17:29 | 14/04/2015 Trade
(VEN) - Vietnamese export turnover to the Latin American market has recorded a strong growth rate in recent times. As a new market group, Latin America has become a huge potential market for Vietnamese goods.
Garments and textiles have accounted for a large share of export turnover to Latin America
According to the Ministry of Industry and Trade, in the first two months of this year, export turnover to Latin America and the Caribbean region reached US$601 million, an increase of 22.4 percent compared to the same period last year. Of this number, export turnover to Chile stood at US$78 million, an increase of 155.5 percent compared to a year ago. This figure was highly appreciated by the ministry, especially in the context of current economic difficulties.
Latin America has become a potentially lucrative market for Vietnamese goods in recent years. According to the Ministry of Industry and Trade’s America Market Department, total two-way trade turnover between Vietnam and Latin American countries reached US$9.5 billion in 2014, a year-on-year increase of 40.7 percent.
Trade relations between Vietnam and Latin American countries have been increasingly expanded. Vietnam’s export markets in the Latin American region have to date increased to 33 countries and territories. Vietnam’s key export markets in this region include Brazil, Mexico and Argentina.
Footwear, seafood, rice, garments and textiles, coffee, rubber, machinery, equipment and electronic components, engineering parts, iron and steel, furniture and ceramics are the main exports of Vietnam. Meanwhile, raw materials serving domestic production including garments and textiles, leather and footwear, iron and steel scrap, plastic materials, animal feed, soybean and cotton are the main imports.
In addition to 10 key markets, bilateral trade turnover between Vietnam and 23 other countries in the Latin American region is still on a small scale, accounting for just nine percent of total export turnover.
In addition to certain advantages, Vietnamese goods have also faced a number of difficulties such as long geographical distance and different consumer culture. A number of garments and textiles as well as leather and footwear businesses have had to visit Latin American countries to learn the tastes of local consumers. Payment methods and different working practices have also created difficulties in the early stages when entering the market. Most notably among the initial problem is that Vietnamese goods have not yet built their own brand.
At a time where key economies such as the US and the EU have not yet recovered, Latin American countries are considered Vietnam’s best potential export markets. According to the Ministry of Industry and Trade’s America Market Department, the ministry has cooperated with relevant agencies to strengthen trade promotion activities. It has also expanded the distribution system and conducted market research in order to help businesses enter deeper into the market and so secure better deals. Businesses are also recommended to actively ascertain market conditions prior to the transaction in order to limit their exposure to risk.
By Lan Phuong