Vietnam Customs data shows that in the first ten months of 2023, Vietnam’s textile and apparel exports were US$32 billion, a year-on-year decrease of 13%. The export target set by the Vietnam Textile and Apparel Association in 2023 is US$46-48 billion, but the US Agricultural Counselor’s report believes that it may ultimately only be close to US$40 billion.
In the fourth quarter of 2022, affected by the decline in demand from major export markets around the world, especially Europe and the United States, Vietnam’s textile and apparel exports began to decrease. The decline in demand for textile and apparel exports has impacted all aspects of Vietnam’s textile supply chain. The most severely injured are apparel manufacturers. The long-term lack of orders has forced many apparel manufacturers to reduce their operating rates, leading to large-scale layoffs. Currently, Vietnam’s textile and apparel industry is banking on the new strategic partnership agreement signed with the United States on September 10, 2023, to bring more opportunities to textile and apparel exports. The United States is the largest market for Vietnam’s textile and apparel exports, accounting for more than 40%.
According to Vietnam Customs data, in January 2023, Vietnam’s total yarn exports fell by 25% year-on-year to about 88,000 tons, but then recovered quickly. The cumulative export volume from January to October this year reached 1.5 million tons, a year-on-year increase of 12% , mainly due to China’s large imports. However, yarn prices fell sharply, resulting in yarn exports falling to US$3.7 billion, a year-on-year decrease of 11%. From January to October 2023, Vietnam’s cotton yarn export volume was 778,000 tons, a year-on-year increase of 8%, accounting for more than 50% of total yarn exports, of which more than 80% was exported to China.
From January to October this year, China’s cotton yarn imports from Vietnam reached 638,000 tons, a year-on-year increase of 11%, but the import value was US$1.7 billion, a year-on-year decrease of 8%. Vietnamese industry reports stated that Vietnam continued to receive orders for cotton yarn from Chinese buyers, but at lower prices, Vietnamese yarn mills chose to accept prices lower than production costs to maintain production. For example, according to a survey of Vietnamese yarn mills by the US Agricultural Counselor in October this year, the FOB price of 100% cotton 32-count carded yarn in Vietnam is US$2.8-2.9/kg, while the price of cotton is US$2.1-2.2/kg. Moreover, when the difference between cotton price and cotton yarn price is less than 1 US dollar/kg, the yarn mill is operating at a loss.
Cotton price fluctuations, the Russia-Ukraine conflict and high interest rates have also impacted Vietnam’s cotton yarn production and exports. According to Vietnamese industry sources, most of Vietnam’s new cotton yarn export orders to China come from Chinese-owned yarn mills in Vietnam, which account for more than 50% of Vietnam’s cotton yarn output. The U.S. Agricultural Counselor predicts that Vietnam’s total cotton yarn exports in 2023 are expected to be 914,000 tons, a year-on-year increase of 5%.
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