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Vietnam bucks the trend by boosting exports to US
Vietnam was the only one of the top 30 exporters to the US to increase shipments to the world’s largest economy during the first four months of the year, benefiting from clothing and footwear production.
American-bound shipments rose 3 percent to US$3.75 billion, according to the US International Trade Commission, while China’s exports fell 12 percent, Japan’s 43 percent, South Korea’s 18 percent and shipments from Singapore slid 23 percent.
Vietnam is benefiting from a “rebalancing” in exports amid the global economic recession due to lower labor costs and because many companies are reluctant to become too dependent on Chinese production, the American Chamber of Commerce in Ho Chi Minh City said in a monthly note sent out this week.
“Our analysts who speak to companies that operate in both China and Vietnam say the operating environment in China has become more challenging,” said Gary Chia, president of Yuanta Investment Consulting in Taipei, a unit of Taiwan’s Yuanta Financial Holding Co.
“In particular, products made in Vietnam like garments and shoes would face competition from the Chinese Pearl River and Yangtze River deltas, and I know of businesses in both those deltas that are shutting down their production,” Chia said in e-mailed comments.
Vietnamese apparel shipments to the US rose 4 percent through April to $1.55 billion, while footwear shipments grew 23 percent to $460 million.
Higher-quality products
“A lot of the very cheap stuff has moved to Bangladesh or Sri Lanka, but Vietnam is now making better higher-quality products,” said John Marron, managing director of Midas Clothing Ltd. in HCMC, giving jackets and dresses as examples.
“For the US market, the volumes are smaller but the value is higher,” he said.
Taiwan’s exports to the US fell 26 percent in the first four months, according to the US trade commission. India’s slid 23 percent, Malaysia’s 38 percent, Thailand’s 26 percent and Indonesian exports fell 14 percent.
Vietnam’s furniture exports to the US fell 9 percent to $407 million, while Chinese shipments declined 17 percent.
Some production has shifted from China to Vietnam, said Chris Freund, managing director of Mekong Capital, which holds shares in Vietnamese furniture manufacturer AA Corp.
“The furniture market is so fragmented, with so many manufacturers, that a company that’s proactive about management and executing their business plan can still grow,” HCMC-based Freund said.
“In spite of the global situation, AA has been able to increase their order book to the US,” he said.
Crude oil, coffee
The value of American-bound oil shipments declined 18 percent through April to $167 million, compared with a 56 percent tumble in the average price of global crude oil over the period.
Vietnam and India were the only Asian-Pacific crude oil producers whose proven crude reserves increased last year, BP Plc said this month.
Coffee exports to the US slipped 25 percent to $97 million. Vietnamese coffee production may decline by 7 percent in the 2009/2010 crop year, the US Foreign Agricultural Service said this month in a note posted on its website.
“Torrential rains destroyed coffee blossoms in the largest growing areas, Dak Lak and Lam Dong provinces,” the US service said.
“Growers are also complaining of poor soil quality and report that coffee trees are dying in some areas of Lam Dong.”
thanhnien, Bloomberg
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