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Raw material crisis restraining the order spur in Vietnam

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vietnam-textileThe fourth quarter of 2020, particularly the US, saw a spurt in orders from export focused clothing units in Ho Chi Minh City. While it is a positive thing, rising markets have made goods scarce and costs in the related sectors such as packaging, adhesive tapes and chemicals have risen 15-20 per cent, contributing to higher costs for manufacturing and reduced profits. In reality, sales for many businesses exceed their expenses just approximately.

The Vietnam Textile and Apparel Association (VITAS) reports that the clothing and textile industries of the country import raw materials primarily from China, including wool, fabrics and subsidiary materials. Three-fifths of the overall imports in 2019 amount to almost 13.5 billion dollars, and fiber imports to 55%. Vietnam is being allowed to use raw substances from several countries under new FTAs, which are stated to become passive in rising demand when orders increase due to the lack of raw materials because of companies who have been using raw materials from China long ago. In addition, raw materials from India, South Korea and Europe do not equal China in consistency or prices. The demand for European and US apparel decreased by 45% and 40%, and for footwear by 27% and 21%, respectively, under VITAS 2020. In the future, when the raw material supplies insufficient and imbalanced and the weaving and dyeing phases are blocked, the fabric and garment industry is likely to face difficulties.

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