This was recently announced by the Department of Processing and Trade for Agro-Forestry-Fisheries Products under the Ministry of Agriculture and Rural Development (MARD).

The MARD had approved a plan to export handicraft products for the period 2010-2015, which set an export target of US$1.6 billion however, the sector fulfilled the target a year ahead of schedule, the Ministry reported.

Last year, Vietnam’s bamboo and rattan exports grossed US$530 million while the turnover for ceramic, weaving, wood sculpture and household products was US$480 million, US$270 million, and US$130 million, respectively.

Other ancillary products in the handicraft industry fetched an export turnover of some US$190 million.

The US, Europe and Japan have historically been the traditional markets for Vietnam’s handicrafts, making up a huge proportion of the sector’s total exports. However, handicraft exporters have shifted their focus to new markets within BRICS including Brazil, Russia, India, China and South Africa.

Vietnam Handicraft Exporters Association (Vietcraft) General Secretary Le Ba Ngoc said last year, an inflow of handicraft orders from Japan and China dramatically improved the market in Vietnam. The move was primarily attributable to policy changes in China that increased minimum wage for workers and in turn led to higher production costs.

Moreover, Chinese manufacturers started setting minimum order requirements making it more costly for consumers to purchase Chinese products. In addition to Vietnam’s price competitiveness the huge number of orders has also been attributed to increased trust consumers place in the quality of Vietnam’s handicrafts.

However, Vietnam’s handicraft exports are still far from matching potential, according to Vietcraft. At present, the world market consumes handicraft products estimated at US$100 billion each year while Vietnam has just 1.5% of market share.

Vietnam’s export volume of just US$1.6 billion has been much too low compared against the increasing number of craft villages of 2,790 and hundreds of labourers.

Vietcraft Vice President Do Van Khoi said due to lack of investment in production technologies and product design, several craft villages and businesses have opted to make low-cost products instead of higher added value items.