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Vietnam’s textile and garment industry: Export prospects in 2022

Vietnam’s textile and garment industry: Export prospects in 2022

Tuesday 16, 11 2021
Vietnam’s textile and garment industry is forecasted to be facing difficulties in the remaining months of 2021. Export prospects of the industry in 2022 will be better, provided that Vietnam can take advantage of certain favorable conditions.

Textile and garment export in ten months of 2021

In October 2021, provinces over Vietnam eased social distancing policies, which helped put textile companies’ production and import-export activities somewhat back on track, leading to the increase of Vietnam’s textile and garment exports.

According to preliminary statistics,

According to preliminary statistics, Vietnam's export of textiles and garments in October 2021 is estimated at 3.04 billion USD, up 3.5% compared to September 2021 but still down 3.7% compared to October 2020 and decreased by 7.2% compared to October 2019. In general, in the first ten months of 2021, Vietnam's textile and garment exports are estimated at 32,563 billion USD, up 10.7% over the same period in 2020 but down 1.1% over the same period in 2019.

Generally, in the first ten months of 2021, Vietnam's exports of textile and garment groups increased compared to the same period in 2020. In which, exports of cord fabrics and other technical fabrics increased the most, up 76.8%.

Compared to before the pandemic, exports of two groups of fibers and textile yarns, cord fabrics and other technical fabrics increased sharply in the first ten months of 2021, with an increase of 30.3% and 26.5%, respectively. On the contrary, exports of textiles and apparel, leather, shoes, and textile materials have not yet reached pre-pandemic levels.

With the current COVID-19 pandemic situation, the 2021 target of 39 billion USD in export turnover will be very difficult to achieve.

Providing a scenario where the pandemic situation is still complicated, with some localities and industrial zones remaining blocked and isolated in November 2021, export turnover of Vietnam’s textile and garment industry in 2021 is expected to reach about 36 to 36.5 billion USD. The least positive scenario is that the pandemic situation will still be complicated until the beginning of December 2021. Then, the export turnover of the industry is expected to reach from 33.5 to 34 billion USD.

export turnover

It is forecasted that in 2022 if the production and business situation returns to normal, Vietnam's textile and garment industry will strive to achieve an export turnover of 39-42 billion USD.

Prospects for 2022

Due to the pandemic, textile companies in Vietnam have been under pressure and faced many risks, namely the inability to keep up with rising demands from main consuming markets that had been in a strong recovery. According to the Vietnam Textile and Garment Group (Vinatex), in the third quarter of 2021, the number of customers that had to move textile and garment orders away was large, equaling an estimated 3-4 billion USD, while the total export turnover of the industry was only 10 billion USD.

Vinatex

Customers relocating orders affects the position and market share of Vietnam's textile and garment in the supply chain. While not immediately, Vietnam's position in the industry worldwide will most likely decrease. At the same time, with the psychology of needing to diversify the country of orders of firms, there is a long-term risk of reducing the growth rate of Vietnam's textile and garment industry.

Recently, enterprises in the textile and garment industry have gradually returned to production, which will promote the textile and garment industry to recover export orders. According to the Ho Chi Minh City Garment and Textile Embroidery Association (AGTEK), unmanufactured orders of textile and garment enterprises are still quite a lot. Along with that, new orders will continue to be added, providing companies with abundant business orders. In addition, the morale of employees is also quite good after being returned to work, there are companies with higher productivity than usual. These are good signals for textile and garment companies, especially for southern ones in the remaining quarter of 2021.

The prospect for textile and garment exports of Vietnam will be better in 2022, since:

  • The world's demands for textile and garments are predicted to increase after two years suppressed.
  • Vietnam’s competitors in the field will have yet to gain many advantages due to the impact of COVID-19 on the world economy.

Vietnam’s textile and garment industry still stands before great opportunities from signed free trade agreements, especially the potential to expand exports to major markets around the world. The market share of Vietnam in the US and EU is still expanding. The trend of shifting textile and garment supply makes Vietnam one of the destinations for importers and retailers.

 

Compiled by VietnamCredit

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