Vietnam Town

(updated:26/9/2007)

The US Department of Commerce DOC has announced the new preliminary tax rates on Vietnam’s tra and basa to be applied for the period from August 1, 2005 to July 31, 2007. The final decision will come in four months.

The Vietnam Association of Seafood Exporters and Producers VASEP, quoting Intrafish.com, said that the DOC had finished the third administrative review of Vietnam’s tra and basa products. Under the preliminary decision, made by DOC after the review, the 14.59% tax rate will be applied for fillet tra and basa products (Latin names are Pangasius bocourti and Pangasius hypophthalmus) to be exported by QVD to the US.

DOC decided that East Sea Seafoods Joint Venture Co Ltd did not dump tra and basa on the US, and thus will bear the tax rate of 0%.

Meanwhile, Can Tho-based CATACO will have to bear the anti-dumping tax rate of 80.88% as the company was considered “uncooperative” with DOC’s investigation.

The common tax rate on Vietnamese companies is 63.88%.

Moreover, Lian Heng Investment Co Ltd and Lian Heng Trading Co Ltd, which export Vietnam-sourced filet tra to the US, were also subjects of the administrative review. The tax rate of 63.88% has been imposed on the two companies. The period for the review of the companies was from October 22, 2004 to July 31, 2006.

DOC has also given a preliminary decision on halting the taxation of nine companies which did not export to the US in the review period: FAQUIMEX; Thuan Hung Co., Ltd; Hung Vuong Co., Ltd; United Seafood Packers Co., Ltd; NAVICO; Van Duc Foods Export Joint Stock Co; Phu Thuan Company; Vietnam Fish-One; DOCIFISH.

The US Association of Catfish Farmers and Processors in August 2006 sent a proposal to the DOC, asking for the review of 52 foreign Pangasius producers, including four Vietnamese companies.

Prior to that, the USITC (US International Trade Commission) announced the final decision on the anti-dumping tax rates on shrimp imported from Thailand, China, India, Brazil, Ecuador and Vietnam after an administrative review. The tax rate has been cut to 0% for several Chinese and Vietnamese companies while it has been raised in other cases.

The tax rates of 0.44%-12.81% have been announced for Chinese shrimp, 2.58-57.64% for Thai, 0-25.76% for Vietnamese, 4.62-67.8% for Brazilian, and 0-3.69% for Ecuadorian. The adjusted rates will not be applied for the companies which have reached specific agreements with the Southern Shrimp Alliance SSA.

Catfish exports have topped a year-on-year revenue growth of 41 percent, according to Viet Nam Association of Seafood Exporters and Producers (VASEP).

Over the past five years catfish farming in the Mekong Delta has doubled to more than 3,600ha of water surface and supplied almost half a million tonnes a year for export-oriented processing

Viet Nam and ASEAN members are counting on the support of the EU to establish a network of ASEAN Fishery Reference Laboratories (AFRLs) that will provide internationally-recognized quality testing services for seafood products destined for export to EU markets, according to Deputy Minister of Agriculture and Rural Development Luong Le Phuong.

“The EU decision to support ASEAN to increase the capacity of quality testing labs is very beneficial,” Phuong said.

According Planning and Investment Ministry’s Foreign Investment Department Director Phan Huu Thang, foreign investors who wish to pour money on seaports will be exempted from tax applied to material for seaport construction and upgrading imported as well as corporate income tax. They will also be given favorable conditions in terms of construction sites and provided with adequate information regarding Viet Nam ’s seaport system.

Posted 1/24/2007

The target of earning over 1 billion USD from exports of “tra” and “basa” catfish export is achievable in 2007, according to the Viet Nam Association of Seafood Exporters and Producers (VASEP).

The increase in the world market’s demand for catfish has resulted in a marked increase in the prices of the product. In the domestic market, one kilo of the catfish is sold for 15,500-16,000 VND, the highest price so far. It is expected that the market will continue to change in farmers’ favors.

Last year, Viet Nam has exported tra and basa catfish to 65 countries and territories, fetching a record of 700 million USD.

Experts from VASEP said that exporters have no longer to be worried about outlets for their products; instead, they should start attaching more importance to trademarks, as well as, prestige and quality of the product.

VASEP has urged farmers and businesses to closely control quality, production and food hygiene during the whole process from roe to processing and preserving.

For the sustainable development of tra and basa catfish production, the fisheries sector is responsible for ensuring stable materials supply and founding long-term cooperation among farmers, fish food suppliers and processors, in addition to its obligation to supervise food safety and hygiene.

(VNA)

Export trends
    

According to Vietnamese customs statistics, the country exported 272 700 MT of pangasius (tra, basa) valued at US$710 million during the first nine months of 2007. This amount was almost equivalent to total exports for 2006. A high growth rate in exports (37 percent in value and 35 percent in volume) has been maintained this year.
      

Stricter regulations on hygiene and food safety set by the authorities in Russia - the second largest importer of Vietnamese pangasius - have been the ‘price’ which the Vietnamese seafood industry has paid for the rapid growth of trade to this market. One result has been the reduction of pangasius exports to Russia. By the end of September this year, exports fell by 1 percent in volume and 2 percent in value.

Vietnamese pangasius exporters seemed to rapidly deal with fluctuations in the Russian market. Statistics show a reorientation of exports with sales to the Ukraine increasing by 222 percent in volume and 194 percent in value. The disparity between growth rates of volume and value suggests a drop in average export prices for the Ukraine which contrasts with the trend for other key destinations.

The EU market for frozen freshwater fish fillets
    

The EU market remained the largest destination for Vietnamese pangasius. In the first nine months of 2007, exports to the EU amounted to 125,700 MT, valued at US$348.1 million, an increase of 42 percent in both volume and value, with more than 70 percent (volume and value) going to four key markets: Spain, Poland, the Netherlands and Germany. These countries were also the top four importing markets in the EU for frozen fillets of freshwater fish. Vietnam has remained the largest supplier of this category to EU markets.
      

Among EU markets for imported frozen freshwater fish fillets, the Netherlands ranked first with 20 percent. In fact, the four key markets referred to above represent more than 70 percent of total EU imports. It should be noted that, according to Vietnamese statistics, the average unit price of Vietnamese pangasius products increased in most EU markets this year while EU statistics show different results.

Two reasons contributed to this disparity. One was that Vietnamese exports reflect a switch to higher dollar priced frozen fillets. Secondly, the strong appreciation of the euro against the U.S. dollar over the past year has meant a negative effect on average unit values expressed in euros, as reported in EU statistics.

The Netherlands
      

Vietnam accounts for the largest share in Dutch imports of frozen freshwater fish fillets. Vietnam’s volume share increased from 75 percent over the January-August period 2006 to 81 percent forthe same period this year following growth of 72 percent.

However, the average unit price fell from €2.39 per kilo to €2.32 per kilo. Most suppliers from third countries outside EU followed this downward trend, especially China with a sharp reduction from €3.03 per kilo to €2.46 per kilo.

Spain
    

Vietnam and Tanzania continue to be the largest suppliers to the Spanish market for frozen freshwater fish fillets. Vietnam maintained its dominant share which increased from 83 percent during the January-August period last year to 87 percent for the same period this year.

Unit value figures suggest that Vietnam has significant price advantages in the Spanish market in particular and in the EU in general. The average unit value for Spanish imports of Vietnamese product in 2006 was €2.42 per kilo and down to €2.29 per kilo in 2007, well below the €3.68 per kilo in 2006 and €3.57 per kilo in 2007 for Tanzanian products.

Poland
    

Among EU markets, Poland is the main destination for Vietnamese pangasius. After this country joined the EU, seafood trade between it and Vietnam, especially in frozen freshwater fish fillets, has seen a strong growth.

With 22,000 MT of frozen freshwater fish fillets imported into Poland during the January-August period this year, Vietnam confirmed its position as the largest supplier in this product category. China was in second position with just 1,650 MT but with a very strong growth rate of up to 523 percent in volume terms.

In contrast to products supplied by either EU member countries, such as Germany and the Netherlands, or African countries, the average unit value for Chinese products was not much higher than that of Vietnamese products (€2.01 per kilo compared with €1.89 per kilo respectively). In fact, a rapid decline in Chinese unit values is evident between 2006 and 2007 took place, from €2.58 per kilo down to €2.01 per kilo.

Outlook
    

Strongly increased supplies from Vietnam and China have put pressures on other suppliers of frozen freshwater fish fillets to EU markets. The average unit price for this category of product has decreased from €2.93 per kilo to €2.80 per kilo and the downward trend is expected to continue.

Advantages regarding natural conditions and labour costs basically help Vietnamese pangasius to be more competitive in terms of price in most export markets. However, due to similarities in natural conditions and products, it is expected that China will provide more competitive pressure for Vietnam’s seafood exporters in the future. With continued depreciation of the U.S. dollar against the euro, the increasing purchasing power of European currencies makes the EU one of the most attractive markets with further potential for Vietnamese freshwater fish products.

Prepared by Truong Tri Vinh
    

FAO GLOBEFISH 2007
    

Vietnam’s cargo ships are yet to call into the most desirable destinations in sea cargo transport - American ports, said Tran Duc Du, Head of the Oil Tanker Department of the East Sea Transport Company.

Ships carrying cargo to American ports can count on high fees and new cargo for their return trips, Du said.

However, at present Vietnamese exports to the US are mostly carried by foreign ships, with Vietnamese vessels acting mainly as “agents.”

Most Vietnamese ships only ply part of the route, unloading their cargo in Hong Kong for foreign ships to pick up and deliver to American ports, according to Du. One of the major problems for Vietnam’s cargo fleet, industry experts say, is the small size of the ships.

It’s unprofitable to ship low volumes of cargo over long distances because the ship-ping fees won’t be high enough to offset the cost of fuel, insurance and labor. The age of most Vietnamese ships is another problem for the nation’s merchant navy, said Nguyen Vu Hai, head of the Sea-Going Ship Department in the Vietnam Register, the office that checks and certifies ships and cars.

“The average age is 14.5 years old, which puts most cargo owners off,” said Hai. One hundred and fifty of the 432 sea-going ships sailing on international routes have been in use for more than 30 years, Ha added.

The fleet is aging for two reasons.

Firstly, Vietnamese ship owners can’t afford new ships and, secondly, Vietnamese ship builders are not yet able to produce models that comply with the increasingly stringent international standards on safety and environment protection.

Many vessels in Vietnam’s existing cargo fleet also have problems meeting the international standards for security, safety and environment protection.

They end up being detained at foreign ports for breaching the standards.

In the first eight months of last year 24 Vietnamese ships were detained at foreign ports, putting Vietnam at number 7 on the list of countries with ships held at foreign ports.

Port problems

The double-handling of Vietnamese cargo is at intermediate ports such as Hong Kong and Singapore because Vietnam lacks deepwater ports that will allow larger vessels to dock. About 80 percent of Vietnam’s exports and imports are transported by sea. Cai Lan, the first deepwater port in northern Vietnam, for instance, can only receive container ships of up to 5,000 TEU (twenty-foot equivalent unit) while more and more cargo ship companies are using 15,000 TEU ships for long-distance carriage. And only nine of the country’s 266 seaports can be upgraded to handle 50,000 DWT (dead weight ton) cargo ships or 3,000 TEU container ships.

However, Deputy Head of the Vietnam Maritime Administration Nguyen Ngoc Hue said within three to five years, Vietnam’s sea transport industry will advance rapidly with the development of maritime, shipbuilding and seaport industries. Hue said many domestic sea transport companies had signed contracts to buy big container ships and oil tankers from abroad. Domestic shipbuilding factories will also be delivering on contracts for ships of 54,000 to 58,000 DWT within a few years, he said. And by 2010, a series of new deepwater seaport projects will be completed.

These include Van Phong in Khanh Hoa Province, Hiep Phuoc in HCMC and Thi Vai-Cai Mep in Ba Ria-Vung Tau. However, experts say sea trans-port infrastructure development is unlikely to keep pace with the rapid growth in sea trade. Last year, for instance, more than 60,000 ships with 154 million tons of cargo called into to Vietnam’s seaports, double the figure six years ago.

So even with the new ports and upgrades, the country will only be able to cope with 80 percent of demand, which is estimated to increase to more than 265 million tons by 2010 and 480 million tons by 2020.

Source: TBKTSG

Date: 01/09/2008  

Vietnam’s identified mineral resources were antimony, barite, bauxite, bismuth, carbonate rocks (limestone and marble), chromium, coal, copper, natural gas, fluorite, gemstones (ruby and sapphire), gold, graphite, iron ore, lead, manganese, nickel, crude petroleum, phosphate rock (apatite), rare earths, silica sand, silver, tin, titanium (ilmenite and rutile), tungsten, zinc, and zircon. Among those identified minerals, resources of bauxite and tungsten had been assessed as significant by world standards. In 2006, Vietnam remained one of the world’s leading producers and exporters of anthracite coal. The country ranked sixth in the production of crude petroleum in the Asia and the Pacific region (Oil & Gas Journal, 2006). Vietnam also was one of the important producers of ilmenite and phosphate rock (apatite) in the region.

Complete study

Fact Sheet on Market Access for Industrial Goods   

Exports of U.S. industrial goods to Vietnam have increased by over 50 percent in the four years since implementation of the U.S.-Vietnam Bilateral Trade Agreement (2001) and exceeded $900 million in 2005. Under the terms of Vietnam’s accession, market access for U.S. exports will be expanded through significant reductions on tariffs on many manufactured goods. More than 94 percent of U.S. exports of manufactured goods will face duties of 15 percent or less upon full implementation of Vietnam’s WTO accession commitments. Vietnam will bind all tariff lines, creating greater transparency for U.S. exporters, and lower its average bound tariff rate on industrial and consumer goods by 20 percent after full implementation. Average staging for all consumer and industrial products will be approximately two years with many commitments being implemented immediately upon accession.

Some examples of tariff reductions in areas of commercial significance to the United States include:

• Information Technology Products: When Vietnam becomes a Member it will join the Information Technology Agreement (ITA), which eliminates tariffs on information technology products including computers, cell phones and modems. U.S. exports to Vietnam in these products exceeded $40 million in 2005.

• Chemicals, Cosmetics and Pharmaceuticals: Vietnam will reduce tariffs to the harmonization rates required by the Chemical Harmonization Agreement on 80 percent of chemical products, which will cover the vast majority of U.S. chemical exports to Vietnam. Vietnam’s average tariff on cosmetics, a key sub-sector in chemicals, will be reduced from 44 percent to 17.9 percent upon full implementation. Pharmaceutical tariffs will average 2.5 percent within five years after accession.

• Civil Aircraft Equipment: Vietnam’s tariff on airplanes and engines are bound at zero upon accession. Vietnam’s average tariff on all aircraft parts will fall to less than 9 percent after full implementation.

• Motor Vehicles and Parts: Tariffs on priority U.S. vehicles such as SUVs will be reduced by 50 percent after full implementation. Tariffs on auto parts will be reduced by 19 percent to an average of 13 percent. Vietnam also will reduce its tariff on large motorcycles by 56 percent and motorcycle parts by 32 percent after full implementation.

• Agriculture and Construction Equipment: Vietnam has bound tariffs at 5 percent or less for close to 90 percent of its tariff lines.

• Medical and Scientific Equipment: Vietnam has bound tariffs at zero on 91 percent of medical equipment products within five years of accession. The average tariff rate for this entire sector will be less than 1 percent. Vietnam will eliminate all duties on 96 percent of scientific equipment within three years after accession.

• Wood Products: Vietnam’s average tariff on wood products will be approximately 4 percent upon accession.

Vietnam also addressed non-tariff issues that significantly impact the scope and quality of market access:

• Motorcycles: Vietnam will eliminate its ban on imports of large motorcycles (i.e., those with engines with capacities greater than 175cc). In the next year, Vietnam will establish a non-discriminatory and transparent system for the importation, distribution, and use of large motorcycles by individuals and firms that meet agreed criteria.

• Products Equipped with Encryption Technology: Vietnam has exempted general, commercially traded goods, including all products covered by the Information Technology Agreement, from restrictions imposed on imports of encryption machines and software.

• Ferrous (Steel) and Other Scrap Metals: Vietnam will reduce export duties on these important, globally traded inputs to steel and other metalworking production by up to 51 percent of current levels over the next five to seven years.

• State-Owned and State-Controlled Enterprises: Vietnam has confirmed that its state-owned and state-controlled enterprises will make purchases (not for governmental use) and sales in international trade based on commercial considerations.

This report gives an overview about steel scrap market in Vietnam

Presently, there are seven projects under construction to produce steel ingot with a total capacity of 1.6 million tons per year. The current production capacity of total local steel ingot manufactures is estimated at 2.6 million tons.

Once these projects are operational in the coming months, Vietnam’s total local production capacity of steel ingot will be 4.2 million tons, accounting for 70 percent of current domestic consumption (6 million tons). Although Vietnam’s steel ingot production capacity will rise, most raw materials for these factories must be imported. Aside from Thai Nguyen Steel Mill and Southern Steel Mill (which have their own mining sources), the remaining factories in Vietnam rely on imported sources of steel scrap.

It is estimated that a factory with capacity of 200,000 tons of steel ingot per year collects 80,000 tons of steel scrap locally and 120,000 tons overseas. Given the above higher import ratio and growing production capacity, the import demand for steel scrap is set to rise sharply in the years ahead.

According to industry experts, most factories have a strong appetite for steel scrap beyond current domestic and overseas supply. Factories especially experience difficulty finding available steel scrap sources from foreign suppliers. In the last six months of 2005, for example, local factories were able to acquire only 3,000 tons of steel scrap, mostly from Japan.

Steel scrap importers must comply with Vietnam’s environmental regulations as well as contend with the poor, inadequate infrastructure of seaports. Most ports are too small to receive large-scale, heavy ships. In addition, most seaports are unable to handle steel scrap ships loaded over 15,000 tons (with the exception of Thi Vai port located close to Southern Steel Mill).

For more information on the Vietnam market about steel and iron, please contact:

Vo Thuy

Commercial Specialist

US Commercial Service

Saigon Centre Building, 9F

5 Le Loi Boulevard, Dist. 1, HCMC, Vietnam

Phone: 84. 8. 8250490

Fax: 84. 8. 8250491

Email: vo.thuy@mail.doc.gov

Website: www.buyusa.gov/vietnam