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Vietnamese enterprises don’t intend to export gold   2010-05-10 - Thoi bao Kinh te Saigon

Vietnamese gold trading companies say they have no plans to export gold, even though the world’s price is now higher than the domestic price.



Gold companies agree that the gap between the world’s price and the domestic price is not large enough to bring a profit.


Gold prices quoted by Saigon Jewelry Company (SJC) on May 6 were 26.74-26.78 million dong per tael (purchase and sale). Meanwhile, the gold price on the Asian market was $1184 per ounce, making the world’s gold price higher by 230,000 dong per tael.


According to Truong Cong Nhon, Deputy General Director of SJC, since the beginning of 2010, the world’s price has been higher than the domestic price by no more than 300,000 dong per tael. Nhon noted that, with such a small price gap, domestic enterprises do not intend to export gold, because the export tariff, transport and storage fees will eat up any profit.


Phu Nhuan Jewelry Company (PNJ) also will not export gold. PNJ Deputy General Director revealed that they may consider exporting gold only when the world’s price is higher by at least 500,000 dong per tael than the domestic rate.


When the world price goes up, companies will ask the State Bank of Vietnam to grant quotas to export gold, since export will bring foreign currency to both enterprises and the State.


PNJ is considering export of manipulated jewelry since it would be easier to export than bar gold, mainly because jewelry products are considered normal goods. There are no restrictions on jewelry exports and no permissions are required.


Gold exports brought high profits to both the companies in 2009. SJC exported large quantities of bar gold in the first quarter of 2009, when the domestic gold price was far below the world’s price. The total export turnover of SJC in 2009 reached $258.3 million, or 217 percent of the company’s export turnover in 2008.  In 2009, the post-tax profit of SJC was 329 billion dong.


In 2009, exports brought PNJ 3500 billion dong profits out of 10,200 billion dong in total revenue. Exports also brought high post-tax profit to PNJ – 220 billion dong, an increase of 67 percent over 2008.


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