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Higher export prices, exchange rate fluctuations bring benefits to exporters
Vietnamese exporters were lucky in the first quarter of the year, because the price increases in the world market, the dong/dollar exchange rate adjustment and the higher demand in foreign countries, have all helped them obtain high export turnover. However, they have been warned that the achievements would not be sustainable if Vietnamese enterprises cannot change the structure of export items.
Earning money thanks to prices, exchange rate, markets
According to the Ministry of Industry and Trade (MOIT), in the first quarter of 2011, Vietnam’s export turnover increased by 33.7 percent in comparison with the same period of 2010, reaching 19 billion dollars.
The ministry has pointed out that the total export turnover increased sharply in the first quarter, thanks to the increasing demand for goods in the world which has led to increases of the prices of many kinds of fuel and farm produce - the main export items of Vietnam.
The prices of cashew nuts, for example, have increased by 36.8 percent, while the pepper price has increased by 59.5 percent, coal by 56.6 percent, and rubber price by 70 percent. In general, the higher prices and higher export volume have helped the export turnover increase by 4.85 billion dollars, of which 2.4 billions dollar came from the price increases.
The first quarter witnessed the sharp increases in the export turnover of many industrial products, especially processed products. The export turnover of the category of products reached 9.06 billions dollar, increasing by 22.8 percent and accounting for 47 percent in the total export turnover.
Deputy Minister of MOIT, Nguyen Thanh Bien, said that Vietnamese export products have been benefiting from the higher demand from foreign markets. The European market, one of the three leading export markets for Vietnam, had the import turnover from Vietnam increasing by 46.2 percent in comparison with the same period of the last year (2.5 billion dollars). Meanwhile, the export turnover to Asian markets increased by 38.8 percent, and African markets by 37 percent.
Especially, Japan, which has suffered heavily from the earthquake and tsunami catastrophes, still saw the growth rate of 17.5 percent thanks to the high demand for essential goods.
Le Xuan Nghia, Deputy Chair of the National Finance Supervision Council has pointed out that the devaluation of the dong by 9.3 percent in February 2011, has benefited exporters.
It was really a good thing that Vietnamese exports could go for good prices, and Vietnamese exporters benefited from higher demand in export markets. However, enterprises have been warned that high prices and high demands would only exist at some specific moments, while the conditions may be changed at any time. Once the favorable factors do not exist, Vietnamese enterprise exports may face difficulties.
Also according to MOIT, in order to boost exports, Vietnamese enterprises have to increase the imports of materials which have also been increasing in prices in the world market. The prices of materials serving local production and consumer goods, for example, have increased by 20 percent.
While garment export turnover increased by 28 percent, the prices of fibers and other kinds of materials have increased by 30-40 percent. Besides, the overly high lending interest rates and the increasing labor costs have caused worries to enterprises that the more they export, the bigger losses they would incur.
Changing export product structure is the key
Vietnam is striving to have the export turnover increase by 10 percent in 2011 in comparison with 2010. If so, Vietnam will have to have the export turnover of 79.4 billion dollars in the whole year 2011, i.e, it will have to export 60.2 billion dollars worth of products in the last nine months of the year and 6.7 billion dollars a month.
Meanwhile, experts have pointed out that the export volumes of some products, especially farm produced have reached their thresholds, i.e., the export volume may not increase further. Therefore, Vietnam will have to spend great efforts to obtain the goal.
Tran Dinh Thien, Head of the Economics Institute, said the thing that needs to be done now is to restructure the export items, and that Vietnam should focus on making high added value products instead of exporting raw products.
vietnamnet, TBKTSG
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