Vietnam's T&C Exports Up 10.5% In Seven Months

Market News

Vietnam's T&C Exports Up 10.5% In Seven Months

The export revenue of Vietnam's garment and textile industry was estimated at US$ 18.34 billion in the first seven months of 2019, a year-on-year increase of 10.5%, according to a report from the Ministry of Industry and Trade (MoIT). The export revenue hike was due to opportunities and market expansion as the result of the signing of free trade agreements (FTA) such as the CPTPP, with a tax exemption roadmap to 0% and other incentives. In addition, the signing of the EU-Vietnam FTA in June 2019 is also expected to help the Vietnamese garment and textile sector to penetrate wider into the EU market. In the January-July period, the production of fabric from natural fibres went up by 8.4% while fabric from synthetic fibres rose by 11.5%. The production of casual clothes also increased by 8.8% compared to the same period last year. The MoIT said that the despite increasingly large export revenue, Vietnam's apparel and footwear sectors maintain dependence on foreign direct investment (FDI) enterprises and mainly do outwork with a large proportion of materials being imported. The ministry also suggested that enterprises in these areas should establish production chains and meet the rules of origin of FTAs to take advantage of incentives and compete with other rivals. VITAS Vice Chairman Truong Van Cam said that the number of orders this year is not as satisfactory as in 2018 and textile and apparel firms are facing a shortage of orders. Cam noted that the number of orders of many enterprises is only equivalent to 70% of the same period in 2018 and the consumption of yarn and accessories is encountering a lot of difficulties. The whole textile and garment sector has grown less than 9% in the first half of this year, requiring the sector to expand by 11-12% by the year's end to fulfill the target of reaching an export turnover of US$ 40 billion in 2019, Cam added. He said that the main reasons for the reduction in number of orders include the higher and more demanding requirements from buyers, pressure on reducing prices and increasing trade barriers such as import tariffs, quality inspection, among others. Vietnam attracted approximately US$ 700 million worth of foreign direct investment in 63 garment and textile projects in the first five months of this year, including 17 Chinese-invested projects, 12 projects invested by the Republic of Korea, among others.