Vietnam textile exports rise lower than targeted growth of 10pc this year

Vietname Garment and textile industry exports in the first five months of this year rose 6.1 percent to US$8.6 billion, but the rise was lower than the targeted growth of 10 percent this year. In May, the industry earned $1.75 billion, up only 3.8 percent, according to Vietnamese trade ministry.

Many Industry insiders expressed concern over the difficult for garment and textile industry to meet the target of US$31 billion this year due to falling export prices and challenges in finding new export contracts, especially for shirts, pants and jackets.

The United States was the largest export market of the industry, with $3.4 billion, up 6 percent. The European Union, Japan and South Korea followed with $936 million, $845.17 million and $677.2 million, respectively.

According to Than Duc Viet, deputy general director of the Garment No.10 Corporation, this year’s business results for local textile and garment exporters, especially among small- and medium-sized firms, were not as good as expected due to rising input costs and falling demand.

The chairman of the Vietnam Textile and Apparel Association (Vitas), Vu Duc Giang, said that some traditional customers of Vietnam’s garment exporters were moving their orders to Laos and Myanmar, which have preferential tax rates for exports to the United States and European Union.

Domestic textile and garment exporters will have to compete fiercely against producers from Laos, Myanmar, Cambodia and Bangladesh as export growth rates among these producers were raising faster than in Vietnam.

The taxes are expected to drop to zero by mid-2018 only after the Trans-Pacific Partner-ship and Vietnam-EU Free Trade Agreement take effect. At present, the tax imposed on Vietnam’s textile and garment exports to the United States averages 17 percent, while the rate to the European Union is nearly 10 percent.