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Seeking new opportunities for export in 2009
Cancelled orders, narrowed markets, export prices sharply falling, and missed export opportunities, the big problems of 2008, will still challenge exporting in 2009.
Export opportunities should not be missed
At least two big export opportunities were missed in 2008, which could have brought hundreds of millions of dollars if they had been taken full advantage of.
The first opportunity came when the world’s rice export price skyrocketed which allowed to sell rice at US $1,100-$1,200/tonne. However, Vietnamese enterprises were ordered to stop exporting rice at the time when the price was high. Vietnam later resumed the rice exports, but with the price down by nearly US $500/tonne, enterprises lost US $200 million from export deals.
The second opportunity came when the ingot steel price soared to the record high at US $1,150/tonne. The high price prompted Vietnamese enterprises to make massive exports of ingot steel to South Korea, Malaysia and Thailand. However, the Ministry of Industry and Trade then asked the Government to take drastic measures to stop ingot steel exports.
The ingot steel price has later dropped to US $650/tonne, just 50% of the highest peak price, while domestic enterprises have become miserable with big stocks.
The opportunities in 2008 will not repeat. How will Vietnamese enterprises look for new opportunities for 2009?
Former Minister of Trade Truong Dinh Tuyen believes that export companies need to be supported in 2009, and that it is necessary to set up a fund to support the companies, especially small and medium ones.
Meanwhile, Dr. Cao Sy Kiem, the former Governor of the State Bank of Vietnam, now Chairman of the Association for Small and Medium Enterprises, noted that export companies should not miss the home market. “Instead of focusing on high-grade products for export, enterprises should also think of making the products that meet the demand of popular people of the country,” Kiem said.
Export order decreases unavoidable
The number of orders from foreign partners began falling sharply in late 2008 with the orders down by 20-30% for garment companies, and 30% for seafood exporters
Thousands aquaculture households in the Cuu Long River Delta felt miserable when the basa price dropped dramatically, while oversize fish could not be sold. Meanwhile, farmers in the central highlands suffered from coffee price decreases. Eleven million labourers in 2,000 trade villages nationwide have been pushed into unemployment as export orders have gotten stuck.
Meanwhile, the Ministry of Industry and Trade (MOIT) has warned that exporters may still face big problems from exchange rate fluctuations, anti-dumping lawsuits, and technical barriers to be installed in many countries. In December 2008, the central bank raised the interbank exchange rate by 3% to VND 16,989/US $1.00, while the forex trading band remains unchanged at +/-3%.
In Q4 2008, the prices of export items decreased by 25-30% in comparison with the beginning of the year.
Developing new export products, seeking new export markets and raising competitiveness of export items are the things MOIT has urged businesses to do.
Tien phong
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