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Vietnam revises down export target amidst global slump
The Ministry of Industry and Trade has lowered its exports estimate for this year by nearly 5 percent to US$61 billion due to low commodity prices and falling global demand.
It would be very difficult in the current situation to export $6 billion worth of goods per month for the rest of the year, Deputy Minister of Industry and Trade Nguyen Thanh Bien said.
He said prices of many export staples have dropped sharply this year as a result of falling demand. The price of rubber, for instance, dropped 46 percent over the past seven months while that of pepper and rice fell 34 percent and 29 percent respectively.
Bien was speaking at a meeting with exporters in Ho Chi Minh City on Monday.
The General Statistics Office estimated last week that July’s exports totaled $4.75 billion. Exports in the first seven months fell 13.4 percent year-on-year to $32.34 billion, the office said.
The earlier export target of $64 billion for 2009 can only be met if global crude oil prices rise above $70 a barrel in the next quarter, according to the Ministry of Industry and Trade.
Crude prices have gained about $10 over the past two weeks to above $68 per barrel Tuesday, spurred by a string of strong earnings by top US firms as well as data suggesting the economy is recovering, AFP reported. The US is the world’s leading energy user.
Crude exports are Vietnam’s biggest source of foreign exchange. In the seven months through July, Vietnam’s crude oil exports fell 44.8 percent from the same period last year to $3.7 billion, even after rising 17.7 percent in volume.
Truong Dinh Tuyen, former Minister of Trade, said at the meeting that although exports often surged in the final months of the year, it would be a difficult task for Vietnam to reach the original target of $64 billion.
He said the ministry needs to engage in more effective trade promotion.
Tran Quoc Manh, deputy chairman of the HCMC Handicraft and Wood Industries Association, said about six years ago local wood exporters could not see any positive prospects in the US, but a sustained promotion campaign has helped them become top suppliers to the market.
The government should help finance promotional events organized by the association, including fairs, exhibitions and fact-finding trips, he said.
Truong Dinh Hoe, Secretary General of the Vietnam Association of Seafood Exporters and Processors, said some countries like South Korea and the Netherlands would get out of the slump soon and local exporters need to prepare for the opportunity to boost shipments to these markets.
But if the government and industry associations do not pay attention to trade promotion, these chances may be seized first by exporters in other countries, he cautioned.
The government would spend VND172 billion ($9.6 million) this year, double that of last year, for promotion programs to boost trade in both domestic and foreign markets, Bien said.
He also said the ministry would propose that the government take measures to reduce production costs for local businesses to improve their competitiveness in foreign markets.
Export staples
Bien said although there was a decline in exports, shipment volumes of many staples like rice, coffee and pepper in the first seven months increased by up to 45 percent over the same period last year.
Shipments of rice may increase by 28 percent this year on a bumper crop in the country’s largest growing area, the government said.
It is “feasible” that rice exports may reach six million tons, according to a statement on the government’s website. The summer-autumn crop has been “a triumph in terms of production, growing area and disease prevention,” it said. The government in February forecast that Vietnam will ship five million tons this year, compared with 4.7 million tons in 2008.
Farmers in the 13 southern provinces of the Mekong Delta, the largest rice growing area, have started harvesting the summer-autumn crop, which will end in September, the statement said, citing the Ministry of Agriculture and Rural Development. Output may be 7.75 million tons of unmilled rice, lifting total production from the delta to 20.7 million tons for the year, it said.
Exports of pepper will also increase to as high as 110,000 metric tons this year, Nong Nghiep Vietnam (Vietnam Agriculture) newspaper reported, citing the Vietnam Pepper Association.
Vietnam, the world’s biggest pepper producer, shipped 90,000 tons of the spice last year, 8.2 percent higher than the previous year, according to the General Statistics Office in Hanoi. Exports totaled 83,000 tons from January to July, according to the office’s figures.
The seafood sector, on the other hand, is set to miss its export target this year because importers have cut back on purchasing or stopped buying completely.
“With great efforts, shipments of seafood may total between $4 billion and $4.2 billion this year,” compared with an earlier target of $4.5 billion, the Vietnam Association of Seafood Exporters and Processors said.
Although Vietnam started to export fish into Russia again in May, shipments over the past two months remained low at only 10 tons, the association said.
Vietnam shipped $2.2 billion of seafood in the seven months ended July, down 8.9 percent from a year earlier, the General Statistics Office said.
Minh Quang - Tran Tam
thanhnien, bloomberg
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