Vietnam’s Soaring Cotton Imports Reflect a Growing Textile Sector

The demand of raw cotton in Vietnam’s textile and apparel industry has had a significant growth over the last six years in a row. After a little slowdown on its pace in late 2015-16, the growth of Vietnam’s’ cotton imports have once again started to soar over the last six months. The recent surge of cotton imports also reflects that Vietnam’s spinning and apparel manufacturing sector is still booming with momentum.

 

Vietnam is currently ranked among the world’s top five textile and apparel exporting countries. Its robust growth rate of textile and apparel exports  also means that the country needs more raw material, especially raw cotton, to cater its mass production. Vietnam’s cotton consumption has been increasing at an average 22% year on year for the last five years. Domestic cotton consumption for 2014-15 totaled 935,900 tonnes, equivalent to 4.29 million bales, representing 35% growth in quantity from the previous year. Vietnam’s spinning industry is expected to consume a volume of 1.17 million tonnes or 5.37 million bales of raw cotton in the 2015-2016, up by 25% from previous year.

 

According to the latest prediction from The United States Department of Agriculture (USDA), Vietnam’s cotton imports are likely to reach 5 million bales in the 2016-17 financial year, while the US will be one of the biggest beneficiaries, as cotton imported from the US has made up around 40% of Vietnam’s total cotton imports over the past few years.

 

The USDA also suggested that much of Vietnam’s growth in cotton product exports has been driven by declines in cotton spinning in China. China’s now-ended cotton price support program requires that the state reserve purchase large amounts of cotton, which drove up cotton prices in China relative to global levels.

 

With the implementation of the ASEAN-China Free Trade Agreement, cotton yarn produced in Vietnam has duty free access to China, versus a 40 percent above-quota duty on raw cotton imported into China. Many Chinese-owned mills have relocated to Vietnam from China, spinning the same yarn using the same (mostly U.S.) cotton, then shipping the yarn back to China for the next stage in the value chain.

 

Today, Vietnam is home to over 100 spinning mills with an estimated capacity of over 900,000 tonnes of cotton-based and man-made yarns. Up to two thirds of Vietnam’s cotton imports are spun in foreign-owned mills, with much of it exported to China. The exports of cotton yarn from Vietnam to China are further expected to increase in the future as the Chinese companies in Vietnam are expanding their manufacturing capacities progressively. Industry experts estimate that new and existing spinning projects being registered in 2015 will raise the number of spindles in Vietnam from 6.3 million in 2014-2015 to 8.2 million in 2016-2017.

 

Vietnam’s textile and apparel exports will be expected to have even bigger growth in the near future, thanks to several free trade agreements, such as the Trans-Pacific Partnership (TPP), the Free Trade Agreement with the EU, ASEAN-China Free Trade Agreement and the Vietnam-Korea Free Trade Agreement. This also means that Vietnam will remain as one of the fastest growing cotton importing countries.

 

Thousands of Vietnam’s leading textile companies can be in your contact list if you register to join 91Ƭ today! Whether you are looking reliable suppliers, top textile manufacturers, wholesalers and potential customers in over 90 major countries, or finding out what your competitors are buying and which suppliers they’re using, 91Ƭ can help you reach out to sales prospects and decision-makers in the textile industry across the globe.

 

Register for free now to build your own network of global textile companies on 91Ƭ

Want exclusive insights for 30M+ Companies? Target the right companies with 91Ƭ's supplier and sales intelligence tools! Get Started>>

x