After a strong recovery, imports and exports are unpredictable

Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department (Ministry of Industry and Trade)

Export and import turnover in the first five months of this year both grew compared to the same period last year. In your opinion, what are the factors that helped Vietnam achieve such results?

In the first five months of the year, exports alone reached over US$130 billion with a growth rate of nearly 31%, imports reached the same value with an increase of about 35%. Both of these figures reflect import and export activities, which are now seeing a very strong recovery.

The world's purchasing power is increasing again as well as the shifting of supplies, especially for the demand for goods of the Vietnamese market which is currently increasing. That is the reason for the significant increase in exports.

After the continuous trade surplus, in May 2021 and the first five months of this year, a trade deficit has returned. In your opinion, are there any unusual factors surrounding this issue?

After four months of maintaining a trade surplus, by May 2021, Vietnam's trade surplus is light. I think this is not too unusual, because currently many imported items are mainly raw materials to serve production activities, especially in the production of export products.

For example, electronic components, as well as raw materials in the textile, garment and footwear industries are currently experiencing strong growth momentum. Therefore, an increase in imports is also inevitable.

In the past, businesses had proposals for increased logistics costs, especially the cost of imported and exported goods. Could you please tell me what is the reason for such high logistics costs?

The increase in logistics costs has both foreign and domestic factors.

For foreign countries, it is the costs related to shipping that have increased since the fourth quarter of 2020 and so far have had a galloping increase. The current average fee is 4-5 times higher than the fee before the fourth quarter of last year. This is a general increase in rates in the global market. Therefore, Vietnamese businesses are also being affected.

As for domestic costs, there are issues of fees at seaports, such as the collection of infrastructure fees at major gateways, including Hai Phong and Ho Chi Minh City. These are also concerns of import-export businesses.

In particular, it is expected that in the near future, from July 1, 2021, Ho Chi Minh City will collect seaport infrastructure fees (fees for using infrastructure, public utility services in the seaport border area).

Currently, businesses are still being greatly affected by the pandemic. Therefore, businesses have also proposed to Ho Chi Minh City to delay the fee collection deadline to the end of the year or later.

Since the end of April 2021, the fourth outbreak of the Covid-19 pandemic has significantly affected production and business activities as well as import and export in a number of provinces with large industrial and commercial production such as Bac Ninh and Bac Giang. Could you please tell us how does the Ministry of Industry and Trade forecast the import and export situation in the coming months, even by the end of this year?

It is difficult to make accurate forecasts about the current developments of the pandemic. During the current outbreak, the hardest hit areas are Bac Ninh and Bac Giang. These are also two localities with huge export turnover. Bac Ninh ranks second and Bac Giang ranks eighth among 63 provinces and cities of the country.

The impact of the pandemic on these two localities will certainly affect the general import and export activities of the country. Therefore, it is necessary to further consider whether this pandemic is likely to be stopped soon and the impact of export decline if any, especially the group of electronics and machinery and equipment.