Vietnam’s 2010 import-export in focus

The world economy’s rebound had positive effects on Vietnam’s import-export activities this year, increasing their value by nearly 21 percent compared to 2009.

Despite the difficulties and challenges from the world economy, the national economy, especially the trade sector, has achieved impressive results.

Fulfilling export target

According to the Ministry of Industry and Trade, exports are estimated to reach US$70.8 billion this year, an increase of 24 percent over the last year and 17 percent compared to the plan. Exports grew strongly after 2009 with negative growth (-8.9 percent). The foreign directed investment (FDI) sector’s exports, excluding crude oil, hit US$33.6 billion, accounting for 47.45 percent of total exports, up by 39 percent compared to 2009. The agricultural and seafood exports are expected to reach US$18.68 billion, up 26 percent. Except cassava products, which went down by 51.4 percent, pepper by 10.4 percent and coffee by 2.6 percent, exports of major agricultural products saw a high increase. Export prices also went up compared to 2009.

Deputy Minister of Industry and Trade, Nguyen Thanh Bien, says five new products have the export value of more than US$1 billion this year, increasing the number products with more than US$1 billion export value to 18. They are cashew nuts, petroleum, plastic products, cable and electric wires and means of transportation.

Luu Quang Khanh, Head of the Department of Service Economy under the Ministry of Planning and Investment, says higher export prices helps push the growth of exports this year. Thus exports earn additional US$3.4 billion while the increase in volume increases the value by US$10.3 billion. The proportion of industrial and processing sector increased from 58.2 percent in 2009 to 62.3 percent in 2010, while that of fuel and minerals fell from 15.9 percent to 11.3 percent.

Khanh adds that exports of high technology products show a rising tendency while exports of unprocessed products with low added value seem to decline.

The FDI sector’s exports increased from 42.3 percent in 2009 to 47.5 percent in 2010 and are likely to continue to go up in the next years. The sector, which mainly exports garments, footwear, timber products, computers and components, and machinery spare parts, continues to lead in terms of export value.

Bien says that Vietnam’s biggest export market is still the US, accounting for 20 percent of total export value, which is nearly equal to last year, followed by the EU with 14.8 percent, down by 1.2 percent; Japan with nearly 10.5 percent, up by 0.25 percent; China with 9.1 percent, up by 0.5 percent; and ASEAN with 12.3 percent, down by 2.8 percent.

Import surplus down

Trade deficit occurred every month this year, out of which 6 months had import surpluses of more than US$1 billion. February hit a record high of US$1.33 billion and August hit a record low of US$395 million. This year’s import surplus is estimated to hit US$12 billion, equal to 16.9 percent of total export value, which is down by 22.5 percent compared to 2009.

Khanh says this shows that the Government and relevant ministries have taken strict measures to reduce trade deficit, which if left unchecked would negatively affect national balance of payment in the long term.

According to Khanh, trade deficit in 2010 can be explained by the high growth of GDP growth (7.6 percent) and foreign investment, which then led to an increased import demand of input materials for production. In addition, tax exemption and high domestic consumption of imported products add to the higher import value.

Another reason for trade deficit is Vietnam’s limited production capacity as the country is in the process of industrialisation and modernisation. Most products that are now imported have not been domestically manufactured yet or their quality is low. The supporting industry for exports is weak and does not meet the increasing demand.

Khanh says that to reduce the import surplus a series of measures is needed to stabilise market, ensure the balance of supply and demand for essential products based on more accurate market forecasts. It is also necessary to evaluate the real import demand against the domestic supply.

Exports in 2011 expected to hit US$78 billion

Khanh says import-export activities in 2011 will continue to face several difficulties and challenges due to globalisation and integration trends. World prices of input materials and fuels, especially crude oil, are forecast to continue rising. Natural disasters and epidemics will affect production and people’s daily life.

Khanh predicts that exports in 2011 will reach US$78 billion, up by more than 10 percent compared to 2010, including US$38 billion from the FDI sector, accounting for 48.7 percent and up by 13 percent; and US$6 billion from seafood.

Imports in 2011 will be US$92 billion, an increase of 11 percent over the 2010, including US$41.5 billion from the FDI sector, accounting for 45 percent of total import value and up by 15.3 percent. – VOV

Tags: Vietnam exports, Vietnam exports 2010, Vietnam trade