Garment exports forecast to plummet due to lack of orders
Vietnam's garment and textile exports in the first four months fell 10 percent year-on-year to 10.63 billion USD and could fall much further as buyers cancelled orders due to COVID-19, according to the Vietnam Textile and Apparel Association (Vitas).
HANOI, VNS/VNA - Vietnam's garment and textile exports in the first four months fell 10 percent year-on-year to 10.63 billion USD and could fall much further as buyers cancelled orders due to COVID-19, according to the Vietnam Textile and Apparel Association (Vitas).
In April alone, exports of Vietnamese garment and textile products saw a month-on-month decline of 20 percent to 2.3 billion USD, the association's statistics revealed.
Truong Van Cam, deputy chairman of Vitas, said these figures are anticipated to fall much further in May and June due to the majority of export orders being cancelled or delayed.
According to the Vietnam National Textile and Garment Group (Vinatex), the domestic textile and garment industry could lose up to 50 percent of orders in May. Meanwhile, the recovery of supply amid falling demand might lead to a 20 percent reduction in prices worldwide, it said.
The group also predicted that textile and garment exports will rebound in the third and fourth quarters with low-cost products accounting for the lion's share of turnover.
However, the nation’s 2020 apparel exports could decrease by 20 percent over the previous year because of a drop of between 20-25 percent is expected in global, said Vinatex’s general director Le Tien Truong.
Truong said it is the right time for textile and garment producers to source raw materials from countries that were part of the Vietnam- EU Free Trade Agreement (EVFTA) so that their products could meet the EVFTA’s “rules of origin” requirements and benefit from the tax reductions.
The firms should also hunt for small-scale orders with higher quality requirements, he said.
For Vinatex, in the second quarter, the group will continue to produce face masks and medical protective clothes to meet the high demand for these products in many foreign markets while ensuring stable operations to catch up with the customers’ demands once the market showed signs of recovery.
Last year, Vietnam earned 39 billion USD from textile and garment exports, up 7.6 percent year-on-year, according to Vitas.
The US remained the largest consumer of Vietnamese apparel products with 12.5 billion USD, up 9 percent year-on-year and accounting for 39 percent of total export turnover.
The EU was next with 4.4 billion USD, up 2 percent or equivalent to 11.3 percent of the total. China and Japan followed with 4.25 billion USD and 4.2 billion USD, up 7 percent and 4.4 percent, respectively. - VNA