According to a report by the Ministry of Industry and Trade, Vietnam had a $49.1 million trade surplus with Ukraine in the first two months of 2022. Specifically, exports to Ukraine amounted to USD 57.5 million, which is 0.11% of the country’s export turnover; Imports reached USD 8.4 million.

SHIPPING, PAYMENT IS DIFFERENT

Mr. Hoang Dinh Chai, Head of Vietnam’s Trade Office in Ukraine, said that the crisis between Russia and Ukraine is having a strong impact on the country’s economy. According to analysts and forecasters, Ukraine’s GDP will shrink by 32% in 2022, followed by a slight recovery with a 5-10% decline in 2023. Analysts note that the trend of the Ukrainian economy in the near future will be L-shaped becomes.

Inflation is predicted to slow in early 2023, falling from 22.6% in 2022 to 14% next year. Inflation is rising as fast as expected, but not out of control.

Industrial and agricultural indicators of Ukraine have not been compiled and evaluated. But the pessimistic comments are due to the severe effects of the war, the main industrial production of Ukraine is in the war zone. Agriculture is badly affected due to the right planting season.

Therefore, economic and trade activities between Vietnam and Ukraine are also affected. Because logistics chains in Ukraine are in a difficult situation: too high freight rates, traffic jams on the rails, traffic jams at car checkpoints.

In maritime transport, shipping companies are tightening the terms of payment. Many airlines have switched to prepaid mode and freight rates are increasing significantly.

Odessa’s main seaport has been temporarily opened, but priority is given to food. Ukraine docks temporarily in the port of Romania and will ferry overland to Ukraine.

The transportation of goods by railway is currently the main mode of transportation, so Vietnamese companies must carefully consider which route the goods will be transported.

Also according to the deal, payment during this period is very difficult and reluctant. Banks only allow a very small amount of foreign currency to be transferred out of the bank due to conflicting laws. After the conflict ended, however, Mr. Chai recommended that companies should also exercise caution and pay up front to avoid defaults later on.

Especially in the current situation, it is difficult to take out conflict insurance for exports. In fact, many ship owners and international insurance companies are currently unwilling to insure shipments going to a war zone. Normally the London insurance market’s conflict insurance premium is at least 0.05% (on the value of the shipment).

NEED TO LEARN INFORMATION

For goods exported to Ukraine, the Vietnam Trade Bureau in Ukraine said the payment was affected but resolved.

It is forecast that this period and the whole of 2023 will be difficult for trade cooperation between the two countries. The implementation of the signed contracts is fraught with difficulties, new signed contracts will be of interest to both parties, but will be examined very carefully.

Currently, Ukrainian companies and the state give priority to importing essential and military goods. In parallel with the struggles to protect territorial integrity, the government of Ukraine presents a comprehensive plan to restore the country in 10 years and has received positive reviews and support from international partners.

Ukraine is trying to promote free trade agreements with many countries, signing agreements to take practical measures to help Ukrainian companies in times of war. Ukraine also recognizes that economic cooperation with Vietnam is particularly good for Ukraine in the post-war reconstruction period.

The current picture shows that Vietnamese and Ukrainian companies have started to resume activities after 4 months of complete cessation, there have been business delegations and trade associations to Vietnam to promote and procure goods. .

The deal also drew a lot of attention to rice, food and textile products for clothing…

In supermarkets, Vietnamese dry products such as pho, vermicelli, rice, shrimp noodles, etc. occupy most of the shelves. “This is the first time that Vietnamese goods make up the majority of goods compared to Thailand and other Asian countries in Ukraine’s distribution system,” Mr. Chai said.

In the coming period, the Trade Office in Ukraine will make efforts to support Vietnamese and Ukrainian companies, as well as Vietnamese abroad, who have suffered many losses and damages in this conflict. The Ambassador and the Trade Office are expected to hold bilateral online and offline seminars with Ukrainian and Vietnamese companies.

Previously, Indonesia held a workshop in Kiev on February 2, 2023. The Ukrainian Chamber of Commerce and Industry and a number of companies will fly to Indonesia to promote trade.

According to Mr. Chai, Vietnamese companies that do business with Ukrainian partners need to maintain and expand relationships at the current time.

However, companies should note that in business relationships it is necessary to collect information and carefully exchange shipping methods, payment methods and insurance. Because there have been many fake cases to get the deposit in advance and it is very difficult to collect.

At the same time, continue to promote Vietnam’s strong products of agriculture, forestry and fisheries… Businesses need to contact the bureau of commerce for help if needed.