06:00 | 03/12/2020 Industry
(VEN) - Export turnover of the garment and textile sector is expected to reach US$33-35 billion in 2020, a drop of 10 percent compared to the previous year. Although the market is recovering, it will be difficult to achieve the set target of US$42 billion.
Impact of Covid-19 pandemic
2020 has been a particularly difficult year for Vietnam’s garment and textile sector, which has taken some of the biggest direct losses of all sectors due to the Covid-19 pandemic. The garment and textile sector is one of Vietnam’s key industries with the second-largest export turnover. In 2019, the industry’s export value contributed to 16 percent of total GDP.
Truong Van Cam, deputy chair and secretary-general of the Vietnam Textile and Apparel Association, said the pandemic has caused double damage to the garment and textile sector, disrupting material supplies and reducing global consumer demand.
Export turnover of Vietnam’s garment and textile sector dropped by two percent and 27 percent in the first and second quarter of the year, slightly improving in the third quarter. “Export turnover of Vietnam’s garment and textile sector is expected to reach US$35 billion this year, a drop of 10 percent compared to 2019,” Cam said. In 2019, Vietnam’s garment and textile industry earned US$39 billion from exports, a year-on-year increase of over 8.3 percent, according to the General Statistics Office of Vietnam.
The demand for garments and textiles has slowed all over the world, leaving Vietnamese manufacturers with no orders and forcing many to shut down. Last year’s global garment and textile imports reached US$775 billion, but this figure is forecast to drop by 15-20 percent, even up to 25 percent, in 2020. Unlike previous years when most Vietnamese businesses had already secured orders for the final months of the year and even for the early months of next year, as of November they only had orders for the next month, at most.
Many manufacturers have shifted production from high-end suits and shirts to personal protective equipment, knitwear and traditional shirts in order to overcome difficulties and maintain trade and production activities.
Although production has gradually been resumed, consumption is the biggest problem for Vietnam’s industrial manufacturers given the slow global recovery.
To overcome post-pandemic difficulties for businesses, the Ministry of Industry and Trade has adopted policies for support industry development and developed strategies for Vietnam’s garment and textile, leather and footwear sectors with specific targets for each period.
The ministry has also contacted foreign agencies and companies to avoid disconnections with domestic businesses, and found new supply sources, partners and markets. In addition, the ministry’s units have worked with Vietnamese trade offices abroad to provide a list of target markets and goods with high export potential compiled by localities and commodity associations. Those offices will then provide market information for importers and distributors in foreign countries.
In addition to the ministry’s trade support, the Vietnam Textile and Apparel Association has organized supply-demand connection conferences between domestic businesses and foreign companies.
|Export turnover of Vietnam’s garment and textile sector reached an estimated US$24.76 billion in the first 10 months of the year, a drop of 9.3 percent compared to a year ago.|