Trade surplus is looming

Friday, 2019-11-08 12:03:50
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Agricultural exports are one of the key drivers of Vietnam’s exports this year
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NDO - Despite an expected slowdown in mobile phone exports in November and December, Vietnam will likely enjoy a major trade surplus this year, with a series of new drivers.

According to the latest figures from the Ministry of Industry and Trade (MoIT), the domestic economy witnessed a trade surplus of over US$7.05 billion in the first 10 months of 2019, with total export and import turnover reaching over US$217.05 billion and US$210 billion, respectively.

This surplus was also higher than US$6.33 billion, US$1.09 billion, and US$3.18 billion in the same periods of 2018, 2017, and 2016, respectively.

“With this positive development, 2019 will likely be the fourth consecutive year in which Vietnam will see a trade surplus, with the economy shifting from a trade deficit to a trade surplus in recent years,” stated an MoIT report.

In 2016, 2017, and 2018, the trade surplus figures were US$2.52 billion, US$2.92 billion, and US$7.2 billion, respectively.

Earlier, the Ministry of Planning and Investment reported that based on positive export-import achievements since early this year, Vietnam will likely witness a record total export-import turnover of US$525 billion this year, up 9.2% year-on-year.

Of which the export turnover is estimated to be US$263 billion, up 7.9% year-on-year, hitting the National Assembly’s target of 7-8% in export turnover growth. The import turnover is estimated to be US$262 billion, a rise of 10.6% compared to the same period last year.

This would mean that in 2019, Vietnam will enjoy a trade surplus of US$1 billion, equivalent to 0.4% of total export turnover.

Notably, the trade surplus for Vietnam this year could be even higher if the Republic of Korea’s Samsung boosted its smartphone exports in November and December. However, according to the MoIT, the giant will slow down its exports in the remaining two months of the year.

In October, Vietnam’s total export turnover hit US$22.4 billion, down 4.1% month-on-month, largely due to Samsung finishing the boosting of exports of its new Galaxy Note 10 smartphone, leading to a 13.5% reduction in Vietnam’s smartphone and spare part exports.

Last year, Samsung Vietnam’s export turnover totaled over US$60 billion, accounting for 25% of the country’s total.

However, MoIT Deputy Minister Cao Quoc Hung pointed out some key drivers of Vietnam’s export growth until the year’s end, including traditional staple exports, such as garments and textiles, footwear, and wood products.

“Normally export turnover in the latter months of the year is higher than that at the beginning of the year because this is the time for preparing for goods to serve shopping for festivals such as Christmas and New Year globally,” Hung said.

Minister of Agriculture and Rural Development Nguyen Xuan Cuong told the National Assembly that this year, wood exports will likely bring in at least US$11 billion, up from nearly US$9 billion last year.

“Demand for Vietnamese wood products are on the rise, in defiance of global market uncertainties,” Cuong said.

To Ngoc Ngoi, general director from woodwork exporter VinaFor Saigon, told Nhan dan Online that his company reaped an export turnover of US$5 million in the first 10 months of 2019, and the figure is expected to be US$6 million for the whole year.

“Not only my company, but all woodwork exporters in Vietnam will benefit greatly from exports this year,” Ngoi said.

Two weeks ago, Vinafor Saigon and New Zealand’s Sequal Holdings Limited inked a distribution agreement, through which Sequal Holdings Limited will provide timely custom cut Radiata pine wood to VinaFor’s manufacturers.

“We import the wood and can resell it to other processors, who will use the material to manufacture products which will then be exported to Europe and the US,” Ngoi said.

In the first 10 months of 2019, Vietnam’s export turnover from footwear hit US$14.6 billion, up 11.2% year-on-year. The footwear sector is expected that the figure will be US$21.5 billion this year, up over 10% year-on-year.

Meanwhile, the export turnover of textiles and garments is forecast to be US$27.36 billion, up 8.7% year-on-year. It is expected that the figure will be US$40 billion this year, up from US$36 billion last year.

“One of the key propellants for a rise in Vietnams’ exports is that exporters have been taking advantage of opportunities from free trade agreements in order to expand their exports, and the domestic business climate has been remarkably improved,” Hung noted.