Vietnam likely to witness slow down in cotton imports next season

Vietnam is ranked amongst the world’s top 5 nations in textile and clothing exports. The exports of textile and apparel products continued to grow in 2014 despite the difficulties in global economy.

But its strong growth of cotton imports is likely to slow next season. The deceleration forecast for next season reflects ideas of reduced demand for yarn by China, where authorities are attempting to boost use of domestic supplies, and erode the huge inventories that the country ran up through a generous guaranteed pricing regime, that was withdrawn last year.

According to the US Department of Agriculture bureau in Hanoi, Vietnam’s cotton consumption growth rate is projected to slow down in 2015-16, mainly caused by China’s reduction of yarn imports resulting from incentives offered by the Chinese government to its spinners who purchase more cotton from Chinese reserves

This in turn will increase Vietnam’s cotton imports, which come largely from the US, by 10.0% to of 4.19m bales in 2015-16.

Until now, Vietnam has been enjoyed particularly strong trade with China, with yarn shipments last year soaring 54% to nearly 400,000 tonnes.

Even assuming a slowdown in yarn shipments to China, Vietnam’s forecast cotton imports for next season look likely to prove sufficient to cement its place as the world’s third-ranked buyer, behind China and Bangladesh.