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Export companies short of capital
According to the latest report from the Ministry of Industry and Trade, there are positive signs that exports will continue to increase sharply. But many enterprises are worried about the possible shortage of capital as they find it difficult to access banks loans.
The report shows that the export turnover of all goods has reached more than 15 percent compared to the same period last year, including crude oil (nearly US$6.9 billion), garment and textiles (US$5.3 billion), footwear (US$2.8 billion), seafood (US$2.5 billion), especially rice (more than US$2 billion). Import turnover has also increased as many materials for production came from foreign countries including machinery and spare parts (nearly US$8.7 billion), oil and petrol (US$8.25 billion), steel and iron (US$5.15 billion), materials for garment, textiles and footwear (nearly US$5 billion). The MoIT forecasts that Vietnam’s export turnover will reach US$68 billion this year while import turnover will be roughly US$88 billion. However, the export turnover of cashew nuts, bamboos and rattan has decreased since the beginning of the year.
According to the Vietnam Cashew Association, some coffee exporting enterprises have run short of capital. Pham Ngoc My, Director of MED Coffee Vietnam Factory in the central highlands complains that many enterprises have encountered financial difficulties as they cannot borrow loans from banks. Therefore, many of them have suffered great losses.
In addition, small enterprises, especially in rural areas have also fared no better as they had to export their products through brokers, leading to a decrease in profits. Some partners warn that they will sue enterprises which have not delivered goods in time. The situation is attributed to the fact that these enterprises have signed export contracts without having a steady source of raw material supplies.
The country needs to accelerate the export of some products to fulfill this year’s targets. Firstly, crude oil exports can only meet half of this year’s plan for 15 million tonnes and wood products also face the same problem. This is due to the fact that two big customers, Japan and the EU have reduced their imports. If the export of wooden products continues at this rate, it will only earn US$2.8 billion, US$200 million lower than the set target. The export price of Vietnamese rice is rising but it is much lower than that of Thai rice. For example, Vietnamese broken rice is US$140 per tonne lower than Thai rice. Seafood exports will remain stable in the next two months but sooner or later businesses will face difficulties in purchasing tra and basa catfish because breeders have suffered big losses.
To promote exports, Vietnam will have import materials. This means an increase in exports will lead to a surge in imports. For instance, seafood, wood, garments and footwear products are key export items but they all need strong inputs. Other important products such as fertiliser, steel ingots, machinery, petrol, and electronics are also imported from other countries. Imports of machinery and equipment are also on the rise. Despite a slight drop in global oil prices. Vietnam will have to import around US$13 billion of petrol apart from US$7 billion of steel and US$1.9 billion of fertiliser this year. In particularly, imports of electronics such as computers, mobile phones and TV sets will also go up by the end of this year.
It will be a good time for exports from now to the end of this year. Rubber currently sells for a good price and its export value is expected to reach US$1.7 billion, higher than this year’s plan. By the end of October, the country will have a bumper coffee crop and the estimated export volume will be around 1 million tonnes. Many other imported products such as automobiles and spare parts will fall. In addition, the prices of rice and fertiliser on the global market will likely go down. Judging from such positive signs, Vietnam will be able to keep inflation in check.
VOV
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