Vietnam faces rising order cancellations by U.S. clients
By Ban Mai - The Saigon Times Daily
HCMC – The outlook for Vietnamese companies to export to the U.S. from now to next year is grim as American importers have scaled down or cancelled many orders signed in the third quarter of this year.
Exporters said the U.S. economy had shown no signs of recovery, putting a dent on consumption in America.
A woodwork exporter in Binh Duong said he had received a request from his U.S. partner to halve the volume of an order for Christmas and New Year seasons, and get a 15% discount on the value of the order.
The American Markets Department under the Ministry of Industry and Trade has warned of the high possibility of losing export orders from traditional customers. Some other exporters have also expressed concern U.S. importers would reduce the volumes of their already signed orders given the difficult market conditions.
Consumption on the American market has dipped steadily, leading Vietnamese exporters of major items to fail to achieve their expected sales growth.
Furniture export is a case in point. Vietnam saw a 1.82% year-on-year decline in furniture export to the U.S. in the first three quarters, at US$1 billion.
Worse still, domestic companies are competing with those in China to export major items such as textiles, clothing, footwear, furniture, electronic appliances and toys. And local exporters will face more obstacles as there will be more U.S. technical barriers like food safety standards to be reinforced next year.
The Ministry of Industry and Trade has advised exporters to focus more on value-added products to cope with rising transport costs while embracing e-commerce as a way to bypass non-tariff trade barriers and cut transaction costs.