The COVID-19 pandemic has already made it quite difficult for Vietnamese goods to enter the US and EU markets and the outlook for the second quarter is also gloomy, according to Cong Thuong (Industry & Trade) newspaper.
A fish processing factory in the Mekong Delta province of Dong Thap
In the first quarter of this year, Vietnamearned 59.08 billion USD from exports, up just 0.5 percent year-on-year, whileimports stood at 56.26 billion USD, down 1.9 percent, the General StatisticsOffice (GSO) has reported.
The country therefore posted a trade surplus of2.8 billion USD compared to 1.5 billion USD in the same period last year. Manytrade experts said this in an acceptable figure given the coronavirus outbreak.
There are signs, however, that prospects in thesecond quarter will be even bleaker, especially regarding exports to the US andEU, both of which have been hit hard by COVID-19.
Bui Trong Tu, Deputy Director of the GSO’s Tradeand Services Statistics Department, said almost all export contracts Vietnamesebusinesses have struck with partners in these two key markets have beensuspended.
Exports are certain to be greatly affected ifthe pandemic continues throughout Q2, he forecast, as in addition to China, theUS and the EU are among the largest importers of Vietnamese goods, particularlytextiles, garments, and footwear, and aquatic products.
The number of apparel and footwear orders fromthe two markets fulfilled in April and May are projected to fall sharply. Neworders to be delivered in June or later, meanwhile, haven’t even beennegotiated.
Wood processing companies said if the situationsurrounding the pandemic does not improve by the end of April then some willhave to cut production by 70 percent.
If the outbreak remains during the secondquarter, most will have to cease production for export contracts. Only a few producingwooden items for sale on the domestic market will be able to sustain operations,but only at 10-15 percent of capacity.
In the electronics industry, Samsung ElectronicsVietnam has reported that the US and EU account for more than 50 percent of itsexport value. Global revenue for Samsung Electronics this year is likely todecline, and it may have to revise its export target to about 45.5 billion USD,compared to an actual 51.38 billion USD in 2019.
Meanwhile, switching the shipment of keyproducts to other markets such as India, the Republic of Korea, and Japan cannotbe done overnight, and it will be difficult to compensate for losses incurredas exports to the US and the EU tumble, the Cong Thuong newspaper noted.
Given this, businesses are pinning their hopeson the US and EU controlling the pandemic, especially given the EU-Vietnam FreeTrade Agreement (EVFTA) is set to take effect this year.
An increase of 20 percent in exports this year wasnot unrealistic under the agreement, according to GSO General Director NguyenBich Lam, with the greatest beneficiary being aquatic products./.VNA