Target of $48.7bil for export turnover unrealistic?

The Ministry of Trade (MoT) has warned that the target of $48.7bil in export turnover may be unreachable due to the lack of products for exports.

According to MoT, by the end of the first quarter of 2007, Vietnam had exported 710,000 tonnes, earning $230mil, a decrease of 43.3% in quantity and 33% in turnover compared to the same period last year. The figures reveal that only 15.7% of the targeted volume and 17% of the targeted turnover have been fulfilled.

Rice exporters said that the low rice stocks since 2006 and the inflexible mechanism on rice pricing set up by the Vietnam Food Association (Vietfood) have caused big difficulties for them. Vietfood has set up regulating price levels, strongly recommending that its members do not to sign contracts at prices lower than the regulating levels.

MOT has forecast that the rice price in the world’s market will be firm by the end of the second quarter of 2007 since the demand for rice imports is increasing from many countries. Vietnamese enterprises plan to deliver 1.4mil tonnes in the second quarter, a low volume.

The taskforce on rice export regulation has agreed to raise exports by 200,000 tonnes, and speed up the export pace in April and the first half of May in order to keep the domestic paddy price at an acceptably high level.

“This would be an opportunity for enterprises to rehabilitate exports,” said Pham The Dung, Head of the Import – Export Department under the Ministry of Trade.

With the total coffee exports of 482,000 tonnes and export turnover of $697mil in the first three months of the year, coffee exports saw an increase of 133% over the same period last year, fulfilling 68% of the yearly plan.

This was the only instance when Vietnam saw such a record growth rate in the first three months. But MoT has warned that exports in the coming quarters may decrease after the overly high exports in the first quarter.

Van Thanh Huy, Chairman of the Vietnam Coffee and Cocoa Association (Vicofa), said that Vietnam’s coffee would still go for a good price as the world’s demand is increasingly high. However, Mr Huy also said that the quality of exported coffee would remain a problem.

The same warning has also been given to the seafood industry. Export prices and markets proved to be very satisfactory for exporters in the first three months ($679 million, up by 11.9% over last year). However, if Vietnamese enterprises cannot improve the quality of seafood exports, the targeted $3.8bil turnover cannot be reached.

MoT has decided that apparel exports will gain the turnover of $2bil higher than last year’s level at $5.8bil. If not, the master export programme for 2007 will not be fulfilled.
However, apparel exporters are facing big difficulties exporting to the US as the country is kicking off the Vietnamese apparel import monitory programme.

Enterprises said that their clients were now tending not to place orders for the last months of the year for fear of anti-dumping activities. A member of the HCM City Textile, Garment, and Embroidery Association (Agtek) said that the door to the US market, the main export market for Vietnam, had been considerably narrowed.

Source: VNE