According to the Ministry of Industry and Trade (MoIT), generally, the total retail sales of consumer goods and services in the first eight months of 2022 have a larger scale and higher growth rate than the same period in recent years and are much higher than the period before the pandemic.
Up to 89 percent of the imports in the first four months of this year are raw materials and accessories for domestic production with a combined value of US$106.6 billion, up 16.8 percent year-on-year, according to the Ministry of Industry and Trade.
Since the beginning of the year, although export turnover has increased by 14.2 percent, import turnover has surged by more than 16.7 percent. The trade balance saw a trade deficit of nearly US$600 million, of which, imported goods were mainly raw materials for production. This shows that domestic enterprises are still dependent on and short of imported materials.
The Ministry of Agriculture and Rural Development on March 29 held a conference on deploying a pilot project to build areas of agricultural and forestry raw materials meeting standards for domestic consumption and export in the 2022-2025 period.
The costs of petrol, logistics, imported materials, and labor have simultaneously increased, putting more burden on the production activities of enterprises. In this context, authorities need to synchronously deploy many solutions to reduce the pressure of price hikes, maintain the purchasing power of the market, and support the operation of enterprises.
Since the beginning of the new year, many enterprises have accelerated production to meet the delivery schedule. Along with that, units have been striving to connect with supply chains to increase the source of raw materials.
On the first days of the new year 2022, many businesses have accelerated production to meet orders of millions of US dollars. Many of them even have planned to expand their production scale to receive orders that are moving from countries in the region to Vietnam.
The prices of many domestic and imported raw materials have climbed by 10-300 percent. This fact has put many enterprises, especially food and foodstuff manufacturing enterprises, at risk of having to increase their selling prices. Amid such context, the Ministry of Industry and Trade (MoIT) has issued regulations to restrict the export of some groups of raw materials in the production chain of domestic enterprises. This is a necessary solution to lower the cost of these items.
Authorities need to clarify the situation in which construction contractors are complaining because construction material prices are constantly fluctuating, with an increase of about 40 percent upwards, while many building material manufacturers earn huge profits.
The supporting industry has a significant meaning to economic restructuring towards industrialization and modernization. However, with the existing contradictions, if there are no drastic policies and actions, the story of building an autonomous supporting industry will remain far-fetched.
The Covid-19 pandemic has continued to obstruct trade activities of the leather and footwear industry in the main export markets of Vietnam, including Europe and the US. Last year, the whole industry exported US$19.5 billion, down 11.5 percent compared to 2019. Currently, Vietnam has controlled the pandemic, so many long-term orders have returned to enterprises. However, experts predict that the difficult situation will last until the end of this year.
Many garment processing enterprises for export in Ho Chi Minh City said that in the fourth quarter of this year, some orders, especially from the US market, have started to increase again. This is good news for the industry in the context that the Covid-19 pandemic still develops complicatedly in many traditional markets of Vietnam.
The Government has just promulgated regulations on selective foreign direct investment attraction for nearly three years, but Dong Nai Province has been ahead of the whole country in carrying out this policy for more than ten years. Therefore, the province’s FDI capital invested in the supporting industries is among the highest across the country and is considered as the capital of the supporting industries by many enterprises.
Many companies based in China, especially the heavily industrialized city Wuhan, had to close their production of raw materials since the nCoV, which raises fear among Vietnamese business owners of raw material shortage, and essentially messed up workflow and discontinued assembly lines.