Industry and Trade Press Review for June 30, 2017

1. Macroeconomic Performance and Policy

• GDP Growth: Vietnam’s GDP for the first six months of 2017 is estimated to have grown by 5.73%. To reach the annual target of 6.7%, the economy must achieve a growth rate of over 7.4% in the second half of the year.
• SOE Reform: The pace of divestment in State-Owned Enterprises (SOEs) remains slow and has failed to meet targets, primarily due to leadership concerns regarding personal responsibility.
• Livestock Regulation: Deputy Prime Minister Trịnh Đình Dũng emphasized the need to end spontaneous and unplanned production in the livestock sector, urging that planning must be aligned with market demand and production capacity.

2. Rice Export Recovery and Market Intelligence

• Low-Price Growth: Rice exports have shown signs of recovery, but experts note this growth is largely due to Vietnamese enterprises selling at prices significantly lower than the global average.
• Information Gap: Despite a rise in global prices following the clearance of Thailand’s inventory and natural disasters in Bangladesh, Vietnamese firms failed to adjust their prices upward in time due to a lack of market intelligence.
• Contract Pricing: Consequently, recent contracts for 5% broken rice were signed at only $356–$370 per ton, highlighting the need for better market orientation from the Ministry of Industry and Trade and the Vietnam Food Association (VFA).

3. Oil, Gas, and Petroleum Developments

• Binh Son Refining (BSR): In the first half of 2017, BSR’s revenue reached approximately 39,350 billion VND, contributing 50% of the total post-tax profit for the Vietnam Oil and Gas Group (PVN). The company is currently exploring options to export gasoline by 2018 when the Nghi Son refinery begins operations.
• Biofuel Transition: The government is moving forward with plans to completely replace RON 92 gasoline with E5 biofuel nationwide by January 1, 2018.
• International Cooperation: Vietnam and Russia have agreed to expand oil and gas exploration and extraction on Vietnam’s continental shelf in compliance with UNCLOS 1982. Additionally, PV Drilling signed a $42 million contract with Rosneft for drilling services.

4. Electricity and Energy Projects

• FDI Attraction: The energy sector significantly boosted Foreign Direct Investment (FDI) in the first half of the year, notably with the $2.07 billion Nam Dinh 1 BOT thermal power project and another large project in Thanh Hoa.
• Infrastructure: A new SCADA/DMS control center was launched in Ho Chi Minh City to remotely monitor and control medium and low-voltage grids across 21 southern provinces.
• Operational Milestones: The Vinh Tan 4 Thermal Power Plant successfully conducted its first coal firing for Unit 2, targeting commercial operation by the end of 2017.

5. Domestic Market and Import-Export Trends

• Retail Competition: Experts are expressing concern as over 50% of Vietnam’s retail market share is now held by foreign investors.
• Agricultural Trade:
  • Import Surge: Fruit and vegetable imports from Thailand have skyrocketed, accounting for 57.5% of the market share—four times higher than imports from China.
  • Export Opportunity: Vietnamese dragon fruit will officially enter the Australian market this year, with raw whole shrimp potentially following as the next export product.
• Consumer Prices: The Consumer Price Index (CPI) for June decreased by 0.17%, largely due to a continuous drop in the prices of pork and chicken.

6. International Integration and Events

• VN-EAEU FTA: The first meeting of the Joint Committee on the implementation of the Free Trade Agreement between Vietnam and the Eurasian Economic Union (VN-EAEU FTA) was held in Moscow to discuss trade cooperation.
• Trade Promotion: The Vietnam-Laos Trade Fair 2017 opened in Vientiane, featuring participation from both countries’ Ministries of Defense and Trade to mark significant diplomatic anniversaries.

Clarification: Would you like more details on a specific sector, such as the new regulations for the automobile industry or further specifics on the PV Drilling contract?