Trade momentum makes comeback with new orders
Trade momentum makes comeback with new orders
Despite numerous difficulties ahead, Vietnam’s trade landscape is gradually gaining momentum thanks to piecemeal reopening of markets worldwide, promising a brighter export-import picture for the country until the year’s end.
According to the Ministry of Industry and Trade (MoIT) in the second half of 2020, Vietnam’s export-import turnover has been bouncing back since May, and “is forecast to witness a brighter growth after many nations begin to ease measures to control the pandemic and begin to accelerate their economic recovery process,” said MoIT Deputy Minister Cao Quoc Hung.
Under the General Statistics Office’s (GSO) latest survey on business trend of manufacturing and processing firms, 34.2 per cent of respondents expected that in the third quarter, their export orders will rise, and 44 per cent forecast that their export orders will continue being stable.
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In a specific case, three weeks ago, Nguyen Van Dung, director of domestically-owned electronics producer Hung Dung JSC based in the northern province of Vinh Phuc, met online with three new partners from Japan and South Korea to agree on export orders on supplying them with electronics items, with total value of nearly $8 million until late 2020.
“We earned export turnover of $10 million in the first half of the year, down from $15 billion in the same period last year due to these markets’ lockdown of trade activities with overseas partners,” Dung said. “Our exports were boosted in January and February, and then halted in March and April. They were resumed in mid-May thanks to Japan and South Korea gradually reopening their markets to import activities.”
The company has also spent a big sum of money importing electronic items from South Korea, Japan, and Indonesia for its production. The import turnover since early this year has increased 5 per cent on-year. It is expected that if the pandemic is well controlled in these markets in the third quarter, the firm’s export and import turnover will grow by about 6 and 7 per cent this year, respectively.
Dung’s company has contributed to a rise in the electronics sector’s performance in the first half of the year, when the sector’s export-import turnover hit $19.28 billion and $27.04 billion, up 24.2 and 13.3 per cent, on-year, respectively. Samsung accounts for over 90 per cent of Vietnam’s total electronics export turnover in the period. However, the MoIT said that Samsung Vietnam is expected to reduce its export target from $51.38 billion last year to only $45.5 billion in 2020.
The MoIT reported that while many items witnessed a cut in export-import turnover in the first six months, electronics is among several key export items with an on-year rise in export turnover in the period, especially in June such as cameras and their spare parts (22 per cent on-year, mostly exported by Canon), textiles and garments (17.8 per cent), footwear (10.8 per cent), wood products (16.6 per cent), and crude oil (27.6 per cent).
The General Department of Vietnam Customs last week released its updated trade figure for Vietnam, stating that the country’s total export-import turnover is creating momentum for an increase, from $36.11 billion in April (down 22 per cent or $10.17 billion against March) to $37.36 billion in May, and $43.28 billion in June. Of the $43.28 billion, $22.57 billion was for export turnover, up 17.6 per cent on-month, and $20.71 billion was for import turnover, up 14 per cent on-month.
The economy enjoyed a trade surplus of $1.85 billion in June and a record figure of $5.46 billion in the first six months of the year – far higher than the $1.7 billion in the same period last year.
According to GSO, the big trade surplus is impressive, and the local trade and production situations are visibly improving as the majority of Vietnam’s 31 groups of imported goods are used for production and exportation.
“Imports of production materials account for 91.4 per cent of total import mix, a large part of which are machinery and equipment,” a representative from the GSO’s Department of Trade and Service Statistics, told VIR.
