Vĩnh Hiệp Company exports the first 296 tonnes of coffee to European market under the Vietnam – Europe Free Trade Agreement (EVFTA) in 2020. Coffee traders need to find a new way for these beans to reach European ports because of the Suez Canal blockage. — VNA/VNS Photo Hồng Điệp

HÀ NỘI — The vessel stuck in the Suez Canal will certainly affect import and export activities between Việt Nam and the European region, said a representative from the Ministry of Industry and Trade (MoIT).

On March 23, the Ever Given, one of the largest container ships in the world, on its way from Asia to Europe ran aground while moving through the canal. The Ever Given, longer than four football fields, has been wedged diagonally across the canal since Tuesday, towering over nearby palm trees and strangling world supply chains.

Johannes Schlingmeier, CEO of Container xChange, a German-based container rental and exchange, told media: "Basically everything going to Europe from Asia passes through the Suez Canal."

MoIT’s deputy minister Đỗ Thắng Hải confirmed: “Together with higher seagoing freight rates due to the COVID-19 pandemic, the incident will affect import and export activities between Việt Nam and the European region.”

MoIT said Việt Nam's exports to Europe reached a turnover of US$43.7 billion, and imported $18.5 billion in 2020. In the first two months of 2021, the export figure was $7.5 billion, and imports were $3.1 billion, corresponding to growth rates of 18 per cent and 12 per cent.

Europe was also the main market for many products and the second largest export market of Việt Nam, said Hải.

According to recent data from the General Department of Customs, Việt Nam exported $7.71 billion worth of goods to Europe, of which EU made up $6.05 billion in the first two months of 2021.

In detail, items with the largest export value to the EU included phones and accessories with $1.38 billion ($10.06 billion in 2020), computers, electronic products and components with $964 million ($6.51 billion in 2020), machinery, equipment, tools and other spare parts with $697 million ($3.49 billion in 2020), textile and garment products with $440 million ($3.68 billion in 2020), footwear with $721 million and aquaculture with $135.15 million.

According to Eurostat, the statistical office of the European Union, Việt Nam was the source of nearly a quarter of the EU's coffee imports while The Wall Street Journal reported that with the Suez Canal temporarily closed, traders would need to find a new way for these beans to reach European ports.

MoIT deputy told local media: “In case the Ever Given case is prolonged, making ships go round the Cape of Good Hope, it would extend the journey from Asia to Europe by two weeks, significantly increasing logistics costs. 

Currently, MoIT has directed its trade office in Egypt to closely monitor the progress of the case to promptly inform import and export businesses.

At the same time, the Việt Nam Maritime Administration from the Ministry of Transport said that if the congestion in Suez Canal continues, it will affect global transport.

“Cargo ships exporting to Europe and the East American coast had to bypass Africa. This will increase freight rates and significantly prolong the transport time,” said a representative of the administration.

Xuân Thịnh Service Joint Stock Company, which deals in petroleum and oil products, said that the incident delayed oil orders from suppliers to Việt Nam for three and four days now, meaning the enterprise was out of products to send to its agents in Việt Nam.

It is expected that the canal will be opened early next week after high tide.

The Suez Canal is 190km long, 205m wide and 24m deep, and has been in operation since 1869. It is one of the busiest maritime routes in the world, carrying out 12 per cent of global transport of goods. In 2020, nearly 19,000 ships and boats passed through the Suez Canal with a total tonnage of about 1.17 billion tonnes. — VNS