Commodity exports – one of the important growth drivers of Vietnam, is facing difficulties due to high inflation and reduced purchasing power, which is the cause of many key commodity industries’ decline in orders.
In order to support businesses under the direction of the Prime Minister at Official Dispatch 238/CD-TTg on promoting production, business, construction investment and import and export in the coming time, the Ministry of Industry and Trade has been aggressively together with enterprises to remove bottlenecks with a proactive attitude with many practical and effective solutions.
Mr. Phan Van Chinh, Director of the Import-Export Department (Ministry of Industry and Trade), said that although relatively positive results have been achieved in 2022, the operation export Vietnam’s goods in the first months of 2023 have recorded many difficulties.
Specifically, export and import turnover both decreased compared to the same period last year and decreased in both domestic enterprises and foreign invested enterprises (FDI); exports to other regions and markets also decreased; In which, the biggest decrease was in the Americas and Europe markets. Regarding the group of export products, there was a sharp decrease in the group of processed industrial products, especially industrial consumer goods.
According to Mr. Phan Van Chinh, the reason for the decrease in production and export compared to the same period last year is due to inflationary high, purchasing power decreased, especially non-essential consumer goods.
In addition, the high cost of input materials, while the export price does not increase, reduces the competitiveness of products, and enterprises produce moderately to avoid risks.
Some industries such as seafood, wood and wood products, iron and steel, and plastic products are facing pressure on trade remedies investigation. Competitive factors in the market affect the price of exported goods.
Data from the General Statistics Office shows that, in the first 4 months of 2023, export turnover of goods is estimated at 108.57 billion USD, down 11.8% over the same period in 2022; in which, the domestic economic sector gained 28.58 billion USD, down 11%, accounting for 26.3% of total export turnover; FDI sector (including crude oil) reached 79.99 billion USD, down 12.1%, accounting for 73.7%.
Mr. Than Duc Viet, General Director of Garment 10 Corporation. (Photo: Duc Dung/BNEWS/VNA).
Mr. Than Duc Viet, General Director of Garment 10 Corporation shared, normally at this time, enterprises already have order information for the third quarter. However, this year, customers in the export market all answered that there was no information and waited to consider the amount of inventory before they could continue counting.
Currently, businesses are being affected by the shrinking output market and a decrease in export orders. Particularly in the first quarter, businesses decreased by 10%; In the second quarter, the third quarter is said to be the peak period for apparel consumption, but the number of orders decreased by 20-30%.
Similarly, Mr. Pham Xuan Hong, Chairman of Ho Chi Minh City Textile, Garment, Embroidery Association, said that in the first quarter of 2023, most businesses will have their orders reduced by 30-40%. The reason is that inflation in major textile export markets of Vietnam has increased, causing people to save money and limit consumption of non-essential items.
On the other hand, high energy costs have pushed up input costs and added difficulties for businesses. Therefore, many businesses are willing to accept difficult and cheap orders from only 1,000 to 3,000 products per code.
In the face of a situation where orders have dropped to only 30%, there is a market that is almost frozen, and meals are measured by container, businesses have to cut back. labor At the factory, experts said that it is necessary to have more open and favorable business support mechanisms and policies for businesses. In particular, there are solutions to improve the ability to access capital of small and medium enterprises so that enterprises have resources to invest in production and business systems.
According to a survey by the Vietnam Association of Small and Medium Enterprises, only about 38% to 45% of small and medium enterprises have access to credit. The number of small and medium-sized enterprises that have not yet been able to access capital face obstacles in terms of conditions and procedures for bank loans.
Therefore, there have been tens of thousands of small and medium-sized enterprises that had to stop operating or dissolve because they did not have the financial resources to continue implementing the production and business plans.
The market decreased purchasing power, slow recovery of orders resulted in inventories of both inputs and outputs. Meanwhile, businesses are facing old loans that are due, if there is no mechanism to handle, many businesses will turn to bad debt, leading to many consequences.
Moreover, in the current context, businesses not only need short-term capital to maintain operations, but also need capital for investment and restructuring. For example, digital transformation, technology transformation, etc. In addition, there should be a ceiling deposit interest rate to make the loan interest rate about 5-6%/year, with a margin of 2-3%, the business will operate effectively and profitably.
In 2023, the Ministry of Industry and Trade has set a target of export turnover of 393-394 billion USD, up 6% compared to 2022. However, only 20% of the target will be completed by the end of the first quarter of 2023, which means pressure for The next quarters will certainly be more.
Analysts also pointed out that the decline in Vietnam’s exports is not over yet, as global demand continues to weaken through 2023. The risk of a global recession could clearly affect orders. goods of factories – the lifeblood of the economy.
In order to effectively implement the Official Dispatch No. 238 dated April 10, 2023 of the Prime Minister to support enterprises to soon promote production and business, construction investment and import and export, the Ministry of Industry and Trade has presided over and directed lead important conferences towards the purpose of finding solutions to open the market; both to maintain export targets, set for 2023, and to boost domestic production.
According to the plan in 2023, there must be an increase of 6% or more and a turnover of nearly 800 billion USD. However, in the first quarter of 2023, we only achieved import-export turnover of USD 156 billion and if there is no breakthrough in the following quarters, the whole year forecast is only around USD 600 billion.
Forecasting the coming time, Minister Nguyen Hong Dien said that the political and economic situation in the world is still potentially complicated and difficult to predict; world aggregate demand will decrease and the competition of export products among countries will be even more difficult; There will be many technical barriers that reduce the motivation and reduce the ability to export.
For the domestic market, the impact from corporate bond issues, frozen real estate market and the fear of responsibility of agencies, organizations and individuals… It is followed by stagnation and slow change. New technology, management, slow innovation in production and business methods of many enterprises will still hinder development and it will be difficult to exploit the advantages from the Free Trade Agreement (FTA) that Vietnam has signed. Is a member.
Therefore, in order to promote exports, the Minister asked businesses and industry associations to continue researching and implementing mechanisms and policies to exploit the market in which Vietnam is a member of the FTA.
At the same time, strengthen grasping mechanisms and policies of importing countries; focus on studying international laws and the laws of the host country to perform well the trade defense function in the case of disputes between enterprises and partners, especially foreign partners.
On the other hand, production, business, import-export enterprises need to strongly restructure in the stages of management, production organization, and cost reduction. At the same time, promote official export production in association with product branding for sustainable export.
In addition, the Minister suggested that the Department of Industry, the Chemical Department, the local Department of Industry and Trade, etc., according to their respective functions and duties, urgently organize working meetings with branches and localities to exchange, discuss and find ways to solve the problem. .
For supporting production, export and market expansion, the Minister requested the Trade Promotion Department, the Import-Export Department, the Trade Remedy Department, etc. to do well with market information, especially potential markets. capacity through the organization of periodic meetings between the Trade Office and industry associations, large domestic manufacturing and exporting enterprises, as well as local representatives.
In addition, it is necessary to innovate and improve the efficiency of trade promotion activities, to step up the development of e-commerce, especially cross-border e-commerce; focus on guiding and supporting associations and businesses to exploit and promote traditional markets and open new markets with rich potential…
As for ministries and branches, Minister Nguyen Hong Dien suggested that the Ministry of Agriculture and Rural Development coordinate with the Ministry of Industry and Trade to continue negotiating with other countries to open the market for agricultural, forestry and fishery products that Vietnam has purchased. South has the advantage.
Moreover, the State Bank, it is necessary to have policy solutions to direct credit into production and business, especially credit packages according to the product value chain. Prioritize the export sector, research and have a policy of freezing and extending debt for enterprises, especially manufacturing and exporting enterprises.
In particular, the Ministry of Finance should consider the issue of VAT refund; at the same time, continue to research and advise the National Assembly and the Government on the reduction, relaxation and postponement of some taxes, creating more resources for enterprises to develop.
According to VietnamBiz.vn
