The main reason comes from the lack of supplies from supporting industries. In the past 5 months, the Ministry of Industry and Trade data illustrates that businesses have strongly imported electronic components, raw materials and accessories in the leather and footwear industries, textiles, computers, electronic products and components; machinery, equipment, tools and spare parts; phones and accessories; plastic raw materials and agricultural products to serve production and export. Specifically, the total import turnover of goods reached 131.31 billion USD in the first 5 months of the year, up 36.4% over the same period last year. Only in May, the country had a trade deficit of more than 2 billion USD, making the trade balance in the first 5 months of the year reversed after a long period of trade surplus.
Notably, according to the Ministry of Industry and Trade, the sharp increase in imported goods came mainly from FDI enterprises with a turnover of 85.5 billion USD, up 39.9% over the same period last year.
Materials imported have increased in recent months because the textile industry has recently recovered with a high volume of orders, contributing to the export turnover of this industry to increase by 15% in the first 5 months of the year. Similarly, for the group of electronics, high-tech goods and imported machinery and equipment, it will help create room and opportunity to increase exports in the coming time. Not to mention, in the context of a sharp increase in import prices, businesses also have the mentality of hoarding more raw materials to prevent a prolonged epidemic, Mr. Vu Duc Giang – Chairman of Vietnam Textile and Apparel Association (VITAS) said.
Besides the supporting industry, the trade deficit is also happening with the agricultural sector. Cashew imports in the first five months of 2021 amounted to more than 1.4 million tons with a value of more than $2.2 billion, up more than 247% in volume and 281% in turnover over the same period last year. The unusually high import made this industry, which has always been the leader in exporting agricultural products, fell into a trade deficit for the first time with a value of more than 1 billion USD.
Not to the point of worrying?
In the long run, if the current export model is maintained, Vietnam will increasingly lag behind, said Director of the Department of Industry Truong Thanh Hoai. Every year the export electronics industry reaches a turnover of 100 billion USD; textile and garment export about 40 billion USD; footwear 20 billion USD. Although accounting for a very large turnover of the total export turnover of USD 270 billion of the country, the added value is actually not high. Specifically, with the textile and garment industry, imported raw materials increased sharply by over 20%. Garment fabric alone reached nearly 5.9 billion USD, up 30.9%.
Regarding the rapidly increasing trade deficit, the leader of the Import-Export Department (Ministry of Industry and Trade) said that it is not unusual for Vietnam to have a trade balance deficit after 5 months. Currently, the most imported items are mainly raw materials for production activities, especially for the production of export goods.