Vietnam Business & Weather Briefing (August 12): Petrol Prices Further Down

Business Briefing

Reference rate exchange

The State Bank of Vietnam set the daily reference exchange rate for the US dollar at VND 23,153/USD on August 12, down VND 10 from the previous day. With the current trading band of +/-3 percent, the ceiling rate applied to commercial banks during the day is VND 23,847/USD, and the floor rate is VND 22,458/USD.

The opening-hour rates at many commercial banks stayed stable. At 8:30 am, BIDV listed the buying rate at VND 23,255/USD and the selling rate at VND 23,535/USD, both unchanged from the end of August 11. Vietcombank also kept both rates unchanged at VND 23,220/USD (buying) and VND 23,530/USD (selling). During the week from August 8-12, the daily reference exchange rate for the US dollar mostly followed a downward trend, except for Tuesday (August 9). It ended the week down VND 22.

Photo: Zing

Petrol price

Fuel prices were reduced in the latest review on August 11 by the Ministry of Industry and Trade and the Ministry of Finance, the fifth consecutive time and the fourth significant drop. Starting from 3:00 pm, the retail price of E5RON92 bio-fuel slid by VND 904 to a maximum of VND 23,725 per liter, while that of RON95-III was cut by VND 939 to VND 24,669 per liter. Diesel fetched VND 22,908 per liter, a decline of VND 1,000; and kerosene, VND 23,320 per litre, down VND 1,213.

The price of Mazut 180CST 3.5S remains unchanged at no more than VND 16,548 per kg. The two ministries also determined to extract VND 350 – 750 per liter from fuel prices for the petrol price stabilization fund. They review fuel prices every 15 days to adjust the prices in accordance with fluctuations in the world market.

Photo: Zing

Aviation news: Air passengers reach record number in July

The number of air passengers reached nearly 12 million in July, including over 10.5 million on domestic flights, an increase of 40.3% compared to July 2019 before the Covid-19 outbreak, said the Civil Aviation Administration of Vietnam (CAAV). Along with a sharp increase in the number of passengers, flight cancellations and delays also increased rapidly, partly due to airlines’ errors.

CAAV said flight delays and cancellations in the past month had increased dramatically many times, causing frustration in public and affecting the quality of aviation services. It attributed the problem to many bottlenecks in the airport infrastructure and unusual weather.

In the past month, the proportion of delayed flights accounted for more than 18% of the total number of licensed flights or more than 6,000 flights, an increase of 16% over the same period last year and equivalent to June. During the month, 41 flights were canceled due to technical factors and late flights. In July, the on-time rate of flights was only 81% out of the total of more than 33,200 flights.

Photo: Zing

Export news: Seafood exports expected to reach 3 billion USD in Q3

Vietnam’s seafood export value is expected to slow growth to USD 3 billion in the third quarter due to a lack of raw materials and disadvantages in the market in the second half. At the beginning of the year, farmers released shrimp due to the forecast that the weather would not be too cold. They have expected to early harvest raw shrimp. However, diseases and the quality of shrimp seeds have affected farming results. According to Ho Quoc Luc, former chairman of the Vietnam Association of Seafood Exporters and Producers (VASEP) and also chairman of the Sao Ta Foods Joint Stock Company (FIMEX), there are three reasons for the shortage of raw shrimp, including disease, quality of shrimp varieties and water source.

By the end of this year, the supply of raw shrimp will not be abundant, and prices will remain high, said Luc. This will encourage farmers with the right financial conditions to expand production. Although output has not increased or increased slightly while the world market prices have not increased, the shrimp export revenue is estimated to surge by 10% this year. The higher export value is due to promoting deep-processed products with higher selling prices at shrimp processing enterprises. The higher selling price is partly due to a surge in transport costs, said Luc.

Le Hang, deputy director of the VASEP.PRO Centre, said that the scarcity of raw materials for shrimp and seafood would continue to affect the export results in the third quarter. After a substantial increase of 39-62% in the first four months of this year, seafood exports showed signs of cooling from May with a growth rate of 34%. In June, it only increased by 18%. In July, the growth rate of seafood exports continued to slow down to 14% on the year, earning USD 970 million. It was down 4% compared to June 2022, according to Hang. In the first seven months, shrimp exports reached USD 2.65 billion, up 22% over the same period last year.

Domestic shrimp production and world shrimp demand are forecast to not be positive in the second half of the year. The shrimp supply from producing countries increased sharply in the first half of this year. The import volume of major markets, such as the US and EU, also increased in the first half, leading to an increase in inventories. Therefore, there was a slowdown in demand in the second half. Meanwhile, domestic shrimp production is facing difficulties due to weather and high costs, so raw shrimp will be in short supply in the year’s second half. The export of pangasius, another key item, surged by 56% to USD 197 million in July. The total pangasius exports in the first seven months of this year reached USD 1.6 billion, up 79%.

When inflation is too high in many countries and export prices tend to increase, consumers in those countries will tighten their spending and switch to affordable products such as frozen pangasius fillets, fish cakes, and other frozen products, Hang said. Seafood export to the US in the first seven months reached nearly USD 1.5 billion, up 31% over the same period last year, Hang said. Shipments to the EU still maintained a growth rate of 28% in July and 39% in the first seven months, with a total value of USD 829 million, compared to the same period in 2021. Meanwhile, seafood export value to China in the first seven months grew by 71% to USD 1 billion.

Weather Forecast

According to the Center for Hydrometeorological Forecasting, in the next 12-24 hours, flood water levels in Hanoi will rise, leading to a risk of flood. In the morning and afternoon of August 13, there will be showers and thunderstorms in Hanoi. During thunderstorms, there is a possibility of tornadoes, lightning, hail, strong winds, and flooding in low-lying areas.

The weather in Ho Chi Minh City was mainly cloudy and sunny. There will be scattered showers and thunderstorms in the afternoon. The highest daytime temperature will reach 33-35 Celcius degrees, the average humidity is 58-78%.