Vietnam stays on track to realize the export growth target of US$368 billion for this year amid severe impacts from the Russia-Ukraine conflict on global supply chains, according to the Ministry of Industry and Trade (MoIT).
|Processing catfish for exports. Photo: Giang Lam|
The ministry’s data as of September 15 revealed the combined export turnover stood at $265.34 billion, up 17.82% year-on-year, while imports rose by 13.15% to $260.7 billion, resulting in a trade surplus of nearly $4.64 billion.
Deputy Director of the MoIT’s Import-Export Department Tran Thanh Hai noted the Regional Comprehensive Economic Partnership (RCEP) that took effect in early 2022 is vital for Vietnam to diversify export markets.
Hai added the deal with the participation of China would help Vietnam source cheaper input materials, subsequently leading to a more significant advantage in penetrating major markets in Europe and America.
Other next-generation free trade agreements (FTAs) that Vietnam is a part of, including the EVFTA and CPTPP, have gone into the next phase of higher tariff cuts. He said this, along with the subdued Covid-19 situation globally, has continued to boost exports.
A highlight in Vietnam’s trade has been rice exports, with many products having gained branding awareness and penetrated high demands markets such as the US or Europe.
In the latest move, Japan, for the first time, has imported 100 tons of ST25 rice to sell at supermarkets and convenience stores.
Due to geopolitical tensions, the disrupted supply of grains and wheat has also prompted higher import demands for rice, including those from Vietnam.
Vice Minister of Agricultural and Rural Development Phung Duc Tien said a sharp rise in export prices for rice would help Vietnam soon realize the export volume target of 6.3 million tons for $3.3 billion in 2022.
Exports of wood and wooden products have also yielded positive results, especially wood pellets, with price increases of 150-200%, as several Western and Asian countries are looking for alternative sources of natural gas.
Vietnam’s Government agencies are prioritizing measures to boost exports during the remainder of the year.
In the agricultural sector, the export turnover target would be $55 billion in 2022. Minister of Agricultural and Rural Development Le Minh Hoan called for a focus on products with high export potentials and offset impacts from those staying below expectations.
The garment industry has also been working on solutions to address risks of disruption to the global supply chains, logistics congestion, or a shortage of empty containers.
Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS), noted local textile companies had been actively sourcing input materials domestically to avoid dependence on foreign markets and looking for new orders to maintain operation and stability.
The MoIT said as part of efforts to realize the trade turnover target, it would closely monitor any changes in trade policies from Vietnam’s major markets and consult with the Government for timely response to negative impacts.
According to the Minister of Industry and Trade Nguyen Hong Dien, priorities also include the organization of trade promotion events and simplification of administrative formalities, especially customs procedures, via the national one-stop-shop portal, or the ASEAN single window, to create favorable conditions for businesses and associations taking part in import-export activities.
“Assuming Vietnam’s trade performance can keep with the same pace as in the past eight months, the export-import turnover for the year could reach over $740 billion, surpassing the trade growth target of 7-8% for this year. This, in return, could improve the balance of payment, build up foreign reserves and contribute to the realization of socio-economic development targets, Dien said.
Hanoi’s exports have been positive so far, with the turnover in a nine-month period at US$13.1 billion, up 19.6% year on year, in which the domestic sector contributed $7.1 billion, up 18.4%, and the foreign-invested sector at $6 billion, up 21.1%.