Industry and Trade News Review dated 29 May 2018

A. MACROECONOMICS AND POLICY UPDATES

1. Consumer Price Index (CPI): The CPI in May 2018 rose by 0.55% compared to the previous month, marking the highest May increase in seven years, primarily driven by rising petrol prices,.
2. Promotion Regulations: The Government issued Decree 81/2018/NĐ-CP, effective 15 July 2018, officially removing the 50% cap on promotions, allowing businesses to discount goods and services by up to 100%,.
3. Petrol Stabilization Fund: The Ministry of Finance announced that as of the end of Q1 2018, the petrol price stabilization fund held a surplus of over 4,526 billion VND.
4. Legislative Debates: Businesses have expressed disagreement with the draft Law on Prevention of Alcohol Harms, specifically regarding proposed mandatory contributions to health funds and distance restrictions between alcohol vendors,. Additionally, the National Assembly is supervising the management of state capital and the equitization of State-Owned Enterprises (SOEs).

B. INDUSTRY AND ENTERPRISE NEWS

1. Textile Counterfeiting: The textile industry faces severe counterfeiting issues, with reports indicating that 50% of products labelled “May Viet Tien” on the market are fake; brands like May 10 and Duc Giang are also heavily affected,.
2. Automotive Market: Motorbike dealers, particularly for Honda, have raised prices by 3–14 million VND above the listed price due to alleged shortages. Meanwhile, a wave of cheap imported cars (Toyota, Suzuki, Mitsubishi) is expected to arrive in late June with zero tariffs.
3. Energy Sector: The Vietnam Electricity Group (EVN) has energized the second circuit of the 220 kV Tuy Hoa – Nha Trang transmission line and has directed units to ensure continuous power supply for the upcoming National High School Graduation Exam.
4. Corporate Developments: Petrolimex reported increased labour productivity following its equitization. Conversely, Giay Sai Gon (Saigon Shoes) is seeking to issue shares to offset accumulated losses.

C. EXPORT-IMPORT AND FOREIGN INVESTMENT

1. Agri-Forestry-Fishery Exports: Total export turnover for the first five months reached approximately 15.6 billion USD, a 9.9% year-on-year increase. Notably, forestry exports reached 3.43 billion USD, overtaking seafood to become the leading agricultural export sector.
2. Rice and Fruit: Rice export prices hit a 4-year high at 460–465 USD/tonne. However, experts warn of increasing reliance on China for fruit and vegetable exports, even as domestic imports of these goods surged to over 2,500 billion VND in a single month.
3. Foreign Direct Investment (FDI): In the first five months, newly registered FDI capital dropped by 30.8% to 7.15 billion USD, although realized capital increased by 9.8% to 6.75 billion USD.
4. Trade Defence: The Canadian International Trade Tribunal has launched a preliminary anti-dumping investigation into cold-rolled steel imported from Vietnam, China, and South Korea.

D. DOMESTIC MARKET AND AGRICULTURE

1. Livestock Price Volatility: Live hog prices in the North have surged to 52,000 VND/kg (double the previous year’s figures), raising concerns about a potential influx of cheap pork from China,. Conversely, Tra fish prices have hit a record high of 34,000 VND/kg due to supply shortages.
2. Crop Price Crashes: Farmers are facing severe price drops for other crops; Thai jackfruit prices fell from 40,000 VND/kg to as low as 2,000 VND/kg, and Japanese sweet potatoes dropped to 1,000 VND/kg, leading some traders to abandon purchases.
3. Da Lat Produce Struggles: Produce from Da Lat is facing intense competition from cheaper Chinese imports, causing local prices to plummet and leaving traders in debt.
4. Multi-Level Marketing (MLM): The government issued Decree 40/2018/NĐ-CP to replace the previous 2014 regulations, aiming to create a more transparent legal framework for MLM activities.