Import and export activities at Hai Phong port. Photo: T.Binh

Difficulties from the market

According to the Ministry of Industry and Trade, export commodity prices in the first two months of the year recorded a decline in most items, contributing to a decrease in overall export growth. The average export prices of agricultural products such as cashew kernels, coffee, cassava and cassava products decreased by 3.7%, 1.7% and 8.5% respectively over the same period last year (nut prices) consumption decreased by 31.4%, rubber decreased by 20.6%. Prices of processed industrial products also dropped sharply such as fertilizers down 25.5%, plastic raw materials down 24.8%, iron and steel down 32%.

Notably, the analysis of the Ministry of Industry and Trade shows that the international context has negatively impacted the exports of some key commodity groups of our country in the first two months of 2023. For example, textile and garment exports to two main markets, the US and the EU, dropped sharply; importing countries have stricter requirements from brands than before; China's opening will create a lot of pressure on textile exporting countries like Vietnam.

In particular, for wood products, the main export markets such as the United States and the EU will continue to reduce import demand due to the effects of inflation, economic recession, and low consumer confidence. For the European markets, although benefiting from new-generation free trade agreements, the technical standards, conformity, and requirements to prove the origin of wood that the EU posed problems. Abundant supply and high inventory in markets, especially Japan and Korea, led to the trend of orders slowing down and export prices of wood materials falling. In the Chinese market, although it has reopened, the domestic supply chain has not completely recovered, containing many risks.

Seafood is also a key commodity in Vietnam facing many difficulties. Currently, seafood importers in major markets such as the US, Japan, EU, UK tend to reduce inventories to optimize costs in the context of high inflation causing consumers to tighten spending more than before.

Although the situation is not very positive, there are positive signs in some commodity groups in the first months of the year such as the prices of some commodities including rice, gasoline, coal, and tea tend to increase compared to the first months of the same period last year.

The fact that Samsung launched a new product line earlier than last year pushed the export turnover of phones and components to increase in the first 2 months of the year. In which, exports of phones and components reached USD 9.42 billion, up 7.6% over the same period in 2022. Exports of fuel and mineral products increased slightly (4.3%) in 2 years. In the first month of 2023, estimated at USD 626 million, mainly due to the increase in crude oil exports by 12.4% over the same period.

World demand declines

The Ministry of Industry and Trade said that under the cycle of previous years, the trade deficit usually comes in the first months of the year because businesses promote the import of raw materials for export production. But this year with the absence of orders from the main markets, the situation of importing input materials has somewhat subsided. This also shows that import and export activities are likely to remain difficult in the coming months.

According to Deputy Minister of Industry and Trade Do Thang Hai, one of the biggest influences on Vietnam's exports is the world's import demand for goods in which Vietnam has strengths. The reason is that the global economy continues to face many difficulties, especially in major economies, such as the United States, EU, Japan, etc.

In the world, the situation of high inflation and high inventories have effects on the import demand of consumers, in which the strongest influence is on non-essential goods which are Vietnam's main exported goods to the developed countries' markets, such as textiles and garments, leather and footwear, etc.

The decline in world demand is a major difficulty and challenge for Vietnam's exports in 2023. Export growth in 2023 also depends on many factors such as developments in the Russia-Ukraine conflict, inflation control, and economic developments in major import markets around the world.