Vietnam Business & Weather Briefing (Oct 14): Garment Export Value Up In Nine Months

Business Briefing

Gold rate

SJC gold price was listed at VND 66 million/tael (buying), VND 67 million/tael (selling), increased by VND 100,000 per tael compared to the morning of October 13, but decreased VND 200,000 per tael compared to the end of the day.

Jewelry prices, 24K gold rings of all kinds are traded at around VND 51.75 million/tael (buying), VND 52.75 million/tael (selling), the same level compared to yesterday.

Reference exchange rate

The State Bank of Vietnam set the daily reference exchange rate for the US dollar at VND 23,541/USD on October 14, up VND 44 from the previous day. With the current trading band of +/-3 percent, the ceiling rate applied to commercial banks during the day is VND 24,244/USD, and the floor rate VND 22,838/USD.

The opening-hour rates at many commercial banks increased. Vietcombank listed the buying rate at VND 23,890/USD and the selling rate at VND 24,200/USD, both up VND 120 from the end of October 13. Similarly, BIDV also added VND 110 to both rates, listing at VND 23,920/USD (buying) and the selling rate at VND 24,200/USD (selling). During the week from October 10-14, the daily reference exchange rate followed an upward trend, ending the week up VND 109 per USD.

Photo: Zing News

Export news: Vietnam’s garment export value up in nine months

Vietnam’s textile and garment export value reached USD 35 billion in the first nine months of 2022, up 21% over the same period last year. To achieve this result, textile and garment enterprises have made great efforts to cope with the challenges of the market. The enterprises did not depend on the five traditional export markets, including the US, Europe, Japan, the Republic of Korea, and China, but also expanded the exports to Russia and some other countries.

In Europe, they not only focused on a few large export markets such as Germany, France, Spain, and the UK as in the past but also expanded the exports to other countries in the EU. In addition, many businesses have eyed Mexico and other countries in Africa. They also promoted the production of knitwear products for export instead of making only traditional products such as jeans, khakis, or T-shirts, due to a shortage of orders for those traditional products.

Among textile and garment exporting countries in the world including Bangladesh, India, and China, Vietnam had the earliest opening-up policy for normal operation after the Covid-19 pandemic. Therefore, in the first six months of the year, Vietnam’s textile and garment industry had a large number of orders and good business results. Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), said in the first half of 2022, the textile and garment industry gained growth in export orders, but entering the third quarter of 2022, the market began to see signs of a decrease.

The export order reduction was due to lower demand in major export markets like the US and the EU. High inflation in those markets caused people to reduce their spending significantly. In which, apparel was a commodity seeing strong cuts. Meanwhile, markets that are important trade partners of Vietnam such as China, Japan, and Taiwan are still applying strict measures against the Covid-19 pandemic. That affected supplies of raw materials, auxiliary materials and the consumption of textile products from Vietnam.

To cope with those challenges, businesses rearranged working hours to ensure stability for workers. Enterprises in the textile and garment industry are still able to overcome the challenges in the fourth quarter, but difficulties are likely to continue until the first quarter of 2023, Giang said.

Tran Nhu Tung, Chairman of the Thanh Cong Textile – Investment – Trading JSC, said almost all countries exporting textiles to the US and EU markets have experienced a decline in orders due to high inflation and lower demand for apparel products. According to Tung, for companies focusing on these two markets, they faced a large decline in production and business. Meanwhile, firms expanding exports to other markets, like Thanh Cong, saw a softer decline than others. Thanh Cong saw a reduction in orders larger than expected, but it was not too much. In the first nine months of the year, the company has fulfilled 80% of the revenue plan and 85% of the after-tax profit plan, he said.

Experts said that if in the first eight months of the year, the average export value per month was USD 3.7-3.8 billion, the value is expected to be USD 3.1-3.2 billion per month in the last four months of the year. According to VNDirect Research, the textile and garment industry will be brighter in the first quarter of 2023 because the export tariffs on some kinds of Vietnam’s textile and garment products to the EU market will be reduced by 2-4% thanks to the EU-Vietnam Free Trade Agreement (EVFTA).

In addition, the European Commission forecasts inflation in the EU will reach 8.3% in 2022 and fall to 4.3% in 2023. The lower inflation will stimulate demand for fashion and garments in 2023. Therefore, some local garment enterprises exporting suits, shirts, pants, and skirts to the EU such as Song Hong Garment, May 10 and Viet Tien, will enjoy more benefits from the EVFTA.

Photo: Doc Bao

Growth forecast: Foreign media highlight appeals of the Vietnamese market

Vietnam’s economy is on a growth trend driven by an opening up to foreign capital while the stock market is growing rapidly and offers attractive returns for a lower entry price than other Asian markets, said an article recently published in Luxembourg’s newswire delano.lu. It said Vietnam’s growth is currently progressing at a rate of 6.5%, driven by four factors: infrastructure spending, healthy macroeconomic policies, the development of a middle class that boosts demand, and the attractiveness of the country to foreign investors.

The first asset of the country is its population. Vietnam has a young and educated population, the article said, noting the emergence of a middle class that consumes. In an economy where 72% of the activity is driven by local consumption, this is an asset, it said. While Vietnam still exports a lot of agricultural products, since 2010, the share of technology-related exports has increased fivefold and now exceeds 30%. “Vietnam is becoming an export heavyweight with a steadily rising global market share that has reached 1.6% today”, the article said.

Meanwhile, Russia’s Sputnik news agency said Vietnam is expected to become a new production hub of the world. It cited Apple’s list of suppliers for the 2021 fiscal year saying that the group now has 25 partners with factories in Vietnam, accounting for 13.9% of the group’s total suppliers as of the fourth quarter of 2021, up from the previous year. A number of important products in the global mobile phone market by Samsung, Xiaomi, and Apple are also produced in Vietnam, according to VNA.

Photo: 24h

Weather Forecast

October 15: In the early morning and at night, Hanoi will be cold, while it will be sunny during the daytime. Daytime temperatures fluctuate between 30 – 32 Celcius degrees, the average humidity is from 39 to 43%.

In the morning and afternoon of October 15, Ho Chi Minh City will be cloudy and sunny. Daytime temperature fluctuates between 29 – 30 Celcius degrees, meanwhile, the average humidity ranges from 60 to 67%. Tonight and tomorrow night, the area of Ho Chi Minh City will be cloudy with no rain.