Vietnam seeks alternative supply sources, expands export markets

15:27 | 24/03/2020 Trade

(VEN) - The spread of the Coronavirus disease (Covid-19) has affected trade and production activities, prompting cooperation between the Ministry of Industry and Trade and ministries, departments, localities and businesses on measures to overcome difficulties posed by the epidemic.

vietnam seeks alternative supply sources expands export markets

Diversifying markets

Tran Thanh Hai, deputy director of the Agency of Foreign Trade under the Ministry of Industry and Trade, said the epidemic has had a strong impact on various aspects of trade and production, import and export activities. To overcome difficulties facing businesses, the Ministry of Industry and Trade has worked with associations to review the overall situation and seek measures.

For example, the Ministry of Industry and Trade has directed overseas Vietnamese trade offices to seek alternative supply sources of raw materials in India, the Republic of Korea (RoK) and Chinese Taipei for the garment and textile, leather and footwear sectors to compensate for suspension of raw materials from China.

Tran Thanh Hai said if the epidemic was brought under control in the first quarter, its impact would still last until the end of the second quarter. Seeking alternative markets to ensure import and export activities is a key task, while trade promotion activities are also in need of change, Hai said.

According to Tran Thanh Hai, Vietnam has effectively exploited major markets, such as the US, Japan, the RoK, India and New Zealand. With new-generation free trade agreements (FTAs) such as the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Vietnam has specific plans to promote market expansion. The country has also paid attention to traditional markets, especially China, which is among Vietnam’s largest sources of imports and largest export markets for a number of commodity groups, such as agricultural products, fruits, rubber and cassava starch. In the long run, China is still a key market with many favorable factors in terms of geographical distance and transport costs.

Upheaval and potential

Tran Thanh Hai said that to minimize the impact of the Covid-19 epidemic on agricultural exports, agricultural restructuring must be promoted to improve quality and added value. Processing content should be increased so that products are of higher value and have longer storage time. Localities need to encourage farmers to change farming methods to create higher quality products.

The support of commercial banks for trade and production activities is also necessary. Recently, some banks have implemented moratoriums for businesses directly affected by the epidemic.

Cold storage plays a very important role at this time. Many logistics companies have taken the initiative to reduce costs of warehousing and cold storage in order to help export businesses hit by the epidemic.

The Covid-19 epidemic is a major upheaval, but also an opportunity for manufacturing sectors and import-export companies to establish solid relationships, participate in the global supply chain more deeply and take advantage of opportunities to step into higher value-added functions.

Nguyen Huong