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Scarcity of cotton concerns apparel sector
15
Apr '10
Vietnam has both, suitable climate and soil conditions for cotton cultivation. Despite this, the country is unsuccessful in supplying adequate quantities of raw cotton to the local textile-industry.

Since other raw materials, required by the domestic clothing industry are also in dearth, Vietnamese industries are importing 70 percent of the required materials mainly from India, Taiwan and China.

However, Vietnam is now under pressure, as India started levying duty on overseas sales of raw cotton, so as to protect its own textile-apparel sector. India exports high amount of raw cotton to Vietnam every year.

If countries continue to levying duty on their raw cotton exports, then the local textile industry may face shortage of the raw material. This could possibly lead to many local industries facing problems to fulfill their orders. Currently, cotton prices across the world are almost US $1.9 per kilogram, nearly double the cost, in the same period last year.

Since the onset of this financial year, many international companies had placed orders with Vietnam for apparel goods. Most of these orders have already been exported, during the first quarter of 2010. More so, instead of selling the end product locally, Vietnamese companies choose to export the goods, so as to earn higher profits.

Though local companies have inked contracts for overseas sales of textiles, they fear that, the cost of cotton imports could continue to increase in the near future. In 2009, Vietnam spent $5.4 billion on imports of fabric, fibre and cotton, while it earned $9 billion as total turnover from its apparel and textile exports.

Fibre2Fashion News Desk - India

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