Apparel / Textiles & Accessories

Vietnam’s "Business Daily" reported on May 5 that Vietnam’s textile exports in the first four months of this year reached 9.51 billion US dollars, a year-on-year increase of 9%. The export value of fiber and yarn reached US$1.64 billion, an increase of 43.4%; the export value of textile and leather footwear raw materials reached US$642 million, an increase of 14.1%.

The Ministry of Industry and Trade of Vietnam stated that in the context of the gradual recovery of some of Vietnam’s main export markets and good use of the signed and effective free trade agreements, the textile industry in Vietnam in the first four months of this year has shown a better performance than the same period last year. As a positive signal.

In April of this year, Vietnam's textile manufacturing index increased by 2.7% month-on-month and 17.3% year-on-year; the garment manufacturing industry increased by 3.9% month-on-month and 29.4% year-on-year. Overall, in the first four months of this year, the textile production index increased by 7.8% year-on-year, the clothing manufacturing industry increased by 9.5%, and leather and related products increased by 11%.

Some products in this industry have achieved good growth. For example, woven fabrics made of natural fibers reached 201 million square meters, a year-on-year increase of 10.1%; textiles made of synthetic fibers and man-made fibers reached 378.3 million square meters, a year-on-year increase of 6.4 %; casual clothing reached 1.494.2 billion pieces, an increase of 8.9%; footwear reached 94.1 million pairs, an increase of 13.3%.

Vietnam's textile and clothing enjoy limited dividends

According to a report by Vietnam's "Industry and Trade News", the Vietnamese textile and garment industry is considered to be the industry most deserving of free trade agreement (FTA) dividends. However, due to the lack of self-sufficiency in raw materials and accessories, Vietnamese domestic textile and garment enterprises have not fully enjoyed FTA tariffs. Offers.

The Vietnam Textile and Apparel Association stated that currently exporting textile and apparel products to countries that have signed FTAs, the average utilization rate of certificates of origin (C/O) is about 58%, of which the CPTPP is exported to Japan, and the C/O utilization rate is about 60%. To 70%, while export to the EU under EVFTA, the utilization rate is only 20% to 30%.

The Vietnam Textile and Apparel Group stated that the main obstacle to the low C/O utilization rate and the failure of enterprises to enjoy the dividends is the origin of raw materials. The group mainly processes garments, and it is difficult to meet the requirements for the origin of yarns and fabrics. In addition, domestic companies are also facing strong competition from foreign companies. Since 2015, foreign investment in the textile and apparel industry has exceeded 20 billion U.S. dollars. Most foreign-funded enterprises can achieve self-sufficiency in raw materials, which invisibly puts huge pressure on domestic enterprises.

According to the report, the Vietnamese government should further strengthen the development of supporting industries to meet the demand for raw materials. At the moment, it should focus on the development of dyeing and finishing projects, solve the problem of fabric dependence on imports, and increase the domestic value of export commodities.

100 billion Vietnamese textile market will be affected

As an important trading partner of my country, Vietnam's textiles are highly dependent on my country. At present, more than 54.9% of textile raw materials need to be imported from my country. In 2020, Vietnam will import more than 103.9 billion yuan of various textiles from my country. In order to get rid of the dependence on my country's textiles, Vietnam is also trying to expand imports from South Korea in order to benefit from the Vietnam-Europe Free Trade Agreement, thereby enjoying the preferential policies in the Free Trade Agreement.

However, it is not easy for Vietnam to do this. After all, South Korea's production capacity may not be able to meet Vietnam's demand. At present, Vietnam imports fabrics from South Korea every year, and its share of overall imports is not large, only 15.2%.

In the future, the Vietnamese government may focus on the development of dyeing and finishing projects, improve the quality of its domestic fabrics, and solve the problem of fabrics relying on imports. Once Vietnam's printing and dyeing process matures, it will inevitably reduce its textile imports to my country, and Vietnam's textile export market exceeding 100 billion yuan will shrink to a certain extent. In addition, the Vietnamese textile industry, which has completed the upgrading of fabrics, will also have more strength to seize the share of my country's textile exports. It is reported that since last year, Vietnam has been preparing to expand its exports to the European Union so that it can gain more benefits.

Since the beginning of this year, various textile data in Vietnam have been increasing rapidly. In order to enjoy more free trade agreement dividends, Vietnam can no longer accept the fact that a large number of textile raw materials are imported from China. It is only a matter of time to develop dyeing and finishing and increase the added value of fabrics. In the future, our textile people will not only face the loss of customer orders from Vietnam, but may also compete with Vietnamese textile companies internationally.