Affected by the epidemic, the production rhythm of many major textile exporting countries has been disrupted, coupled with the market opportunities brought by the holiday consumption season, the flow of clothing orders has become the focus of attention at home and abroad. What is the situation in major garment exporting countries such as India, Vietnam, and Bangladesh, and how powerful is the flow of orders to my country's spinning and weaving industries?
India: "no group" or accelerate the outflow of textile and apparel orders
Among the 15 countries that signed the RCEP agreement this time, India, one of the founding countries, did not choose to join. Even under the call of the other countries in the agreement, the spokesperson of India still said that "there are important issues that have not been resolved", so it is temporarily not considering joining.
Previously, due to the impact of the epidemic, the textile orders of Indian factories returned to China, which solved the urgent needs of some domestic garment and textile foreign trade factories in a short time. With the signing of the RCEP agreement and the reduction of tariff barriers, the trade exchanges between the 15 countries that signed the contract will be closer than before. This will also further promote intra-regional trade, of which textiles and clothing will benefit most.
According to industry insiders, on the basis of mutual benefit, it is not ruled out that some textile factories in India will lose orders from the agreed countries. With this agreement, more overseas textile orders may flow to factories in China in the future.
Vietnam: Restricted by imported fabrics, the annual export target is hopeless
Vietnam’s “Investment News” recently reported that the latest report submitted by Vietnam’s Ministry of Industry and Trade to the National Assembly showed that the textile and apparel industry’s annual export value is nearly 40 billion U.S. dollars and requires 10 billion meters of fabric. However, the domestic fabric production capacity is only 2.3 billion meters, and the self-sufficiency rate is about 25%, most of the fabrics are imported from China, Taiwan and South Korea. The domestic garment processing industry only stays in the sewing link of the industrial chain. The added value is low and it is difficult to meet the origin standard stipulated by the Vietnam-EU Free Trade Agreement, so it cannot be fully enjoyed. The benefits of the Vietnam-EU Free Trade Agreement.
Since South Korea has signed a free trade agreement with the European Union, clothing companies can only import fabrics from South Korea if they want to benefit from the Vietnam-Europe Free Trade Agreement. However, currently only 15.2% of fabrics are imported from South Korea, 54.9% are imported from China, and 12.1% are imported from Taiwan.
The main reason that affects the production capacity of domestic fabrics is that supporting industries such as cotton, yarn, dyeing and finishing cannot keep up with the demand for garment processing, especially the environmental protection department's restrictions on the development of dyeing and finishing industries, which severely restrict fabric production. At the same time, the development of fabric production from the source requires huge investment. To solve the 8 billion meters of fabric production gap, an investment of 30 billion US dollars is required, which is a bottleneck restricting fabric production.
According to a report from Vietnam's "Industry and Trade Electronic News", Vietnam's textile and apparel exports in the first 10 months are expected to be US$24.76 billion, a year-on-year decrease of 9.3%. The annual export is expected to be USD 33-35 billion, a year-on-year decrease of 10%. Even if the textile and apparel export market is recovering, it is still difficult to achieve the target set at the beginning of the year.
The textile and garment industry is the industry that has been hit hardest by the new crown pneumonia epidemic in Vietnam. The Vietnam Textile and Apparel Association stated that the new crown pneumonia epidemic has caused the Vietnamese textile industry to cause export difficulties and the suspension of the import of raw materials from China.
Since March this year, demand in the European and American markets has dropped sharply, resulting in a bleak export of Vietnamese textile and garments. The export value in the first quarter fell by 2%, and the export value in the second quarter fell sharply by 27%. There was a slight improvement in the third quarter, but still facing difficulties. It is expected that Vietnam's textile and apparel exports will reach 35 billion US dollars this year, a sharp drop of 10% year-on-year.
The Ministry of Industry and Trade of Vietnam stated that due to the shrinking consumer market, textile and apparel companies have adjusted their product structure, shifting from producing traditional products to rapidly adapting products such as high-end suits, high-end shirts, to work clothes, knitted garments and traditional shirts to maintain production. And business activities.
Bangladesh: The second wave of epidemics in Europe and the United States intensifies the order crisis
According to Bangladesh’s “Daily Star” report, due to the decline in domestic and foreign demand during the new crown virus epidemic, the profits of most listed clothing companies in Bangladesh fell from July to September. Of the 56 textile and apparel companies listed on the Dhaka Stock Exchange, 39 have issued quarterly financial reports. Among them, 15 companies reported lower profits than the same period last year. According to data from the Bangladesh Export Promotion Bureau, from July to September, the export revenue of the Bangladesh textile industry fell 5.78% year-on-year to 3.88 billion US dollars.
Sri Lanka: exports fell by 20% year-on-year
Sri Lanka’s “Daily Financial Times” reported that Sri Lanka’s clothing industry has become a victim of the new crown epidemic. In the first nine months of this year, Sri Lanka’s clothing and textile exports fell by 21.97% year-on-year to US$3.1 billion, the lowest level in five years. The highest record is $3.9 billion in 2019.
According to the Sri Lanka United Apparel Association Forum (JAAF), in the first nine months of this year, Sri Lanka's exports of apparel and textiles to the United States fell by 22.15% year-on-year to US$1.4 billion; exports to the EU fell by 21.36% year-on-year to US$1.3 billion; to other countries /Regional exports fell 23.25% year-on-year to 400 million US dollars.
Myanmar: insufficient supply of raw materials
Myanmar Global Star News reported that, according to statistics from the Myanmar Ministry of Commerce, the garment industry's exports in the 2019/20 fiscal year reached 4.28 billion U.S. dollars, a decline of 6.95% from the 4.6 billion U.S. dollars in the same period last year.
The Myanmar garment industry enjoys preferential tariffs when exporting to EU countries, so it is the main traditional export item, accounting for about 30% of the total export value. Due to the impact of the new crown epidemic this year, the import of garment raw materials was blocked, the international market demand slowed down and the elimination of orders and other negative factors. As a result, some garment factories were closed, and thousands of employees were unemployed.
In order to avoid the impact of the epidemic on international transportation and the insufficient supply of raw materials, experts recommend that the government and private units cooperate to establish a complete supply chain of spinning, weaving, dyeing and finishing, and sewing manufacturing for the garment industry.
Jordan: partially converted
Petra News Agency recently reported that the Jordan Industry Association stated that the export value of Jordanian clothing and leather in the first nine months of this year was approximately 899 million yuan (approximately US$1.27 billion), down 15% year-on-year. Industry exports are expected to deteriorate in the fourth quarter of this year, with a drop of 25%, and are expected to gradually return to normal in early 2021. At present, some clothing and leather companies in Jordan have turned to the production of masks, protective clothing, and protective shoes to meet local needs and create jobs. The export scale of this industry reaches 550 million U.S. dollars and has the potential to create 33,000 jobs.
"Jordan Times" reported that weekend sales accounted for 50% of total Jordanian clothing sales. Preparations for winter sales began in September, but 90% of products are currently piled up in warehouses. The clothing retail industry has stagnated and businesses have suffered serious losses. Actions should be taken immediately to change this uncertain situation.
In order to increase cash flow and make up for employee salaries, utilities and costs, it is expected that merchants will offer discounted prices this season, leading to fierce market competition. There are currently about 11,000 stores in Jordan’s clothing retail industry, accounting for 60% of stores in major commercial centers. The clothing importing countries are mainly China (accounting for more than 50%), Turkey, India, Bangladesh, Egypt and European countries.
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