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    Vietnam'S Textile Export Is Expected To Increase By 11% In 2019

    2020/1/22 15:49:00 8

    Vietnam Textile Export2019

    Due to the unclear global economic prospects, Vietnam's cotton import volume will be reduced from 7.6 million bales to 7.2 million bales in 2019 / 20, and the proportion of US cotton will still reach about 55%.

    According to the estimation of Vietnam textile and clothing association, the export volume of Vietnam's textile and clothing will be 36 billion US dollars in 2018, with a year-on-year growth of 16%. In 2019, it is planned to reach US $40 billion, with a year-on-year increase of 11%.

    As the United States imposes tariffs on Chinese clothing, some overseas orders flow from China to Southeast Asian countries, including Vietnam. The United States is the largest buyer of Vietnamese clothing, accounting for more than 35% of Vietnam's clothing exports. In 2018, Vietnam's clothing export to the United States was close to US $14 billion, with a year-on-year increase of 12%. This trend will be maintained from January to February in 2019.

    The implementation of the cptpp agreement on January 14, 2019 is expected to stimulate Vietnam's textile and garment exports, but the strict provisions on the origin of yarn are a great challenge for Vietnam, because the raw materials of Vietnam's garment production are seriously from non cptpp countries, especially China. However, the cptpp is likely to help Vietnam attract more foreign direct investment.

    In June 2019, the EU and Vietnam signed a free trade agreement, which is another new opportunity for Vietnam to promote the export of textiles and clothing. The EU is one of the largest buyers of Vietnamese clothing, accounting for 15% of Vietnam's clothing exports. In 2018, Vietnam's textile and clothing exports to the EU increased by 10.5% year-on-year. After the implementation of the agreement, Vietnam's clothing export tariff to the EU will be reduced by 12%.

    However, Vietnam's textile and clothing industry may face other adjustments, because these free trade agreements have strict requirements on the origin and the production costs will be greatly increased. At the same time, Vietnam's textile mills are also facing the challenges of cotton and cotton yarn price fluctuations and export demand decline due to the trade war. Cotton prices rose steadily for most of 2018, peaking from July to October 2018. In the same period, the price of yarn exported from Vietnam to China has gradually declined, and the profit of textile mills is very small. When the price difference of fancy yarn is less than $1 / kg, the textile mills will lose money.

    In 2018, Vietnam's cotton yarn exports to China increased by 3% year-on-year, and 19% from January to August 2019, but most of the growth was from textile enterprises invested in China and Taiwan. Although nearly half of Vietnam's production is accounted for by these enterprises. As the yarn produced by these mills is mainly supplied to Chinese parent companies, they are not sensitive to yarn price fluctuations.

    Vietnam's local cotton mills pay close attention to the current Sino US trade disputes. The obvious rise in the minimum wage and electricity charges since the beginning of 2019 has brought great pressure on the yarn mills, and also has a serious impact on yarn production, which may weaken the export competitiveness of Vietnam's cotton yarn. In 2019, Vietnam's cotton yarn export is expected to increase. The export volume from January to October will be 1.4 million tons, with a year-on-year increase of 14.8%, but the export volume will only increase by 3.6%, indicating that the current price drop makes it difficult for the mills to survive. At present, China, South Korea and Turkey are the largest buyers of Vietnam's cotton yarn, accounting for more than 80% of Vietnam's cotton yarn exports. The decline in the markets of Turkey and South Korea is offset by the increase in China's market demand.

    According to the data of Vietnam customs, Vietnam's cotton import volume in 2018 / 19 was 1.51 million tons, which was flat on a year-on-year basis. It is expected to be 1.57 million tons in 2019 / 20. The main import sources are the United States, India, Brazil, Australia and Cote d'Ivoire, accounting for 70-80% of Vietnam's total cotton imports. In 2019 / 20, Vietnam's import of cotton from the United States is expected to reach 870000 tons, with a year-on-year increase of 5%.

    Driven by cotton yarn export, Vietnam's cotton consumption continued to grow. 80% of Vietnam's imported cotton is made into cotton yarn and exported, and the rest is digested at home. Vietnam's cotton consumption is heavily dependent on China's demand for cotton yarn. In 2019, Vietnam's cotton yarn export to China is expected to be 800000 tons, accounting for 80% of the total cotton yarn export. Therefore, China's cotton and cotton yarn policy will have a great impact on Vietnam's cotton yarn production and export, and the current Sino US trade friction will have a serious impact on Vietnam's spinning industry. Vietnam's cotton yarn consumption is expected to be 1.51 million tons in 2018 / 19 and 1.57 million tons in 2019 / 20.

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