Gold exports soften trade gap, again

Vietnam’s trade gap is expected to be low again this month at around US$200 million, thanks to gold exports, after topping the $1 billion mark in each of the first five months.

Gemstones, precious metals, and jewelry exports are likely to rake in $800 million in July after fetching $806 million in June.

Overall exports are estimated at $8.4 billion, down $60 million, according to preliminary data from the General Statistics Office (GSO).

Textile and apparel will continue to be the major exports at $1.3 billion, the only item to top $1 billion in July.

Exports and imports in January-July are estimated at $51.5 billion and $58.1 million, up 33.5 percent and 26.2 percent year on year, leaving a deficit of $6.64 billion.

The full-year deficit is expected to be $14-14.5 billion, more than 10 percent higher than last year despite a stronger-than-expected growth in exports to $84.5-85.5 billion, the government has said.

This is around 16 percent of exports, the target approved by the National Assembly.

Gold exports

A source from the Vietnam Gold Business Association told newswire Vnexpress that gold exports skyrocketed in May and June since domestic prices were much lower, resulting in a profit of VND2 billion ($97,230) per ton of export.

But the difference between Vietnamese and global prices has begun to shrink.

Businesses said the cost of exporting one tael (37.5 grams) was almost VND200,000, including taxes and other expenses.

But the exports also beg a question: Why is Vietnam doing this while countries around the world are bolstering their gold reserves to deal with the global spread of inflation.

The World Gold Council reported that central banks bought more gold in the first half of this year than in the whole of 2010 when they become net buyers for the first time in two decades.

They were buying gold to diversify their foreign exchange reserves, a fact that was driving up gold prices, it said.

Vietnam is not a gold producer and depends almost completely on imports of the precious metal. – Tuoitre

Tags: vietnam gold, Vietnam gold exports, Vietnam gold market