Local warehouse plan goes for gold

International gold prices have been rising

The two 400 square metre warehouses will be located at Noi Bai airport in the north and Tan Son Nhat airport in the south and will be built and developed by the Fine Art Jewellery Trading Company (FAJC) under the state-owned Bank for Agriculture and Rural Development. FAJC general director Nguyen Thanh Truc said the construction and procedures for opening the warehouses were expected to be completed by November.
A customs-bonded warehouse is a storage facility where imported goods are kept without having to pay import duty and export goods which have already undergone all custom procedures are stored prior to shipping.
Gold bonded warehouses allow domestic enterprises with gold import quotas to buy gold at any time. The warehouses will allow gold importers to access their gold within two or three hours of its arrival in the country, rather than having to wait two to seven days as would otherwise be the case.
“Given the sharp fluctuations in world gold prices and the difficulty of predicting prices in the future, now is an ideal time for Vietnam to establish gold bonded warehouses,” Truc said.
“It will help the country take the initiative in coping with sudden shortages in domestic gold supply, which sometimes we cannot foresee, help the price of gold on the domestic market follow world rates and reduce the price fluctuations of gold and US dollars on the domestic market.”
Truc said gold bonded warehouses had been developed a decade ago in many other countries and were one of main tools used to stabilise domestic gold prices.
Several international gold traders have expressed interest in the project, including Singapore’s Merchant Standard Bank, the US-based Brinks’ Inc. and the French Bipielle company, the main gold exporter to Vietnam.
Truc said the domestic market stood to profit if these companies exported their gold using the warehouse because gold stored in the warehouse would be more competitive than directly imported gold due to lower transport costs.
It is believed the Ministry of Finance’s decision to reduce the import tax on gold to 0.5 per cent will lower the quantity of smuggled gold, creating a better investment environment to attract foreign gold investors to the country.