Packing pomelos for export. Photo: C.T

Pressure of lack of orders

According to the Ministry of Industry and Trade (MoIT), because there were two holidays in January 2023, the number of working days in the month was lower, so the total import-export turnover was low.

In February, import and export activities were active again with an estimated turnover of US$49.46 billion, up 6.2% over the previous month and up 1.8% over the same period last year. In which, exports were estimated to increase by 9.8% over the previous month and 11% over the same period last year. Imports increased by 2.3% month-on-month and decreased by 6.7% year-on-year.

Although February has prospered, the MoIT assessed that due to the lack of export orders and the downward trend in commodity prices, trade activities continued to slow down in the first months of 2023. Generally, in the first two months of 2023, Vietnam's import and export turnover of goods was estimated at US$96 billion, down 13.2% over the same period last year. In which, export turnover decreased by 10.4%, reaching US$49.44 billion; imports decreased by 16%, reaching US$46.62 billion.

For export activities, in February 2023, the turnover was estimated at US$25.88 billion, up 9.8% compared to January 2023. In which, the domestic economic sector reached US$6.08 billion, up 11.7%; the FDI sector (including crude oil) reached US$19.8 billion, up 9.3%. Compared to the same period last year, the export turnover of goods in February 2023 increased by 11%, of which the domestic economic sector increased by 5.7%, the FDI sector (including crude oil) increased by 12.7%

Generally, in the first two months of 2023, merchandise exports were estimated at US$49.44 billion, down 10.4% over the same period last year. In which, the export turnover of domestic enterprises decreased by nearly 21.1%, reaching US$11.52 billion; FDI enterprises (including crude oil) decreased by 6.6%, reaching US$37.92 billion.

In the first two months of 2023, there were eight items with export turnover of more than US$1 billion, accounting for 69.9% of total export turnover (there were three export items of over US$5 billion, accounting for 45.9%).

Regarding imports, the turnover in February 2023 was estimated at US$23.58 billion, up 2.3% over the previous month. In which, the domestic economic sector gained US$7.7 billion, up 2.5%; the FDI sector reached US$15.88 billion, up 2.3%. Compared to the same period last year, the import turnover of goods in February decreased by 6.7%, of which the domestic economic sector decreased by 7.2%; and the FDI sector decreased by 6.4%.

Generally, in the first two months of 2023, import turnover was estimated at US$46.62 billion, down 16% over the same period in 2022. The domestic business sector was estimated at US$15.2 billion, down 17.3%; FDI enterprises were estimated at US$31.41 billion, down 15.3%.

In the first two months of 2023, there were 13 imported items worth more than US$1 billion, accounting for 69.1% of the total import turnover (there were two imported items over US$5 billion, accounting for 39.3% of the total import turnover).

According to the MoIT, Vietnam's trade balance in February 2023 continued to have a surplus of US$2.3 billion, bringing the total trade deficit in the first two months to US$2.82 billion (the trade deficit was more than US$300 million in the same period last year). In which, the domestic economic sector had a trade deficit of US$3.69 billion; the FDI sector (including crude oil) had a trade surplus of US$6.51 billion.

According to the cycle of previous years, the trade deficit usually came in the first months of the year because businesses promoted the import of raw materials for export production. However, because of the absence of orders from the main markets, the situation of importing input materials has somewhat subsided this year. This also showed that import and export activities were likely to remain difficult in the coming months.

Continuously implement solutions to diversify export markets

At the regular Government meeting, on March 3, 2023, Minister of Industry and Trade Nguyen Hong Dien said that traditional markets would be promoted, and export markets would be diversified. Specifically, continue to closely monitor developments of the world economy, especially policy adjustments of major economies such as the US, China, the EU, and Japan that have affected Vietnam, thereby promptly giving warnings to the business community and advising the Government on appropriate policy responses.

Besides, there is still plenty of room to develop markets in northern Europe, eastern Europe, and Latin America. Therefore, the Ministry will continuously promote the negotiation of new FTAs such as the FTAs with Mercosur countries (Brazil, Argentina, Uruguay, and Paraguay) to turn them into a driving force to exploit the Latin American market; take advantage of the rapid recovery of markets in the ASEAN region and some Asian countries to boost exports.

Simultaneously, carry out a comprehensive assessment of China's reopening measures; take advantage of opportunities for exchanges and cooperation between the two sides to promote the export of goods that are not subject to Covid-19 testing. Improve efficiency and regulate the speed of customs clearance at the border gate, and effectively implement the official export scheme.

Additionally, the MoIT will strengthen support for businesses, raise awareness about sustainable production and consumption to meet increasingly strict standards and regulations of developed countries; the trend of sustainable development and greening in the EU's consumer and fashion industries; and new regulations in the appraisal of supply chains of the EU for export industries.