Market recovers, textile sector sets target of US$39 billion

	Leather and shoe industries have orders until the end of the year while textile sector continues to face difficulties
	Obstacles could slow progress for textile sector in 2020
	Enterprises from 2 key import markets of textile sector suspend import

Textile enterprises have adapted quickly to seize opportunities from the order shift and the recovery of the export market. Photo: N. Thanh

Currently, many enterprises in the industry have orders till the end of the third quarter of 2021, even to the end of the year. It is forecasted that textile exports will be able to reach the target of US$39 billion in 2021.

There are orders until the third quarter of 2021

From the beginning of the year, the world textile, garment and footwear market has gradually recovered. Vietnam's textile and garment industry also had many positive signals compared to the same period last year. Although the pandemic is still present, businesses have found a suitable direction. Data from the Ministry of Industry and Trade showed that the export turnover of textiles and garments in the first quarter was estimated at US$7.2 billion, up 1.1% over the same period last year; the export turnover of fibers and fibers of all kinds increased by 31%; the export turnover of curtain fabrics and other technical fabrics increased by 8.8%.

Mr. Vu Duc Giang, Chairman of Vietnam Textile and Apparel Association, said that the consumption demand is starting to recover, having a positive impact on export activities. Textile enterprises adapt quickly through solutions to diversify product lines and markets, as well as adapt to the foundation of the purchase and sale mechanism according to the new context, differing from the traditional way of buying and selling.

“The fact that businesses have been and continue to invest in automation and technology is also one of the factors that contributes to creating a foundation for the textile and garment industry to withstand market pressures on quality and fast delivery," Mr. Giang said.

Another factor mentioned by Mr. Vu Duc Giang is that the new generation Free Trade Agreements (FTAs) significantly contributed to boost textile exports.

Typically, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has helped textile products spread to Canada, New Zealand, Australia; The Vietnam - EU FTA (EVFTA) also helps some product lines better penetrate the EU market.

Since the first months of the year, Vietnam's textile and garment industry has received a lot of information about orders. Mr. Cao Huu Hieu, Deputy General Director of Vietnam National Textile and Garment Group (Vinatex), said this proves the textile market is recovering. At present, most garment enterprises in the industry have orders until the end of the third quarter; even many businesses have orders for the whole year.

“The global textile and apparel market has seen recovery due to economic support packages and positive information on vaccines; the demand for items in general and garment in particular has recovered. The shifting of orders from competing countries, especially from Myanmar, helps Vietnam receive a sudden increase in orders from the first quarter,” said Mr. Cao Huu Hieu.

Outperforming target of US$39 billion

In terms of commodity consumption trends, Mr. Le Tien Truong, Chairman of Vinatex's Board of Directors, said that through the pandemic, the world's apparel consumption trend has changed a lot. In 2020, vestons, shirts and casual pants declined the most (veston decreases 70%, casual pants 45%, shirts 30%).

In 2021, the mentioned items have seen a certain recovery compared to 2020 but are still at a low level compared to the production capacity of Vietnam's garment industry. These are the strong products of Vietnam.

The growth of production of these products this year is still unclear; because it depends a lot on how to transport and work back to the way they were before the pandemic. If the world still maintains the way of working from home, then those goods will not be able to recover.

"It can be sure that, in the first six months of 2021, the market will mainly consume basic products with relatively cheap prices," said Mr. Le Tien Truong.

Although the situation of textile production and export in the first months of the year has prospered, Mr. Vu Duc Giang acknowledged that Vietnam's garment and textile sector is facing significant challenges. The typical problem mentioned by Mr. Giang is the fact that Vietnam's logistics costs are very high, especially the cost of renting empty containers. According to many enterprises, container rental price has increased 5 times compared to last year. A series of production orders due to lack of export containers leading to traffic congestion, delayed delivery to partners.

However, when it comes to textile export results, Mr. Giang still believe that the target of US$39 billion exports will be achieved. “This stems from the fact that there are many big brands and orders moving from other countries to Vietnam in the market. In addition, the US, which is a traditional market with a large proportion in the export structure of Vietnam's garment and textile sector, showing signs of recovery after the country expands vaccination to people,”said Giang.