The textile and garment market suffered a lot from the Covid-19 pandemic, the price of input materials and transportation costs increased, but in the first 6 months of 2022, Vietnam’s textile and garment industry still made a breakthrough with a growth rate of 21 .6% over the same period in 2021. The trade surplus reached USD 8.86 billion, but there were still many challenges.
Textile and garment exports grow positively
Textile and garment market made a strong breakthrough in the first 6 months of 2022. According to the General Statistics Office, the total textile and garment export turnover of Vietnam reached 18.65 billion USD, up 21.6% over the same period last year. 2021. This is an impressive number for the textile and garment industry in the context of having just experienced a difficult period due to the Covid-19 epidemic.
In which, garment continues to be the key export product with export turnover reaching 16.94 billion USD, up 19.5% over the same period last year; followed by, lychee exports reached 1.4 billion USD, up 20.8%; fibre exports reached 2.76 billion USD, up 4.4%; export of textile and garment accessories reached USD 734 million, up 22.3%; exports of nonwovens reached US$452 million, up 25.5%.
Also in the first 6 months of 2022, the total import turnover of textile raw materials and accessories is estimated at 13.4 billion USD, up 9.8% over the same period in 2021. Thus, in the first half of 2022, the textile and garment industry trade surplus reached 8.86 billion USD, up 32% compared to the first 6 months of 2021. This is the effort of textile and garment enterprises in the context of the world economy still facing many difficulties.
According to a report by VIRAC, the EU is Vietnam’s second largest textile and garment export market with export turnover in the first six months of 2022 up 32.1% over the same period in 2021. most markets after the period of slowing down due to the Covid-19 epidemic, in which, the markets that increased the most were Denmark (up 133.4%), Germany (up 46.3%), Spain (up 46.3%). 42.8%, the Netherlands (up 29.4%).
Export potential of the textile and garment market
If in 2021, textile and garment enterprises with factories located in the South – a place heavily affected by the Covid-19 epidemic – record negative results, then in the first 6 months of 2022, the average export growth rate will be increased. The army of textile and garment enterprises in the southern region reached about 15%.
Most domestic garment manufacturing companies have production orders until November 2022 due to the shift of orders from China to Vietnam, despite inflationary pressures. According to Mr. Than Duc Viet – General Director of Garment 10, Garment 10 has signed contracts with import partners from now until the first quarter of 2022, some orders are signed until the second quarter of 2022. As strong as shirts, vestons have had orders until the end of 2022, enough for businesses to feel secure and stabilise production.
Why is the textile and garment market super?
The trade surplus in the textile and garment industry is thanks to the effective application of free trade agreements with 15 effective agreements that have expanded the market corridor for Vietnamese textiles; in which, a number of agreements with binding rules of origin such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) have promoted the domestic textile industry to develop dramatically in the past 5 years. this.
In addition, Vietnam’s textile and garment industry made a breakthrough thanks to the application of automation technology, many large investment factories, and the use of a digital management model. The spinning industry is also at the forefront of the development strategy of diversifying markets, reducing dependence on input materials of the textile industry.
Moreover, Vietnam’s textile and garment industry is growing rapidly in terms of greening and sustainability, converting to using green energy, solar energy, saving water, thereby better meeting international standards. and is highly trusted by customers.
In addition, the recovery of the economy after the Covid-19 pandemic, the trend of shifting orders from China has contributed to bringing positive results to Vietnam’s textile and garment industry.
The textile and garment market is forecasted to face many challenges in the last 6 months of 2022
Although the textile and garment market is expected to prosper this year, there are still many difficulties and challenges. Total demand is not expected to increase much. In the “tight” of aggregate demand, countries that compete with Vietnam’s textile and garment are all trying to increase their export market share. In particular, China has approved the 14th five-year plan dedicated to the textile and garment industry and ambition to expand market share in the segments with the highest added value, creating great pressure on the textile and garment industry. Vietnam in 2022.
In addition, Vietnam’s textile and garment industry is also under considerable pressure when developing according to the requirements of the market. As Europe is introducing policies that require textile products when exported to Europe to be of clear cotton, fabric, and yarn origin or to use recycled products, including recycled fibres from the EU. old clothes,…
According to VIRAC‘s report, inflation continues to increase in many countries around the world, causing high production costs. Specifically, the price of cotton increased by 19.1%, the price of crude oil increased by 40%, the price of gasoline in the country increased by 67%, the cost of transportation was 3 times higher than the average in the past 5 years… industry increased by about 20-25%.
VIRAC forecasts that the prices of input materials for the textile industry such as cotton, fibre, yarn, and fabric will continue to increase; and logistics costs such as container prices and transportation costs have not shown any signs of decreasing. The increase in production costs will cause difficulties for businesses, especially when many businesses face financial difficulties.
In the last months of 2022, the world’s textile and garment orders may shrink due to a series of negative impacts on the economy such as inflation, consumer tightening, but Vietnam still has advantages if making good use of it, the textile and garment industry still maintained a good growth rate. Specifically, exploiting markets where Vietnam has signed free trade agreements, many international corporations are continuing to reallocate supply chains so as not to be too dependent on a few large markets. If Vietnamese textile enterprises meet the requirements of their partners, they will easily receive orders.