Overview of Import and Export Activities in the First 2 Months: Reducing Trade Deficit

Wednesday, March 20, 2019  11:56

Month of Tet holiday - most commodity groups saw a drop in turnover

According to preliminary statistics in February of the General Department of Customs, the total export and import value of the whole country reached $US 28.58 billion, down by 34.1% compared to the previous month; in which the export value was $US 13.91 billion, down by 37% and the import value was $US 14.67 billion, down by 31%.

The cause of the decline is due to the number of working days in February being much less than in January (due to the Lunar New Year holiday occuring fully in the month, and February only having 28 days). However, import and export activities compared to the same period in the last year still increased slightly by 0.6%.

From the data of the General Department of Customs, in that month, there were 42/45 main export commodity groups that saw a drop in turnover compared to the previous month, including 35 commodity groups with a sharp drop of over 30%.

In contrast to the general trend, in that month, there were 3 commodity groups with higher export value than the previous month. Specifically, ore and minerals was twice as much; coal increased 5 times; phones and accessories increased 5.2%.

In the field of imports, 48/53 major commodity groups decreased their turnover compared to the previous month, of which there were also 34 groups of goods that fell sharply over 30%. However, there were 5 product groups still reaching positive growth rates, namely milk and milk products, cashew nuts, soybeans, CBU cars and transport vehicles and spare parts.

The most prominent point in import activities in February is the CBU cars. Although the month is the occasion of Lunar New Year, the demand for imported cars of all types has increased by 9.6% compared to the previous month with a total of 14,134 units. This is a contrary trend to previous years, because usually in the Lunar New Year the amount of imported cars plummet. Especially, since the Decree 116/2017/ND-CP stipulating conditions for production, assembly, import and business of warranty service, automobile maintenance came into effect (January 1, 2018), this is the month with the third highest import volume (after November and December in the last year with 14,538 vehicles and 14,176 vehicles; respectively).

overview of import and export activities in the first 2 months reducing trade deficit
Export and import of goods in Vietnam in the first 2 months of 2016-2019 period. Chart: Binh.

Import and export of domestic enterprises is higher than FDI

In the end of February, the total import-export turnover reached $US 72.29 billion, a slight increase of 5% compared to the same period in the last year. In which export value is $US 36.11 billion, up by 4.2%; import value was $US 36.18 billion, up by 5.8%. With this result, the turnover of the first 2 months of 2019 reached the highest level compared to the same period in previous years. At the same time, the scale of import and export of Vietnam in the first 2 months of 2019 has increased by $US 3.44 billion compared to the same period last year, of which exports increased by $US 1.47 billion and imports increased by $US 1.97 billion.

An important contribution to the increase in the size of export goods in the first 2 months of 2019 are textile and garment groups with an increase of $US 488 million; footwear with an increase of $US 317 million; machinery and equipment and spare parts with an increase of $US 290 million; computers electronic products and components with an increase of $US 144 million; wood and wood products with an increase of $US 161 million.

However, the largest group of products is mobile phones and components, which reduced by $US 576 million. In addition, many commodity groups in the agricultural sector such as vegetables, coffee, rice... also experienced a decline in turnover.

For the field of import, the groups with more turnover can be mentioned, such as: machinery, equipment, tools and spare parts increased $US 667 million; crude oil increased by $US 594 million; computers, electronic products and components increased by $US 570 million; automobiles of all types increased by $US 542 million; coal increased by $US 259 million...

Similar to the export, the import of phones and components decreased by $US 528 million; gasoline fell by $US 766 million; iron and steel scrap reduced by $US 156 million...

Regarding the trade balance, contrast to the trade surplus in January, the country saw a deficit of $US 768 million in February. Accumulated in the first 2 months of the year, our country is suffering a deficit of $US 64 million. However, when production and business activities of enterprises go into orbit, it is likely that Vietnam will gain a trade surplus right from the beginning of March.

In February 2019, according to the general trend, the import and export of goods of both foreign direct investment (FDI) and domestic enterprises declined sharply compared to the previous month. In which domestic enterprises decreased more. Specifically, import and export value of FDI enterprises was $US 19.02 billion, down by 29.5%; of domestic enterprises is $ US 9.56 billion, down by 41.5%.

An optimistic point in the first 2 months of 2019 is that the growth rate of import and export of domestic enterprises continues to be higher than the growth rate of FDI enterprises. This is different from the trend over the past few years. Because, in previous years, FDI enterprises have always achieved higher growth rates than domestic enterprises, but since 2018 there has been a reversal when domestic enterprises surpassed FDI enterprises and this trend is still maintained in 2 the first month of 2019.

Specifically, in the first 2 months of the year, total import and export turnover of domestic enterprises reached $US 26.15 billion, up by 9.5%, meanwhile, import and export of FDI enterprises reached $US 46.14 billion, up by 2.6%.

Regarding the export market, in the first 2 months of 2019, it recorded impressive growth in the US market - Vietnam's largest export market for many years, with a growth rate of up to 36%, 9 times higher than the national growth rate (4.2% nationwide).

Regarding the imports, along with the growth of crude oil imports, data of the General Department of Customs recorded a high growth in turnover from Kuwait - a country which is one of the investors located in Nghi Son Refinery and Petrochemical Limited Liability Company (Thanh Hoa) with a turnover of $US 627 million, up by 34 times compared to the same period in 2018 (the same period only reached $US 18.4 million).In other big markets, China saw a strong drop of 16%, especially due to the difficulties of some agricultural products.

While growth in major markets such as China, Japan, and the United States... averaged at 10% or less, imports from South Korea alone declined slightly by 3%.

 

By Thai Binh/Kieu Oanh (Source: VCN)