Demand in global markets fell for the year says the Ministry of Industry and Trade (MoIT), and the glut in oil may take another year to clear, creating a rather bleak short term outlook for oil prices.
However, there was a mild revival in the later part of last year for agricultural and seafood exports, which though not strong enough to lift overall exports is considered a positive sign, offering hope of an improved outlook this year.
To kick start exports for the year, MoIT Minister Vu Huy Hoang said the ministry is stepping up communications with local companies and trade associations about the benefits of signed trade agreements.
In addition, he strongly recommends relevant ministries, agencies and local authorities implement major solutions to simplify export procedures to reduce clearance times and cost for enterprises.
Sharing this view, MOIT Deputy Minister Tran Tuan Anh said despite the many difficulties that lie ahead in 2016, Vietnam still has a lot of potential to boost its economic and export growth.
The participation in new free trade pacts will bring a golden opportunity for domestic companies to increase their production and participate in global supply chains, he underscored.
Tuan Anh also noted with the phase-out of tariffs and other non-tariff barriers, Vietnam can secure better market access and diversify exports with its trade partners in the coming year.
Additionally, the Vietnam government is undertaking a monumental effort to revamp laws and institute policies more conducive to the creation of a more favourable business environment, he said.
Opportunity for key exports
Rice exports have been thriving from early this year as the number of signed contracts indicate export demand is high, says Huynh The Nang, president of the Vietnam Food Association (VFA).
He forecasts that rice exports in the first half of the year will prosper as major importers like the Philippines, China, Indonesia and Malaysia will soon sign contracts to stabilize food supplies and cope with a possible drought caused by El Nino.
Earlier, the Philippines National Food Authority had announced its plan to buy at least 50,000 metric tons of rice from Vietnam and Thailand while the Indonesian Government planned to purchase around 350,000 metric tons of rice in the first quarter of this year.
China will undoubtedly remain the largest important importer of Vietnam rice not only in 2016 but also in the coming years, said Nang.
In terms of garments and textiles, Vinatex General Director Le Tien Truong estimated the sector’s export volume for the year at US$29.5-US$30 billion, up 11%-12% compared to last year thanks to the establishment of ASEAN Economic Community (AEC).
Vietnam's wood industry is also expected to gain total export value of wood and wooden products of US$7.7 billion for this year, higher than US$7.1 billion in 2015, according to Nguyen Ton Quyen, vice chairman cum general secretary of the Timber and Forest Product Association of Vietnam (VIFORES).
Exports of wood and forestry products from the country will have the advantage of starting operations through the AEC and other trade deals, he says.
The new year brings fresh hope, says the MoIT. The Vietnam government finances are strong enough to push critical infrastructure projects and prospects for continued foreign investment never appeared stronger.
Hopefully, local companies will see productivity gains that can improve the competitiveness of our exporters. On that note, we can all hope and look forward to a happy and prosperous new year.