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Vietnam’s weekly financial - monetary update (Week 24 – 2021)

Vietnam’s weekly financial - monetary update (Week 24 – 2021)

Thursday 17, 06 2021

 

Vietnam’s macro-economic overview

Vietnam’s economic has slowed down due to the fourth outbreak of the Covid-19, which has caused a lot of difficulties and challenges to manufacturing and export activities. The Manufacturing Purchasing Managers' Index (PMI) of Vietnam, caculated by IHS Markit, fell from 54.7 in April to 53.1 in May. In particular, the number of new orders has experienced the lowest growth since February 2021. However, the recovery of some major partners of Vietnam has boosted their demands, which has made Vietnam's export turnover reach 26.13 billion USD in May 2021.

IMPORT EXPORT

Vietnam’s import turnover in May 2021 reached 28.23 billion USD, up 1.8% compared to April 2021. As of the end of May 2021, the total import turnover reached 131.6 billion USD, up 36.7% over the same period in 2020. In May 2021 and in the first 5 months of 2020, Vietnam suffered from a trade deficit of more than 2 billion USD and nearly 500 million USD, respectively.

Currently, the epidemic has basically been controlled in most parts of the country. It is expected that economic growth will be more positive and production activities will be on track in the coming time when more and more people are vaccinated.

Weekly financial - monetary situation and forecasts

Exchange rate

Last week, the State Bank sharply reduced the purchase price of the USD to help stabilize the price of imported input materials, helping to control inflation.

On June 10, the USD / VND exchange rate decreased by 80 VND/USD  compared to the previous week, to 22,830 VND / USD (purchased) and 23,060 VND / USD (sold). Compared to the beginning of 2021, the USD / VND has decreased by 130 VND / USD.

On the unofficial market, the USD / VND was stable at 23,150 VND / USD and 23,180 VND / USD, respectively.

EXCHANGE RATE

At the State Bank of Vietnam, the USD / VND exchange rate was 822 VND / USD lower than the ceiling price. Compared to the previous week, the USD exchange rate on the selling side decreased by 28 VND / USD to 23,747 VND / USD and was 50 VND / USD lower than the ceiling price.

Gold price

The world gold price fell due to the recovery of the USD. However, the gold price outlook remains positive.

China has just announced a sharp increase in inflation in May 2021 with the PMI increasing by 9% year-on-year, after increasing by 6.8% in April 2021. The consumer price index in May 2021 increased by 1.3% compared to the same period in 2020. Rising inflationary pressure around the world is a positive factor for metals.

Investors are waiting for the US economic data to be released this week. The consumer price index for May 2021 of this economy was forecast to increase by 0.5% compared to April 2021 and by 4.7% over the same period in 2020.

The Eurozone economy has shrunken for the second consecutive quarter, with a 0.6% decrease due to the third outbreak of the Covid-19 epidemic. According to Bloomberg, gold prices will rise to new record highs next year even when the US Federal Reserve (Fed) goes further in its asset purchase program.

Meanwhile, Fitch Solutions predicts that gold prices will continue to rise in the coming months in the context of a weakening dollar and worries about new outbreaks of the Covid-19 epidemic. According to the World Gold Council (WGC), 21% of the world's central banks expect to increase their gold reserves in 2021. Meanwhile, no central banks plan to sell gold this year, down from 4% in last year's survey.

GOLD PRICE

At the end of the week, spot gold price was 1,887 USD / oz. Gold futures price in June 2021 on Comex New York was1,895 USD / oz, while on Kito it was from 1,888.8 to 1,889.8 USD/oz.

World gold price was about 53.6 million VND / tael, which is 3.7 million VND lower than the domestic gold price.

The domestic gold prices also decreased in line with the world gold price. In Hanoi, SJC gold price decreased by 300 thousand VND / tael on the buying and sellings sides, to 56.65 – 57.27 million VND / tael.

Commodities and services

Vietnam’s peper industry

Global and domestic pepper prices have improved in recent months. At the end of the trading session on June 9, 2021, the spot price of pepper at the Kochi platfrom - India increased by 600 rupees / quintal to 42,000 rupees / quintal.

In the domestic market, the price of pepper has fluctuated around 70,000 VND/kg, which is reasonable for bother pepper cultivators and consumers. Due to the fact that pepper production is forecasted to drop sharply by 20-25% compared to 2020, and demand for peper is increasing, the price of pepper is expected to maintain the uptrend until the end of the year.

According to statistics from the General Department of Customs, Vietnam's pepper exports in May 2021 reached 27.9 thousand tons, with a turnover of 95.8 million USD, down 13.2% in volume and 8.9% in value compared to April 2020. For the first 5 months of 2021, Vietnam's pepper exports reached 121.33 thousand tons, with a turnover of 379.5 million USD, down 17.1% in volume but up 23% in turnover compared to the same period in 2020.

The average export price of Vietnam's pepper in May 2021 reached 3,429 USD/ton, up 70.3% compared to the same period last year. Generally, for the first 5 months of 2021, the average export price of pepper reached 3,128 USD/ton, up 48.3% over the same period in 2020.

Top peper exporters in Vietnam

Topping the list of largest peper exporters in Vietnam is Olam Vietnam Co., Ltd, whose total peper export turnover reached 25,301 thousand USD in the first 4 months of 2021.

Olam Vietnam Co., Ltd is a 100% foreign-invested company under the International Olam Group. It is as one of the largest exporters of cashew, pepper and coffee in Vietnam. Currently, the company employs more than 4,000 employees working in 10 large agricultural processing factories located in central and southern Vietnam.

Coming out second is Pearl Trading- Services and Import Export Joint Stock Corporation. In the first four months of 2021, this company’s peper export turnover was 21,088 thousand USD, which was follwed by Nedspice Processing Vietnam Limited (20,644 thousand USD), Phuc Sinh Corporation (16,220)…

PEPER

Source: Ministry of Industry and Trade

Compiled by VietnamCredit

Categories
Vietnam Economy

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