Billion-dollar export sectors bring down targets amid low demand

By Thi Ha August 14, 2023 | 08:01 pm PT

Workers process fish at a factory in southern An Giang Province. Photo by VnExpress/Thi Ha

Vietnam’s billion-dollar export industries such as cashew nuts, wood and seafood have all lowered their shipment targets for this year amid global economic challenges.

The Vietnam Cashew Association has lowered its exports target twice this year to $3.05 billion, down nearly 20% from its original goal of $3.8 billion.

The wood export industry has also brought down its target from $18 billion to $14 billion, a 22% drop.

The Vietnam Association of Seafood Exporters and Producers has recently said that under the unfavorable situation of the last five months, exports could fetch $8.7 billion this year at most, down 21% from a record of $11 billion last year.

The lower targets reflect the difficulties that exporters are facing amid declining global demands.

Exports of agriculture, forestry and seafood in the first seven months fell 9.1% on-year to $29.13 billion. Seafood and forestry exports plunged 25%.

Nguyen Chanh Phuong, deputy chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City, said that demand for wood products and furniture in the U.S. and the E.U. were low in autumn this year.

The strengthening euro is also causing disadvantages for exporters, he added.

Cashew exporters also say that demand for their products are falling. African buyers have been cutting their purchases from Vietnam as this country has been increasing its production capability.

Seafood buyers from the U.S. and China have been lowering their orders by 20-30% year-on-year.

This has brought down prices and some farmers have shut down all activities due to fear of further losses, which consequently resulted in a supply decline, exporters said.

VASEP expects marginal increases in demand from Japan, South Korea and China in the last quarter.

In the U.S., the holiday season might help boost purchases, it added.

The agriculture ministry has said that exports can reach its target of $55 billion this year if the forestry and seafood sectors can achieve growth in the second half of the year.

There is rising demand for Vietnamese agricultural produce in China, it added.

Analysts of SSI Securities Corporation expect an improvement in profits for exporters, especially those who ship to the U.S., in the last six months this year, thanks to declining costs of transportation and ingredients.