First seven month exports worrisome

According to data by the Ministry of Industry and Trade, although export turnover in the first seven months of this year was estimated at above US$72 billion, up 14 percent year-on-year, exports showed a worrisome picture in each sector.

Compared to the same period last year, farm produce and seafood--the country’s main export commodities, fell 7.2 percent in July, and 8.6 percent in the first seven months of this year. In the first seven months, export items which saw an increase compared to the same period last year, included vegetables and fruits with 28 percent, pepper with 17 percent, and cashew nut with 5 percent. An increase in export volume covered a slump caused by price reduction.

Farm produce should improve quality to increase competitiveness. (Photo: SGGP)

Except seafood exports of $3.38 billion, down 0.2 percent, key export items all drastically fell over the same period last year, such as coffee at $1.9 billion, down 23 percent; rice at $1.87 billion, down 13 percent; and rubber at $1.22 billion, down 17.6 percent.

Seven-month-accumulated slump in exports was estimated at $814 million year-on-year, of which, coffee accounted for $589 million, and rice $213 million, as commodity prices in global market declined by $359 million.

Fuel and minerals also posted decrease in volume and value. Export turnover of fuel and minerals was estimated at $755 million in July, down by nearly 14 percent over June, and 30 percent year-on-year. In the first seven months, exports of this group touched $5.76 billion, down 15 percent year-on-year. Export price of all items in this commodity group fell with ore and other minerals plummeting 49.9 percent, and coal sinking 20.4 percent. Thus, export turnover of this commodity group dropped $562 million in value, and $456 million in volume.

Noticeably, an increase of 14 percent in seven-month export turnover was contributed by industrial processing products with exports surging by nearly 26 percent year-on-year, accounting for 69.5 percent of total export turnover. Of which, cellphones continued to have highest export turnover with $11.63 billion, up 87 percent year-on-year.

Another highlight in last seven-month exports was that Foreign Direct Investment companies still played an important role. While total imports of the domestic sector reached US$24.5 billion, up 1.6 percent year-on-year, the FDI sector export totaled US$48.28 billion, including crude oil, up 22 percent year-on-year.

The role of FDI sector became more important in the balance of trade as FDI sector saw trade surplus of $6.91 billion, whereas domestic sector posted trade gap of $7.65 billion.

The appearance of foreign investors has helped Thai Nguyen Province become the province which has highest newly-licensed FDI projects in the first seven months of this year with registered investment capital of $2.1 billion, accounting for 44.8 percent of total newly-registered investment capital.

However, these results still reflect that Vietnam remains a processer. For instance, cellphones have the highest exports and strongest growth, but foreign companies mainly import components and accessories into the country to reassemble for export. Hence, despite large export turnover, profits remain low.

By Quang Minh – Translated by Thuy Doan

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