Vietnam Eyes Bigger Export Turnover in Second Half

Vietnam Eyes Bigger Export Turnover in Second Half

Vietnam, which recorded export turnovers of roughly US$11.8 billion in the first half of this year, will turnover US$12.3 billion in the second half, a year-on-year increase of 19.1 per cent, partly due to higher demand of more foreign markets which will push up prices of several local key exports. Meanwhile, 17 out of 19 key exports, including some of the largest hard currency earners, such as crude oil, garments, footwear, rice and woodwork, will see higher turnovers with year-on-year growths of 0.2-78 per cent, according to the Ministry of Trade.

Crude oil is predicted to generate export turnovers of US$2.3 billion in the second half, up 24.8 per cent, although its prices in the world market are expected to slightly decrease to US$35-37 per barrel in late 2004 as security situations in the Middle East will be more stable at that time. As a result, Vietnam will earn US$4.8 billion from shipping crude oil abroad this year, mainly to the US, China, Singapore, Japan and England, up 25.6 per cent against last year.

Garments and textiles, Vietnam's second biggest hard currency earners, are estimated to bring home US$2.25 billion in the last six months of this year, a year-on-year rise of 10.7 per cent, partly because of larger exports to the enlarged European Union (EU). Since May 1, the products exported to 10 new EU members, namely Estonia, Latvia, Lithuania, Czech, Slovakia, Slovenia, Cyprus and Malta, have been subject to the block's common quota-based import policy. However, Vietnam will find it difficult to ship garments and textiles to the US in the second half, because its quotas granted by the foreign country will run out of by August or September, while it may fail to negotiate with the partner for bigger quotas for this year or to use quotas designated for 2005. To realize the annual export target of US$4.25 billion, local companies should boost non-quota export items to the US as well as intensify exportation of garments and textiles to non-quota markets such as Japan, South Korea and Taiwan. They exported some US$320 million worth of non-quota items to the US in the first half, up 16 per cent, said the ministry.  

Vietnam's footwear export revenues are estimated to post an on-year rise of 16.8 per cent to US$1.35 billion in the last six months of this year, thanks to higher demand from major importers such as the EU, the US and Japan, and more new markets, including several African countries. However, domestic footwear makers must renovate equipment and technology to raise the quality of their products and actively participate in international fairs to seek new foreign markets, since Vietnamese footwear is facing fiercer competition from the Chinese in the US, while the EU may remove preferential tariffs on the local product.

Vietnam is predicted to reap US$400 million from shipping rice abroad in the second half of this year, a year-on-year rise of 37.3 per cent, while prices of the commodity will slightly decrease due to a higher demand in China, Iraq, Indonesia, Nigeria and Colombia, and the world's lower rice reserves. The country, which has recently finished harvesting 17 million tonnes of paddy rice from nearly three million hectares of this year's winter-spring crop, up one percent over last crop, plans to export 3.5 million tonnes of rice worth some US$900 million this year, up 25 per cent in value against last year, mainly to the Asia-Pacific region and Africa. The Philippines is expected to import over one million tonnes of rice in 2004, up from 945,000 tonnes in 2003, creating greater chances for Vietnamese rice exporters that shipped 510,000 tonnes of the product to the country in the first half. However, to stabilise the local rice market and ensure national food security, the Vietnamese Ministry of Trade has regulated that all domestic rice exporters must report their rice contracts, especially articles relating to export volumes to the Vietnam Food Association in the second half. It is tightening management of rice export by monthly supervising their export volumes.

Woodwork, whose export revenues rose 88.9 per cent to US$493 million in the first half of this year, is forecast to bring home US$500 million in the second half, a year-on-year increase of 66.7 per cent, mainly due to higher demand from US importers who want to avoid higher duties imposed on Chinese woodwork and unstable supplies in several other Asian countries owing to currently unstable situations. Another contributing factor is that Vietnamese woodwork is mainly made from materials imported from the US. The product is now available in 120 countries, with the US being the third biggest importer after the EU and Japan. Vietnam's wood processing industry currently houses over 1,200 local enterprises including more than 300 exporters, and some 50 foreign-invested projects with total registered capital of some US$110 million, which import over one million cubic meters of timber, worth around US$250 million, annually.

Vietnam is likely to earn a turnover of US$230 million from coffee exports in the last six months of this year, up 27.3 percent, bringing the estimated total turnovers to US$630 million dollars in the whole year. In the period, prices of coffee beans are expected to slightly decline, since Brazil is harvesting its main coffee crop. Domestic firms should continue tapping markets which accepted higher prices in the first half such as the US, Italy and Switzerland, and seek potential new ones, including China, Russia, Ukraine, Lithuania, Belarus and Latvia. The Vietnam Coffee and Cocoa Association has signed a contract to annually export 10,200 tons of coffee to China whose demand for the product is increasing. 

In the second half, like peanuts, local seafood will see an on-year fall in export turnover, estimated at US$1.1 billion, down 10.9 per cent, due to impacts of the shrimp lawsuit againist several Asian countries, including Vietnam and the US, and stricter hygienic requirements set by the EU. The US Department of Commerce, on July 6, determined that the rates of duty for four local mandatory respondents would be 12.11-19.06 per cent, those for 17 voluntary respondents 16.01 per cent, and those for 17 other voluntary respondents 93.13 per cent. It will announce its final determination by 24th November. To deal with the situation, Vietnamese seafood exporters should open more representative offices in the US to establish distribution channels there, and beef up export of their products, especially catfish to markets with increasing demand such as Japan, the EU, Hong Kong, South Korea, Taiwan and the Chinese mainland. The mainland's demand for mollusca and crustacean is growing sharply.

To achieve the targets set for the second half of this year, Vietnam will boots trade promotion to of the above items with high turnovers, provide stronger assistance to items with high revenue growths, including plastic wares, electrical products, bicycles and their spare parts, computer components, electronic appliances, electric wires and cables, focus on reviving markets such as the US, Japan, China and the EU, and facilitate exports to China through unofficial channels. It will also promote trademarks of local commodities, develop goods distribution systems abroad, create closer coordination between state management agencies and associations and enterprises, and create more favourable conditions for businesses to actively and smoothly participate in export activities.
Vietnam is predicted to post an export turnover of US$24.1 billion this year, up 19.4 per cent over last year, said the ministry.         

• Dong Phong