FX Pressure Mounts, Fruit Exports Falter – Time for Investors to Hedge
01-04-2025, 10:45:12Q2/2025 opens with two key alerts: the USD/VND exchange rate is gaining upward momentum, and Vietnam’s fruit exports are declining for a third straight month. The VND faces persistent pressure amid U.S. trade tensions and rising FX demand, while stricter import rules from China threaten the country’s $8 billion produce export target. These shifts could weigh on trade-sensitive sectors. For investors and businesses with USD obligations, now is the time to reassess currency exposure and export assumptions before volatility intensifies.
1. FX Market: Pressure on the VND is Building
On March 31, the USD/VND interbank rate rebounded to 25,590 after dipping to 25,540 in the morning – a response to the USD’s weakness on Friday. However, strong capital outflows and a swift rebound of the U.S. dollar pushed the exchange rate back up by end of day.
As April kicks off, a new risk emerges. U.S. President Donald Trump stated on Sunday that new tariffs would be imposed on all countries with significant trade deficits with the U.S. this week – contradicting prior market expectations that only 15–25 countries would be affected. Vietnam, with a considerable trade surplus, could be included. If so, expectations of a weaker VND to support exports may drive the exchange rate higher in the coming weeks.
Furthermore, Q2 typically sees higher seasonal demand for USD from importers, compounding the impact of global currency volatility. Taken together, these factors create a strong case for proactive FX risk management for companies with upcoming USD payments in April and May – echoing prior recommendations from advisors.
2. Fruit & Vegetable Exports: Target at Risk After Three-Month Slump
While the rising exchange rate weighs on importers, exporters of fruits and vegetables are facing their own crisis. In March 2025, Vietnam’s fruit and vegetable exports fell to $420.6 million, down 10.5% YoY. That marks the third straight month of decline, dragging Q1 exports to just over $1.1 billion – a 13.2% drop compared to Q1/2024.
The primary reason? China – Vietnam’s largest market – has tightened regulations, especially on durians, by introducing new quality and traceability requirements. These include stricter controls on plantation codes, post-harvest processing, and packaging standards – creating bottlenecks for many exporters still adapting to the new regime.
Vietnam’s ambitious 2025 export target of $8 billion – up nearly $1 billion from last year – is now under real pressure. To stay on course, the sector must accelerate compliance efforts for the Chinese market while diversifying into alternative destinations to hedge against regulatory shocks.
Currency volatility and declining exports are not abstract macro concerns – they strike at the core of profitability, cash flow planning, and corporate valuation. This is the time for investors to reassess: which companies are exposed to rising FX costs? Which depend heavily on fruit exports? Which are best equipped to hedge and adapt? The answers will help reposition portfolios strategically for a turbulent Q2 ahead.