Vietnam's textile exports have fallen and it relies on China for raw materials
Date：(2020/4/13)
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Vietnam's textile exports have fallen and it relies on China for raw materials
Vietnam's textile exports totaled just $39 billion in 2019, according to official Vietnamese statistics, which missed its $40 billion export target. Undaunted, however, Vietnam wants to keep up the momentum, raising its textile export target to a range of $42 billion to $42.5 billion by 2020. However, based on Vietnam's textile exports in the first two months, Vietnam's textile export target for 2020 is likely to miss again.
Textile exports were just $5.3 billion in the first two months of this year, and Vietnam's $42.5 billion target for 2020 is likely to be missed again
In the first two months of 2020, Vietnam's textile and apparel exports reached $5.3 billion, down 3.5 percent from the same period last year, according to the latest data from the Vietnam news agency. Vietnam's textile exports in the first two months of this year were already much lower than in the same period last year, meaning that the country would have to reach its target of $42.5 billion by 2020, with an average monthly export target of about $3.72 billion. But the chances of that monthly target being met now look low without some big news.
The textile and apparel industry, with total exports of us $820 billion, plays an important role in the global economy. Vietnam is already the world's third-largest exporter of textiles after China and India. In 2019, Vietnam reached a free trade agreement with the European Union, Japan, Canada and other countries with a zero export fee for textiles and clothing. But even with the help of zero fees, Vietnam missed its export target last year, meaning that zero fees will have little impact on export promotion by 2020.
Moreover, Vietnam is highly dependent on China for textile materials. According to Vietnamese statistics, last year, Chinese fabrics and fibers accounted for 60 percent and 55 percent of Vietnam's imports, respectively. It can be said that China's suspension of textile raw material supply to Vietnam's textile industry has a considerable impact. China has now restored some of its raw material supplies to meet Vietnam's basic production needs for march and April.
Soon, as Chinese companies return to full production, supplies will return to normal, but competition for orders will intensify. According to incomplete statistics, at least 143 countries have been affected by the new outbreak, which will lead to increased production of some products needed for the outbreak and a surge in demand for textile materials such as some parts of face masks. Whether Vietnam will be able to secure Chinese raw materials as well as it has in the past remains to be seen.
China has suspended durian trade with Vietnam after the country raised prices by at least 40 percent
In addition to the weaker than expected textile industry, Vietnam's agricultural exports are also facing sluggish sales. In the first two months of 2020, Vietnam's seafood exports plunged 17.7 percent to $912 million, according to the country. Fruit and vegetable exports fell by 17.4%. Amid a slump in Vietnam's fruit and vegetable exports, the durian harvest in the province of qiangang has fallen due to a shortage of water for irrigation during the dry season and heavy losses from seawater intrusion.
According to the latest report of the vietcong news agency, under such circumstances, the price of durian in Vietnam's qianjiang province has soared, helping to reduce the loss of local farmers. The region's 350-hectare durian growing area yields 7, 000 tonnes of the fruit, and the price per kilogram of the fruit has soared to around 70, 000 dong. The total revenue of local fruit farmers is over 490 billion dong.
In the past, the normal selling price of durian was 50,000 dong/kg, with an average income of 1 billion dong per hectare, or just 350 billion dong for fruit farmers. In other words, despite the impact of the disaster, Vietnam's fruit farmers are not losing money, but making more. But can buyers sell durian at a premium?
At one time, 70 percent of Vietnam's durian could be sold to China through the border trade. But at the beginning of last year, China suspended the sales channel. And although Vietnam has been seeking its own durian to enter China's entry card, but so far has not been successful. Vietnam can only sell durian cheaply to the United States, but the current purchase price of durian in Vietnam is much higher than the usual selling price. If the American market does not buy durian, then the high price will have to be paid by Vietnamese exporters.
