In the first half of this year, Vietnam’s export turnover is estimated to have reached US$42.3 billion (up 30 percent over the same period last year) and accounting for 53 percent of the yearly plan.

With the prices of export products such as coffee, rubber, cashew nut and tea (exclusive of rice) increasing, 11 key items of farm produce and seafood earned more than US$1 billion.

Vietnam plans to export about 800,000 tonnes of rubber worth US$3 billion in export revenue in 2011, a remarkable increase in both volume and value over 2010.

Despite a decline in crude oil and coal exports, Vietnam’s export turnover in the past six months was still higher than last year’s corresponding period.

Industrial products achieving high export growth included chemical and plastic products, bags, suitcases, footwear, steel and iron. However, some other products such as computer components, spare parts, electrical wires and cables failed to achieve export growth as high as expected. Therefore, incentive policies should be adopted to boost the export of these products in the second half of the year.

On account of high export growth in the first half, the trade deficit dropped to a five-year record low, accounting for only 15.7 percent of total export turnover, even lower than the set target of 16 percent.

To ensure export growth, Vietnamese businesses are still finding themselves in a difficult position.

The Deputy General Director of the Vietnam National Textile and Garment Group (VINATEX) Le Tien Truong said despite some progress in the export market, many businesses are running short of capital for production to fulfill bulk orders as they have to pay the high interest on bank loans.

For a quick profit, some businesses have resumed the manufacturing line of production for export.

Footwear exports also achieved significant results with turnover of nearly US$3 billion in the first half of this year. However, many risks remain as footwear businesses still find it difficult to fulfill the signed contracts for lack of workers in the remaining months of this year. Furthermore, soaring input material prices and loan interest rates have forced businesses to narrow their production scale because their profits cannot make up for spending. The European Union’s strict supervision of Vietnamese leather-capped shoes has also affected the sector’s growth.

Diep Thanh Kiet, Vice Chairman of the Vietnam Leather and Footwear Association, said the sector will maintain the same growth rate as in the second quarter to achieve the set target of 20-25 percent for the whole year.

The sector is expected to achieve higher growth in 2012. Though the EU agreed to remove 10 percent anti-dumping tariff on the leather-capped shoes as from April 1, 2011 it has still continued with strict supervision throughout the year, Kiet said.

It seems very difficult to spur the growth of some key agricultural and seafood products in the face of shrinking cultivation areas and processing materials.

Major markets often have strict requirements for product quality, food hygiene and safety and environment protection and subject all imported agricultural and seafood products to close scrutiny. So to speak, importers have set up sophisticated protective barriers or imposed anti-dumping tariff.

Over the past six months, the rate of application for preferential certificate of origin (C/O) has accounted for 15 percent of total export turnover (estimated at US$6.5 billion). This should be promoted to accelerate exports to preferential markets, said Phan Van Chinh, head of the Import-Export Department under the Ministry of Industry and Trade.