The reopening of China will boost Vietnam’s exports in the fourth quarter. Mirae Asset remains optimistic about Vietnam’s agricultural exports.
China’s reopening will boost Vietnam’s exports in the fourth quarter
In a recent report, Mirae Asset Vietnam Securities Joint Stock Company expects exports to continue to maintain a positive growth rate compared to the same period last year in the fourth quarter thanks to the following positive factors.
Firstly, the growth rate of input costs is still low. In addition, the global supply chain is expected to stabilize after China relaxes strict COVID-19 lockdown measures. The third factor is the reopening of China’s domestic market after the 20th National Party Congress of China.
Preliminary estimates for 9 months of 2022 show that exports to China (up 3.2% y/y) have been hardest hit.
Exports to the US (up 25.4% over the same period) still grew steadily. Note, the preliminary data of the General Statistics Office will be adjusted and is expected to be published around the middle of next month.
“The reopening of China will boost Vietnam’s exports in the fourth quarter. We remain optimistic about Vietnam’s exports of agricultural products (especially seafood products), which have been heavily affected by China’s “Zero COVID” policy, experts at here said.
Exporters of agricultural products will be more favorable
The report also said that cooling commodity prices will boost the profit margins of agricultural exporters in the fourth quarter.
Prices of many key commodities, including energy (except for natural gas and coal, in which Vietnam has some autonomy in supply) and agricultural products, are declining after a long period of strong increases in the first 6 months. year 2022.
This has directly helped reduce the cost of the manufacturer. In addition, the recent devaluation of the dong will increase the profits of agricultural exporters. Therefore, exporters of agricultural products are forecast to improve margins in the near future, especially for items with very small profit margins (such as rice).
In terms of export value, there are currently 7 product groups with export value of over 2 billion USD, including: seafood, coffee, rice, rubber, vegetables, cashew, wood and wood products.
Specifically, in the 9 months of 2022, the export turnover of aquatic products is estimated at 8.5 billion USD, up 38% over the same period; group of agricultural and forestry products reached 18.5 billion USD, up 6.2% over the same period.
In which, there are 6 items with increased export value: Coffee reached 3.1 billion USD, up 37.6% (the volume increased by 13.7%); rice reached USD 2.6 billion, up 9.3% (volume increased by 19.3%); rubber reached 2.3 billion USD, up 7.8% (volume increased by 9.7%); pepper reached USD 774 million, up 7.7% (although the volume decreased by 17.4%, the export value still increased due to the increase in export prices); tea reached USD 156 million, up 1.6% (a decrease of 0.8%).
There were 2 items with a decrease in export value: Vegetables and fruits reached $2.45 billion, down 11.1%; cashew nuts reached 2.3 billion USD, down 14% (the volume decreased by 10.6%).
Experts here reiterated the outlook for the food and beverage (F&B) sector, especially the livestock and agricultural products industry, which has been hit hard by the recent rise in oil prices and supply chain disruptions. global response, due to China’s strict lockdown.
“We believe the F&B sector will see an improvement in margins due to the recent drop in fuel and input prices and increased food demand in the future due to record-breaking global drought. . In addition, we maintain our forecast that the Chemicals/Fertilizers & Agrochemicals industry will continue to grow well in the fourth quarter,” said Mirae Asset.
Regarding the textile and garment industry, the analysts assessed that the short-term outlook was not positive. As observed, the number of orders for the fourth quarter had a decline. The reason may be due to the sharp drop in retail sales of the euro area (July: 0.9% y/y; August: 2% y/y).
Mirae Asset believes that the outlook for Europe’s retail/consumer industry in general is still difficult, consumer confidence is still low and inflation has not shown any signs of cooling down.
According to VietnamBiz.vn
