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Domestic enterprises have started to recover when exports increased by 12%. Photo: Danh Lam

Acceleration

According to the latest statistics from the General Department of Customs, Vietnam’s total export turnover in the first three months of 2017 reached nearly $ US 44.64 billion, increasing by 15.1% over the same period of 2016. Compared to the growth rate below 10% in 2016, this was a relatively good rate. Bringing the total export turnover and the export turnover of the domestic enterprises to an increase of about 12%, and FDI enterprises to an increase of 13%.

Mr. Phan Van Chinh, Director of Import-Export Department (Ministry of Industry and Trade) remarked that comparing to the last year’s growth rate, when the growth rate of domestic enterprises was below 1% and much lower than the growth of FDI enterprises (over 5%), the domestic enterprises had an export growth rate of 12%, which nearly balanced with the FDI enterprise’s growth rate, being is a remarkable result.

The growth rate of 15.1% in the first quarter of 2017 was due to the contribution of all groups. Specifically, the mineral fuel group was estimated at $ US 1.05 billion, up by 43.5%, equivalent to $ US 318 million to the same period last year. This growth was mainly caused by price factor: Coal price increased by 46%, petroleum increased by 64% and liquefied gas increased by 42% ... especially crude oil, although it dropped by 14.2% in exported volume but increased by 30.5% in value due to the increase in price of 50.4%, despite the crude oil only accounted for 2.4% of total export turnover and was not encouraged to export, Le Quoc Phuong, Deputy Director of the Vietnam Industry and Trade Centre (Ministry of Industry and Trade), said that this was also a factor to increase export growth.

The group of agriculture, forestry, and fisheries continue to record its recovery and positively contribute to the export growth, reaching $ US 5.46 billion, accounting for 12.5% of total export turnover. Most of the items had a high growth, such as rubber increased 90.7%, coffee 27.5% vegetables and fruits increased nearly 30%. However, Mr. Phuong said, there were 3 items with turnover reduction: rice, pepper and cassava, in which rubber declined (down by 23.3%) mainly caused by the export decline (23.9%) due to the competitive pressure and quality quarantine barriers of the major export markets in the traditional export markets of Vietnam such as Malaysia, Ghana, and Hong Kong.

Meanwhile, the group accounting for the largest proportion - 80% of the total export turnover was processing industry which also increased steadily and was estimated at $ US 35.08 billion, up by 12.5% over the same period. Especially, key export items (an average of more than $ US 1 billion per month) all increased, such as computers and electronic products increased by 42.3%; Machinery, equipment, and spare parts increased by 34.6%; Textiles increased by 10.3%.

There are still advantages

Sharing with a Customs reporter, Mr. Phuong said, thanks to factors such as an increase in price, increase in demand of import countries and FTAs that Vietnam signed and came into effect, that promoted the exports in the recent times. As for the price factor, most of the items well increased. For example, thanks to the price factor, the mineral fuel group increased $ US 318 million over the same period last year. As for agro-forestry-fishery products, the increase in export turnover was mainly due to the price increase of all commodities in this group, though some commodities decreased in volumes such as cashew nuts, cassava, and coffee.

These advantages are the basis for the Ministry of Industry and Trade to forecast that "Exports will continue to have positive growth and better than the first quarter of 2017, contributing to control of trade deficit". As analyzed by a leader of the Ministry of Industry and Trade, in the first quarter of 2017, enterprises promoted to import raw materials, fuels and ancillary materials for production such as petroleum, corn, rubber, cotton, iron and steel. Import growth of this commodity group in the first quarter is a precondition to predict that the exports will be able to grow positively in the coming months because this is the input for export production. Moreover, according to the cycle, the export of agricultural and fishery products normally decreases at the beginning of the year, increases in the middle of the year and reaches the peak at the end of the year; and the industrial items with large turnover such as textiles, footwear, and furniture enter the export season from the middle of the second quarter.

However, besides advantages, a factor that brought two-dimensional effects to Vietnam’s exports was a market factor. In fact, Vietnam's export is still mainly dependent on the world market, if the world's demand is reduced, the Vietnam’s export will be immediately affected. The difficulties in export in the recent years proved this. In addition, Mr. Phuong also acknowledged, the exports in the second quarter of 2017 also depends on whether the price is maintained as it in the recent times or not? Do the major export marketing set up a technical barrier because all countries set up barriers to limit the exports to their countries upon the sudden export increase?

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According to Mr. Tran Tuan Anh, Minister of Industry and Trade, in the coming time, it is necessary to diversify export products and export markets against dependence on some key commodities and some key export markets. For example, the export turnover of the Samsung company decreased by $ US 828 million in the first quarter of 2017, thereby the export growth of the processing industry dragged down. Without this decline, the growth in export turnover in the first quarter of 2017 would increase by 19%.