Trade optimism driven by big surplus

The manufacturing sector is driving imports for export-oriented production Photo: Le Toan

In October, Van Phat An JSC, specialising in producing and exporting plastic items in the northern province of Hung Yen, imported 10 batches of goods from Korea worth about VND2.2 billion ($100,000), 30 per cent higher than the quantity last October.

“Since early this year, we have used VND15 billion ($681,820) – up 25 per cent year-on-year – for importing plastic pellets and several types of other materials for our production. It is because local and foreign demands for products like ours are strongly rising,” said Van Phat An director Nguyen Van Huan.

In October, the firm’s export turnover is estimated to reach VND3.8 billion ($172,730), which is 35 per cent higher than that of last October. The firm’s 10-month export turnover and total revenue are expected to be VND23-28 billion ($1-1.28 million).

“Our revenue and profit have risen by about 20 and 25 per cent, respectively, in this year’s first 10 months,” Huan said.

Several optimistic figures of Van Phat An JSC also coincided with the country’s trade picture in this year’s first 10 months.

Specifically, October witnessed $19.4 billion in export turnover and $18.5 billion in import turnover, resulting in a trade surplus of $900 million.

In this year’s first 10 months, the country enjoyed a $1.23 billion trade surplus, higher than the $1.1 billion trade surplus of this year’s first nine months.

Breaking down the 10-month figures, the export turnover hit $173.7 billion, up 20.7 per cent year-on-year – with locally-owned firms reaping $48.2 billion (up 17.2 per cent year-on-year), and foreign-invested firms harvesting $125.5 billion (up 22.1 per cent year-on-year), including crude oil exports.

Meanwhile, the import turnover reached $172.5 billion, up 22 per cent year-on-year – with locally-owned firms fetching $64.6 billion (up 11.6 per cent year-on-year), and foreign-invested firms raking in $107.9 billion (up 29.2 per cent year-on-year).

Of the $1.23 billion trade surplus, locally-owned firms saw a trade deficit of $16.4 billion, and foreign-invested firms witnessed a trade surplus of $17.63 billion.

According to the General Statistics Office (GSO), the local trade and production situations are getting better, because both exports and imports are strongly increasing. The majority of Vietnam’s 31 groups of imported goods are used for production and export.

Imports of production materials occupy over 90 per cent of the total import mix, of which about 50 per cent are machinery and equipment.

For instance, the turnover of many imported items used for production soared year-on-year, such as machinery and equipment (nearly $28 billion – up 23.1 per cent), electronics, computers and their spare parts ($30.9 billion – up 35.3 per cent), mobile phones and their spare parts ($12.8 billion – up 49.3 per cent), cloth ($9.2 billion – up 8.3 per cent), steel ($7.5 billion – up 14 per cent), plastic ($6 billion – up 29 per cent), and garment and footwear materials ($4.5 billion – up 8.2 per cent).

According to GSO, in this year’s first 10 months, the turnover of key export items strongly increased, such as mobile phones and their spare parts ($36.5 billion – up 28.8 per cent), garment and textiles ($21.5 billion – up 9.5 per cent), electronics, laptops and their spare parts ($21 billion – up 39 per cent), footwear ($11.7 billion – up 12 per cent), and machinery and equipment ($10.4 billion – up 28 per cent).

Van Phat An’s Huan said that, like many other companies, his company is “quite optimistic about the economy’s prospects”.

“We are expecting a rise of at least 25 per cent in export turnover this year,” Huan said.