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Why is Vietnam's trade surplus 11 times higher than in the same period in 7 months?

Trade surplus in 7 months is 11 times higher than that year on year. Photo: ST

Import turnover decreased by 17.1%

The reason analyzed by the Ministry of Industry and Trade is that imports fell more sharply than exports.

According to a report of the Ministry of Industry and Trade, in the first seven months of 2023, the import turnover of goods was estimated at 179.5 billion USD, down 17.1% over the same period last year, of which the domestic economic sector reached 64. 1 billion USD, down 16.1%; FDI sector reached 115.4 billion USD, down 17.7%.

The reason for the decrease in imports is due to difficulties in production and export, so the import turnover of goods, especially raw materials and accessories of Vietnam from most markets in the past 7 months has decreased compared to the same period last year. Particularly, China is still the largest import market of Vietnam with an estimated turnover of 58.59 billion USD, down 18.4% year on year; South Korea ranked the second position with an estimate of 28.52 billion USD, down 25.3%. ASEAN market reached 23.56 billion USD, down 16.6%; Japan reached 12.11 billion USD, down 12.6%; EU market reached $8.56 billion, down 5.9%; The United States reached 8.1 billion USD, down 6.4%.

Import turnover of commodity groups requiring import restriction decreased by 12.8% over the same period last year, estimated at 10.94 billion USD. Goods that fell sharply are included Iron and steel scrap (down 25.9%), gems, precious metals and products (down 28%), auto parts and accessories with less than nine seats (down 28%), goods household electrical appliances and components (down 19%). However, turnover increased in a few items including vegetables and fruits (up 2.6%), complete car with less than nine seats (up 18.5%).

On the other hand, in the first 7 months of 2023, export turnover of goods was estimated at 194.73 billion USD, down 10.6% over the same period last year. In which, the domestic economic sector reached 51.5 billion USD, down 10.2%, accounting for 26.4% of total export turnover; FDI sector (including crude oil) reached 143.23 billion USD, down 10.8%, accounting for 73.6%.

According to the Ministry of Industry and Trade the decline in industrial production and import-export activities in the past 7 months was resulted from the tighten purchasing expenses of the major Vietnam's export partners such as the United States and the EU, led to a decrease in the volume of orders. Meanwhile, domestic industrial production was mainly export-oriented, heavily dependent on the global market due to domestic production output far exceeds the demand of the domestic market, especially for industries such as textiles and garments, leather - shoes, electronics, etc., which only supply 10% of the output and 90% of the rest output for domestic demand is for export.

Export prices tended to decrease in the first 7 months of 2023, in which the prices of many agricultural products such as cashew kernels, tea, pepper, rubber, etc. have all decreased compared to the same period last year, such as: pepper down 28, 4%; rubber down 20.6%. Especially, export prices of some processed industrial products dropped sharply at double digits such as: crude oil down by 25.2%; petrol and oil of all kinds decreased by 16.9%; Fertilizers of all kinds decreased by 36.2%; Plastic raw materials decreased by 25.2%; Textile fibers and yarns of all kinds decreased by 23%; Iron and steel of all kinds down 24.8%...

The reopening of China also created competitive pressure on Vietnam's exports of the same type. Meanwhile, our businesses are still facing many difficulties due to decreasing foreign orders, low purchasing power in the domestic market, high input costs, and not easy access to credit...

Continue to accelerate the negotiation and signing of new FTAs

In order to develop the export market, the Ministry of Industry and Trade said that in the coming time, it will continue to promote negotiations and sign new agreements, commitments and trade links, including completing the implementation of FTAs with Israel, signing of FTAs, trade agreements with other potential partners (UAE, MERCOSUR...) to diversify markets, products and supply chains.

Support businesses to take advantage of commitments in FTAs, especially CPTPP, EVFTA, UKVFTA agreements to boost exports, through propaganda on rules of origin and issuance of Certificates of Origin, opportunities and ways to take advantage of opportunities from agreements.

At the same time, coordinate with the Ministry of Agriculture and Rural Development to negotiate with China to open more export markets for other Vietnamese fruit and vegetable products such as green-skinned pomelo, fresh coconut, avocado, pineapple, and breast milk. , lemon, cantaloupe…

Improve efficiency and well regulate the speed of customs clearance of import and export goods at the border gate area between Vietnam and China, especially for seasonal agricultural and aquatic products; fast and strongly shift to official export.

In addition, the Ministry of Industry and Trade also strengthens early warning of trade remedy lawsuits; instruct businesses on how to respond to lawsuits; timely inform businesses and associations about new information, demands and regulations of the market.