More businesses predicted to withdraw from market

 According to the Ministry of Industry and Trade (MoIT), in the first four months of this year, the export volumes of garment and textile products fell by 0.4 million units.

 Now in peak season, most of businesses claim to have received export orders for the second quarter of this year, just a few are lucky to negotiate contracts that last until the end of the third quarter.

 Deputy Director of the National Textile and Garment Group (Vinatex) Hoang Ve Dung says this requires businesses to make greater efforts to boost exports in the coming months. 

 Over the past four months, the footwear sector could only export less than 100 million pairs of sport shoes, down 3.9 percent from a year earlier.

 In addition, leather & footwear businesses also found themselves in a difficult position to go along with strict regulations on quality and environmental standards and social responsibilities set by major global markets.

 In the meantime, the biggest problem for the agro-forestry-fishery sector is falling prices. Director of the Can Tho provincial Industry and Trade Department Nguyen Minh Tan, says despite the harvest of good winter spring crops in the Mekong River Delta, the price of rice still hovered around VND5,000-6,000 per kg, leading to high unsold inventories in the wake of lower consumption power.

 The price of Tra fish also dropped from VND27-28,000 per kg in early April to VND 22,000 per kg and farmers have kept large volumes in stock despite lacking capital.

 Vice Chairman of the Vietnam Food Association (VFA) Pham Van Bay says approximately 2.4 million tons of rice are unsold on account of slow delivery.

 Over the past four months, rice export earnings hit only US$800 million due to a reduction of 32 percent in volume and 33 percent in price. As a result, the price of most agricultural products dropped considerably compared to the same period last year.

 Deputy Minister of Industry and Trade Nguyen Thanh Bien underlines the need to work out an effective solution to help export businesses and craft associations iron out snags in the second quarter as well as in the second half of the year.

 Vietnam’s export turnover in the past four months was estimated at US$33.4 billion including US$18.3 billion from foreign invested businesses (excluding crude oil). Foreign invested businesses contributed 44 percent to export growth in the reviewed period.

 Domestic businesses say even though lending interest rates have been lowered over the past  month, they still find it difficult to have access bank loans at a rate of 18 percent/year. In their opinion, the more reasonable rate for them to restore production is 15 percent or even lower.

 Another reason for high input costs, they argue, is that the price of petrol has been raised twice in a month.

(VOV)