Export growth to US slows

Vietnam’s export growth to the US, its largest market, eased in April as shipments of footwear and seafood struggled to expand.

US-bound sales rose 22 percent to US$3.64 billion in the four months through April from a year earlier, after increasing 23 percent in the three months through March, according to figures from the US International Trade Commission.

A slowdown in shipments to the US may make it harder for Vietnam to cut a trade deficit that has sparked concerns the country may have to devalue its currency.

Vietnamese export growth to the US has been curbed by a downturn in the American economy, Moody’s Economy.com said Thursday in a report.

“Preserving or enhancing exports to the US has to be a key part of any export promotion strategy in Vietnam,” said Ayumi Konishi, Vietnam country director at the Asian Development Bank in Hanoi.

“But for Vietnam to reduce the trade deficit, emphasis should be given to controlling imports as well as to promoting exports.’’

Vietnamese imports from the US more than doubled through April to $1.05 billion from $436 million a year earlier, as shipments of cars to Vietnam surged fivefold to $173 million.

“The higher car imports show that people in Vietnam are looking for other ways to preserve the value of their assets, instead of putting their money into the stock market,’’ said Konishi of the ADB.

Vietnamese footwear exports to the US rose 13 percent through April to $375 million, down from a 17 percent pace through March.

Shipments of shoes have been hurt by Vietnamese inflation, which reached 25.2 percent year-on-year in May.

Lack of workers

“Higher prices for shoes make our exporters less competitive,’’ said Diep Thanh Kiet, vice chairman of the Shoes and Leather Association of Ho Chi Minh City.

“The second problem is a lack of workers. After Vietnam joined the World Trade Organization, workers had more choices to move to other businesses and others have gone back to the countryside.’’

Inflation has also resulted in more worker strikes, which has further crimping footwear exports, Kiet said.

Thousands of workers at a Nike supplier in the southern province of Long An stopped working for a week in April in a wage dispute.

Seafood shipments to the US climbed 12 percent through April to $207 million, down from an 18 percent rate through March.

Vietnamese shrimp and catfish exports are subject to anti-dumping duties in the US market.

Anti-dumping duties

“The main issue with the US market is the dumping duties,’’ said Gil Watts, a HCMC-based senior consultant to the Vietnam Aquaculture Association.

“Exporters would jump back to the US market if they could, because the prices there are higher than most other markets.’’

Shipments of apparel, Vietnam’s top export to the US market, rose 28 percent through April to $1.49 billion.

Garment exports to the US were up 31 percent through March and 45 percent through February.

“Inflation and the lack of workers is not only affecting the footwear companies but also garment companies,’’ said Kiet.

Furniture shipments advanced 25 percent to $445 million, while exports of crude oil to the US almost doubled by value to $205 million from $103 million.

“The export value of crude oil increased strongly in spite of production capacity constraints, benefiting from high international prices,’’ the World Bank said in a report released this month.

Coffee exports to the US rose 4 percent through April to $130 million.

“Coffee exports from Vietnam have been intensely price-sensitive throughout the 2007-2008 season, picking up when the price is strong, tailing off when prices ease,’’ Fortis Bank SA/NV and VM Group said in a report sent this month.

A slowdown in Vietnamese coffee exports reflects “the increased financial ability of coffee traders within Vietnam to withhold coffee until they are able to sell at prices they find compelling,’’ Fortis and VM said