Vietnam Commentary: April 2012

Portfolio Management Comments

Recent developments in economic growth – In April, Industrial Production Index increased by an estimated 7.50% YoY, compared to 6.50% in March. The index for the January-April period rose by just 4.30% from the same period last year. Meanwhile, total Retail Sales and Service revenues were estimated to edge up to VND192.4tn (US$9.2bn), rising 25.14% YoY (1.58% MoM). The figure for the first four month of 2012 gained 25.85% YoY to VND762.2tn (US$36.5bn), compared to 24.22% for the same period last year. Facing the slow economy during the first months of the year, the Vietnamese government initiated a number of measures to stimulate growth. The Finance Ministry (MoF) proposed to the government to cut 50% of value added tax and consider tax concessions worth VND 25tn (US$1.2bn), including a 30% reduction of corporate income tax for small and medium enterprises (SMEs) in 2012. Given the current conditions and prospects, Ernst & Young ranked Vietnam the third of the fastest growth economies (+7.10% in 2013) after India (+8.50%) and China, Hong Kong (+8.60%)1. The IMF also forecasts…

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Duxton’s Agri Bits and Pieces Vol. 79

Quote of the week:

“Some critics have argued that every animal needs to be tested. That’s like saying that kindergarteners should be tested for Alzheimer’s. USDA appropriately focuses its surveillance on older animals and animals that are displaying clinical signs of the disease,”

– Eric Mittenthal, a spokesman with the American Meat Institute, a trade group based in Washington that includes Tyson Foods and Cargill among its members. More testing isn’t necessary now that the USDA has a handle on the extent of the Mad Cow Disease reports of which panicked markets this week, reckons Mittenthal.

1)     Organic not enough to feed the world?

Studies show that yields from organic farming are much lower than those for conventional farming but there are no clear winners in the ‘organic Vs. conventional’ debate

It is painfully obvious. There are going to be more people in the world than there will be food and feeding us all is going to be a pain in the neck. Said another way, agricultural yields or the amount of food produced per unit of productive…

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Duxton’s Agri Bits and Pieces Vol. 78

1)      Oil’s well that ends well

Major supply side constraints imminent for most oilseeds and edible oils amid rising demand could make prices end up higher

Oilseeds and edible oils are back on traders’ radar. Soybean production is estimated to fall record 22-23m tonnes from 240m tonnes produced overall, according to Oil World, the German forecaster, even as the use of soy, palm, rapeseed and six other oils will rise 3.9 percent this year, reducing the ratio of reserves to demand to the lowest since 1977, the U.S. Department of Agriculture estimates.

Prices for Soybeans, already supply constrained with just 77 days worth of supply left on the planet,-10% less than average amount for the last five years, could trend upwards amid a drought in South America.

High prices for Wheat and  corn, which usually compete with the oil and animal feed yielding soybeans for acreage,  at the beginning of the last growing season, enticed farmers to plant more of the grains at the expense of Soybeans- weighing down on supply. Meanwhile, appetite for soybean meal has only…

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