Vietnamese textile and apparel export value rise speeded up in May 2021

Export of Vietnamese textile industry speeds up in 2021. In May 2021, Vietnamese textile and apparel export value rose by 707 million USD to 2.574 billion USD, up 37.9% year-on-year. And it moved up by 88 million USD compared with that in last month, up 3.5% month-on-month.

Vietnam exported 1.31 billion USD worth of textile and apparel to US, 243 million USD worth of textile and apparel to Japan and 150 million USD worth of textile and apparel to Korea, up by 50%, 12% and 18% respectively. The decline in textile and apparel exports has been felt in all major markets, but not in the same way.  Exports from Bangladesh and India fell by 85 per cent and 90 per cent respectively, while those from Pakistan, Turkey and the European Union fell by 60 per cent.  Vietnam's textile and clothing exports are down about 30 percent. In previous economic slowdowns, such as the Great Recession of 2008, a sudden drop in consumer demand was not initially matched by a slowdown in the cotton-related processing sectors, namely spinning, knitting, weaving and tailoring. This has led to huge increases in inventories throughout the supply chain.  As consumer demand recovers, excess inventory is slowly being worked off.  

However, the COVID-19 outbreak has had a simultaneous impact on demand and supply.  The embargo slowed consumer spending and halted cotton processing.  In India, Pakistan and the United States, mill utilisation has fallen by more than 90 per cent, while in China the decline has been slightly less.  Similar to the export figures, Vietnam's utilisation fell by only 30 per cent.  

The recovery in the spinning industry has also been uneven, with COVID-19 hitting China first, coinciding with the Chinese New Year holiday.  China has recovered faster than many countries, with utilisation rates returning to close to pre-epidemic levels after three to four months, while others are still below pre-epidemic levels after six months.  While the rapid closure of spinning mills limited the increase in yarn and fabric stocks to some extent, cotton stocks expanded rapidly.  When COVID-19 appeared, most of the 2019/20 crop had already been harvested and this year's planting had already begun.  Estimates for global production in 2020/21 have fallen only slightly since February, but global consumption is a different story.  Comparing the global consumption in November with the USDA's February forecast, the consumption forecast for 2020/20 is estimated to be reduced by 17 million bales (14%) and 2020/21 by 7 million bales (6%).  As a result, global cotton stocks in 2020/21 are expected to be 22 million bales (22%) higher than in the Outlook Forum.