No gold export in sight despite high world prices

World gold prices are now higher than local levels but local trading firms have yet to consider exporting the yellow metal to enjoy a margin as they did last year.

Local gold yesterday closed at 26.74 million dong per tael for buying and 26.78 million dong for selling at the country’s leading gold trading house Saigon Jewellery Holding Co (SJC). A tael equals 1.2 troy ounces. Meanwhile, gold traded at $l,184 an ounce, meaning it was 230,000 dong per tael higher than local gold.

Truong Cong Nhon, deputy director general of SJC, described this margin as small, saying it had never exceeded 300,000 dong in the year to date and that such a differential could not guarantee a desired rate of profit.

If import tax, transport cost and warehousing charges are factored into local gold prices, current export prices will certainly not bring a real profit, he said.

Another major gold trading firm, Phu Nhuan Jewellery Company (PNJ), is not mulling gold export either.

Nguyen Thi Cuc, deputy general director of PNJ, said her company would think of selling the metal abroad when the difference between Traders said they would seek central bank approval for gold export quotas when they find export prices attractive enough and this export would bring in foreign currency for the economy.

PNJ, which is strong in gold and silver jewellery, said it would choose an appropriate time to step up jewellery export to capitalise on good world prices.

Jewellery export is not subject to any limitations under prevailing regulations.

Thanks to gold export in the first quarter of last year, SJC’s outbound gold shipments in all of 2009 amounted to $258.3 million, up 117 percent from the previous year. This also contributed to the company’s 2009 after-tax earnings of 329 billion dong, up 119 percent from a year earlier.

Similarly, PNJ’s 2009 revenue totalled over 10.2 trillion dong, of which export accounted for 2.5 trillion dong. Therefore, its after-tax earnings leapt by a phenomenal 67 percent to 220 billion dong.

TBKTSG

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