Near the counter of the Phu Quy gold store in central Hanoi, a man hovers nervously with his wife, his six-year-old daughter and a 10-inch thick wad of 100,000 dong (£3.72) banknotes.

Above the sales desk, a flashing Bloomberg screen displays complex price charts, but Mr Tran is entranced by the simple, constantly changing “we sell” display controlled by the shop's own independent trading system: the price of gold flickers down to the equivalent of $1,037 per tael (1.31oz) and the brick of money is hastily shoved over the counter.

All around the store, the action is frenetic and will be all day because, despite the imposing statues of Ho Chi Minh and Lenin a few streets away, the Socialist Republic of Vietnam lives and breathes commodity markets.

Looming global recession has begun to ruin the party. Coffee, rice, pepper and other soft commodity exports on which so many Vietnamese depend have begun to fall into the same alarming spiral that has started to suck the prices of industrial metals to year-lows. People are questioning whether it was in Vietnam's interests to join the World Trade Organisation last year now that the American consumer is tightening purse-strings. In some cases, soft commodity prices have collapsed so sharply that producers are losing money on what they are selling. Food industry insiders in Hanoi say that shipment defaults have already begun.

The vibrant physical gold market reflects the deep distrust most Vietnamese have for their own currency and its fluctuations. They remember times when “one day, a wallet of dong would buy a cow, the next day 100g of beef” and put their faith in the more reliable precious metal. Gold's surge to $960 per ounce this year was a magical windfall for many Vietnamese households: the new fear is that even gold may now disappoint in the worldwide meltdown.

Vietnam's extraordinary economic success in recent years has, in effect, been a double-play on the global commodity boom and the voracious Western consumer. Just over 50 per cent of Vietnam exports are commodities — from prawns to the rubber for scooter tyres in Sichuan. The problem is that the commodity boom is now on hold. China can no longer be relied upon to provide endless commodity upside: the old logic that 1.5 billion consumers would “eat the world” has, temporarily, evaporated as a market force.

Suddenly, the Vietnam story looks vulnerable. Rubber sap prices have halved and the Vietnam Rubber Association has given warning that producers are operating at below breakeven levels. Stockpiles are starting to build.

There is similar trouble on black pepper markets, where the price of the best quality has fallen by 75 per cent since September. Even rice, at historic highs this year, has joined the downward trend. A spokesman for the Vietnam Coffee and Cocoa Association gave warning of similar trouble for coffee prices, which have plunged by more than a third since last month.

But the global downturn will hit another pillar of Vietnam's economy — its appeal to manufacturers as a cheap place to site factories. Japanese and Korean companies have been especially hot on this trend, but it has left Vietnam with an export profile skewed to Western consumption. About 45 per cent of Vietnam's exports to the US — its biggest export market by a wide margin - are clothing and shoes.

What a carry on

— The collapse of the global “carry trade” has emerged as the next destructive force to hit markets, sucking liquidity out of the system and leaving investors in torment

— The sharp plunges in crude oil, copper, rubber and coffee are all thought to be related to the unwinding of carry trades

— The “carry trade” is the process of loading up with debt in currencies such as the yen that could be borrowed very cheaply, and using that money to finance asset-buying sprees in more adventurous markets

— Carry trade stops making sense when foreign currency markets become volatile and the exchange rate risk outweighs the low cost of the original leverage

— Dozens of speculation-charged markets — from fine art and rare wine to exotic currency swaps — are thought to have been partly financed by the carry trade

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