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 › Vietnam biz urged to boost exports via FTAs
 Updated: 9 / 16 / 2010

Vietnamese businesses should take advantages of signed free trade agreements (FTAs) to further boost their exports, aiming to limit the country’s rising trade deficit.

Participants said at a seminar on discussing ways to make the best of opportunities in FTAs organized by the Export-Import Department under the Ministry of Industry and Trade and the College of Business Administration for Managers (CBAM) in Ho Chi Minh City September 7.

They also warned over the emerging challenges of FTAs, especially Vietnam’s widening trade deficit with partners, the Voice of Vietnam Radio said, noting the Southeast Asian nation incurred a huge trade gap of $8 billion with China in the first eight months of 2010.

The seminar provided local businesses with FTA partner commitments on tariff reduction, export-import policies, and new regulations on the rules of origin in FTAs, aiming to help them overcome trade barriers and further penetrate into these markets.

Vietnam has signed a number of free trade agreements, including AFTA, ASEAN- Australia-New Zealand (AANZFTA), ASEAN-India (AIFTA), ASEAN-South Korea (AKFTA), ASEAN-China (ACFTA) and ASEAN-Japan (AJCEP) and Vietnam-Japan Economic Partnership Agreement (VJEPA).

The Southeast Asian nation is in negotiations on the Trans-Pacific Strategic Economic Partnership Agreement (TPP) with the U.S., and FTAs with Turkey and Chile, and expects to start negotiations on FTA with the EU later this year. (VoVNews)

Vietnam Rice, Shrimp Export Gains Advantage (Show, chebienca3- Vinh Long.jpg)

Vietnam is holding advantages in price and volume of agricultural products like rice, shrimp and coffee on global markets.

Continuous rise in rice price

The Informatics and Statistics Centre under the Ministry of Agriculture and Rural Development said Vietnam was estimated to ship 700,000 tonnes of rice worth US$295 million in August, bringing the total rice export volume to 5 million tonnes and value to US$2.4 billion in the first eight months, up 8.2 % in volume and 12.8 % in value year on year.

According to information from Vietnamese Market Analysis and Forecast Joint-stock Company (Agromonitor), Vietnam’s rice export continues to increase. The price of 5 % broken rice climbed from US$395 per tonne to US$407.5 while the price of 25 % broken rice also jumped to US$377.5 per tonne from US$365 a week earlier. Rice prices advanced 16 % in only two months.

AgroMonitor gave many reasons for higher rice prices, including the soaring demand from Bangladesh. Particularly, the Southern Food Corporation has recently signed a contract to export 100,000 tonnes of rice to Bangladesh. Besides, Vietnam will negotiate to supply additional 200,000 tonnes of rice to this country in the future.

According to the Vietnam Food Association (VFA), Vietnamese exporters have signed contracts to export 6.2 million tonnes of rice. Therefore, VFA applied floor price from August 11 to limit low-price contracts. On August 27, VFA lifted the floor price to US$450 per tonne for 5 % broken rice and US$410 for 25 % broken rice.

In addition, the rejection of raising rice export target from 6 million tonnes to 6.5 million tonnes is also a reason for the price leap.

When rice export exceeds 6 million tonnes and VFA imposes floor price higher than the current market rate, companies will sign fewer contracts in the coming time. This will push up rice prices. However, according to AgroMonitor, businesses and farmers will be at a loss as they could not sell rice at high prices.

Record growth in shrimp export

According to the General Department of Customs, Vietnam exported a total of 29,700 tonnes of shrimp worth US$212 million in July 2010, up 64.7 % in volume and 32.1 % in value from the previous month. The Southeast Asian nation shipped 110,000 tonnes of shrimp valued at US$928 million in the first seven months, up 25.2 % and 23.9 % from the same period of 2009, respectively.

Ten largest importers of Vietnamese shrimp used 25,300 tonnes worth US$179 million in July, accounting for 85 % of volume and 84.5 % of value.Japan continued to be the largest importer of Vietnamese shrimp with US$63.3 million in July, an increase of 21.9 % from the previous month. A supply slump in some countries like Indonesia and Russia is a reason for the jump in Vietnam’s shrimp exports to Japan in the past time. Vietnam’s shrimp export to the U.S. made a record monthly growth of 68.9 % to US$23.8 million in July.

Also according to the customs authorities, Vietnam exported 39,300 tonnes of coffee worth US$62.1 million in the first half of August, up 15.4 % and 10 % from the first half of July, respectively. The country shipped exported 816,000 tonnes of coffee valued at US$1.2 billion in the year to mid-August.

With the State Bank of Vietnam’s decision to devalue the local dong against the US dollar, Vietnamese coffee export is estimated to jump high in the upcoming time. Coffee is the second largest agricultural export of Vietnam and Vietnam is the second largest coffee exporter in the world and the largest Robusta producer on the globe. In the first 11 months of the 2009/2010 crop year, Vietnam’s coffee exports reached 1.12 million tonnes, or 18.61 million bags, up 4 % over the same period last year.

Shrimp export value and volume in 2009 – 2010 (1,000 tonnes, US$1 million) – VCCI

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