Stronger yen a present from heaven for local exporters

Vietnamese seafood exporters are poised to cash-in on the more robust yen

“The appreciation of the yen will affect Vietnam’s trade because Japan is one of its leading partners regarding  trade, direct investment, official development assistance (ODA) and tourism. The strong yen will support Vietnam’s exports to Japan and bring about investment and tourism opportunities,” said Cao Sy Kiem, a National Monetary Policy Advisory Council member and former State Bank governor.

With the yen hitting a 15-year high against the US dollar in August, 2010, local exporters to the Japanese market are being urged to step-up their game. 

Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said: “Vietnamese enterprises can export more to Japan and get better prices.”

“Especially, shrimp prices have been escalating and there are many orders from Japan, so exporters need to take full advantage of this period,” he said.

Japan accounts for 34-36 per cent of the Vietnamese seafood sector’s total export turnover. Previously, Vietnam ranked third among shrimp exporting countries to Japan, in both turnover and market share. Last year Vietnam ranked first, with revenue of around $700 million, accounting for about 23 per cent of the Japanese market share, exceeding India and Indonesia.

The State Bank on August 18, 2010 weakened the dong via the mid-point exchange rate by 2.1 per cent, to VND18,932 per dollar, from VND18,544.

“According to the  crossing exchange rate, the yen gained its value compared to the dong,” said Nguyen Viet Hung, director of research & investment of SME Securities JSC.

Nguyen Ton Quyen, chairman of the Vietnam Timber and Forest Product Association, said: “This is a good opportunity for the wood industry to export to Japan, with demand for wood products still high.”

According to the Ministry of Industry and Trade, in 2009 the trade turnover between Vietnam and Japan reached $13.5 billion in which Vietnam’s exports to Japan reached $6.2 billion encompassing seafood, wood products and textiles. Meanwhile, Vietnam’s imports from Japan reached $7.3 billion.

However, the strong yen does have downsides.

Hoe said it would have a negative impact on Japan’s economy, so in the long-tern Japanese consumers must tighten spending.

“There will be more competition exporting to Japan between Vietnam exporters and other countries,” said Huynh Minh Tuong, director of Ba Ria Seafood Factory.