Losing nearly 23 billion USD, the Chinese market is a bright spot; Japan "prefers" Vietnamese squid and octopus

Exports fell short by nearly 23 billion USD, the Chinese market is a bright spot; Vietnamese fresh lychees gradually conquer US consumers... are the highlights in the export news bulletin on June 30 - July 2.

Timber exports have declined dramatically. (Source: Investment Newspaper)

Exports fall short by nearly 23 billion USD, Chinese market is a bright spot

In the first 6 months of 2023, the export turnover of goods is estimated at 164.45 billion USD, down 12.1% over the same period, equivalent to a decrease of 22.75 billion USD.

Export activities are strongly affected by the world economy . Although global inflation has cooled down, it is still high, many major economies, including Vietnam's important trading partners, have slowed down their growth, even falling into recession, making the export picture not as bright as expected.

This impact is clearly seen in the export figures just announced by the General Statistics Office. Accordingly, the export turnover of goods in the first 6 months of 2023 is estimated at 164.45 billion USD, down 12.1% over the same period, equivalent to a decrease of 22.75 billion USD. Of which, the domestic economic sector reached 43.41 billion USD, down 11.9%; the foreign-invested sector (including crude oil) reached 121.04 billion USD, down 12.2%.

There were 27 items with export turnover of over 1 billion USD, accounting for 90.1% of total export turnover (of which, 5 items had export turnover of over 10 billion USD, accounting for 57.8%). Difficulties in the market, when the EU, the US, South Korea, and Japan all reduced purchases from Vietnam, caused all 5 export items of over 10 billion USD to decrease from 8.2% to 17.9% compared to the same period.

Specifically, exports of phones and components decreased by 17.9%, reaching 24.3 billion USD; computers, electronics and components decreased by 9.3%, reaching 25.2 billion USD; other machinery, equipment and spare parts reached 19.73 billion USD, down 8.2%. Meanwhile, textiles and footwear decreased by 15.3% and 15.2%, equivalent to 15.75 billion USD and 10 billion USD, respectively.

Even commodity groups with smaller export contributions also declined. Wood and wood products decreased by 28.8%, reaching 6 billion USD; other base metals decreased by 13.3%, reaching 2.13 billion USD; iron and steel decreased by 17.2%, reaching 4.13 billion USD; iron and steel products decreased by 16.3%, reaching 2.05 billion USD; fibers decreased by 26.2%, reaching 2 billion USD; handbags and suitcases decreased by 9.4%, reaching 1.84 billion USD.

In the first half of 2023, exports to all major markets decreased. Of which, exports to the US reached 44.2 billion USD, down 22.6% over the same period; China reached 25.6 billion USD, down 2.2%; exports to the EU reached 21.6 billion USD, down 10.1%; to Japan reached 11 billion USD, down 3.3%; to ASEAN reached 16.3 billion USD, down 8.7%; to South Korea reached 10.9 billion USD, down 10.2%.

The bright spot is that exports to China are recovering quite strongly, pulling back the 6.8% decrease of 5 months to a decrease of 2.2% after 6 months.

Along with that, some items recorded very high growth rates, such as rice brought in 2.3 billion USD, up 34.7%; vegetables and fruits 2.75 billion USD, up 64.2%; cashew nuts 1.62 billion USD, up 7.7%; coffee 2.04 billion USD, up 3%; paper and paper products nearly 1.05 billion USD, up 10.7%; means of transport and spare parts 6.6 billion USD, up 14.4%.

Fresh Vietnamese Lychees Conquer US Consumers

The Vietnam Trade Office in San Francisco has coordinated with agencies and businesses to import fresh lychees from Vietnam for consumption in the US market.

Following the success in bringing lychee to penetrate large supermarket systems (Safeway, Albertsons, Winco, ...) in the US market in 2022, implementing the Project "Promoting Vietnamese Enterprises to Directly Participate in Foreign Distribution Networks by 2030" in Decision No. 1415/QD-TTg dated November 14, 2022 of the Prime Minister, implementing the direction of the Ministry of Industry and Trade and the Consulate General of Vietnam in San Francisco, since November 2022, the Trade Office Branch in San Francisco together with the Vietnam Trade Office in Washington DC has mobilized and coordinated with domestic agencies, enterprises and US enterprises to import fresh Vietnamese lychee for consumption in the US market, especially in the West Coast states of this country.

After many efforts, with the close coordination of domestic agencies and enterprises, especially thanks to the perseverance, determination and professional investment of Dragonberry Produce Company, a US enterprise headquartered in Canby, Oregon, nearly 20 tons of fresh lychees transported by sea were successfully imported, officially distributed and sold at Safeway and Albertsons supermarket chains in the West Coast states of the United States including Washington, Oregon and California from June 30, 2023, just in time to serve the American people on the occasion of Independence Day on July 4.

Safeway (https://www.safeway.com) and Albertsons (https://www.albertsons.com) are the largest supermarket chains on the West Coast of the United States, with Safeway having 913 stores and Albertsons having over 300 stores.

It can be assessed that continuing to bring lychee to these supermarket systems at a fairly competitive price, only 3.99 USD/pint, equivalent to 200,000 VND/kg, is a great success in promoting the consumption of Vietnamese fruits in general and lychee in particular in the US market, because most of our country's fruits exported to the US only reach the system of small markets and supermarkets serving Asian consumers.

The price of VND200,000/kg is very competitive compared to fresh lychees imported from China and Mexico (currently sold at Asian markets in San Francisco for $4.99/lb, equivalent to VND259,000/kg), which are the two main suppliers and also the two biggest competitors of fresh lychees from Vietnam. This is the result of many efforts by Vietnamese and US businesses.

To contribute to bringing Vietnamese lychees closer to US consumers, the San Francisco Trade Office in collaboration with the Vietnamese Entrepreneurs Association in the United States (VENUSA), organizations and businesses have implemented promotional and communication activities on information channels, especially on social networks; organized booths to display and sell lychees in some Vietnamese and Asian markets; organized tasting activities to help people get acquainted with and love lychees, thereby promoting the consumption of this fruit.

Squid and octopus exports to Japan "prosper"

According to the Vietnam Association of Seafood Exporters and Producers, Vietnam's squid and octopus exports in the first five months of 2023 reached more than 240 million USD, down 13% over the same period last year. In May 2023 alone, exports of this product reached 52 million USD, down 18% over the same period.

Although negative growth is inevitable in the general downward trend of Vietnam's seafood exports, compared to other main seafood export products of Vietnam, the export value of squid and octopus recorded a milder decrease.

As of May this year, Vietnamese squid and octopus products were exported to 65 markets. The top 10 largest squid and octopus importing markets of Vietnam include South Korea, Japan, Thailand, China and Hong Kong, Italy, the US, Malaysia, Taiwan, Spain and France.

Japan is the second largest single import market for squid and octopus from Vietnam. (Source: Industry and Trade Newspaper)

Squid and octopus exports to major consumer markets all decreased by double digits except for Japan.

Accordingly, South Korea is the largest import market for squid and octopus from Vietnam, accounting for 35%. In the first 5 months of this year, squid and octopus exports to South Korea reached 84 million USD, down 13%.

Japan is the second largest single import market for squid and octopus from Vietnam, accounting for 27%. Compared to the Korean market, Vietnam's squid and octopus exports to the Japanese market have shown more positive signs. In the first 5 months of 2023, squid and octopus exports to this market reached 64 million USD, up 4% over the same period in 2022.

Japan's domestic squid and octopus production is decreasing while Japan's demand for ready-to-eat, convenient squid and octopus products is increasing due to modern, busy lifestyles with little cooking time. This is a factor that positively affects Vietnam's squid and octopus exports to Japan.

Besides Japan, squid and octopus exports to smaller markets such as Malaysia, Australia, Taiwan, and the Philippines showed more positive signs, recording double-digit growth of 15-75%.

In the general picture, the decline in export turnover is believed to be due to the impact of inflation and the global economic recession, which has reduced demand from markets. The IUU "yellow card" has not been removed. In addition, squid and octopus exporting enterprises continue to face disadvantages in raw material prices and unfavorable weather conditions for fishing activities. This reduces the competitiveness of enterprises. Many squid and octopus exporting enterprises have had to operate at a low level due to a decrease in orders or close some factories.

It is expected that in the third quarter of 2023, export activities will be better than the previous two quarters. However, the source of raw materials will be difficult because the exploitation output in the world's seas is decreasing, along with the ban on exploitation in the seas starting to take effect, and the upcoming rainy and stormy season will reduce supply, which are challenges for businesses exporting this item.

Source