Exports to Russia seen declining as rouble falls
The plunge of the ruble is becoming a challenge to Vietnamese exporters dealing with the Russian market.
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| Workers pack coffee products for export to Russia and other countries at Vinacafe Bien Hoa in the southern province of Dong Nai. Exports from Viet Nam to the Russian market are forecast to decline. — VNA/VNS Photo Kim Phuong |
Key export products of Viet Nam to the Russian market, including seafood, telephones and their spare parts, rice and coffee, are at risk of declining in export turnover.
The plunge of the ruble against the dollar and euro will raise the price of Vietnamese products imported to the Russian market.
The Russians will likely reduce imports from foreign countries to decrease their spending.
Trade Counsellor to Russia Pham Quang Niem said that the slide of the ruble would limit the imports of the country.
A representative of the An Dinh Technology Investment and Development Co Ltd told Dau Tu (Vietnam Investment Review) that its Russian partner had stopped signing new contracts for 2015. Next year will be a tough year for Vietnamese exporters to the Russian market.
The company, located in My Hao District in the northern province of Hung Yen, had an average agricultural export turnover to the Russian market of nearly US$1 million per year. This accounts for 20 per cent of the company's total export turnover.
Statistics from the General Department of Customs showed that the rice export of Viet Nam to Russia in the first 11 months of 2014 fell by 74 per cent compared with that recorded in the same period last year.
Than Duc Viet, management director of Garment 10, remarked that Russians will have to pay more for products when the ruble weakens. Therefore, customers will have to adjust their spending and may choose to buy lower-quality products. These are factors that Vietnamese exporters should take into consideration.
Slow payments
Apart from worrying about the decline in export turnover, enterprises are also anxious about the increasing risks associated with payment. Russian partners may have difficulty buying dollars to pay for import contracts from Viet Nam, which could result in slow payments, shared Dinh Hong Ky, chairman of the Secoin joint-stock company management board.
However, a number of enterprises expressed optimism that the market will still need to import products with lower prices. This would create opportunities for Vietnamese products with reasonable prices since Russian customers are expected to limit their purchases of high-quality products as the ruble weakens.
The Russian market will still be a potential consumption market for Vietnamese exporters, especially for seafood and garments and textiles, said the Viet Nam Enterprises Association in Russia. — VNS
