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Exports of textiles and footwear on the increase

Exports of textiles and footwear on the increase

Wednesday 17, 02 2021
The export of textiles and footwear saw a sharp increase in the first month of the year.

Exports of textiles

In January 2021, the textile production index and the apparel production index increased by 16.6% and 9.9% compared to the same period in 2020, respectively, according to the Ministry of Industry and Trade.

Export Textile

The production of textiles from synthetic fibers and artificial fibers was estimated at 92.4 million square meters, increased by 20.4% year over year. Casual clothing was estimated at 380.1 million pieces, up 9.3% year over year. The total export turnover of textiles and garments in January 2021 was estimated at USD 2.6 billion, increased by 3.3% over the same period last year.

The trend of price reduction and simple clothing will replace fashionable clothing, causing the available production capacity to become redundant and new production capacity requirements to arise. However, in 2021, the goal of the textile and garment industry is still equal to that of 2020, with the highest export reaching USD 39 billion.

Mr. Le Tien Truong, Chairman of the Board of Directors of Vietnam National Textile and Garment Group (Vinatex), assessed that textile and garment enterprises have received the attention of the Government over the past time. However, up to now, the global COVID-19 pandemic situation is still complicated. The negative impact of the pandemic can even last for one or two years. The year 2021 was forecasted to still be full of difficulties and uncertainties for the textile and garment market.

On the positive side, the Ministry of Industry and Trade believes that the textile and garment industry is facing a huge opportunity for development because of recently-signed free trade agreements, especially the potential to expand exports to major markets around the world.

In particular, the Regional Comprehensive Economic Partnership (RCEP) signed in mid-November 2020 was expected to create motivation and opportunities for Vietnam's garment and textile industry and replace some markets where the COVID-19 pandemic has not been controlled yet.

In the coming time, the textile and garment industry needs to promote building Vietnamese brands and supply chains linking and develop supporting industries. 

Exports of footwear

Similar to textiles and garments, Vietnam's footwear exports in the first month this year also increased over the same period last year.

Specifically, in January 2021, the index of leather and related products increased by 20.8%; the production of footwear and leather shoes was estimated at 21.9 million pairs, up 3%. The export turnover of footwear of all kinds in January 2021 was estimated at USD 1.8 billion, increased by 26.4% over the same period in 2020. 

Exports of footwear

As a result of the COVID-19 pandemic, new supply chains have been re-established. This is an opportunity for Vietnamese footwear enterprises to participate more deeply in the global supply chain. Footwear is also one of the sectors that make the best use of free trade agreements. The exports of shoes and bags will grow 15 - 20% in 2021 if the pandemic is well controlled. 

Moreover, FDI enterprises continue to invest and expand their production, contributing to the growth of the footwear industry in the coming time.

However, enterprises in the industry need to invest heavily in the processing industry of raw materials to meet the rules of origin requirement. Currently, the supporting industry for the footwear industry is not adequate. For example, the raw and auxiliary materials for the industry only focus on the medium and fairly good product lines. The rest still needs to be imported, making the added value of the industry not high. If we depend too much on imported raw materials, the supply chain will be very passive when there is a problem.

According to the Ministry of Industry and Trade, regarding the export market in January 2021, the US was the largest export market of Vietnam with a turnover of USD 7.5 billion, increased by 57.4% over the same period last year; followed by China with USD 5.8 billion (up 111.6%), EU market with USD 2.8 billion (up 14.8%), ASEAN market with USD 2.3 billion (up 31.9%), Japan with USD 1.9 billion (up 22.7%), and South Korea USD 1.7 billion (up 24.2%). 

Compiled by VietnamCredit

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