Vietnam's seafood export rose 39.9 percent yoy to US$ 1.05 billion in April 2022.

Vietnam’s export values rose 25.0 percent yoy (-4.2 percent mom) to almost US$33.3 billion in April 2022, according to GSO. The export growth rate has improved dramatically from the first quarter of 2022, when total export value increased by 13.7 percent year on year.

In April 2022, several factors that supported Vietnam's exports, include (1) increased manufacturing output as a result of improved COVID-19 conditions in Vietnam, (2) strong demand for Vietnam's exports in the context of global shortages of food and production materials due to the impact of the Russia-Ukraine conflict, and (3) improved export prices amid a sharp rise in global commodity prices.

The most striking feature of April's export activity was a substantial increase in the shipment of all types of phones. According to GSO data, the total value of phone exports in April 2022 was US $6.2 billion, up 1.6 times from the same period previous year. The Galaxy S22, Samsung's top phone, was given to consumers all around the world, which contributed significantly to this outstanding increase. Electric goods and computers (23.2 percent yoy), machinery and equipment (13.4 percent yoy), textiles (25.4 percent yoy), footwear (18.9 percent yoy), wood and wooden products (5.7 percent yoy), automobiles (6.3 percent), seafood (39.9 percent yoy), steel (23.6 percent yoy), and cameras and camcorders (59.4 percent yoy) were among Vietnam's top export products in April 20.

That said, whether Vietnam’s exports can be sustained at such a fast pace is worth considering. Indeed, its bounce in industrial production is stronger than peers, partly reflecting a boost since Vietnam re-opened its economy last October. However, in HSBC’s opinion, trade headwinds are stiffening.

For one, as the impact of COVID-19 on household spending fades, global demand has gradually shifted from goods to services. Take the US as an example. The gap between goods and services has been shrinking, as spending on services has accelerated. This has key implications for Vietnam’s exports, given the sheer dominance of the US. The US has been Vietnam’s largest export destination since 2004, with its share rising to a record high of 30%.

The other factor is China. There is a popular argument that Vietnam may reap the benefits from China’s supply chain disruptions, as more firms may likely diversify their production lines. However, we also need to be mindful that Vietnam itself is sensitive to China’s supply chain disruptions, as evidently shown at the start of COVID-19 in early 2020.

"While Vietnam’s exports have been shining over the years, its manufacturing base is quite import-intensive. Around 30% of its imports come from China, most of which are concentrated in electronics (30%) and machinery equipment (22%). As such, prolonged logistic bottlenecks in China pose headwinds for Vietnam’s future export growth. Indeed, how to secure materials given COVID-19 restrictions in China has been frequently flagged as a major concern for local producers,"HSBC’s analysts said.