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Recovering after the storm

Recovering after the storm

Friday 15, 05 2020
Some enterprises are having new orders as the pandemic is gradually controlled better while others try to maintain operation waiting for a recovery opportunity

According to the General Statistics Office, in the first 4 months of 2020, the commodity export turnover is estimated to have reached nearly 83 billion USD, increasing by 4.7% compared to the same period last year, and the trade surplus is estimated to be approximately 3 billion USD.

Statistics show that the commodity export and import activities during the fight against COVID-19 were severely affected, yet there is still much potential left.

Growth is making recovery

Particularly, in the first for months of the year, the export value of the agriculture industry reached 11.9 billion USD, decreasing by 4.9% compared to the same period in 2019, but there was still a trade surplus of 2.8 billion USD. Some commodities with an increasing trend are wood and wooden products with an increase of 3.5%, coffee with an increase of 1.5%, cashew with an increase of 4.2%, vegetables with a rise of 5%, rattan, bamboo and rush sedge with a rise of 11.8%.

According to Nguyen Quang Hoa, Director of Duong Vu Limited Liability Company of Long An province, which is an enterprise specialized in exporting sticky rice, since 24th April, this agricultural commodity has been allowed to export freely on demand.

On 26th April, the first order of the enterprise left the storage and the earliest date when customers will receive their delivery is 5th May. Due to the 1-month postponement in rice export of Vietnam (including that of sticky rice), consuming markets such as China, the Philippines, and Malaysia are suffering from a temporary scarcity. Some customers have accepted the sticky rice price of 650 USD/ton, increasing by 90 USD/ton compared to earlier, with the conditions that the rice must be delivered in May.

Therefore, enterprises are taking advantage of the situation to export sticky rice, accepting the high delivery costs to make the delivery in time. The increasing sticky rice export price has also raised the purchase price of sticky rice from farmers to 14,000 VND/kg, increasing by 1,500 VND/kg compared to March.” – Hoa said.

Recovering after the storm

According to General Director of Phuc Sinh Company Phan Minh Thong, the 2 main export commodities of the company, which are coffee and pepper, maintain a growth of 20% compared to the same period in 2019. Regarding the coffee industry, even though the COVID-19 pandemic has sharply reduced the consuming volume of channels such as café chains, restaurants, hotels, etc. it has also significantly raised the quantity of distributing importers in channels such as supermarkets and online shopping.

“Coffee is a necessity for multiple people, therefore at supermarkets in several countries customers are constantly buying this type of product and we have to increase our shifts to refill the shelves. In addition to the efforts of enterprises, the harmonic coordination of the Government in countering the pandemic is also important in controlling it, maintaining the smooth flow of goods and the usual operation of aquatic customs, helping enterprises to maintain their operation” – Thong said.

The Deputy General Director of Truong Giang Seafood Joint Stock Company Ong Hang Van joyfully announces that the volume of orders exported in April increased by 1.5 times compared to that in the first 3 months of the year. Seafood products exported to the US market remains favorable even in the context of the pandemic. Even China, the main exporting market of Vietnam’s catfish, which faced difficulties in the first quarter of the year due to the pandemic, has also started to recover.

However, according to Van, the seafood export prices are declining due to the constant price pressure from the partners. “Despite taking advantage of the situation to export, businesses should not be too eager to do so, and instead they should wait until June to have possibly higher prices. In general, businesses need to be alert" - he added. 

Model restructuring and transformation

Textiles is one of the industries with the most difficulties during the COVID-19 pandemic as orders from the EU and the US markets were delayed and the domestic consumption also reduced due to people focusing on necessities rather than fashionable clothing and footwear, etc. Vice Chairman of the Ho Chi Minh City Embroidery and Knitting Association and General Director of Viet Thang Jeans Pham Van Viet says that the fact that customers in major markets postpone operation means that 60-70% of orders are affected, and the enterprise can only rely on markets such as Japan, South Korea, and ASEAN nations, but these are not sufficient. In order to retain workers, about 50% of textile and apparel enterprises in the association have shifted to producing masks and labor protection.

Mask orders mainly create jobs for workers in the short term to overcome this difficult period. “Currently, there is no import market of the textile and garment industry in the state of being able to control the disease. We are expecting the EU, US markets, etc. to recover by the end of September or the end of the year; Only the Japanese market will control the epidemic situation in July.

That will also be the time when enterprises in the industry return to their main production activities.” – Pham Van Viet said – “To prepare for the post-production period, since April 2020, Viet Thang Jeans has begun to restructure and reevaluate the entire operation process and work efficiency, etc.”

According to the representative of the Vietnam Pulp and Paper Association, to overcome common difficulties caused by epidemics, paper enterprises have taken advantage of machine maintenance, model transformation, exploiting new customers, and taking advantage of the opportunity of Chinese material scarcity to export inventories, etc. “We propose that the supporting policy should be more flexible so that enterprises can access capital, maintain production and business, and revive the economy.

The retention of debt groups is very important for businesses, especially in this period, so banks need to apply closely the instructions of the Prime Minister and the circular of the State Bank to ensure the interests of businesses, as well as apply the support policies with debt groups and add loans in USD besides those in VND "- the representative of this association commented.

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