Leather and shoe industries have orders until the end of the year while textile sector continues to face difficulties

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Textile is one of the industries that suffered the most from the impact of Covid-19.

Leather and shoes sector recovers

According to the latest information from the Ministry of Industry and Trade, leather footwear production in October 2020 is estimated at 31 million pairs, up 5.3% from the previous month and 11.8% higher than the same period last year.

In first ten months of 2020, leather footwear production is estimated at 249.1 million pairs, up 0.8% over the same period last year. Footwear export turnover of all kinds in ten months was estimated at $13.38 billion, down 9.9% over the same period last year.

After a sharp decline in the second quarter of 2020, since the third quarter of 2020, the order situation of businesses in the footwear industry is gradually recovering. Some enterprises in the leather and footwear industry haveorders until the end of the year and have started recruiting workers again.

However, the orders returned but not much, because the importers were cautious, the purchasing power of the market was still weak because the main import markets of Vietnam's leather and footwear products werestill affected by the Covid-19 pandemic.

The remarkable point in leather and footwear exports is that after more than two months of the implementation of the EU-Vietnam Free Trade Agreement (EVFTA), footwear is a commodity on the list of Vietnam's export productswith the most positive variable in terms of exports.

Mr. Tran ThanhHai, Deputy Director of Import and Export Department (Ministry of Industry and Trade), said that after two months since theEVFTA came into effect, the authorized organizations have issued more than 20,000 sets of certificates of origin (C/O) EUR.1 form to 28 EU countries.

The items that have been granted C/O form EUR.1 are mainly footwear, seafood, plastic and plastic products, coffee, textiles, bags, suitcases, vegetables, rattan products, bamboo,knitting, and agricultural products. Of which, the items that best take advantage of EVFTA's opportunities are footwear (with a turnover of $385 million), followed by seafood ($118 million), plastic and plastic products ($48 million).

Although the market situation cannot fully recover, the export turnover of footwear and handbags in the fourth quarter of 2020 is expected to return to growth when this is the time of rising consumption in European and American countries.

The Ministry of Industry and Trade assessed that the EVFTA will be a great driving force for the growth of the footwear and handbag industry in the remaining months of 2020 and 2021.

Textile industry continues to facedifficulties

Not as good as the footwear industry, the textile and garment industry is forecast to continue facing many difficulties.

Data fromthe Ministry of Industry and Trade shows that, for the first ten months of 2020, textiles made from natural fibers are estimated at 548.8 million m2, up 4.7%; production of textiles from synthetic fibers and synthetic fibers was estimated at 782.7 million m2, down 10.6%; casual clothes was estimated at 3,639.2 million pieces, down 6.1% over the same period last year.

Export turnover of textiles and garments in ten months was estimated at US$24.76 billion, down 9.3% over the same period last year.

The year 2020 is a particularly difficult onefor Vietnam's textile and garment industry when the market has facedcomplicated and unpredictable fluctuations. Facing the impact of the Covid-19 pandemic, textiles and garments are one of the industries with the greatest direct losses, along with tourism, aviation, and footwear.

The demand slowed down due to the Covid-19 pandemic when consumers around the world only paid attention to essential appliances and disease prevention, so Vietnamese textile and apparel enterprises faced many difficulties due to scarcity of orders.

Facing this situation, the Vietnamese textile and garment enterprises havepromoted the rapid transformation of the structure of traditional goods to adaptive items such as switching from high-end suits and high-end shirts to workwear, knitwear, traditional shirts to maintain production and business activities.

The Ministry of Industry and Trade stated that textile enterprises need to have new measures to change the mode of production and business to suit the new situation, and at the same time exploit and expand the domestic market; along with that is actively linking with customers to form a production chain, meeting the rules of origin as committed by FTAs.