Gold trading firms in Vietnam have yet considered resuming exporting the yellow metal on a margin as they did last year even though world gold prices are now higher than local levels.
Local gold today closed at VND27.25 million per tael for buying and VND27.34 million for selling at the country’s leading gold trading house Saigon Jewelry Holding Company (SJC). A tael equals 1.2 troy ounces.
Meanwhile, gold traded at $1,197 an ounce on the world market, meaning it was VND290,000 per tael higher than local gold.
Truong Cong Nhon, deputy director general of SJC, described this margin as small, saying it had never exceeded VND300,000 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 Jewelry 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 local and world prices was at least VND500,000 per tael.
Traders said they would seek the 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 jewelry, said it would choose an appropriate time to step up jewelry export to capitalize on good world prices. Jewelry 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% from the previous year. This also contributed to the company’s 2009 after-tax earnings of VND329 billion, up 119% from a year earlier.
Similarly, PNJ’s 2009 revenue totaled over VND10.2 trillion, of which export accounted for VND2.5 trillion. Therefore, its net earnings leapt by a phenomenal 67% to VND220 billion.
Earlier this year the prime minister ordered all the local gold trading floors to close through the end of March as part of efforts to stabilize the financial market. (Saigon Economic Times)
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