It is anticipated that exports will regain their growth momentum and flourish in the remaining months of this year.
Rising Demand Spurs Overtime Work
Instead of facing the prospect of job losses due to dwindling export orders, employees at the Gia Dinh Group Joint Stock Company, a specialized exporter of leather and footwear, have been working diligently, even resorting to overtime, to meet the surging demand for their products. Mr. Nguyễn Chí Trung, Chairman of the company's Board of Directors, expressed that buyers have been returning to Vietnam, with the United States, a key market for Vietnamese leather and footwear, exhibiting promising signs. As inventories diminish, the demand for imported goods during the Christmas and New Year period has been steadily rising. Furthermore, businesses have intensified their efforts to explore new markets in South Africa and Asia. The Chinese market also presents numerous opportunities for Vietnamese enterprises to export their products, making this an opportune moment to reap the rewards.
Textile exports have also received encouraging signals. According to Mr. Vũ Đức Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), the entire industry exported USD 26.3 billion over the past eight months, with August accounting for more than USD 3.6 billion. Consequently, the textile market has started to exhibit signs of recovery compared to the early months of the year. Some industry players have reported the return of American and European buyers, while efforts to tap into new markets have yielded positive outcomes for the entire sector.
A similar story unfolds in the seafood and wood industries. Despite a decline of over 15% in seafood exports in August compared to the same period last year, this marked the lowest negative growth rate in the past six months. Sales figures surpassed those of previous months, and with inventories in major markets such as the United States and Europe expected to decline significantly towards year-end, the holiday season is anticipated to bolster seafood exports. Mr. Nguyễn Chánh Phương, Vice Chairman of the Ho Chi Minh City Handicraft and Wood Processing Association (HAWA), reported that from May until now, monthly wood and wood product exports have averaged over USD 1.2 billion. Forecasts indicate that by the year's end, wood and wood product exports may increase by an additional USD 6 billion, bringing the total export turnover for 2023 to USD 14-14.5 billion.
The US Remains the Primary Market
According to a report by the Ministry of Industry and Trade, export activities surged by 7.7% in August compared to the previous month, reaching an estimated USD 32.37 billion. This marked the highest export turnover recorded over the past year and the fourth consecutive month of growth. The standout achievement in August was the domestic economic sector's export growth, rising by 8.7%, outpacing the foreign investment (FDI) sector, which recorded a 7.3% increase, and surpassing the country's overall export growth of 7.7%.
Deputy Minister of Industry and Trade Đỗ Thắng Hải attributed the resurgence in exports to an increase in import market demand. Particularly noteworthy is the United States, the primary export market, which has experienced a sharp decline in inventories, predicted to reach near depletion by the end of 2023. This presents a golden opportunity to bolster exports to this market.
The United States holds a pivotal role in the strategies of many Vietnamese industries. For instance, the US ranks as the top import market for seafood. According to Ms. Lê Hằng, Communications Director of the Vietnam Association of Seafood Exporters and Producers (VASEP), Vietnamese seafood exports to the US reached USD 2.15 billion in 2022, marking an 80% increase compared to a decade ago when the comprehensive partnership between Vietnam and the US was established in 2013. Moreover, following President Joe Biden's state visit to Vietnam and the elevation of bilateral relations to a comprehensive strategic partnership, expectations are high for Vietnam's seafood trade with the US to make significant and sustainable strides forward.
Businesses Gear Up for the Long Haul
Mr. Nguyễn Chí Trung emphasized that Gia Dinh Group, a leading player in the leather and footwear industry committed to green production, is actively collaborating with domestic and foreign partners to establish a green factory model aimed at reducing carbon emissions. This proactive approach not only ensures compliance with increasingly stringent importer requirements but also enhances competitiveness, including against rivals like Bangladesh.
However, the pursuit of green production and carbon emissions reduction by Gia Dinh Group and others is hampered by various challenges. One of the major hurdles is the slow development of policies and legal frameworks. Clearer guidance is required on aspects such as carbon credit issuance and issuance processes. It is high time for authorities to proactively address these issues and ease the path for businesses.
These concerns were also echoed by expert Tô Xuân Phúc, a researcher at the Crawford School of Public Policy, Australian National University, during the recent "Green Finance and Carbon Credit Market" conference organized by SGGP newspaper. While Vietnam has launched a carbon credit trading floor, many key questions remain unanswered, including the identification of buyers and sellers, pricing structures, and the participation of international buyers. Mr. Phúc underscored the importance of understanding that there are around 170 different types of carbon credits worldwide, each with varying prices contingent on the type of project generating them. Consequently, the specifics of Vietnam's carbon credits remain elusive.
In conclusion, Vietnam's export sector is experiencing a revival, driven by increased demand from import markets and enhanced trade relations. As businesses adapt to shifting market dynamics and sustainability trends, policymakers must play a crucial role in providing clear guidance to support their endeavors and facilitate further growth in the export industry.
