It’s increasingly difficult to export gold

Unlike 2010, when domestic goldsmith companies could easily export gold under the form of preliminarily processed jewelry (gold made bracelets, necklaces ashtrays) weighing several taels and more; in 2011, the companies have to further process gold before exporting, due to the stricter regulations on gold export management.
Under the Circular No 184, which took effect on January 1, 2011, the gold exports with the title of 999.9 percent are imposed the 10 percent tax. The same tax rate is also being applied to the export jewelry weighing more than one ounce (0.8 taels) and to semi-finished gold products.

However, analysts say that most of the gold exports recently are preliminarily processed jewelry which has the gold content of less than 99.99 percent. In fact, Vietnamese companies really want to export sophisticated jewelry, but they are still incapable enough to make sophisticated products.

In Vietnam, SJC and PNJ are considered the two biggest goldsmith companies. Meanwhile, SJC’s jewelry making factory is still under construction, while PNJ only exported 8 million dollars worth of jewelry with the gold content of less than 65 percent in the firs six months of the year.

TH, the owner of a private business which exported more than one ton of gold in the form of jewelry in the last six months, said that she had to make jewelry products with the gold content of 98.5 percent in order to enjoy the export tariff of zero percent.

Since every jewelry item needs to be lighter to go through customs agencies, she could not manufacture big items such as big bracelets or necklaces.

In general, domestic goldsmith companies try to export as much gold as possible for profit. However, as the government does not encourage to export bullion gold, the companies have to “dodge the laws” by exporting preliminarily processing products.

“We now focus on making pendants weighing 0.5-0.6 taels for each, with patterns. As for bracelets, we cannot make products with simple designs any more, because simple jewelries will be listed by customs agencies as “semi-finished products which bear much higher tax,” she said, adding that bracelets need to be lighter and thinner than previously. Meanwhile, manipulators have to spend more time and efforts to make more sophisticated products.

In general, experts say, Vietnamese gold exporters have to pay 80,000 dong more for every tael of gold exports this year, because they export products with less title of gold. As a result, the foreign importers decided to charge the fee on converting 98.5 percent gold into 99.99 percent gold. Besides, domestic companies also have to pay more to manipulators for their more complicated works.

This explains why though the gap between the domestic and international gold prices is high at 300,000 dong per tael, goldsmith companies can make the profit of 100,000 dong per tael only, while the profit was higher at 180,000 dong in 2010.

Saigon Tiep Thi has quoted its sources as saying that the gold exporters are mostly private enterprises, each of which exported from one to several tons of gold. The enterprises exported many times, and exported 50-400 kilograms each time.

According to “K”, the owner of a gold company in district 6, said that if the domestic gold price is lower by 300,000 dong than the world’s price, the company would just need one or two day to make jewelries for export.

Analysts say some private enterprises borrow foreign currencies at the low interest rates, then sell to commercial banks for dong and use the dong to purchase gold. After they export gold, they can get foreign currencies to pay bank debts.

VnExpress has quoted the General Statistics Office as saying that by June 15, about 20 tons of gold had been exported. Especially, the gold exports in June alone reached 12 tons, higher than the total export volume in the first five months of the year.

The jewelry export has been resumed since April 2011. – Vietnamnet

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