Vietnamese firms eye new markets as orders from EU fall

Due to inflation, consumers in the European Union (EU) have tightened their budget, sending orders falling. As a result, Vietnamese exporting enterprises have plans to access new markets.

 

A representative of a local company exporting wooden products to the EU on Monday told Tuoi Tre (Youth) newspaper that it is struggling to survive as European consumers are on a tight budget.

“Putting ourselves into their shoes, amid the difficulties of the market, we also have to give priority to necessities," the representative said.

“Wooden products cannot replace essential commodities, so their spending [on wooden products] plunges.

“Some colleagues told me that they will temporarily suspend their firms’ operations.”

However, the company does not want to give up, so it has restructured its production and business activities to adapt to the market’s unexpected and unpredictable developments.

“If the situation remains unchanged until 2023, I will access Asian markets with lower inflation," the representative shared.

“I will not depend on certain markets but will diversify and expand them.”

As the U.S. is a net exporter, its interest rate hikes have affected Vietnam and many other countries worldwide.

An enterprise in the central province of Quang Ngai, which exports bowls, dishes, spoons, glasses, and trays made of spathes to Canada and Poland, is also put at a disadvantage.

“I find it hard to sell my products locally but they are exported to Canada, South Korea, Poland, and the U.S. and are preferred there," a company leader said.

However, many domestic enterprises are facing a shortage of orders.

“Nevertheless, I will seek new distributors and partners via other channels to ship my products to neighboring Asian countries,” the leader said.

Similarly, some cashew nut exporting companies admitted that the export markets are gloomy.

La Van Loi, director of Quang Vinh Co. Ltd., said the low purchasing power used to be seen in the past but has never lasted as long.

Loi used to think of seeking new markets but many countries have imported cashew nuts and distributed the product to other markets, including Asian ones, so it will be hard for exporting firms to exploit the new markets.

“At present, the inventories remain high in Europe and the U.S., so the export volume is low," Loi said.

"Meanwhile, large importers of Vietnam’s cashew nuts are the U.S., China, European countries, and the Netherlands.

“Giant firms have come up with solutions to downsize their exports and will resume their shipments once the market is bustling again.

“Solutions are different for different products."

Rice exports fall slightly

Pham Thai Binh, general director of Trung An Hi-tech Farming JSC, said, “The food sector in Vietnam and the world as a whole is being affected by inflation, China’s zero-COVID policy, and the Russia-Ukraine military crisis.

“Consumer demand for coffee, tobacco, and cashew nuts may decline but rice is still needed. Therefore, the fall in rice exports of my company and Vietnam’s rice sector is modest.

“I used to forecast that the country would export 6.5 million tonnes of rice in 2022 but the figure may reach 6.7 million tonnes due to the high number of orders until the end of this year.

“My company has just secured orders for some 20,000 tonnes of rice for February and March 2023."

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