(VEN) - The National Assembly has set an export goal for Vietnam of US$78.8 billion in 2011, which would mark a 10 percent increase from 2010. Major export items played a key role in achieving this goal. Most of the sectors were members of the One Billion Dollar Club, such as seafood, textiles, apparel, and footwear. The One Billion Dollar Club contributed about US$82.49 billion to the total export revenue of around US$96.3 billion in 2011, representing an increase of 33.3 percent more than 2010 and more than three times more than what was projected by the National Assembly.
As a result of the Government's support and businesses' efforts to overcome difficulties, to renew business ways, to seek new partners, and to apply e-commerce for commercial retail transactions, export companies have achieved significant breakthroughs by rapidly increasing monthly export earnings. Particularly, the One Billion Dollar Club welcomed four new members in 2011, including plastic products (which brought in revenue of around US$1.35 billion in 2011, an increase of 28.7 percent from 2010), bags, briefcases and umbrellas (US$1.3 billion, up 35.6 percent from the year before), iron and steel (US$1.7 billion, a jump of 62 percent), and iron and steel products (US$1.12 billion and up 35.3 percent). This has brought up membership to the club membership to a total of 22, five of which earned more than US$5 billion in 2011.
Textiles and garments continued to lead exports bringing in revenue of US$12.78 billion in the first 11 months of 2011, marking a 27.5 percent increase from 2010. Of this, export revenue from the US market rose to US$6.28 billion, a 13.6 percent increase; as for the EU, exports brought US$2.23 billion, up 38.3 percent; exports to Japan earned US$1.54 billion, up 48.5 percent; and South Korea brought in US$822 million, an increase of 116 percent. Total earnings from exports are estimated to reach US$14.2 billion by the end of the year, marking a 26.9 percent increase from the year before.
Crude oil continued to contribute tremendously to Vietnam's export revenue. Crude oil exports had amounted to 7.68 million tonnes towards the end of November 2011, a 5.8 percent increase from the same period of last year. Crude oil export revenue also increased by 51.7 percent, to US$6.76 billion, due to increased prices (contributing US$2.04 billion), as well as an increase in volume (contributing US$260 million). Forecasts predict that crude oil export revenue will increase by 49.3 percent from 2010 to 2011, reaching US$7.4 billion.
Exports of telephones and telephone accessories also grew impressively among the One Billion Dollar Club members. Export revenue increased twice, in the first 11 months this year, to US$6.06 billion. The major buyers in this sector were the EU (buying US$2.67 billion, compared with US$344 million in the first 11 months of 2010, and contributing 44 percent of total telephone and telephone accessories export revenue), Hong Kong of China (US$502 million increasing 46.9 percent during the same months of 2010), Russia (representing a US$498 million increase, or 120 percent), and India (which imported US$331 million, an increase of 51 percent). Expectations in this sector had predicted that exports would be US$7.5 billion in 2011, marking a 275 percent increase from 2010.
Exports for footwear reached US$5.84 billion in the first 11 months of 2011, a 28.1 percent increase from a year ago. This was a 0.7 percent above at was expected from the year. Topping the list was the EU, who imported US$2.31 billion, which was an increase of 15.5 percent. They contributed 39.5 percent of total footwear export revenue. The US market came in close second with US$1.72 billion, a rise of 36.4 percent, which was followed by China with US$230 million, but in terms of percentage was higher, with a 65.6 percent increase. Japan came in third, with US$225 million and a 43.6 percent increase. Footwear export earnings were about US$6.4 billion by the end of the year, marking a 25 percent increase against 2010.
Seafood was also among the list of the top five export sectors, these exports, which earned US$5.53 billion in the first 11 months of 2011, still represented a 22.8 percent increase from the year before. Of this, seafood exports to the EU were US$1.26 billion increasing 16.3 percent; the US, US$1.05 billion increasing 21.5 percent; Japan, US$916 million increasing 13.2 percent; and the Republic of Korea, US$446 million increasing 32.3 percent. In addition, Vietnamese seafood exports to the rest of the Association of Southeast Asian Nations (ASEAN) soared 49 percent from last year, to US$287 million. Seafood exports to Brazil were particularly noticeable, with a 161 percent rise in revenues, to US$75.9 million. There was an expected increase of seafood exports of 23.6 percent for the year , which would have added up to US$6.2 billion.
The remaining members of the One Billion Dollar Club also increased export revenues by an average of 30 percent. These included cashew nuts; coffee beans; rice; latex; gasoline and oil products; timber products, fabric fibers; electronic appliances and computer accessories; other machinery, equipment and spare parts; wire and cable; and means of transport and their components.
Fossil fuels, coal, gemstones and precious metals declined in export revenue. Specifically, fossil coal exports added to about US$1.55 million in 2011, marking a 3.7 percent drop from 2010. Gemstones and precious metal exports came to US$2.7 billion, which was a 4.3 percent decline from the year before. The decline was, at least in part, because of Vietnam's policy to restrict these exports.
When all is added up, the export revenues for the nation exceeded US$5 billion, and other sectors continued to grow rapidly. In the end Vietnamese exports have made a great leap from last year, and have gained the spotlight on the world stage.
Challenges for this year
Economic experts have stated that the textile and garment sector would face many obstacles this year, including increasing labor and overhead costs, the monetary tightening policies of both the US and Japan, as well as the changes in consumption and saving policies in EU countries. As a result of these factors, it has been predicted that Vietnamese textile and garment exports to these major markets would drop by 10 to 15 percent from in the next year.
Exporters are also expected to face challenges at home, such as inflation, which would cause overhead expenses, such as power, water gasoline, oil and wages to increase, especially affecting growth in the textile and garment industries in the coming year. Businesses also lack capital for expansion of production due to high interest rates. The lending interest rates may be reduced from between 16 to 19 percent. However, only a small number of businesses would be eligible to obtain a loans at this interest rate.
Meanwhile, the EU plans to continue to oversee Vietnamese leather exports. In the event that the export volume increases, while the prices fall during a certain period of time, EU monetary agencies could look at reapplying tariffs without investigation. This would be disadvantageous for Vietnamese businesses, particularly now that they have to compete with leather and footwear businesses in several countries, which enjoy tariff preferences, such as Indonesia, Sri Lanka, Bangladesh and India.
In addition, the Vietnamese leather and footwear businesses would face high risks next year because around 80 percent of the materials for this sector of production would have to be imported, most of which would come from China.
Rice is another major Vietnamese export. Because of growing competition, many fear a decline in export contracts. Other countries, such as India, Pakistan and Myanmar, are increasing their production and exportation. Currently, India exports rice at around US$100 per tonne cheaper than Vietnamese rice. Given this, commercial contracts signed between Vietnam and African countries will likely face difficulties in 2012.
Getting well-prepared and active
In expectation of the challenges facing the country's export market next year, the Minister of Industry and Trade, Vu Huy Hoang, said that the ministry would coordinate with other related ministries and sectors to promote trade and create better business environment for export and trade, particularly regarding major export items.
Vu Huy Hoang also suggested that businesses be aware of the difficulties facing them in the coming year, and be flexible in terms of the coming changes in the world market.
The apparel, leather and footwear sectors will need to focus on their designing capacity, and secure contracts for the materials they need, so as to gradually reduce their reliance on imported materials.
In addition, to help businesses to overcome rice export problems in the coming year, the Ministry of Industry and Trade is beginning to cooperate with businesses to increase trade promotion activities and in seeking new markets, such as Indonesia and the Philippines. The Government will also ask the Ministry of Industry and Trade draft several memorandums of understanding for rice exports on a contract basis.
Vietnam has a goal to restructure rice exports in order to boost the production of high quality rice. This, it is hoped, would add value and prestige to rice exports from Vietnam. To achieve this goal, it is important to invest intensively in the technology of industrial processing. The development of forestry products and seafood is also a prioritized goal for 2012 and beyond.
Despite the challenges facing Vietnamese exports, the industry and trade sectors are expected to earn US$108.5 billion in exports in 2012. This would be a 13 percent increase from this year. However, in order to achieve this goal, the Government, ministries and individual businesses must cooperate./.
By Hung Cuong
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