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The West tightened spending, and Vietnam's exports to the US dropped sharply

According to data from the Ministry of Industry and Trade, Vietnam's exports of goods decreased due to the general difficulties of the world market.

The Ministry of Industry and Trade is promoting negotiations and signing new trade agreements, commitments and links to diversify markets, products, and supply chains and increase exports of Vietnamese goods.

Import and export started showing signs of improvement.

The Ministry of Industry and Trade has just released a statistical report on industrial production and trade in the first 7 months of 2023.

According to the Ministry of Industry and Trade, export activities have been strongly implemented with active and synchronous measures to remove difficulties to support domestic production, trade promotion, and expand domestic and export markets. Imports in July showed positive signs.

Specifically, goods' total import and export turnover was estimated at 57.21 billion USD, up 2.5% over the previous month.

However, in the first 7 months of 2023, due to the general difficulties of the world market since the beginning of the year, the total import and export turnover of goods was estimated at 374.23 billion USD, down 13.9% over the same period last year. 

Exports decreased by 10.6%; imports decreased by 17.1%. The trade balance in goods in the first seven months of 2023 is estimated to have a trade surplus of 15.23 billion USD.

Mentioning specific numbers, the Ministry of Industry and Trade said that in terms of commodity exports, in July, commodity export activities continued to have positive signals when increasing by 0.8% compared to the previous month, estimated at 29 .68 billion USD.

July is also the month with the second-highest export turnover since November 2022 (only lower than the export turnover of March 2023, reaching 29.71 billion USD).

In which the domestic economic sector reached 7.76 billion USD, down 1.8%; the foreign-invested sector (including crude oil) reached $21.92 billion, up 1.7%.

Compared to the same period last year, the export turnover of goods in July decreased by 3.5%, of which the domestic economic sector decreased by 4.2%, and the foreign investment sector (including crude oil) decreased. 3.2%.

According to the Ministry of Industry and Trade, the main driver for the prosperity of commodity exports in July came from the group of processed industrial products with a turnover of 1.1% compared to the previous month, estimated at USD 25.12 billion, accounting for 84.65% of the total export turnover of the country.

The export of some main industrial products tends to increase, such as computers, electronic products and components; textile, footwear; wood and wood products…

For example, the Ministry of Industry and Trade said that in July 2023, the export of wood and wood products reached nearly 1.1 billion USD, bringing the 7-month turnover to 7.1 billion USD.

Besides, the export turnover of fuel and minerals in July 2023 was estimated at 369 million USD, up 8.7% over the previous month.

Export turnover of agricultural and aquatic products in July 2023 slowed down compared to the previous month (down slightly by 0.9%) but increased by 13.5% over the same period last year.

In general, for the first seven months of 2023, the export turnover of goods was estimated at 194.73 billion USD, down 10.6% over the same period last year. The domestic economic sector reached 51.5 billion USD, down 10.2%, accounting for 26.4% of total export turnover; the FDI sector (including crude oil) reached 143.23 billion USD, down 10.8%, accounting for 73.6%.

In the first 7 months of 2023, Vietnam has 30 products with an export turnover of over 1 billion USD, accounting for 91.6% of total export turnover (5 export products with over 10 billion USD, accounting for 57.6%).

Super strong export

In the opposite direction, the decrease in world demand for goods also affects the import turnover of raw materials for the production of export orders of Vietnam, according to the Ministry of Industry and Trade.

However, thanks to the positive signals in industrial production and exports in July, the import turnover of goods in July 2023 was estimated at 27.53 billion USD, up 4.4% over the previous month.

However, due to the decline since the beginning of the year, in the first 7 months of 2023, the import turnover of goods is estimated at 179.5 billion USD, down 17.1% over the same period last year, of which the economic sector in the country reached 64.1 billion USD, down 16.1%; FDI sector reached 115.4 billion USD, down 17.7%.

In the first 7 months of 2023, there are 35 imported items worth over 1 billion USD, accounting for 88.8% of the total import turnover (2 imported items with over 10 billion USD, accounting for 37.9%).

Because imports fell more sharply than exports, Vietnam's trade balance in July continued to have a trade surplus of about 2.15 billion USD, bringing the total trade surplus in 7 months of 2023 to 15.23 billion USD, more than 11 times higher than the trade surplus of the same period last year (a trade surplus of 1.34 billion USD).

The domestic economic sector has a trade deficit of 12.58 billion USD; the FDI sector (including crude oil) has a trade surplus of 27.81 billion USD.

Also read: Rice export: Big chance and risk prognosis » Vietnam News - Latest Updates and World Insights | Vietreader.com

Wood industry waiting to explode.

Although the export turnover of wood has not been able to increase sharply, the turnover of July 2023 is almost equal to the turnover of July 2022, showing a signal that the export of wood and wood products has gradually recovered.

Mr. Trinh Duc Kien - Deputy Director of Ke Go Co., Ltd., shared that this is not the first time that wood exporters have encountered difficulties because they have faced them in the past.

Mr. Kien expressed that businesses understand that there will be certain cycles, and after each difficult period will be a new development cycle. How long the difficulty will last cannot be predicted, but at some point, it will have to pass, and businesses must prepare and maintain "health" until that time. Surely then, consumer demand will increase.

Mr. Trinh Duc Kien also said this is a good time to evaluate his capacity to automate many stages.

Ms. Dao Thi Thanh Thuy, CEO of Thien Phat Construction, Trading and Production Company, told Vietnam Plus/VNA that normally, every year, until April 30 and May 1, you have to schedule a holiday to take a holiday. In the first half of this year, even normal days are alternated due to decreased orders.

Vietnam's partners tighten spending.

The Ministry of Industry and Trade data shows that Vietnam's exports to key markets declined in the past 7 months. Typically, the US market decreased by 21.8% over the same period last year. In addition, the EU market decreased by 9.9%; ASEAN decreased by 9.6%; Korea down 8.8%; Japan fell by 3.5%.

The Ministry of Industry and Trade explained why Vietnam's imports, exports, and orders fell: "The cause of the decline in import and export in the past 7 months is because major economies are Vietnam's export partners such as the United States and the United States. The EU reduced spending on conventional and luxury products in the United States, decreasing order volume.

A Vietnam Leather, Footwear and Handbag Association representative also said that many businesses in the industry still face great difficulties and challenges.

For traditional customers, the decline is about 30-40%, and for some businesses, especially small and medium enterprises, small orders have almost no positive signal.

Assessing the general situation, according to Deputy Minister of Industry and Trade Do Thang Hai, in the past period, the world and regional situation continued to have very complicated and unpredictable developments, affecting and deeply affecting the stability of the country that emerged in the Russo-Ukrainian conflict. Meanwhile, the long-lasting consequences of the COVID-19 pandemic led to disruptions to supply chains, especially the decrease in purchasing power in some key markets, which significantly affected production in the country in general and industrial production in particular because these are the import markets for many key industrial products such as garment, footwear, wooden furniture, etc. of Vietnam.

Along with that, the price of export goods tends to decrease in the first 7 months of 2023, in which the prices of many agricultural products such as cashew kernels, tea, pepper, rubber... all decreased compared to the same period last year (such as pepper down 28.4%; rubber down 20.6%).

The ministry also said that export prices of some processed industrial products of Vietnam also fell sharply to double digits such as crude oil fell by 25.2%; petrol and oil of all kinds decreased by 16.9%; Fertilizers of all kinds decreased by 36.2%; Plastic raw materials decreased by 25.2%; Textile fibers and yarns of all kinds decreased by 23%; Iron and steel of all kinds down 24.8%...

Meanwhile, Vietnamese enterprises are still facing many difficulties due to a decrease in foreign orders, low purchasing power in the domestic market, high input costs, and not easy access to credit.

Increase exports of goods.

In the coming time, the Ministry of Industry and Trade is making efforts to accelerate negotiations and sign new agreements, commitments and trade links, including completing the implementation of the FTA with Israel and signing the Agreements, FTAs, and trade agreements with other partners still have many potentials (UAE, MERCOSUR...) to diversify markets, products and supply chains.

The Ministry of Industry and Trade continues to support businesses to take advantage of commitments in FTAs, especially CPTPP, EVFTA, and UKVFTA agreements, to boost exports through propaganda on rules of origin and licensing. Certificate of origin, opportunities and ways to take advantage of opportunities from the Agreements.

Also read: FTAs provide impetus for exports » Vietnam News - Latest Updates and World Insights | Vietreader.com

The ministry also said it is coordinating with the Ministry of Agriculture and Rural Development to negotiate with China to open more export markets for other Vietnamese fruit and vegetable products such as green-skinned pomelo, fresh coconut, avocado, pineapple, milkweed, lemon, cantaloupe...

Improve efficiency and regulate the speed of customs clearance of import and export goods at the border gate area between Vietnam and China, especially for seasonal agricultural and aquatic products; fast, strong shift to official export.

In addition, increased early warning of trade remedy lawsuits. The Ministry of Industry and Trade strives to step up and guide businesses on how to respond to lawsuits and, at the same time, promptly inform businesses and associations about new information, demands and regulations of the market.

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