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High supply costs hurt exports
Enterprises that produce goods for export are grappling with the rising prices of raw materials as we enter Q4, with many firms braced for higher production costs.
Rising materials and input prices have hit enterprises in the seafood, garments and wooden products sectors. Firms in these sectors are also trying to overcome a lack of capital for production and electricity.
The price of wooden materials increased by VND2 million (US$102) per cubic metre to VND5 million against the same period of last year, said director of Kien Phuc Export Wooden Products Enterprise in Dong Nai Province.
The company must stock up on materials fast because the price is likely to continue to increase, a representative of Kien Phuc said.
The price of cotton on the world market has increased by 45 per cent against the same period last year, as low supply affects production costs of domestic textile and garment producers as we approach the end of the year, said Le Van Dao, deputy chairman and general secretary of the Viet Nam Textile and Garment Association.
Domestic cotton supply met just 5 per cent of the demand of the textile and garment industry this year, and the country is expected to import 370,000 tonnes of cotton for production by the end of the 2010, 70,000 tonnes more than in 2009.
Garment and textile producers are also likely to have to invest in electricity generators to counter a lack of electricity for production.
Meanwhile, a shortage of seafood will also continue until the end of 2010, especially catfish and shrimp, due to over demand, said the Viet Nam Association of Seafood Exporters and Producers.
October is a busy month for seafood processors as many try to fulfil export contracts. Demand for catfish in particular has pushed the price of processed products up to $4 per kilo.
Despite these difficulties, the wood processing, seafood and textile and garment industries still expect to hit their export targets of $3 billion, $10.5 billion and $4.8 billion respectively this year.
vietnamnews
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