Exports forecast for the last six months of the year indicate that there are still some groups of industries that have the ability to accelerate and achieve their target. However, this may not be the case where many other industries are concerned, with a bleaker picture emerging day by day.
Fruit exports increase
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In the agricultural sector, fruit and vegetable export turnover has a growth rate of more than 80 percent. Export turnover increased sharply in the first six months of the year, reaching US$ 1 bln, an unprecedented record in the more than 30-year history of this sector. This result helped the entire industry reach a target of nearly US$ 2.8 bln, up 64 percent over the same period last year.
Currently, China accounts for 63.5 percent of total fruit and vegetable exports froeên, General Secretary of the Vietnam Fruit and Vegetable Association, said that at the beginning of the year the whole industry had forecast that the export figures this year would reach around US$ 4 bln. With the current strong growth momentum, US$ 5 bln is now in reach, or may even surpass the figure.
The fruit that contributed the most to this success was durian which was exported to China. Durian exports from the beginning of the year to now have continuously been increasing. In May alone, durian exports reached US$ 332 mln, ten times higher than in the previous month, while in June durian exports reached around US$ 350 mln.
However, Vietnamese durian is facing some difficulties because the number of planting areas and packing facilities is still small, so it is difficult to export all of the harvested durian. In the future, the turnover can be more if more durian can be exported. Currently, China spends about US$ 4 bln each year to import durian.
Previously, Thailand accounted for 90 percent of the market share, but now Vietnam is catching up very quickly. It is forecast that this year the durian export turnover to China will be about US$ 1 bln to US$ 1.2 bln. In 2024 Vietnam can rival Thailand for the Chinese market.
Another agricultural product that has also yielded positive results is rice. In the first six months of the year, Vietnam exported 4.27 million tons of rice valued at US$ 2.3 bln, up 22.2 percent in volume and 34.7 percent in value over the same period in 2022. The average export price of rice is estimated at US$ 539 per ton, up 10.2 percent over the same period in 2022.
In the coming months, it is expected that rice exports will increase because the output in many rice-producing countries in Asia is at risk of falling due to the impact of the El Nino factor which will boost demand as well as increase rice prices in the international market. It is highly likely that rice exports this year will bring in a turnover of over US$ 4 bln with an output of about 8 million tons, an increase of 1 million tons compared to 2022.
Vietnam is likely to rank at third place in the world in rice exports this year, behind India which records 22.5 million tons, and Thailand which records 8.5 million tons, totally accounting for 12.7 percent of global rice trade.
Seafood market gloomy
Currently, the seafood industry is going through a bleak phase. The total seafood export turnover in the first six months of 2023 reached US$ 4.13 bln, down 27.4 percent over the same period in 2022, reaching only 41.5 percent of the target plan. The main reason is the increase in inventory, which reduces the demand for consumption and imports in markets. In addition, inflation in many countries around the world, especially in those that are the main export markets of Vietnam for seafood exports such as the US, EU, and Japan is also strongly affecting this industry.
However, positive signs have also begun to appear in some key products like pangasius exports, where the decrease compared to the previous month to some markets is narrowing. Specifically, pangasius export turnover to China and Hong Kong in April decreased by 66 percent, in May it decreased by 30 percent, and in June it decreased by 15 percent compared to the same period in 2022. This narrowing of the gap can be considered as good news for the Pangasius export industry in Vietnam.
Similarly, shrimp exports are hopeful to see some success in the US and Chinese markets. In June this year, shrimp exports to the US fell by 23 percent, the lowest decline since the beginning of the year. The value of Vietnamese shrimp exports to the US in June reached around US$ 71 mln, the highest since the beginning of this year. Expectations of low shrimp prices in the US have created a bottom, and shrimp consumption for the year-end has increased. June is also the first month since the beginning of this year that shrimp exports to China recorded an increase over the same period last year, up by 19 percent to touch US$ 59 mln.
Mr. Truong Dinh Hoe, General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said that he hopes there will be many positive signs at the end of the year. Mr. Hoe believes that the market has been too gloomy lately, and prices have also decreased with inventories also decreasing, so new demand will be gradually established in the last months of the year. However, regarding the whole year’s turnover, the seafood industry is showing many signs of completing the target of US$ 10 bln for this year.
Mr. Pham Xuan Hong, Chairman of the Ho Chi Minh City Textile, Embroidery and Knitting Association, said that entering the third quarter businesses have begun to show signs of improvement. In the previous months, the business was reduced by about 30 percent, now the number has decreased to about 25 percent. Most businesses have small orders with reduced unit prices but are still making efforts to maintain operations and have jobs for employees and retain customers. Mr. Hong believes that the difficulty may last until the end of this year, but the export situation will improve gradually in months to come.
All businesses also expect support, especially in terms of capital resources, while trying to find opportunities and struggling with endless difficulties. In a recent meeting with the press on the situation of the industry, the leaders of the Vietnam Textile and Apparel Association said that although the State Bank of Vietnam has reduced the operating interest rate four times, due to high deposit interest rates from the end of 2022, the loan interest is still at a high level. Besides, businesses still cannot access the support package of VND 40,000 bln with a 2 percent interest rate reduction.
