The Vietnam Textile and Garment Group (Vinatex) forecasts the country’s textile and garment exports will continue to decline by 14-18 percent each month for the rest of 2020 over the same period last year.
|The industry and trade ministry forecasts that Vietnam's textile and garment export value this year would reach 33.6-36 billion USD. (Photo: haiquanonline.vn) |
Hanoi - The Vietnam Textile and Garment Group (Vinatex) forecasts the country’s textile and garment exports will continue to decline by 14-18 percent each month for the rest of 2020 over the same period last year.
The group also said the total textile and garment export value for this whole year is estimated to hit about 32.75 billion USD, a year-on-year decrease of 16 percent.
Vinatex general director Le Tien Truong said the textile and garment will face greater difficulties in the final half of the year than the first half.
“At present, there are almost no orders for member companies producing in the fourth quarter. That is a huge challenge for the group's business plan. Mask orders have reduced to low quantity while the price of this product has also decreased to the level that is the same rate with production cost," Truong told the Voice of Vietnam (VOV).
According to the Vietnam Textile and Apparel Association (VITAS), the second quarter was the most difficult quarter for the textile and garment industry because customers in major export markets such as the US and EU cancelled 30-70 percent of orders because the markets were closed due to the COVID-19 pandemic.
Strong reductions in orders have caused higher inventories and increased pressure to pay workers, bringing more and more difficulties to textile and garment companies.
The Ministry of Industry and Trade also said as of July, many textile and garment enterprises had few orders for the last two quarters of this year, especially high-value products. Meanwhile, face masks and personal protective equipment, which are considered major products for many garment enterprises, have sharply decreased due to global oversupply.
The ministry said nobody knows when the pandemic will end so by this year-end, textile and garment enterprises need to pay attention to demand on the domestic market due to lower export orders. At the same time, they should manage production costs and maintain product quality to minimise the decline in revenue.
In addition, the businesses need to provide jobs and income for workers who have accompanied the enterprises during a difficult period.
At present, 80 percent of enterprises in the textile and garment industry have cut their labour force while most businesses have slashed operation capacity by 50 percent, the association said.
According to the Ministry of Industry and Trade, Vietnam’s export value of textiles and garments in July was estimated at 3.43 billion USD, up 14.4 percent compared to June but down 11.8 percent year-on-year.
In the first seven months of this year, the textile and garment export value was at 19.21 billion USD, down 13.8 percent year-on-year.
Of which, fibre exports in the first seven months reached 876,000 tonnes, earning 1.89 billion USD. Exports plunged by 7.9 percent in volume and 20.9 percent in value over the same period of last year.
Garment export value during the first seven months was estimated at 16.18 billion USD, down 12.1 percent year-on-year, accounting for 84.22 percent of Vietnam’s total textile and garment export value. In July, export value rose by 15.3 percent month-on-month to 3 billion USD though it dropped by 8.9 percent year-on-year.
The ministry forecasts Vietnam’s textile and garment export value this year would fall by 10-15 percent to 33.6-36 billion USD compared to last year. This value is higher than the Vinatex forecast.