Goods are imported and exported through Tan Thanh border gate in northern Lang Son province (Photo: VietnamPlus)
Hanoi (VNA) – Not only domestic businesses but also foreign direct investment (FDI) enterprises saw a two-digit drop in their export turnover in the first month of 2020.
Key staples suffer falling exports
A report released by the Ministry of Industry and Trade (MoIT) showed that the country’s export earnings reached 19 billion USD in January, down 15.8 percent as compared to the figure in December 2019 and falling by 14.3 percent from the same period last year.
Export turnover of the domestic sector was just 6.3 billion USD, dropping by 11.4 percent while the foreign-invested sector (including crude oil) witnessed a year-on-year decrease of 15.7 percent in export revenues to 12.68 billion USD.
Key export staples were the hardest hit products. For example, garment and textiles raked in 2.6 billion USD, down 21 percent; mobile phones and components earned 2.6 billion USD, decreasing by 22.4 percent; footwear brought home 1.6 billion USD, falling by 9.7 percent; and machines, equipment and tools got 1.5 billion USD, dropping by 6.5 percent.
Le Tien Truong, General Director of the Vietnam National Textile and Garment Group (Vinatex), the drop in export turnover was attributed to the New Year 2020 and Lunar New Year Holidays falling in January. In fact, the number of working days in January 2020 was just 17, less than the number of 22 days in January 2019.
Meanwhile, export revenues of agro-forestry-fishery products in January also suffered a 21.9 percent drop as compared to the previous month and an 18.8 percent fall from the same month last year, raking in 1.85 billion USD.
Coffee saw the biggest decrease, plummeting by 30.6 percent in volume and 30.3 percent in value. Aquatic products brought home 550 million USD, down 25.2 percent, while rice exports earned 170 million USD from 350,000 tonnes, falling by 11.6 percent and 18.7 percent, respectively.
The decrease in export turnover of the processing industry (accounting for 83.6 percent of the total earnings) strongly affected the country’s revenues.
Statistics released by the Ministry of Industry and Trade showed that products of the processing industry earned just 15.88 billion USD in January, down 15.1 percent from the previous month and 13.8 percent from the same period last year.
Changing export direction
Together with the prolonged Lunar New Year Holiday, the COVID-19 pandemic caused by the novel coronavirus SARS-CoV-2 has strongly affected prices of agricultural products, said Nguyen Dinh Tung from the Vietnam Fruits and Vegetables Association (VinaFruit).
Many local businesses could not ship fruits to China due to the COVID-19 outbreak, he said.
Deputy Minister of Industry and Trade Tran Quoc Khanh said the export of goods to China has been badly affected by the falling demand in this country.
Khanh cited Starbucks coffee chains as an example. As Starbucks closed many cafes in China, leading to a drop in the demand for coffee imported from Vietnam. The closure of restaurants of McDonald, KFC and other brands in China also caused a decrease in the consumption of white coffee and aquatic products.
Moreover, the late reopening of border markets after the Lunar New Year Festival (since February 9) also interrupted the exchange of goods between residents and impacted on the export of Vietnamese farm produce.
The Ministry of Industry and Trade estimated that import-export turnover via road between Vietnam and China was 7 billion USD, of which 3.7 billion USD worth of products were exported through official channels and 1 billion worth of goods were exchanged between residents.
To minimise the adverse impact from complicated developments of the COVID-19 pandemic, Khanh suggested local farmers change the progress of production and connect supply chains with fruit growers in Binh Thuan and Long An provinces and conduct proper packaging and labelling to serve origin tracing.
The Ministry of Industry and Trade works with big trade firms to step up the consumption of agricultural products (Photo: VietnamPlus)
He affirmed that the Ministry of Industry and Trade has instructed Vietnamese trade offices abroad to seek and connect with new customers to shift exports to new markets. Logistics companies were requested to support the preservation of farm produce when domestic exporters were seeking new markets, Khanh said.
“Branches of trade offices in Guangdong, Guangxi and Yunnan have actively worked with border provinces to accelerate the reopening of border markets,” he added./.
