Overview of Seven Biggest Currency Earners in 2005

Vietnam is estimated to make export revenues of US$32.23 billion in 2005, up 21.6 per cent against 2004, according to the country’s General Statistics Office. Nearly 69.2 per cent of the revenues came from seven biggest currency earners, namely crude oil, garment and textile, footwear, seafood, woodwork, electronics appliances, and rice.

 

Crude oil

Vietnam exported 18.08 million tonnes of crude oil worth nearly US$7.39 billion in 2005, mainly to China, Singapore, Japan, Britain and the United States, down 7.3 per cent in volume but up 30.3 per cent in value against 2004. Vietnam’s crude oil production decreased 7.7 percent to roughly 18.5 million tonnes in 2005.

 

Recently, the Ministry of Planning and Investment proposed that the Vietnamese Government lower crude oil exports between 2006 and 2010 so as to ensure sufficient supply of the product for domestic industries. Accordingly, the country’s crude oil export will decline to 18.5 million tonnes in 2006 and 15.6 million tonnes in 2010.

 

To reduce reliance on petroleum imports, Vietnam, a major crude oil exporter in Asia, is pouring some US$2.5 billion into constructing its first oil refinery named Dung Quat with annual processing capacity of 6.5 million tonnes in the central province of Quang Ngai, which is scheduled to become operational in late 2008 or early 2009, meeting about 40 per cent of the domestic demand for petroleum products. The refinery’s construction officially kicked off in November 2005.

Garments and textiles

Vietnam shipped nearly US$4.81 billion worth of garments and textiles in 2005, up 9.6 per cent, becoming the world’s 16th biggest garment and textile exporter and the 10th biggest garment exporter. Vietnam did not realize its garment and textile export target of US$5.2 billion in the year, but it was still a successful year for the country’s garment and textile year in the context of its limited quotas.

 

In 2005, Vietnam’s garment and textile exports to the United States is estimated at nearly US$2.63 billion, up 6.1 per cent; to the European Union (EU) around US$840 million, up 12 per cent; and to Japan around US$620 million, up 17 per cent, according to the Trade Ministry. Vietnam has eyed garment and textile export turnovers of US$6 billion in 2006.

To boost production and export, Vietnam needs to invest US$2.5-2.7 billion in its garment and textile industry in the 2005-2010 period, according to the Vietnam Textile and Apparel Association. A large amount of the money should be spent on improving the industry's weaving and dyeing which are very poor. The industry's weak points are heavy reliance on material imports and outsourcing contracts of foreign firms, and lack of well-known trademarks, the association said. The association has urged its members to more actively construct and promote trademarks both at home and abroad, and diversify products to have specific items for specific traditional markets, and to explore new markets in Africa and East Europe.

 

Vietnam sold footwear worth more than US$3 billion in 2005 to overseas markets, mainly in the EU, Japan and the United States, posting a year-on-year rise of 11.7 per cent. The country is expected to gain footwear export turnover of US$3.3 billion in 2006. It has striven to penetrate more deeply into Japan, the United States and African countries after the EU issued its preliminary findings on anti-dumping investigation on Vietnamese leather-upper shoes. Vietnam has also intensified trade promotion, offered stronger support to leather products makers and exporters, and got to know fashion trends in foreign markets.

 

Vietnam's footwear export to the United States is predicted to increase sharply in 2005 and the years to come. Major items shipped to the market are sports shoes, leather-upper shoes, and cloth-upper shoes. The volume of Vietnamese sports shoes now makes up more than 65 per cent of that of all footwear items exported to the United States. Most of them are manufactured by foreign-invested enterprises, and branded Nike, Adidas, Puma and Skechers. Vietnam should assist local shoe makers, especially small and medium enterprises, in accessing the US market to ensure the sustainable development of the domestic footwear industry, many foreign and local trade experts said, adding that the makers themselves should be more creative in designing models, and more active in constructing their own product brands.

In 2005, Vietnam’s seafood export revenue increased 14.2 per cent to US$2.74 billion. The value hike was partly due to higher demand of the country’s key importers, including the EU, the United States, Japan and China. Due to bird flu outbreaks in many countries, consumers turned to seafood. The fact that the US International Trade Commission in November 2005 did not revoke the existing anti-dumping duty orders on certain frozen shrimps and prawns from Thailand and India also helped similar products of Vietnam to compete well in the US market.

 

Vietnam has eyed seafood export revenues of US$16.1 billion US dollars in the 2006-2010, with US$4 billion to be made in 2010, according to the Fishery Ministry. To this end, the country is improving its capacity of forecasting seafood prices and demand of export markets, penetrating into the Middle East, East Europe, Africa and South America, and strengthening export to traditional markets. Vietnam is also promoting trademarks of its key seafood products, including shrimp, catfish and tuna, and helping more local enterprises and farmers to meet strict hygiene and safety standards set by importers. Vietnam, which recorded seafood output of 3.43 million tones in 2005, targets seafood production of more than 18.7 million tonnes between 2006 and 2010, up from 14.3 million tonnes in the 2001-2005 period.

 

Vietnam earned nearly US$1.52 billion from exporting wooden products, mainly to the EU, the United States, Japan and Taiwan, in 2005, up 33.2 per cent over 2004. To facilitate woodwork production and export, the country is diversifying material sources and export markets. Now, many Vietnamese woodwork items made from materials imported from the United States and South Africa are available in both the traditional markets and new ones, including South Africa, Kuwait, Chile and Peru. Vietnam, home to a wood reserve of 600 million cubic metres, can exploit some three million cubic metres of wood every year. Now, it houses some 1,500 wood processing enterprises, mainly in Ho Chi Minh, Binh Duong and Dong Nai and several central coastal localities.

 

Recently, an official from the Wood Processing and Handicraft Association in Ho Chi Minh City warned that Vietnam cannot rule out the possibility of facing an anti-dumping lawsuit against woodwork shipped to the United States. Regarding the US market, local woodwork export turnovers as well as its export growth rates are rising considerably, which may be one of reasons for the United States to place anti-dumping tariffs on the products. Several woodwork producers in the United States, China and some European countries have recently shifted their production to Vietnam to cut production costs and enjoy lower tariffs, which is pushing up export revenues of Vietnamese wood products, the official stated.

In 1005, Vietnam reaped US$1.44 billion from exporting electronics goods, including computers, mainly to Japan and Southeast Asian countries, up 34.1 per cent. Vietnam is intensifying trade promotion, mainly by organising and attending international trade fairs and exhibitions, carrying out market surveys in China, Japan, France and South Korea, and promoting electronics international cooperation. The country is seeking closer cooperation with Japan and China on training electronics manpower, according to the Vietnam Electronic Industries Association.

 

Vietnam’s rice export is estimated to soar 47.3 per cent to roughly US$1.4 billion in 2005, according to the General Statistics Office. It supplied 5.2 million tonnes of the commodity to the world market, mainly to the Asia-Pacific region, Africa and the Middle East. Vietnam turned out 35.79 million tonnes of paddy rice from nearly 7.33 million hectares in 2005, down 1 per cent and 1.6 per cent.

 

Vietnam plans to record paddy rice output of 38-39 million tonnes and export 4-4.2 million tonnes of rice in 2006, according to the Ministry of Agriculture and Rural Development. The Trade Information Center under the Trade Ministry forecast that prices of rice in Asia will remain high in the year, mainly because rice outputs of China and India will drop, while their populations will grow. Rice outputs in India's key rice-growing areas are on the decrease for farmers have turned to growing plants and trees with higher value.
Dong Phong