in August, which was four to five times higher than that in previous months and years.
|Tra fish is processed for export in An Giang. Photo: Minh Khang / Tuoi Tre|
“In September, we will continue exporting such large volumes of tra fish and will devote all resources to these orders.”
The company has been exporting tra fish to the UK for more than four months in addition to the orders it fulfills for clients from Germany, France, and Canada.
Lat hopes that demand for white fish, tra fish, and basa fish will continue to rise so that exporters like Loc Kim Chi Seafood can move their business away from China, where heavy obstacles made doing business extremely difficult.
Currently, Loc Kim Chi Seafood exports between 200 and 250 metric tons per day.
A representative of Vinh Hoan Corporation in Dong Thap Province said tra fish exports to the UK and other European countries have skyrocketed since the same period last year.
Until the end of the year, tra fish exports are forecast to continue their upward rise.
“Vietnam tra fish exports will increase sharply during the third and fourth quarters while other countries prepare for their holiday seasons.
“We are confident that we can meet export demands until the end of the year,” the Vinh Hoan representative noted.
According to Le Chi Binh, vice chairman of the An Giang Fisheries Association, the UK had previously bought Vietnam’s tra fish through a middleman based in a third country.
However, thanks to the good relationship between Vietnam and the UK, enterprises from the UK are now buying tra fish directly from Vietnam.
As a result, the volume of tra fish exports the UK has increased.
“Vietnam used to sell tra fish through a middleman because local enterprises did not directly promote the product in the UK. The middleman used to purchase our tra fish, put on a new label, and ship the product to the UK,” Binh explained.
|Workers in An Giang package tra fish fillets for export. Photo: Minh Khang / Tuoi Tre|
Duong Nghia Quoc, chairman of the Vietnam Pangasius Association, told Tuoi Tre (Youth) newspaper that over the past few weeks, the UK and other European markets have increased their imports of Vietnam’s tra fish.
In addition to residents’ demand for food products at reasonable prices amid high inflation, the disruption of Russia’s white fish supply has also caused the growth of Vietnam’s tra fish exports.
According to the Vietnam Association of Seafood Exporters and Producers (VASEP), Vietnam’s tra fish exports to the UK last month tripled compared to the same period last year.
Quoc added that Europe is a selective market and many agricultural products, including tra fish, have been in that market for a long time, but exports are still surging due to rising demand.
As a result, enterprises should ensure stable resources, deliver products on time, and ensure the quality.
“The UK and Europe as a whole are in dire need of white fish, and Vietnam is doing well with exporting seafood to the market.
“Insiders forecast that seafood exports to the UK and Europe will continue increasing until the end of the year,” Quoc noted.
According to seafood experts, the European Union–Vietnam Free Trade Agreement (EVFTA), which took effect in August 2020, has brought multiple incentives to producers, improved the competitiveness of Vietnamese seafood, and opened up opportunities for Vietnamese enterprises to directly export products to the European market.
Exchange rates raise concern
Phan Hoang Duy, deputy director of Can Tho Export Import Seafood JSC, said that the UK and Europe as a whole have a higher demand for seafood from Vietnam, especially tra fish and shrimp, compared to the past.
However, as the euro is weaker than the U.S. dollar, people in the European Union have to pay more to buy tra fish and shrimp.
“This is a major hindrance to the exports of shrimp and fish to the market. Except for this particular issue, Vietnam’s export of seafood to Europe is favorable,” Duy affirmed.
Can Tho Import Export Seafood JSC exports its products to more than 30 countries, mainly large markets such as the U.S., Europe, Mexico, Canada, Brazil, as well as some Asian markets.
Until the end of 2022, exports to the U.S. and other markets will not increase sharply, so the company is relying on exports of tra fish and other seafood products to Europe to continue their growth, Duy added.
FTAs pave the way for rice exports
Besides seafood, Vietnamese rice is a major export to the UK.
A representative of Loc Troi Group said that, the in the past, the UK only imported a small volume of rice from Loc Troi.
|Workers load bags of rice onto a vessel at the My Thoi Port in Long Xuyen City, An Giang Province. Photo: Buu Dau / Tuoi Tre|
Now, however, Loc Troi will export more than 6,000 metric tons of rice to the UK in just October.
“We used to only export 200 to 300 metric tons of rice to the UK each month,” the Loc Troi representative said.
The UK demand for Loc Troi rice rose strongly once word spread that it met European standards.
Vietnamese rice is exported to the UK at $600 to $800 per metric ton.
There are many reasons for the increase in rice exports to the UK, including the UK-Vietnam Free Trade Agreement and other free trade agreements (FTAs).
Thanks to these FTAs, Vietnamese products, including rice, are entitled to tax exemptions and reductions upon being exported to the UK.
Furthermore, tax reductions have attracted UK attention to Vietnam’s rice quality.
“Loc Troi’s rice exports to the UK used to be subject to a tax of $175 per metric ton, but that tax has been removed. Now, the UK wants to import more Loc Troi rice thanks these tax reductions.
“Moreover, Europe and the UK found that Vietnamese rice meets their standards,” the Loc Troi representative explained.
However, the UK and Europe have only allowed some, not all, Vietnamese enterprises to ship rice to their markets.
To export rice to the UK, Vietnamese firms are required to have the Sedex Members Ethical Trade Audit (SMETA), in addition to a certificate stating it meets global standards.
In particular, rice must satisfy three criteria: product-market fit, being managed with a high-quality certificate system, and ensuring food safety with permitted pesticide residue levels.
SMETA is the most widely used social audit and the highest level of ethical assessment in Europe. Loc Troi has been a member of SMETA for two years.
Deals for rice exports to high-end markets are often concluded before farming, which is contrary to Vietnamese farmers’ habit of finding buyers after harvesting rice, the Loc Troi representative said.
Two years ago, Loc Troi established criteria and cut deals with farmers on appropriate products for importers before drawing up cultivation plans.
Vietnam’s bond market slightly down in Q3, but up 21% yoy: ADB
Vietnam’s local currency bond market at the end of the third quarter of 2022 showed a marginal contraction of 0.2 percent quarter-on-quarter (q-o-q) to VND2,323.5 trillion (US$97.4 billion), after its strong growth in the previous quarter, according to the latest Asia Bond Monitor (ABM) by the Asian Development Bank (ADB).
This slowdown has reserved the previous quarter’s rapid growth of 8 percent q-o-q, but compared with the same quarter in the previous year, Vietnam’s bond market grew 21.1 percent year-on-year (y-o-y) in the period, slowing from the 31.4 percent y-o-y expansion in the previous quarter.
The decline was mainly due to a contraction in the government bond segment and a slowdown in the corporate bond segment, the ABM, which was issued on Friday, reported.
Such a situation in Vietnam has resulted from the overall context that emerging East Asia witnessed the accelerating deterioration of financial conditions and rising bond yields between August 31 and November 4, largely driven by aggressive monetary tightening in major advanced economies in the world.
In respect of government bonds, Vietnam’s local currency government bond market at the end of September contracted 2.0 percent q-o-q to VND1,604.9 trillion ($67 billion).
Much of the decline can be attributed to central bank bills, whose outstanding bond stock fell significantly by 70.3 percent q-o-q in the third quarter of this year.
In contrast to the previous quarter’s aggressive expansion, the ABM said, central bank bills displayed the largest decline among all bond segments during the third quarter, with the total stock of central bank bills slumped to VND30.4 trillion ($1 billion) at the end of September from VND102.4 trillion ($4 billion) at the end of June.
As regards corporate bonds, growth in the corporate bond segment moderated to 4.1 percent q-o-q in the period from 9.5 percent q-o-q in the previous quarter, according to ABM.
At the end of September, the total outstanding corporate bond stock climbed to VND718.6 trillion ($30 billion) and was mainly dominated by the banking and property industries, which collectively accounted for 75.3 percent of the aggregate corporate bond stock.
Vietnam’s top 30 corporate issuers, largely comprising firms from the banking and property sectors, including a few finance and energy firms, had an aggregate bond stock amounting to VND448.6 trillion ($18.8 billion) at the end of September, which was equivalent to 62.4 percent of the total local currency corporate bond market.
The top corporate issuer remained the state-owned Bank for Investment and Development of Vietnam (BIDV), with an outstanding bond stock of VND58.4 trillion ($2.45 billion) at the end of the July-September period, accounting for 8.1 percent of the total corporate bond stock of Vietnam.
The ABM also noted that the Vietnamese government promulgated Decree No. 65 in September, amending the existing regulations on the offering and trading of privately issued bonds, with an aim to enhance transparency and sustainability in the bond market by tightening disclosure requirements and imposing stricter conditions on bonds’ private placements.
The new legal document was developed to protect investors in several key areas, such as limiting the purpose of bond proceeds, implementing new requirements on the issuer’s credit rating, and mandating additional disclosures by the issuers.
According to the Vietnam Bond Market Association (VBMA), the total volume of corporate bond issuance in the third quarter of 2022 decreased by about 68 percent y-o-y.
Construction and real estate groups saw the most declines in bond issuance value in the period, with the drops of 98.7 percent and 93.4 percent, respectively.
Most corporate bonds issued in the third quarter of 2022 had maturities of 1-3 years, accounting for about 52 percent of the total issuance volume, with an average issuance yield of 7.17 percent per year, a slight increase from the quarter earlier.
Modern pharmacies thrive in Vietnam
Vietnam has witnessed the fast growth of pharmacy chains as Vietnamese people’s spending on pharmaceutical products amounted to US$6.6 billion last year, according to the Vietnam Report.
Vietnam’s healthcare market was valued at $16.2 billion by 2020, accounting for 6 percent of the country’s gross domestic product (GDP).
Total health spending increased from $16.1 billion in 2017 to over $20 billion in 2021, and is projected to reach $23.3 billion in 2025 and $33.8 billion in 2030, with an annual average growth rate during the 2020-30 period expected at 7.6 percent.
Nearly 90 percent of pharmaceutical manufacturing, distribution and trading enterprises reported higher revenue, and some 80 percent of them recorded profit growth in the first nine months of this year compared to the same period in 2021, according to a survey conducted by the Vietnam Report in October and November.
The experts participating in the survey said that the COVID-19 pandemic created a faster shift in the revenue structure of the pharmaceutical industry in different ways.
The outbreaks of the viral disease caused people to limit their visits to hospitals and switch to buying drugs to treat COVID-19 symptoms and health supplements in the post-COVID-19 period.
Big names in the pharmaceutical retail industry such as Long Chau, Pharmacity, and An Khang are wasting no time expanding their market dominance.
They aim to reach 7,300 pharmacies by 2025, or 16 percent of the domestic market share.
These modern pharmacy retailers win market share from traditional pharmacies as the government gradually introduces stricter regulations for pharmaceutical retail businesses, including tighter control over prescription drugs and the rollout of electronic prescriptions.
Besides, public hospitals’ more caution in drug procurement offers more advantages to pharmacies.
On the other hand, over-the-counter drugs accounted for ten percent of pharmacies’ sales in 2021 and continued to improve by the end of the first quarter of 2022.
The experts expect the market to become more competitive in the future due to the emergence of new businesses.
Citigroup converts $1 mln worth of bonds in Vietnam’s property developer No Va Land to 271,000 shares
Reuters previously reported No Va Land was firing staff and seeking urgent cash as it struggles to pay creditors, showing signs of distress in the real estate sector.
The Vietnamese government’s move to tighten rules on corporate bond issuance and restrict their refinancing have left some developers facing a credit crunch.
The conversion price, according to a No Va Land statement dated November 22, was at 85,000 dong ($3.42), while shares were trading at 21,950 dong as of 0431 GMT on Thursday, the lowest level since the company listed on Ho Chi Minh Stock Exchange.
Trading of company shares were lacklustre over the past month, data from Ho Chi Minh Stock Exchange shows. However, a large volume of 128 million shares of the company was traded on the day of conversion.
Founded in 2007, No Va Land is active mostly in residential property and luxury resorts. The company’s share value has dropped nearly 76% since the beginning of this year.
No Va Land has been the biggest issuer of corporate bonds among Vietnam’s property firms this year, says industry body Vietnam Bond Market Association, placing debt worth 9,857 billion dong ($396.3 million).
In a separate statement, No Va Land said it has actively worked with both domestic and international financial institutions to ensure financial health and to be fully prepared for the upcoming period.
($1 = 24,847 dong)
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