Vietnam’s Export Performance in the First Half of 2023

Vietnam’s exports in the first half of 2023 have faced significant challenges due to the global economic downturn and high inflation. According to the General Statistics Office, there were 27 export items with a value exceeding $1 billion, a decrease of 2 items compared to the same period last year, accounting for 90.1% of the total export turnover. Among them, 5 export items exceeded $10 billion, representing over 57% of the total export value.

The total import-export turnover of goods in the first six months of 2023 is estimated at $930.6 million, a 14.2% decrease compared to the same period in . Specifically, the export turnover is projected to reach $730 million, down 14.4%, while the import turnover is expected to reach $200.6 million, a decrease of 13.4% compared to the same period last year. The trade balance remains positive with an export surplus of $529.4 million.

The main reasons for the decline in export value are the prolonged conflict between Russia and Ukraine, which has greatly affected the global economy, especially in Europe. Furthermore, the year 2023 is forecasted to be challenging for export-import activities due to projected high inflation and a global economic recession, leading to reduced purchasing power and consumption. This has resulted in a sharp decrease in export orders for many key industries. Businesses are struggling to secure contracts with partners due to a shortage of orders, production difficulties, rising production costs, and interest rates.

The major export sectors of Vietnam are textiles and garments, as well as timber products. However, the seafood processing and furniture manufacturing industries have been heavily affected in the province. Seafood exports from Binh Dinh province to major markets such as the United States have experienced a significant decline due to inflation, rising interest rates, banking crises, and the country’s near-insolvency situation, which have had a significant impact on the economic demand and consumption of seafood products.

In addition, the seafood sector is still dealing with various issues such as the IUU (Illegal, Unreported, and Unregulated) yellow card and the procedural regulations for exporting seafood to the EU market, as well as the IUU regulations of Japan and the United States. This trend may continue in other markets as well. Moreover, competing seafood-producing countries have emerged strongly, gradually gaining a competitive edge with their large supply, lower costs, and maximum support from their respective governments.

In the first six months of 2023, the seafood sector is estimated to reach $55.9 million, representing only 66.7% compared to the same period last year, as global inflation has tightened consumer spending. Currently, Binh Dinh’s seafood exports reach 46 markets, with the highest exports to the US, estimated at $11.2 million, accounting for 20.8% of the total seafood export turnover. Mexico accounts for $6.4 million (11.8%), Japan for $6.2 million (11.5%), and Israel for $5.3 million (9.8%) of the direct seafood export turnover.

The furniture sector is also facing challenges, with projected revenue of $203.8 million, equivalent to 69.9% of the same period last year. The global inflation has led to a sharp decline in purchasing power, resulting in a reduction in furniture orders compared to the same period in . This is a difficult reality for the industry. Currently, the businesses with orders mainly receive small orders that are expected to be fulfilled until June 2023. The housing sector in the US is expected to remain weak in 2023, reducing the demand for wooden furniture and impacting Vietnam’s exports to the US. Regarding the EU market, a recent agreement has been reached, banning the export of agricultural products related to global deforestation, including timber products. When the EU applies these new laws, exporting wood and wood products from Vietnam to the EU will face more challenges if the wood production and export industry does not strictly comply with the new regulations from importers. Currently, businesses in the furniture processing industry, both for interior and exterior furniture, garden furniture, and synthetic rattan/wicker products, are facing difficulties. This industry attracts a large number of workers in the province, and the export difficulties have had a significant impact on the livelihoods of the local people. Given the current situation, the outlook for wood and wood product exports in the remaining months of 2023 is not very optimistic, as people in various countries continue to tighten their spending due to inflationary pressures.

To overcome these challenges, businesses need to explore new market opportunities and improve product quality to effectively compete in the international market.