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The crisis caused by the Covid-19 epidemic created a phenomenon unprecedented in history when world demand suddenly stopped. This makes Vietnam’s exports face many difficulties.
Concerned about volatility in the US USA And the EU
According to the General Statistics Office, in the first quarter of 2020, Vietnam’s export reached 59.08 billion dollars, 0.5% more; Imports reached 56,260 million dollars, 1.9% less. The trade surplus in the first quarter of this year reached $ 2.8 billion (the same period last year had a trade surplus of $ 1.5 billion). In particular, the domestic economic sector had a trade deficit of US $ 4.4 billion; The FDI sector (including crude oil) recorded a surplus of $ 7.2 billion.
Trade expert Pham Tat Thang assessed that although the growth rate of exports in the first quarter of this year was quite low, it was still growth, Vietnam still had a trade surplus. This shows that the export of the last time was seriously affected by the Covid-19 epidemic, but that rate was acceptable.
But in the second quarter, the situation could be much more serious because many EE partners. USA And the EU simultaneously canceled and extended Vietnam orders due to Covid-19.
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| Textile has never faced such a difficult situation today. |
For example, the US markets. USA And the EU represents more than 50% of the export value of Samsung Electronics Vietnam products. Samsung’s global sales and production are forecast to decline due to the overall impact of the epidemic on overall electronics. Samsung Vietnam is also expected to lower its export target to approximately $ 45.5 billion in 2020 (compared to $ 51.38 billion in 2019).
As for the timber industry, if the situation does not improve, after the next 1-2 weeks, the timber industry companies are expected to reduce 70% of their capacity, just to maintain the rotation regime. In the next 3-4 weeks, most companies will stop producing entirely according to export orders. Some companies that produce domestic products can only produce in moderation, about 10-15% of the plant’s capacity.
Many large customers in the United States and the EU have asked Vietnamese textile and clothing and footwear companies to delay and delay the delivery process, and have not signed new contracts. In some cases, clients have requested to cancel the contract. The number of orders in April and May from these two industries is expected to decrease by approximately 70%, no new orders will be negotiated from June and the ability to retrieve orders until the end of 2020 is very slow.
In a report to the Prime Minister on March 31 on the impact of the Covid-19 epidemic on industries, the Ministry of Industry and Commerce said fluctuations in the US. USA And the EU would directly affect the country’s main export sectors. Vietnam as electronics, textiles, footwear, carpentry. The production capacity of these industries far exceeds the demand for domestic consumption, mainly directed to foreign markets, with the largest concentration in the US markets. USA And Europe.
“The difficulties in export markets will be more serious than the shortage of raw materials in China,” said the Ministry of Industry and Commerce.
Meanwhile, it is difficult to redirect exports to other countries because these markets (India, Korea, Japan …) are generally difficult to compensate for the shortage of the US market. and Europe, meanwhile, Vietnam’s textiles and footwear may face significant competition from Chinese products due to their very large and substantially restored production capacity.
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| EVFTA was approved after 10 years of waiting, now is the time to wait for the agreement to take effect to compensate for the damage caused by Covid-19. |
Still rekindle hope
Mr. Bui Trong Tu, Deputy Director of the Department of Trade and Services Statistics (Office of General Statistics), was concerned that exports in the first quarter had a very low growth rate during the same period. Recently, the Covid 19 epidemic suddenly erupted in Europe and the United States. Most orders from companies in the United States and Europe are on hold. If the second quarter of the epidemic continues to boom, it will certainly affect Vietnam’s exports. Because outside of China, these are two relatively large markets in Vietnam, especially textiles, footwear, and seafood.
Therefore, in the near future, when the Covid 19 epidemic is reduced in these markets, we must take advantage of the Vietnam – EU free trade agreement (EVFTA).
The Director General of the General Statistics Office, Nguyen Bich Lam, said that when the EVFTA comes into force, exports to the EU can achieve decent growth of more than 20% this year and this number will continue to increase in the following years. . One of the export products with many advantages is seafood. When EVFTA comes into force, Vietnamese seafood will compete with similar products from other countries.
“With regard to exports of agricultural, forestry and fishery products in general to the EU, in 2019 the total value of income will be USD 2.6 billion, which represents 6.4% of the total volume of exports to this market. Exports of this item are expected to increase in 2020, representing approximately 10% of total exports to the EU market, “said Mr Lam.
Trade expert Pham Tat Thang hopes that if the EU can control the Covid-19 epidemic in the second quarter to start the third and fourth quarters, to restore production activities, EVFTA will be the broad route and the door to go. the products. EU Market … If the Covid-19 epidemic was brought under control in the second quarter, even though the first-quarter export was “flat”, Vietnam could make good use of EVFTA, it could still make up for previous losses The “ultimate goal” target increased by 7-8%.
Furthermore, China has initially controlled the epidemics and is a close market for Vietnam. Therefore, Mr. Pham Tat Thang pointed out that attention should be paid to promoting exports to the Chinese market, especially food products, food, fresh vegetables, etc. It can be said that this is the golden period. for Vietnam to boost exports to China.
Hà Duy
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Raw materials imported from China are no longer a concern for many industries, but US partners. USA And the EU cancels orders, making production face huge challenges. The priority now is not for companies to go down.
