Apparel / Textiles & Accessories

According to Vietnamese customs data, Vietnam's textile and clothing exports reached 43.4 billion US dollars in 2022, a year-on-year increase of 11%. Although data shows growth, Vietnam's textile and clothing export orders and amounts have significantly decreased since the fourth quarter of 2022, due to weak demand in major export markets, including the United States and the European Union.

In addition, Vietnamese textile and clothing producers continue to face other challenges in production and export, including the continuous rise in raw material and logistics costs (Russia-Ukraine conflict and epidemic), the sharp fluctuations in international cotton prices, Vietnam's tightening monetary policy to control inflation, and the increase in labor costs.

Customs data shows that Vietnam's textile export orders decreased by 25-27% year-on-year in the first quarter of 2023. In response to the decline in orders, many Vietnamese textile and clothing companies have reduced their operating rates, resulting in a large number of workers losing their jobs. The industry expects this downward trend to continue at least until the third quarter of 2023. Nevertheless, the Vietnam Textile and Clothing Association still sets an export target of $46 billion for 2023, provided that the economy and consumption of the main export markets recover.

According to customs data, in 2022, Vietnam's textile industry added approximately 100000 spindles, with a total of approximately 110 textile factories, half of which are located in the south, 40% in the north, and 10% in the central region. According to Vietnamese customs statistics, the export volume of Vietnamese yarn in 2022 was 1.6 million tons, a year-on-year decrease of nearly 19%, and the export value was 4.7 billion US dollars, a year-on-year decrease of 16%. The small increase in exports to Bangladesh has not offset the significant decline in exports from China and South Korea.

Customs data shows that in 2022, cotton yarn exports accounted for 56% of all Vietnamese yarn exports, but the export volume of cotton yarn was only 866000 tons, a year-on-year decrease of 24%, and the export value was 2.9 billion US dollars, a year-on-year decrease of 16%. The increase in cotton yarn exports in the first five months of 2022 did not offset the decrease in the remaining period. The decrease in global demand for textiles and clothing has led to a decrease in Vietnam's demand for raw materials such as cotton and cotton yarn. According to industry news in Vietnam, due to the combined impact of reduced orders and falling cotton yarn prices, the operating rate of most textile factories in Vietnam has dropped to 50-70%. This trend is expected to continue until the first quarter of 2023, and the rebound depends on the recovery of the global economy.

Customs data shows that Vietnam exported 788000 tons of cotton yarn to China in 2021/22, a year-on-year decrease of 20%. In the first half of 2022/23, Vietnam exported 280000 tons of cotton yarn to China, a year-on-year decrease of 35%. Due to a decrease in China's import demand for cotton yarn, Vietnam's cotton consumption is expected to decline in 2022/23. In 2023/24, with the recovery of the economy and consumption, Vietnam's cotton consumption is expected to slightly increase by 3%, reaching 6.5 million bales.