Vietnam’s export turnover, after a decline in April, has regained its growth thanks to strongly boosted trade promotion activities. However, export activities are forecast to continue to encounter many difficulties as total export turnover in the first six months of this year fell by 12.1% over the same period last year amid overall slow growth in global trade.
The export growth target of about 6% for 2023 is obviously very challenging, requiring great efforts from management agencies as well as the business community.
According to the General Statistics Office, the total import-export turnover of Vietnam in the first six months of the year was estimated at 316.7 billion USD, including 164.45 billion USD worth of export revenue, down 12.1% and 152.20 billion USD of import revenue, down 18.2% over the same period in 2022.
There remain bright colours
Goods handled at Hai Phong Port.
Director of Trade and Services Statistics Department under the General Statistics Office Nguyen Viet Phong said that although export turnover declined sharply in the first half of this year, export growth in the same period in 2021 and 2022 were high. If compared in terms of scale, exports in the first six months of 2023 rose by 3.7% over the same period in 2021.
According to the report of Tradingeconomics updated in April, 13 out of the 16 major economies in the world posted declines in exports, accounting for 81.3%. Therefore, the results of Vietnam’s exports in the first six months of the year are considered a bright spot in the context of a plunge in world aggregate demand. At the same time, Vietnam recorded a trade surplus of 12.3 billion USD in the first half of this year, the highest in the past 10 years, making great contribution to the economic growth.
Forestry products is the brightest spot in the six-month export picture with turnover of 12.79 billion USD, up 12% over the same period last year. In which, seven groups of products posted export values of more than 1 billion USD each, including: coffee, rubber, rice, fruit and vegetable, cashew nuts, shrimp and wood products. In particular, fruit and vegetables saw an export value of 2.7 billion USD, up 64.2% over the corresponding period last year, making it the largest agricultural export group.
Deputy Minister of Agriculture and Rural Development Phung Duc Tien said that if this pace is maintained in the next six months, this year’s fruit and vegetable exports could reach more than 5 billion USD and maybe 10 billion USD in the future. Rice and cashew nuts also saw increases in both export volume and value.
The advances of vegetable and fruit products, coffee, rice and cashew nuts have been the driver for the 6.1% increase in export of agricultural and forestry products in the past six months.
The US continues to be Vietnam’s largest export market with an estimated turnover of 44.2 billion USD while China is Vietnam’s largest import market with estimated turnover of 50.1 billion USD.
Notably, some important export markets of Vietnam have shown positive signs of recovery to nearly the same level as last year such as India (reaching 95.7% of the same period last year), Japan (96.7%), and China (97.8%). Some new markets recorded high growth in export turnover such as Argentina (up 35%), Saudi Arabia (up 67%), and Algeria (up 91%).
Vietnam also enjoyed 1.2 billion USD in trade surplus with Japan while saw decreases in its trade deficit with China, the Republic of Korea and ASEAN.
Ready solutions to respond to challenges
Besides the positive signs from several agricultural products, the agricultural sector in general still faces many difficulties in terms of export markets. The export value of forest products in the first half of 2023 was only about 6.42 billion USD, down 28% over the same period last year due to a shrinking in the export of wood and wood products to five major markets, namely the US, the EU, China, Japan, and the Republic of Korea.
Commenting on the export prospect in the remaining six months of the year, Director of the National Agro-Forestry-Fisheries Quality Assurance Department (Ministry of Agriculture and Rural Development) Nguyen Nhu Tiep said that the market has not shown any clear signs of recovery because of the high inventories of both importers and domestic enterprises in addition to low demand.
Meanwhile, export markets in general and the EU in particular have also placed increasingly strict requirements on imports. According to the Ministry of Industry and Trade, some key export products of Vietnam such as seafood, wood and wood products, iron, steel and plastic products are facing pressures on trade remedy investigation, creating difficulties for exporters.
In addition, developed countries are also paying much attention to consumer safety, sustainable development, and climate change, thereby setting up new standards and regulations related to supply chains, raw materials, labour and environment for imported products. In addition, there are risks of economic recession, inflation and high interest rates in the markets of Vietnam’s major trading partners such as the US and the EU.
Amid unprecedented risks and challenges that export activities are facing, we need to prepare response solutions to achieve the export growth target of about 6%.
According to Nguyen Viet Phong, it is necessary to closely monitor developments of the world economy, especially the policies of major economies such as the US, China, the EU, and Japan to promptly give warnings to the business community for timely responses.
Notably, China, Vietnam’s largest two-way trade market, has fully reopened its doors, also a positive factor for our country’s commodity exports, especially for agro-forestry and fishery groups.
Vietnam also needs to continue to make good use of trade agreements, especially already signed free trade agreements (FTAs), and make more efforts in trade promotion activities as well as boosting market diversification to reduce its dependence on traditional markets.
The Ministry of Industry and Trade said that the key task in the last six months of the year is to focus on supporting businesses to take advantage of commitments in FTAs, especially new generation FTAs such as the CPTPP, EVFTA and UKVFTA to promote export.
In addition, the ministry will also step up the negotiation and signing of new trade agreements and commitments to diversify markets, products and supply chains. Export markets for Vietnamese goods will be expanded through trade promotion and e-commerce activities. Another key solution is to set up linkages to help domestic enterprises participate in the supply chain of FDI enterprises, especially large global enterprises as well as the overseas distribution system, thereby opening up opportunities to boost production and exports.