The market still has many risks, export orders decrease, textiles and garments accept flexible production organization, enough to cover costs in the first quarter of the year, the priority goal is to ensure jobs.
The world textile market is still difficult. Although inflation has cooled down in some countries, the purchasing power is slow, the inventory of goods is still large…, causing the export orders of textiles and fibers to remain in decline.
Looking at the export turnover in the first month of the year shows a part of the market picture. The export turnover of textiles and garments in January 2023 only reached USD 2.6 billion, down 38.5% over the same period last year, of which yarn exports reached USD 225 million, down 52%, garment exports reached USD 2. .39 billion USD, down 36% over the same period.
Notably, some key export markets of Vietnam also tended to decrease: the US market decreased by 46% over the same period, reaching US$1.02 billion; The EU market first saw a 25% decline in the same period in 2021; For the Chinese market, exports continued to decrease by 54% over the same period, reaching 149 million USD; the Japanese market decreased by 17% compared to the same period in 2022.
At the symposium in February 2023, information about the global economic situation, the world textile market, the impact on textile enterprises when China opens, Mr. Vuong Duc Anh, Chief of Office of the Board of Directors Vietnam Textile and Garment Group (Vinatex) said that, although in the US, inflation has begun to cool down, US retail sales in January 2023 increased by 6.4% over the same period last year, department stores increased. 17.5% but clothing only grew by 2.5%.
“This shows that the inventory of textiles and garments in this market is still large. With the EU, although the tightening monetary policy is starting to take effect, with the rapid cooling of inflation, there may be demand risks. is weakening and prices will fall,” said Mr. Vuong Duc Anh.
China’s opening has put pressure on developing countries as well as on developed countries that still depend on this country for raw materials.
As China implements a zero Covid policy, many developing countries can benefit as supply chains shift.
However, with the opening of this market, millions of workers in various industries have begun to return and join the supply chain, the price of orders tends to deteriorate because China has a great advantage in terms of trade. labor source and complete supply chain, especially when China’s textile and garment is leading the world.
Mr. Le Tien Truong, Chairman of the Board of Directors of Vinatex, said that the world market has not yet shown a clear signal of recovery and there are still mixed developments. It is forecasted that the return of inflation is still high, interest rates in the first quarter of 2022 will continue to increase in the US to over 5%; China returned to production, causing a sudden increase in supply while demand has not recovered, putting great pressure on producer prices.
Meanwhile, in the raw material market, cotton prices are struggling in the trend of weak demand, low prices and the possibility of China needing to re-import cotton, making cotton demand increase, leading to price adjustments; Fiber, depends a lot on the price of oil, but now the oil price scenario is forecasted by many different organizations from 80 to 100 USD; Yarn, the demand will increase, but the price will only improve after about 3 months when the stock is basically exhausted.
With the factors that are not very positive about the world economy and the recovery of the main textile and garment export markets, Mr. Truong suggested that the units in the system continue to maintain and control the cash flow and capital. in the first 6 months of the year, saving resources to reduce bank loans.
“The market still has many risks, it is necessary to consider the investment programs expected in the first 6 months of the year, accept the flexible organization of production, enough to cover costs in the first 4 months of the year, ensuring employment is the main goal. prioritized goals, as well as controlling non-urgent expenses…”, Mr. Truong emphasized.