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Industry News | Time: Mar 19 2020 10:45AM
Vietnamese textile exports fell with feedstock supply dependent on China
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According to the official statistics of Vietnam, the total Vietnamese textile export in 2019 was only 39 billion USD, and its export target industry of 40 billion USD failed. However, the textile export target in 2020 is raised to the range of 42 billion to 42.5 billion USD. However, according to Vietnamese textile export situation in Jan-Feb, textile export in Jan-Feb was only 5.3 billion USD, and Vietnam's target of $42.5 billion in 2020 is likely to fail again.

In Jan-Feb 2020, Vietnamese textile and apparel exports reached $5.3 billion, down by 3.5% than that in same period of last year. That is to say, if Vietnam wants to achieve the target of $42.5 billion in 2020, the average export target of the following months must be about 3.72 billion USD. But at present, if there is no significant favorable news, the possibility of the realization in Mar will be relatively low.

Total export of textile and apparel industry reaches 820 billion USD, which occupies an important position in the global economy. Vietnam has become the third largest textile exporter in the world after China and India. In 2019, Vietnam reached a free trade agreement with EU, Japan, Canada and other countries with zero export costs of textiles and apparel. But even with the support of zero charge, Vietnam failed to achieve its export goal last year, which means that zero charge will not play a significant role in promoting exports in 2020.

Moreover, Vietnam is very dependent on China's supply of textile feedstock. In 2019, Chinese fabrics and fibers accounted for 60% and 55% of Vietnam's imports respectively. It can be said that China's suspension of textile feedstock supply has a considerable impact on Vietnamese textile industry. At present, China has restored some feedstock supply, which can roughly meet the basic production demand of Vietnam in Mar-Apr.

In the near future, with the full resumption of Chinese mills, the feedstock supply will return to normal, but the competition for feedstock orders will be fiercer. According to incomplete statistics, at least 143 countries in the world are affected by the pandemic, which makes these countries increase the production of products needed during the pandemic, and the demand for textile feedstock such as masks components will also surge. Whether Vietnam can get China's feedstock as smoothly as before is unclear.

Source: Jin10
[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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