Vietnam fears falling exports will push target beyond reach

A slowdown in exports of some key items means the year’s export target of US$48 billion could be missed, a routine trade ministry meeting Tuesday heard. Pham The Dung, head of the Ministry of Trade’s Export-Import Department, said as a result the export sector faced a heavy burden in the second half.

As the country’s number one export turnover earner, crude oil plunged by 5 percent to $3.8 billion.

Oil industry insiders attributed the slip to declining global prices and lower than expected output by certain overseas operations.

Rice exports fell by 5 percent to $732 million. Huynh Minh Hue, deputy general secretary of the Vietnam Food Association, said a shortfall in cargo services and a 40 percent hike in transport costs had pushed exports down.

As a result, shipments to some key markets like Russia, Cuba, and South Africa had plunged by 75 percent, 67 percent, and 58 percent respectively.

Footwear exports fetched $1.9 billion, a year-on-year rise of 11 percent against a targeted rise of 21 percent.

This was mainly due to anti-dumping duties slapped by the EU which buys 80 percent of Vietnamese footwear exports.

Exporters failed to address the problem by finding alternate markets.

However, despite the problems, the country‘s exports jumped by 20 percent in the first half to $22.5 billion.

Deputy Minister of Trade Nguyen Tinh Bien warned that nothing less than a massive effort would do to reach the export target.

The coffee, apparel, and seafood industries were on track to achieve their targets, especially apparel, which could reach its $7.3 - 7.5 billion goal.

A push was required to ensure fisheries, another important export item, achieved its export target.

The government had agreed to provide VND50 billion to set up facilities to test fisheries products to ensure they were free of banned chemical substances.

Van Thanh Huy, chairman of the Vietnam Coffee Association, said coffee exports had already achieved 92 percent of the whole year’s target with revenues of $1.5 billion so far.

But he was worried that the low coffee quality could hurt the goal.

A Ho Chi Minh City-based coffee trader admitted that Vietnamese coffee had 1 percent impurities compared to 0.5 percent elsewhere.

Exports are expected to maintain robust growth, helped by Vietnam's membership in the WTO. The country’s ambitious export goal is to reach a whopping $100 billion in export value by 2010, according to the Ministry of Trade.

The nation’s four giant exporting markets now are the EU, the US, Japan and China.

Trade officials said exports to the US were forecast to rise 35 percent from last year to nearly $11 billion in total this year while revenues from goods sold to Europe would jump 22 percent to $8.3 billion by the year’s end.

Source: Reuters