The majority of businesses that export goods to Europe have not been affected when the euro plunges. Illustration: TL
Most are unaffected
By the evening of July 14, while the selling price of the euro was still higher than the US dollar (USD) on the banking channel, the buying price at most commercial banks recorded the USD surpassing the euro.
The strength of the dollar is continuously increasing in the world market while the euro has recorded the opposite situation, the exchange rate of both foreign currencies to Vietnam dong is recording unprecedented fluctuations.
Data shows that the euro has plunged by 12% compared to the beginning of this year, causing some concerns that Vietnamese enterprises that export goods to this regional market will be greatly affected. However, in reality that is not the case.
For example, at Garment Company 10, there is an export activity to the EU market, but according to the leader of this business, it is not affected.
About 30% of the garment products of this enterprise are exported to Europe, each year the value is equivalent to about 60 million euros, but according to international practice of garment products, the payment to Vietnamese enterprises not euros.
According to General Director of Garment 10 Corporation, Mr. Than Duc Viet, all of the company's European customers sign payment contracts in USD. Therefore, the exchange rate between USD and euro will change, increase or not, it does not matter.
Similarly, according to Mr. Pham Xuan Hong, Chairman of the Ho Chi Minh City Textile and Apparel Association (AGTEK), most businesses that are members of AGTEK exporting goods to this market also trade in USD, so at this stage, businesses also Unaffected.
For businesses in the agricultural sector, Mr. Phan Minh Thong, Chairman of Phuc Sinh Group, said that currently the European region accounts for 55% of Phuc Sinh's total export value of pepper and coffee products. However, Phuc Sinh's transactions in this market have also been in USD for a long time, so even if the euro drops sharply, it will not affect the group.
Any immediate benefits?
Some businesses also think that they will benefit if they buy components and machinery from the EU at this time, Illustration: TL
Not only enterprises of the garment or agricultural products mentioned above, but also businesses operating in other fields such as furniture, footwear, food, etc. also reported commercial transactions with partners in the main EU market. denominated in USD.
Mr. Nguyen Van Sang, Director of Vietnam Goods Import-Export Joint Stock Company (Viet Products), also the owner of the Furnist furniture store chain, said that his company currently has transactions to export goods to more than 15 countries in Vietnam. The EU and for many years now all of Viet Products' wood products import partners in this region also trade in USD.
Therefore, Viet Products is currently not only unaffected in this market when the euro depreciates, but also finds it beneficial because the current USD exchange rate has increased against the Vietnamese dong.
Businesses said that not only in the EU market but also in most other export markets in the world such as Japan, Korea, China, etc., they also trade in USD, so they have not been affected when the euro depreciated. .
Similarly, Mr. Than Duc Viet sees a weakening euro as the time for businesses to import goods at good prices from this region. "I think that now we can import machinery and equipment cheaper than importing raw materials, fuels and materials from Europe to create finished garments, which is also cheaper," Mr. Viet shared.
The EU market is forecasted to be difficult in the coming time as consumers tighten spending on non-essential goods. Illustration: TL
Viet Products is also importing some wood materials in Europe and exporting finished wood products to the US and some other markets, which will lead to price competition.
Experts also recognize that if businesses import goods from the EU market, they will be able to buy good prices at this time because of the weakening euro.
It will be difficult in the future
Although not or not affected at this time, according to businesses and analysts, it is likely that the EU market will face difficulties in the coming time and affect export businesses.
Regarding this issue, Mr. Pham Xuan Hong, Chairman of AGTEK, said that the depreciation of the euro shows that the European market is unstable, consumers will therefore reduce spending on non-essential goods. Therefore, it is forecasted that in the coming time, the export of the textile and garment industry to the European market will be reduced.
A representative of Viet Thang Jeans Co., Ltd. also said that the situation showed that the company's export orders to Europe had decreased by nearly 20% in the past few months. This shows that the demand of the market in this area is weak and businesses that are in the recovery stage continue to fall into a difficult position.
Similarly, Mr. Nguyen Van Sang of Viet Products noticed that the demand of the European market is tending to weaken. “The difficulty of the economy, high inflation will cause people to only focus on essential goods in the near future, so the consumption of wooden products is forecasted to have difficulty in growth but may decline. decrease in the near future”, Mr. Sang forecast.
On the other hand, the difficult business situation will cause importers of this market to ask for a discount, Mr. Sang analyzed.
On the other hand, according to analysts, if the euro continues to decline, the price of Vietnamese goods exported to Europe may be more expensive. This affects the competitiveness of Vietnamese products compared to other countries in this key market.
Le Hoang
https://thesaigontimes.vn/dong-euro-lao-doc-tac-dong-toi-doanh-nghiep-viet-nam-nhu-the-nao/
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