Many signs of prosperity from the world textile market

According to a recent analysis from the Center for Industry and Trade Information (Ministry of Industry and Trade), in 2021, the textile and garment industry finished with $39 billion in export turnover, up 11.2% over the previous year. However, in terms of market share, Vietnam's textile and garment industry has not improved.

Among the main export markets of Vietnam's textile and garment in 2021, in addition to the US market, there is a recovery equal to 2019 with about $ 100 billion in apparel import turnover, the remaining major markets of textiles and garments. Vietnam's resilience is low, even lower than 2020. This will continue to be a challenge for the industry in 2022.

Besides, domestic textile and garment enterprises will face a series of internal challenges such as: Transportation costs are 3 times higher than the average level of the past 5 years; the disadvantage of exchange rate makes Vietnam's textile and garment less competitive against rivals; Labor imbalance, enterprises in the south still lack labor, while this sector accounts for about 40% of the total export turnover of the whole industry.

Although the textile and garment market is thriving, many competitors of Vietnam's textile and garment such as China, Bangladesh, India... also accelerated and made many efforts to make up for the shortfall in turnover in 2021.

According to the Vietnam Textile and Apparel Association (Vitas), with the most positive scenario, the epidemic situation is basically controlled, the total export turnover of Vietnam's textile and garment products will reach about 42-43.5 billion USD.

The basis for this goal, Mr. Truong Van Cam, Vice Chairman of the Vietnam Textile and Apparel Association, said that in 2022, the forecast of the COVID-19 epidemic situation in the world and Vietnam is still very complicated unpredictable. 

However, a positive signal is that major markets such as the US, EU... have reopened, especially Vietnam, which has had a safe, flexible adaptation policy, effectively controlled the COVID-19, epidemic economic recovery and development under Resolution No. 128/NQ-CP.

In addition, new-generation free trade agreements are effective, Vietnamese textile and garment enterprises will have more opportunities to expand their markets.

Mr. Truong Van Cam said that the vital point for textile enterprises is to have orders, enough workforce and control the COVID-19 epidemic. Businesses that want employees to stick together must take care of their lives, ensure jobs, and provide welfare regimes.

"At the moment, many textile and garment enterprises have orders until the third quarter of 2022, but it is not possible to predict what the market will be like after that because it depends a lot on the epidemic situation. Moreover, the difficulty of The textile and garment industry is an input material, especially fabric and dyeing.In some localities, the textile industry still feels polluting, so they are not interested in projects to develop this field. coordinate with the Ministry of Industry and Trade to build large textile and garment industrial parks with wastewater treatment systems, environmental protection... to partially meet the source of raw materials for the industry," shared Mr. Truong Van Cam.

There are still many challenges

As the "big brother" enterprise in the field of textile and garment in Vietnam, Mr. Le Tien Truong, Chairman of the Board of Directors of the Vietnam National Textile and Garment Group (Vinatex) said that the forecast number of Vietnam's textile and garment industry in general could reach the target. Export turnover of 43 billion USD in 2022 is completely grounded.

Because, the world forecasts that the total demand for textiles and garments in 2022 will increase by about 3%. Along with that, after the recent epidemic, maintaining the continuity of Vietnam's position in the global supply chain is an advantage. Vietnam is a priority destination when large customers and large orders in the world return to place orders.

"Last January, an international organization assessed 27 textile-producing countries with attractiveness when ordering in 2022, Vietnam ranked first, reaching 59/75 points, the second country was Turkey. 54 points, China 54 points. These are two objective premise due to the internal strength of Vietnam's textile and garment industry, the attractiveness and competitiveness of the industry, achieving the growth target of almost double the total demand. the world, improving the market share of Vietnam's textile and garment in the international arena," said Mr. Le Tien Truong.

However, Chairman of the Board of Directors of Vinatex also said that "challenges are many". Because, right in the first months of the year, there were many different signals of the market from rising oil prices, the political crisis in Russia-Ukraine, the European Central Bank, the US Federal Reserve (Fed) increasing. interest rates… these pressures will change world aggregate demand very quickly.

"There are many factors that can change the plan, according to the world oil price forecast, there are groups that say up to 140-150 USD/barrel, the world economy will not have growth - this is a bad scenario for Export production industries depend on world aggregate demand.There are also groups that forecast oil prices at USD 82-85/barrel, which could grow 4.1% compared to 5.7% of the previous year. Vietnam reaching more than 43 billion USD in textile and garment exports is quite feasible in this scenario", said Mr. Truong.

In contrast, in the bad scenario, a representative of Vinatex said that one of the first steps to reduce spending is on fashion goods.

Lessons of 2020, when the world broke out in the COVID-19 epidemic and the global shutdown, the textile and fashion industry dropped greatly. Although Vietnam's decrease is not much, about 8-9%, but many countries have had a deep decrease, such as: India, Bangladesh, which decreased by about 20%, the world's total demand also decreased sharply.

"These are uncertainties. We are still closely monitoring and finding appropriate solutions. Although currently the orders are signed until June, many orders are out of the year, but we cannot confirm that this year's results will be completed. successfully with the set target, because the risks and market fluctuations are happening very quickly and complicatedly", shared Vinatex Chairman.

Talking about accessing the Government's major policies on tax reduction and interest rate compensation for businesses, Mr. Le Tien Truong said: The National Assembly has Resolution No. 43/2022/QH15 on fiscal and monetary policies. currency to support the Socio-Economic Development and Recovery Program. It can be said that this is an important resolution on the support package for a labor-intensive industry such as textiles and garments: 3-month housing support, money returning to the labor market for workers, support for corporate interest rates, etc. good corridor, good atmosphere for manufacturing business.

"We are waiting for a way to implement it so that businesses can access it. Because each business has its own characteristics, such as the current textile and garment enterprises, the number of new investment projects is not much due to the epidemic in the past 2 years, such as: Therefore, support for investment, textile and garment enterprises will be less accessible, and support for working capital loans, salary support, short-term loan interest rates... better benefits for businesses", said Mr. Le Tien Truong.

Sharing more, Chairman of Vinatex's Board of Directors said that: Enterprises most expect a stable macro environment so that they can soon evaluate the forecasts put into plans and solutions in production and business. We expect stable macro policy, especially the official interest rate of the banking system, so that businesses also have equal access to other competitive countries. Many countries borrow only 3-4%, while ours is 8-10%, even more than 10% for small businesses, new businesses are making the competitiveness of businesses weaker.

"We approach in the direction of how so that in the global competitive playing field, Vietnamese enterprises are not disadvantaged more than other businesses due to the price level and domestic policies. Solving this problem, certainly developing mobilize the internal strength and determination of enterprises, and the creativity of Vietnamese people to contribute to the goal of economic growth", Mr. Truong said.

Phan Trang