Several export staples including rice and seafood hit record highs last year, but industry insiders fear that market conditions will be less favorable in 2012.
Vietnam exported 7.11 million tons of rice worth US$3.5 billion in 2011, breaking the 2010 record of 6.75 million tons, according to the Vietnam Food Association. A target of 6.5-7 million tons has been set for this year.
However, Vietnamese exporters are now worried about growing competition from other suppliers of the grain, even after Thailand, the world's largest exporter, has become less competitive in terms of pricing.
"The rice market in 2012 will change significantly due to competition from India and policy changes of rice importers," said Pham Van Bay, vice chairman of the Vietnam Food Association.
He said African countries, for instance, will likely switch to cheaper products from India or Pakistan. Meanwhile, the Philippines, a major rice consumer, will let the private sector import most of the targeted amount of 850,000 tons, leaving only 350,000 tons to be delivered via government-to-government agreements.
According to the association, Vietnamese exporters have been contracted to ship 1.1 million tons through August, an alarmingly low volume considering the wide span of eight months.
The poor market prospects have caused prices to drop. Prices of unhusked rice now vary from VND5,500 to VND5,700 and exporters fear they could fall further to around VND5,000 when supply increases.
The Vietnam Food Association plans to stockpile rice to keep prices stable. It will also seek government support to ensure a profit margin of 30 percent for farmers. It has said Vietnamese exporters should take advantage of Thailand's higher prices to increase shipments to China and some other high-end markets.
The Vietnam Association of Seafood Exporters and Processors, often known as VASEP, is also adopting a cautious approach.
"Vietnamese seafood exports hit $6.1 billion last year. We think there will still be opportunities to boost shipments to achieve the target of $6.5 billion," said VASEP Chairman Tran Thien Hai.
However, the seafood industry is facing huge challenges, including shortages of raw materials, stronger competition from other countries and new technical barriers, he said.
According to VASEP, Vietnamese seafood products have made it to 150 markets but global economic difficulties could have a negative impact on seafood consumption this year.
"Many countries are increasingly protecting local production with more trade barriers and this is a challenge for Vietnam's seafood industry," it said.
Exports were one of the brightest spots on Vietnam's economic horizon last year, with shipments rising 33.3 percent year-on-year to $96.2 billion. Thanks to the surge, the country's trade deficit narrowed sharply to $9.5 billion in 2011, the lowest in a decade.
HSBC said in a report last month that Vietnam's exports have been strong, primarily due to high demand for agriculture products, garments, and crude oil.
"We expect export to expand by 24 percent year-on-year in 2012, versus 33.3 percent in 2011," the bank said.
Vu Viet Ngoan, chairman of the National Financial Supervisory Committee, warned that global trade growth is expected to slow down to 5.8 percent in 2012 from 7.8 percent last year.
Major markets for Vietnamese products like the US and EU will see weaker demand, he said, adding that prices could fall, causing the earnings of exporters to drop.
Le Nguyen Ngoc, director of Viet Thang Garment JSC, said he's not optimistic about the coming months because importers may cut back on purchases as economic conditions deteriorate.
He said his company sells only to Europe and the US and it was not easy to expand its market now. "Credit and interest rates are still a problem, so we don't have high hopes," he said.