AsemconnectVietnam - Việt Nam's textile and garment industry expects to have a better performance in production and business in the fourth quarter.

Việt Nam's textile and garment industry expects to have a better performance in production and business in the fourth quarter of this year, creating momentum for recovery in 2024.
In the fourth quarter of 2023, almost all of the Vietnam National Textile and Garment Group (Vinatex)'s businesses have fewer orders than every year, but there are signs of customers increasing orders.
For the fiber industry, the price of cotton put into production in the third and fourth quarters of 2023 is currently approaching the market price and is lower than the first six months of the year, helping the fiber industry be more effective in production and business.
Trần Hữu Phong, chairman of Vinatex Phú Hưng JSC, said in the last months of 2023, the fiber industry still does not have many signs of improvement, while businesses face multiple challenges, including a high level in fiber production costs, electricity prices, high-interest rates, and raw material prices.
Besides that, other problems of the textile and garment enterprises are market work and labour productivity, meanwhile, they are facing heavy competition from rivals.
2023 garments and textile exports likely to drop 5.0%-6.3%
Vietnam’s textile and garment exports are expected to fall 5.0%- to 6.3% to between $40.5 billion and $41 billion this year on the continued weak global demand, the head of the country’s textile and garment association said.
Textiles and garments are Vietnam’s third-largest export earner after smartphones and electronics, manufacturing items for major high street brands that include Nike, Calvin Klein, Zara, Adidas and Ralph Lauren. “The global economy hasn’t recovered, keeping consumers from spending on goods including on garments,” Vu Duc Giang, chairman of Vietnam Textile & Apparel Association told Reuters.
“This is a challenge for the global garment and textile industry, not only for Vietnam,” he said.
Several garment and textile firms have so far this year been forced to scale down their production and cut thousands of jobs amid the lack of orders.
Giang said there had been signs of recovery, however, a trend he said would continue into 2024, noting that Vietnam’s textiles-related exports fell 13.5% for the first nine months of the year, a slight improvement from the 17% drop in the first half.
Investment Opportunities in Vietnam’s Garment and Textile Industry
Vietnam’s garment and textile industry has been a cornerstone of the country’s rapid economic development. Despite global challenges, the sector has proven somewhat resilient and still presents a wealth of opportunities for foreign firms.
The garment and textile industry is one of the key industries in Vietnam. In 2022, the industry’s export value topped US$36.9 billion. The country’s exports has already reached US$24.6 billion in the first nine months (Jan-Sept) this year, according to the General Department of Customs.
These huge export numbers have been driven by a number of factors, including low labor costs and free trade agreements (FTAs) with key export markets that have in many cases eliminated tariffs on garments and textiles altogether.
Notably, however, there has been a marked decline in production on the back of lower demand in key export markets this year. S&P’s Purchasing Manager’s Index has consistently found itself below the 50-point mark indicating production in Vietnam is in a contraction. Furthermore, there have been layoffs around the country in the apparel sector on the back of lower-than-expected orders. Taiwanese footwear manufacturer Pou Yuen, for example, has reduced its workforce by almost 10,000 workers across three rounds of job cuts.
Vietnam's fibre exports foresee positive signals
Vietnam is the world's sixth-largest fibre exporter and the world's third-largest exporter of textiles and garments - just behind China and Bangladesh.
Latest statistics from the General Department of Customs showed that, by the end of the third quarter of 2023, fibre exports earned 3.2 billion USD with more than 1.3 million tonnes of goods exported abroad, up 9.3% in volume but decreasing 13.8% in value compared to the same period last year.
Regarding the market, in September, fibre exports to China reached 77,459 tonnes worth more than 203 million USD, down 18.8% in volume and down nearly 20% compared to August 2023.
Overall, in the first nine months of the year, Vietnam exported 647,862 tonnes of fibre to the Chinese market and earned more than 1.71 billion USD, up 18.1% in volume but down 2.1% in value over the same period last year. The export price reached 2,652 USD per tonne, down 17.1% compared to the same period in 2022.
The Republic of Korea (RoK) is the second-largest export market of Vietnamese fibre. In September, fibre exports to the RoK reached 10,898 tonnes with a value of more than 30 million USD, an increase of 0.6% in volume and an increase of 2.8% in value compared to August 2023. Overall, in the first nine months of the year, fibre exports to this market reached 101,880 tonnes and earned more than 284 million USD, down 5.78% in volume and 24.2% in value compared to the same period in 2022. The average export price reached 2,788 USD per tonne, down 19.65% over the same period in 2022.
The US market ranked third. In the first nine months of 2023, Vietnam exported 75,483 tonnes of fibre to the US with a value of more than 108 million USD, down 13.8% in volume and 29.4% in value over the same period. The average export price reached 1,443 USD per tonne, down 17.5% over the same period in 2022 and less than half the export price to China or the RoK.
T.Huong
Source: Vitic/en.nhandan.vn/vietnam-briefing.com