May 22, 2010

The euro has fallen almost 15% this year due to the European debt crisis causing delays in contract negotiations for Vietnam's exports to the EU.

"We offer products with prices in dollars but now that the dollar has strengthened while the euro has weakened, our EU partners want lower prices. Therefore, negotiations on contracts for seafood exported to the EU have been delayed," said Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters & Processors (VASEP).

Hoe said that Vietnam-based exporters were waiting for the EU's market to recover, as it accounts for 26% of the country's total seafood export turnover.

The euro yesterday weakened 0.8% to US$1.2333, nearly the lowest level since April 2006.

"EU importers bought too little in 2009. The global economy this year, in general, is brighter than last year, and EU's consumption demand is still high, said Huynh Quang Thanh, a director general.

Recently, Dang Hoang Hai, director general of the European Market Department under the Ministry of Industry and Trade, said that the frail recovery of the EU would affect Vietnam's exports to the market. He forecasted a slow and modest increase of the country's exports to the EU in 2010 and in the coming years.

However, the weak euro may in fact benefit Vietnam's importers. According to Jean-Luc Voisin, managing director of a French-owned company, his company can import cheaper goods from Europe due to the currency's decline.