Vietnam Update – December 2014

ECONOMIC UPDATE

The economy continues to recover amid record low inflation.

HSBC’s Purchasing Manager Index increased to 52.1 in November from 51.0 in October on the faster growth of output and new orders as well as record rise in stocks of purchases in the survey’s history. Meanwhile, Industrial Production Index also accelerated 7.5% YoY, led by the healthy expansion of the manufacturing and processing industry.

The Consumer Price Index (CPI) declined 0.27% MoM on the negative growth of the transportation basket following a combined drastic cut of 6.6% in gasoline prices.1 The headline CPI was also below the market expectation with a 2.6% rise, the lowest rate since Sep 20091

Vietnam’s YTD trade surplus contracted to USD 2.06 billion due to November’s deficit of USD 300 million1. Machinery still made up a significant part of imports turnover, while Samsung’s mobile phones topped exports value1.

Foreign Direct Investment (FDI) Disbursement was on the right track with a growth of 6.2% YoY to reach USD 11.2 billion in November1, while committed FDI witnessed an upsurge to…

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Duxton’s Agri Bits and Pieces Vol. 213

QUOTE OF THE WEEK

Wheat prices have reached a five-month high, on the back of speculation Russia may move to curb its wheat exports.

Grains market analyst Lloyd George, of Ag Scentia, says the Russian Government has been sending mixed messages, but there’s been consistent talk for several days that it may introduce some kind of restriction on wheat exports.

They’ve been saying on one hand that they are not looking at putting in any export quotas or limits. On the other hand, they are saying they are getting more stringent on quality which could lead to restrictions on exports. The noises they are making is that they are concerned about food security and maintaining enough grain at home to keep local users happy.

There’s a lot of investment money that goes into a whole range of different commodities and at the moment there appears to be money that’s flying out of the energy (stocks) and some of that is coming back into ag commodities. The really sharp decrease in crude oil, that’s certainly coincided with a run-up in funds owning a long position…

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Duxton’s Agri Bits and Pieces Vol. 212

QUOTE OF THE WEEK

A mix of farmer and external investment will be the key to driving agriculture in Australia forward, according to Rural Bank’s new board appointee Alex Gartmann.

Ms Gartmann, who is also the chief executive of Rural and Regional Renewal and spent nearly a decade at the helm of Birchip Cropping Group (BCG), said the financial industry serving agriculture needed to foster innovation to allow maximum returns from investment in the sector.

There’s been a lot of commentary about whether the traditional family debt-driven model can raise enough capital to continue to bring the industry forward. The truth is, family farming will always be an important part of Australian agriculture, but we may see it linked in with other sources of capital in the future.

Already we are seeing some innovative arrangements where family farms transition to a corporate style set up while still allowing facets of traditional family ownership, whether that be the farming business set up separately from land ownership or other models. It’s something that’s working for farmers wishing to free up capital and while it won’t be…

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