Nghe An exports respond to market fluctuations to reach the finish line

Export turnover maintains growth

Total export turnover in 2022 is estimated to reach 2.52 billion USD, up 3.7% over the same period last year, exceeding the annual plan by 7.2%. Of which, goods export in 2022 is estimated to reach 2.17 billion USD, up 2.6% over 2021, exceeding the annual plan by 8.4%.

Many items grew compared to the same period in 2021 such as phone components (up 35.4%), textiles (up 19.6%), electric wires and cables (up 219.5%), processed fruits and fruit juices (up 17%), superfine white limestone powder (up 17.3%), wood pellets (up 320%), shoes and sandals of all kinds (up 531%),...

Textiles and garments continue to be the sector with high turnover in Nghe An in 2022. In photo: Production at Trong Phuc Garment Company Ltd., Dien Chau district. Photo: Thu Huyen

In 2022, the export market will be expanded in the direction of diversification and effective use of markets with which Vietnam has signed FTAs. Nghe An enterprises have exported to more than 127 countries and territories around the world, of which, exported goods are mainly to major markets such as: China (accounting for 24.6% of total export turnover), South Korea (accounting for 13%), Hong Kong (accounting for 11.3%), Taiwan (accounting for 7.8%), the United States (accounting for 11.3%),... Some new export markets this year are: Sao Tome and Principe, Costa Rica, Equatorial Guinea, Niger, Djibouti, Palau, New Caledonia, Armenia, Comoros, Vanuatu, Republic of Congo, Palau...

There are over 340 enterprises in the province (including about 200 domestic enterprises and 140 foreign enterprises) participating in the export of goods of Nghe An. According to statistics, there are 11 enterprises with a turnover of over 30 million USD, 22 enterprises with over 20 million USD. Some typical enterprises that regularly participate in export activities and achieve a good turnover (over 30 million USD), specifically: Hoa Sen Group Joint Stock Company, Thanh Thanh Dat Company Limited, Merry & Luxshare Vietnam Company Limited and LUXSHARE - ICT (Nghe An), Minh Anh Do Luong Garment Joint Stock Company, Minh Anh - Kim Lien Garment, Kido Vinh Company Limited, Em Tech Vietnam Vinh Company Limited.

Nghe An's export turnover in 2022. Graphics: Huu Quan

Sharing about the efforts of the Industry and Trade sector in promoting export turnover growth, Mr. Hoang Minh Tuan - Head of the Import and Export Department, Department of Industry and Trade said: "We regularly grasp the import and export situation of enterprises in the province, thereby promptly advising the Provincial People's Committee to remove difficulties and obstacles for enterprises to ensure the growth target in 2022. Besides connecting and gathering business leaders through digital platforms, regularly exchanging and updating information on markets, product demand, promoting exports, sharing experiences on import and export, the Department of Industry and Trade also proactively advises and organizes training conferences on C/O procedures in the RCEP Agreement; Conferences to meet with Vietnamese Trade Counselors in Korea, Australia and China with Nghe An enterprises; Training conferences on new generation free trade agreements for enterprises...".

There are challenges

The Department of Industry and Trade stated that the recent import and export results show that businesses have been making good use of free trade agreements and this continues to be an opportunity to boost exports. Director of the Department of Industry and Trade Pham Van Hoa emphasized: Free trade agreements are gradually being implemented more comprehensively and effectively. In particular, the CPTPP, EVFTA, UKVFTA agreements... will continue to create conditions for Vietnamese goods to penetrate partner markets with preferential tariffs, promoting strong export growth in the coming time.

However, businesses continue to face many difficulties in import and export activities. China is increasingly strengthening law enforcement and border trade policies by increasing supervision and strictly implementing regulations on agricultural and aquatic product imports on land borders, through measures such as traceability, packaging specifications, and food hygiene and safety.

Most tea processing lines in the province have not been invested in modern technology, and the products are mainly exported raw. Photo: Thu Huyen

Nghe An's green tea is mainly exported to Afghanistan and Pakistan, in addition to Taiwan, Iran and UAE, which are low-end markets. The Afghan market is often politically unstable, has economic crisis and inflation. These are low-end markets, do not require high technical standards, and customers can easily squeeze prices. Currently, the quality standards of tea are difficult to enter the demanding, high-tech market because the input is purchased in small quantities from people, there are still pesticide residues, there are no tea areas or tea gardens according to standards; Technology has not been renewed in the past 10 years.

Or the white limestone powder exported mainly to countries like India is also facing fierce competition from foreign rivals, especially Malaysia because the prices from these countries are much cheaper. Meanwhile, the increased costs make it even more difficult. Mr. Nguyen Trung Hai - Chairman of the Board of Directors of Trung Hai Mineral and Trading Joint Stock Company said: Sea freight has increased many times while the price has remained unchanged, causing profits to drop sharply. Enterprises in the industry are facing difficulties, competing with each other, without connection, so the price of exported products is even lower.

Food processing enterprises need to take advantage of new market opportunities to restructure production. Photo: Thu Huyen

Many export enterprises even had to stop operating due to the impact of inflation and low exchange rates of the currencies of importing countries (Korea, Japan, European countries, Laos, etc.). Many enterprises shared that Nghe An's traditional export market in Laos faced many difficulties due to the continuous devaluation of the Kip. The devaluation of foreign currencies such as Euro, Kip, Won, etc., especially the fluctuation of the USD, has also greatly affected foreign trade contracts, many enterprises have lost orders.

The tense war situation between Russia and Ukraine has changed the way of transporting goods to Russia, it cannot go directly but must be transferred through ports in Asia. Enterprises have to take a detour while fuel prices and container costs are rising. Payment time is delayed (previously committed to pay for goods after 45 days, now increased to 105 days).

International container ship BIENDONG MARINER docks at Cua Lo port. Photo: Thu Huyen

Export activities in 2023 are forecast to face a number of challenges, therefore, to achieve the target of 2.5 billion USD in export turnover, it is necessary to promote the development of foreign trade markets through supply-demand connection activities, participation in international fairs and exhibitions, organizing trade connection delegations, etc. to seek and diversify consumption markets for the province's export products, limiting risks.

Focus on expanding and developing some potential markets such as: Korea, India, Taiwan, Southeast Asia, Europe, etc. Strive to export some products of Nghe An. Research the market to orient the production of products suitable to the needs of the world market. At the same time, continue to disseminate the rules of origin and how to meet the rules of origin to help businesses grasp the opportunities opened up by FTAs, further improve the rate of taking advantage of incentives in FTAs...