Orders are better, will textile exports prosper in 2022?

In the most positive scenario, the value of textile and garment exports this year is expected to reach about US$37.5-38 billion. Photo: NT

After the difficulties due to the impact of the pandemic and production stagnation, recently, enterprises in the textile and garment industry have gradually returned to production.

Mr. Pham Xuan Hong, Chairman of the Association of Garment-Textile-Embroidery-Knitting in HCM City (AGTEK), said that the stock of unmanufactured backlog orders is still quite high, and the newly added orders will help businesses have abundant orders. Besides, the morale of employees is also quite good after returning to work, there are businesses with higher productivity than usual.

“After a long period of stagnation, workers are in dire need of jobs and income. Many businesses have considered overtime to keep up with orders. I think this is also a good sign for the textile and garment enterprises in the South in the last three months of the year," Mr. Hong said.

Looking back at the overall impact of the pandemic, Mr. Le Tien Truong, Chairman of the Board of Vietnam Textile and Garment Group (Vinatex), said that the pressure and risks are quite large for Vietnam's textile and garment enterprises because while the main markets have recovered strongly and the demand has increased rapidly, the Vietnamese enterprises were not able to organize production due to the pandemic.

The number of customers who have to move orders will certainly be large, with a forecast of about US$3-4 billion in the third quarter of 2021 when export turnover is only US$10 billion, while the average of 2019 is about US$13 billion.

The movement of customers means that it affects the position and market share of Vietnam's textile and garment in the supply chain, it is not immediately confirmed that it will decrease but there are signs of a decreasing trend.

"At the same time, creating a need to diversify the orders of firms, there is a long-term risk of reducing the growth rate of Vietnam's textile and garment industry, which has been achieved in the past three years," Mr. Truong said.

Regarding the outlook for 2022, Mr. Hong said that in 2022, Vietnam and the world's pandemic situation will be relieved, the ability to control the pandemic will be better, then the market will improve.

After about two years, the global textile and garment market is under "pressure", but if people's shopping demand recovers, it will increase. Besides, Vietnam's rivals currently do not have too many advantages compared to Vietnam.

“Not only social security and political stability, but also the skills of Vietnamese workers are better. We should take the opportunity to rise in 2022. I hope that after a period of "weariness" because of the pandemic, businesses will together exploit the growth potential of the world textile market," Mr. Hong said.

Mr. Le Tien Truong said the pressure to return to production capacities like pre-pandemic levels and social distancing will be the theme of businesses in the next three years. In addition to the competition in the textile and garment industry for labor, there is also fiercer competition with other industries in the southern key economic region, which are facing a widespread shortage of labor.

In addition, non-production costs will continue to increase for businesses in 2022, the largest includes Covid-19 testing for employees; logistics costs at home and abroad.

In the first nine months of 2021, the main export items in the textile and garment industry are garments, reaching US$21.7 billion, up 5% over the same period in 2020 and down 5.4% over the same period in 2019; lychee exports reached US$1.8 billion, up 37.4%; fiber exports reached US$4 billion, up 56.2%; non-woven fabric exports reached US$557 million, up 77.3%; exports of textile and garment accessories reached US$921 million, up 21.8%.

According to the Vietnam Textile and Apparel Association, with the most positive scenario, the export value of textiles and garments for the whole year 2021 will reach about US$37.5-38 billion. It is forecast that if in 2022 the production and business situation return to normal, Vietnam's textile and garment industry will strive to achieve an export value of US$39 billion - 42 billion.