09:44 | 11/12/2017 Trade
(VEN) - Significant contributions to the trade surplus achieved in recent months stemmed from the success of key export sectors in overcoming difficulties.
Phones, rice and fish
Telephones are among key Vietnamese exports, accounting for 20 percent of the country’s total export value. However, due to the Samsung Galaxy Note 7 explosion incident in late 2016, the export value of these products decreased continuously until the end of the first quarter of this year. In the first three months of 2017, telephone export value was down US$888 million compared with the same period last year.
After the incident, Samsung Vietnam launched a variety of new products to make up for the shortcomings of the Galaxy Note 7. The company has also expanded production. Samsung Display’s expansion project has launched its products. The resumed growth of Samsung Vietnam’s export value has contributed significantly to the increased export value of telephones and components. Data from the Ministry of Industry and Trade (MoIT) show that export value of products in this group reached US$36.5 billion in the first 10 months of this year, up 28.8 percent compared with the same period in 2016 and accounting for 21 percent of Vietnam’s total export value.
Telephones and components currently top the list of five product groups with annual export value exceeding US$10 billion, including textiles and garments; computers, electronic appliances and components; footwear; machinery, equipment and spare parts. Telephones and components also top the list of export value, ranking far ahead of traditional export products, such as crude oil, cement and coal. In October, Vietnam exported about US$5 billion worth of products in this group, up 76.4 percent compared with October 2016. This is the highest monthly export value of telephones and components so far.
Rice exporters have also successfully overcome difficulties. In the first 10 months of this year, they exported five million tonnes worth US$2.23 billion, up 21.6 percent in volume and 20.3 percent in value compared with the same period in 2016. This was a significant result in the context of numerous difficulties facing rice exports. However, since May 2017, importer demands from major markets, such as the Philippines, Bangladesh and China, have increased. The Philippines, for example, invited tender bids for 250,000 tonnes of rice in July and Vietnamese businesses won a contract to supply 175,000 tonnes. The memorandum of understanding on trade in rice between Vietnam and Bangladesh was extended in late May and will be effective for five years until 2022. Satisfactory export results have encouraged the Vietnam Food Association to raise the 2017 export volume target from 5.2 million tonnes to 5.6 million tonnes.
Tra fish exports have grown strongly despite difficulties. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), in the early months of this year, tra fish exports faced an anti-dumping lawsuit from the US and a smear campaign by the EU. Despite declines in exports to these two major markets, the export value of tra fish in the first three quarters grew 5.8 percent compared with the same period last year and reached US$1.3 billion. This included US$288.1 million worth of exports to China and Hong Kong (China), up 42.7 percent compared with the same period last year. Exports to Brazil, Mexico, Colombia and Saudi Arabia also made up to some extent for declines in exports to the US and the EU. VASEP forecast a six-percent growth in tra fish export value this year compared with 2016.
The export of many other products, such as textiles and garments, leather and footwear, seafood, fruit and vegetables, remains on the rise despite non-tariff barriers from importing countries.
Rosy year-end forecasts
The MoIT forecast further export growth for major products. For example, exports of computers, electronic appliances and components are predicted to continue growing due to the fact that Samsung Display increased its investment capital earlier this year and has created products for export.
Fruit and vegetables top the list of agricultural and aquatic products in terms of export growth. The export of fruit and vegetables is expected to further grow towards year’s end. In the first 10 months of this year, fruit and vegetables moved ahead of coffee to stand among the top three agricultural and aquatic products in terms of export value. The US$3 billion export value target set for 2017 is believed to be achievable and may even be exceeded.
The MoIT also predicted further growth of rubber exports towards year’s end due to the increasing demand from China - the largest importer of Vietnamese rubber products.