Overseas sales from Vietnam fell 5 percent in the first two months of the year to US$8.02 billion, according to government estimates. The figure, together with a 43 percent drop in imports to $7.73 billion, resulted in the country reporting its first year-to-date trade surplus since 2006.

Vietnam’s export performance has been “perhaps not that bad, in terms of regional comparisons,” Ho Chi Minh City-based Dragon Capital said in a weekly note to investors, citing Japan, South Korea and Taiwan. “One might conclude that Vietnam’s package of lower-end manufactured goods and basic agricultural commodities has given it some cushion in labor-intensive sectors.”

Japanese exports tumbled 46 percent in January from a year earlier, while South Korea’s foreign-bound shipments slipped 33 percent. Efforts by American consumers to economize and shop at less expensive stores may benefit Vietnamese exports in comparison with countries that produce higher-end goods, US Ambassador to Vietnam Michael Michalak said in November.

Vietnam’s shipments of apparel – which through February surpassed oil as the nation’s top export – rose 1 percent in the first two months of the year. Bangladesh and Vietnam are benefiting from lower production costs to take market share from Indian garment exports, which may fall by about 10 percent this year, India’s Economic Times reported February 20.

‘Increased competition’

Rice exports from Vietnam surged 113 percent by value through February to $399 million, and 104 percent by volume to 919,000 tons. The US Foreign Agricultural Service last month cited “increased competition” from Vietnam in cutting its forecast for exports of the grain this year by Thailand, the world’s biggest shipper.

Vietnam plans to export between 3.4 million and 3.5 million tons of rice in the first half of the year, Vietnamese rice exports may reach 5 million tons this year for the first time in four years, buoyed by a larger crop and a widening price advantage over Thailand, the United Nations said last week.

The average export price of Vietnam’s 5 percent broken-grain rice variety had fallen to about $407 per ton as of January from $414 in December, the Food and Agriculture Organization of the United Nations said. Thailand’s main export variety, known as 100B, rose to an average of about $611 per ton in January from $582 in December.

Autumn harvest

The last time that Vietnam – the world’s second-biggest rice exporter last year – shipped more than five million tons was when the country sold 5.2 million tons in overseas markets in 2005. Last year, Vietnam exported about 4.7 million tons, trailing Thailand’s 10 million, according to the Food and Agriculture Organization.

Vietnam is producing more rice, due to “a record spring crop but also to a much larger autumn harvest, fostered by buoyant price expectations that encouraged farmers to plant more,” the Food and Agriculture Organization said last week in its Rice Market Monitor.

The pace at which Vietnam’s imports fell in the first two months of the year may soon ease, according to the Dragon note.

While the 43 percent year-on-year slump in imports through February “seems to indicate an economic implosion, clients will recall how feverishly inflated inward purchases were throughout the first half of last year,” Dragon said in its note. “So the nosedive from that high base is not surprising.”

“‘Normalized’ imports probably did fall a lot, in line with the slowdown of foreign direct investment disbursements, but it is unlikely that they slipped by nearly half,” Dragon said.