Recently, the return of clothing orders to China has become the focus of attention at home and abroad. Since September, many large export-oriented textile companies in India have been unable to guarantee normal delivery due to the epidemic. In order to ensure that supplies during the Thanksgiving and Christmas sales seasons are not affected, European and American retailers have transferred many orders originally produced in India. Produced in China.
Not only India, major garment exporters such as Vietnam, Myanmar, Sri Lanka, and Bangladesh also entered the “winter” almost at the same time…
India: “Not joining the group” may accelerate the outflow of textile and clothing orders
Among the 15 countries that jointly signed the RCEP agreement this time, as one of the founding countries India did not opt in. Even under the call of other agreement countries, the relevant spokesperson of India still said that “there are important issues that have not been resolved”, so it will not consider joining for the time being.
Previously, due to the impact of the epidemic, textile orders from Indian factories returned to China, which instantly solved the urgent needs of some domestic garment and textile foreign trade factories. With the signing of the RCEP agreement and the reduction of tariff barriers, trade exchanges between the 15 countries that signed the contract will be closer than before. This move will also further promote intra-regional trade, among which textiles and clothing will benefit the most.
Industry insiders said that on the basis of mutual benefit, it is not ruled out that some textile order factories in India will lose orders from agreement countries as a result. With this agreement, more overseas textile orders may flow to factories in China in the future.
Vietnam: Constrained by imported fabrics, there is no hope of achieving the annual export target
Vietnam “Investment Report” 》Reported recently, the latest report submitted by Vietnam’s Ministry of Industry and Trade to Congress shows that the annual export volume of the textile and apparel industry is nearly 40 billion US dollars and requires 10 billion meters of fabric. However, domestic fabric production capacity is only 2.3 billion meters, and the self-sufficiency rate is about 25%. Some fabrics rely on imports 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 standards stipulated in the Vietnam-EU Free Trade Agreement. Therefore, it cannot fully enjoy the Vietnam-EU free trade. benefits from the agreement.
Since South Korea has signed a free trade agreement with the EU, if clothing companies want to benefit from the Vietnam-EU Free Trade Agreement, they can only import fabrics from South Korea. 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 affecting domestic fabric production capacity is that cotton, yarn, dyeing and finishing and other supporting industries cannot keep up with the demand for garment processing. In particular, the environmental protection department’s restrictions on the development of the dyeing and finishing industry have seriously restricted fabric production. At the same time, developing fabric production from the source requires huge investment. To solve the 8 billion meter fabric production gap, an investment of US$30 billion is required, which is a bottleneck restricting fabric production.
According to a report from Vietnam’s “Industry and Trade Electronic News” on November 2, 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%. Exports for the whole year are expected to be US$33-35 billion, a year-on-year decrease of 10%. Even though the textile and apparel export market is recovering, it is still difficult to achieve the goals set at the beginning of the year.
The textile and garment industry is the industry in Vietnam that has been most directly affected by the COVID-19 epidemic. The Vietnam Textile and Apparel Association stated that the new crown pneumonia epidemic has caused export difficulties to Vietnam’s textile industry and a double blow of interruption of imports of raw materials and auxiliary materials from China.
Since March this year, demand in European and American markets has dropped sharply, causing Vietnam’s textile and apparel exports to be bleak. Exports fell by 2% in the first quarter, and dropped sharply by 27% in the second quarter. They improved slightly in the third quarter, but still face difficulties. Vietnam’s textile and apparel exports are expected to reach up to US$35 billion this year, a sharp drop of 10% year-on-year.
Vietnam’s Ministry of Industry and Trade stated that due to the shrinking consumer market, textile and garment companies have adjusted their product structure, shifting from the production of traditional products to rapidly adaptable products, such as switching from high-end suits and high-end shirts to work clothes, knitted clothing and traditional shirts, etc. to maintain production and business activities.
Bangladesh: The second wave of epidemics in Europe and the United States exacerbates the order crisis
According to Bangladesh’s “Every The Daily Star reported on November 16 that due to the decline in demand at home and abroad during the COVID-19 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 companies have released their first-quarter 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 Bangladesh’s textile industry fell by 5.78% year-on-year to US$3.88 billion.
Covid second wave panic weakens import orders! Bangladesh’s import orders fell nearly 14% in October as apparel exporters scaled back purchases of textiles amid the second coronavirus wave in the United States and Europe.
The latest data from the central bank showed that the amount of letters of credit issued fell to US$3.83 billion in October from US$4.43 billion a month ago. Likewise, on a value basis, a letter of credit��Settlements, often referred to as actual imports, fell to $3.34 billion in October from $3.71 billion in October, a drop of more than 10%.
The country’s overall imports have fallen again as a second wave of coronavirus infections grips the US and European countries, a senior Bangladesh Bank (BB) official said while talking to FE. Reduced demand for readymade garments (RMG) products in Bangladesh. Additionally, the central banker attributed the recession to an unexpected slowdown in the global economy from the pandemic.
BB data shows that in October, the opening volume of import letters of credit for back-to-back imports of textiles dropped from US$546.70 million in September 2020 to US$431.34 million, a drop of more than 21%.
After analyzing the data for the past eight months, it was found that the downward trend in imports started in April this year after the coronavirus outbreak in Bangladesh.
Imports increased in June after the resumption of overall business activities across the country, but the downward trend in purchases from abroad started again from July 2020. The downward trend in imports continued into August.
RMG entrepreneurs are keeping a close eye on the bigger picture as they fear a new wave of Covid-19 pandemic in Western countries, Bangladesh’s main export destinations.
Chowdhury pointed out: “Supply chain disruption in the apparel and apparel industry continues due to the ongoing Covid-19 pandemic.”
On the other hand, raw cotton’s sales in October Import orders rose nearly 20% to $237.1 million from $194.2 million a month ago, while letters of credit openings for capital machinery rose to $442.8 million from $409.8 million.
Sri Lanka: Exports dropped by 20% year-on-year
Sri “Daily Financial Times” 10 It was reported on March 15 that Sri Lanka’s garment industry has become a victim of the new crown epidemic. In the first nine months of this year, Sri Lanka’s garment and textile exports fell 21.97% year-on-year to US$3.1 billion, which is the lowest level in five years. The highest record was in 2019 3.9 billion US dollars in the year.
According to the Sri Lankan Joint Apparel Association Forum (JAAF), in the first nine months of this year, Sri Lanka’s clothing and textile exports 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$1.4 billion. US$1.3 billion; exports to other countries/regions fell 23.25% year-on-year to US$400 million.
Myanmar: Insufficient supply of raw materials
Myanmar Global Star News reported that according to statistics from the Myanmar Ministry of Commerce, garment industry exports reached 4.28 billion in the 2019/20 fiscal year. USD, a decrease of 6.95% from USD 4.6 billion in the same period last year.
Myanmar’s 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. This year, due to the impact of the new crown epidemic, the import of garment raw materials was blocked, and the international market demand slowed down and consumption Negative factors such as order taking have led to the closure of some garment factories, resulting in thousands of employees losing their jobs.
In order to avoid the shortage of raw materials caused by the impact of the epidemic on international transportation, experts suggest that the government cooperate with private units to establish a complete supply chain for spinning, weaving, dyeing and sewing, and sewing manufacturing in the garment industry.
Jordan: Partial conversion of production
Petra News Agency recently reported that the Jordanian Industry Association stated In the first nine months of this year, Jordanian clothing and leather exports amounted to JD 899 million (approximately US$1.27 billion), a year-on-year decrease of 15%. The industry’s exports are expected to worsen in the fourth quarter of this year, with a decline that may reach 25%, and are expected to gradually return to normal in early 2021. Currently, some garment and leather companies in Jordan have turned to producing masks, protective clothing, and protective shoes to meet local demand and create jobs. The industry’s export volume reaches US$550 million and has the potential to create 33,000 jobs.
The “Jordan Times” reported that weekend sales account for 50% of Jordan’s total clothing sales. Preparations for winter sales have begun in September, but 90% of the goods are currently piled up in warehouses. The clothing retail industry has come to a standstill and merchants have suffered serious losses. Immediate action should be taken to change this uncertain situation.
In order to increase cash flow and cover employee wages, utility bills and costs, merchants are expected to offer discounted prices this sales season, resulting in fierce market competition. At present, there are about 11,000 stores in Jordan’s clothing retail industry, accounting for 60% of the stores in major commercial centers. The main clothing importing countries are China (accounting for more than 50%), Turkey, India, Bangladesh, Egypt and European countries. </p
