VNBusinessNews – According to the Ministry of Industry and Trade (MoIT), exports fetched US$3.8 billion in January, down 24.2% compared to January 2008 and 18.6% against December 2008. The reduction was attributed to a sharp decline in the price and volume of export staples.

Difficulties

MoIT experts say businesses specialising in garments, electronics, wooden and farm products found it difficult to sign new contracts due to low global demand. Crude oil, which is one of Vietnam’s leading export staples, rose 12.7% in volume, but dropped 52.4 percent in value as a consequence of a sharp decline in the world oil market.

The export of other farm products such as coffee, cashew nuts and tea fell 20-30% in volume and 30% in value compared to January 2008.

A steady decrease in the price of seafood also did not encourage farmers in Mekong Delta to keep shrimp farming, causing a shortage of products for export. In addition, seafood markets also shrank after Russia halted the import of Vietnamese Tra catfish and other countries built technical barriers to protect domestic production.

Nguyen Ton Quyen, vice president of the Viet Nam Timber and Forest Products Association, says normally wood product exports fetch US$650-700 million in the first quarter of the new year. But the figure for this year is predicted to fall to US$200 million. Mr Quyen acknowledges that it is not easy to seek new markets for the product in the current context.

Meanwhile, Nguyen Huu Dung, vice president of the Vietnam Association of Seafood Exporters and Processors (VASEP), says 2009 will be a difficult year for the seafood industry, which is expected to see exports tumble by between 15-20%.

Rice exports up

Rice exports increased by 229% in volume and 254% in value, becoming the top foreign currency earner. Late last month, the price of Vietnamese rice offered on the world market increased by an additional US$20 per tonne. Several rice exporters signed contracts to ship 5-percent broken rice abroad at US$500 per tonne and 25-percent broken rice at US$400 per tonne.

Currently, businesses are busy loading 500,000 tonnes onto ships as part of their contracts to export 1.5 million tonnes to the Philippines this year. Many clients from Africa and Singapore are putting in orders for Vietnamese rice.

Viet Nam is expected to export between 4.5-5 million tonnes of rice in 2009.

Ambitious targets

The National Assembly has approved the Government’s plan to rake in US$72 billion from exports in 2009, up 13% against 2008. However, with only US$3.8 billion generated in January, economists are concerned that it will be difficult to meet the set target.

According to Dr Vo Tri Thanh, a senior economist from the Central Institute for Economic Management (CIEM), the downward trend in exports is the inevitable consequence of the global economic recession.

Former Trade Minister Truong Dinh Tuyen explains that even though global economic fluctuations did not have much impact on Vietnam’s import-export activities in 2008, the country’s total export value only fetched US$64 billion.

“Our exports are coping with a “double” decline: the price of export products falls and domestic and overseas demand for consumption remains low. So it is not easy to meet the target of 13-percent growth this year.”

As agro-forestry and fisheries and minerals are estimated to decrease by US$6.6 billion this year, Vietnam has high hopes for processed industrial products which make up more than 70% of total exports.

The MoIT forecasts that Viet Nam is likely to earn US$11.5 billion from garment exports, US$5.1 billion from footwear, US$4.1 billion from electronics and computer accessories and US$3 billion from wooden products.

Le Quoc An, president of the Viet Nam Textiles and Apparel Association (VITAS), says the garment sector will strive to achieve the growth rate it did in 2008 and efforts will be made to maintain production and create stable incomes for workers.

Meanwhile, the Viet Nam Timber and Forest Product Association forecasts that 20 percent of its businesses, mostly small and medium-sized, are likely to go bankrupt this year and 30% are in a critical condition.

VASEP says seafood exports are estimated at US$4.5 billion, far beyond the US$5.3 billion target set by the MoIT.

Trade deficit low

According to the General Statistics Office, the trade deficit last month stood at only US$300 million, much lower than the record figure of US$2.3 billion a year earlier.

Imports fell in both volume and value, particularly for completely built cars, steel, steel ingots and petrol. Unlike previous years, imports of consumer goods went down in January due to a low demand during the Lunar New Year holiday. (VOV)