Modest Export Targets

 

With stable growth of 13-14 percent, exports achieved the target relatively easily. Structurally, agricultural, forest and aquatic exports increased 14.5 percent, and manufactured products rose 14.8 percent over 2013. Other goods grew 21.2 percent and accounted for 5.8 percent of the country’s total export turnover.

 

Price drops caused the export earnings of agricultural, forest and aquatic products to fall by US$320 million and the export revenue of fuel to decrease by US$286.5 million.

 

Coffee shipment unexpectedly soared 35.4 percent. Other agricultural commodities also gained volume like black pepper by 18.3 percent, cassava by 3.4 percent, and rubber by 1.7 percent. To ensure energy security, Vietnam restricted resource export, resulting in huge drops in materials. Export turnover of coal, petroleum, ores and minerals plunged 40 percent, 22.7 percent and 60.2 percent, respectively. Due to changes in export price and volumes, the export value of agricultural, forest and aquatic products and minerals increased by US$2.4 billion over a year earlier.

 

Exports to the US, the EU and Japan, the key markets of Vietnam, climbed 21.3 percent, 11.4 percent and 9.9 percent, respectively.

 

In spite of weak world demand, low costs and competitive prices have really made Vietnam a bright spot in the Asian export picture in recent years. During the global financial crisis, Vietnam’s exports expanded at an impressive two-digit growth rate. Export turnover relied less on raw materials. Rapid export growth and slow import growth gave Vietnam a trade surplus in three consecutive years.

 

Vietnam has economic and commercial relations with 200 countries and territories in the world. The country is a top exporter of products like rice, coffee, seafood and apparel. Many more exports have grown strongly in the past years, including telephones, computers, electronic devices, and plastics.

 

In the latest three months, Vietnam concluded FTA negotiations with three major economic partners, namely the European Union (EU), the Customs Union and South Korea. These economies are supplementary, not competitive, to Vietnam. Minister of Industry and Trade Vu Huy Hoang said Vietnam can strongly expand exports to the EU (with over 500 million people), the Customs Union (170 million people) and South Korea (more than 40 million people).

 

In 2015, the National Assembly has set export - import turnover growth of 10 percent and trade deficit to export at 5 percent. However, some traditional exports of Vietnam such as coffee and rice are forecast to confront obstacles. Mr Luong Van Tu, Chairman of the Vietnam Cocoa and Coffee Association, said climate change and prolonged drought caused the country’s coffee output to fall by 20 percent in the 2014-2015 season from the previous season. Accordingly, Vietnam expected to ship 1.4 million tonnes worth over US$3 billion in the current harvest, down 200,000 tonnes from the 2013-2014 harvest season. Abundant supply and stiff competition from Thailand are also major obstacles for Vietnam’s rice export. The Government of Thailand is actively negotiating rice deals with China, the Philippines and Indonesia to reduce its inventories.

 

To strengthen exports in 2015, the Ministry of Industry and Trade has introduced export support measures like exporting more manufactured goods. The ministry does not encourage the export of low-value products or environment-polluting items.

 

The ministry will focus on removing difficulties, support production and create more resources for export, seek and expand export markets, accelerate trade promotions in 2015, with focus on developing countries, potential and emerging markets.

 

With some FTAs coming into effect, the industry and trade sector will help businesses utilise favourable advantages and conditions to access markets to boost exports to countries with FTAs with Vietnam.