According to data from the General Department of Customs, in the first 7 months of 2023, two-way trade turnover between Vietnam and the Russian Federation reached 1.88 billion USD, down 15.8% (the first 6 months of 2023 decreased by 20.9%) compared to the same period in 2022 and down 37.8% compared to 2021.
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| Export of ceramic products to Russian market grows by 3 digits |
Of which, export turnover from Vietnam to the Russian Federation recovered quite quickly. While Vietnam's exports to the Russian Federation in the first quarter of 2023 decreased by 32%, in the first 7 months of 2023, it decreased by 3.2% compared to the same period in 2022, reaching 931.1 million USD.
Meanwhile, Vietnam's import turnover of goods from the Russian Federation in the first quarter of 2023 decreased by 49.2% to 7 months of 2023, reaching a decrease of 25.2% to 950.8 million USD. The trade deficit by the end of July 2023 was 19.7 million USD.
In the first 7 months of 2023, some of Vietnam's key export items grew significantly compared to the first 7 months of 2021 - the time before the Russia-Ukraine military conflict. Specifically, coffee exports increased by 58.1%; rice exports increased by 263.1%; rubber exports increased by 31.5%; rubber product exports increased by 107.8%.
Compared to the first 7 months of 2022, many items had strong export turnover increases such as rubber products increased by 383.9%; ceramic and porcelain products increased by 225.4%; confectionery and cereal products increased by 59.2%. Some items showed signs of export recovery such as cashew nuts increased by 19.6%; handbags, wallets, suitcases, hats, umbrellas increased by 49.1%; textiles increased by 79.7%.
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| Vietnam's goods export turnover to Russia in the first 7 months of 2023 |
According to data from the World Bank (WB) on August 4, with a total GDP of 5,510 billion USD, the Russian Federation is the 5th largest economy in the world in terms of purchasing power parity, after China, the US, India, and Japan. The WB also forecasts that the Russian economy will continue to hold this position in 2030.
According to the latest assessments of the Russian Federation, the Russian economy could grow by 2-2.5% in 2023, after shrinking by 2.1% in 2022.
According to the Vietnam Trade Office in the Russian Federation, after nearly 7 years of implementing the Vietnam - Eurasian Economic Union Free Trade Agreement (EAEU FTA), import tax on most export goods of the two sides has been reduced to 0% or at a very low level, creating favorable conditions for Vietnamese and Russian enterprises to increase trade and investment cooperation in each other's markets.
Western businesses withdrawing from Russia creates a big gap in the market. This is an opportunity for Vietnamese businesses with strengths in garments, footwear, agricultural products, consumer goods, and home electronics to increase exports and investment in Russia. Enterprises cooperating with Russia should carefully study, consider increasing, investing, and establishing businesses in Russia to organize production and consumption of garments, footwear, processed agricultural products, and consumer goods in Russia, making better use of the Free Trade Agreement with the Eurasian Economic Union.
In the opposite direction, Vietnamese enterprises can import raw materials, fuels, etc. from Russia to serve domestic production and consumption.
Currently, the Russian Federation and Vietnam have relaxed visa regulations for each other's citizens. From August 1, 2023, Vietnamese citizens can apply for an electronic visa to enter Russia, and from August 15, Russians can stay in Vietnam for up to 45 days visa-free.
In addition to the advantages, according to the Vietnam Trade Office in the Russian Federation, the two countries still mainly use USD and Euro in import-export payments, not other strong currencies. Meanwhile, Vietnamese banks are very concerned when working with Russian banks due to fear of secondary sanctions by the West, especially for payments for imported goods from Russia.
The geographical distance between the two sides is relatively far, the main shipping routes from Vietnam to Russia, encounter many difficulties due to the Western embargo after the conflict with Ukraine, negatively affecting the import and export of goods between the two countries.
The capacity of international railway transport routes through China and Mongolia to EAEU FTA countries is still low, and depends on a third country, so efficiency is not high.
On the other hand, the fact that the two sides have not resumed direct flights between Hanoi and Ho Chi Minh City also limits travel, trade, tourism, transportation, etc. between the two countries, thereby hindering the development of bilateral economic, trade and investment cooperation.
According to the plan, from October 12 to 15, 2023, the Embassy and Trade Office of Vietnam in the Russian Federation will organize Vietnam Week at the Hanoi - Moscow Trade Center. The event will include activities to display and promote Vietnamese goods and businesses (about 30 booths), and a seminar connecting Vietnamese - Russian businesses. This is an opportunity for Vietnamese businesses to promote and trade goods in this market.
The Vietnam Trade Office in the Russian Federation also requested ministries and branches to encourage/support localities/associations/enterprises to organize trade promotion delegations (about 10-15 enterprises) to attend specific specialized exhibitions such as garment, wood products, consumer goods, food, beverages, coffee, tea, etc. in the Russian Federation in 2023-2024.
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