Apparel raw material imports continue to rise
Industry analysts while studying the structure of import goods during the first months of 2010 found out that, apparel material import revenues were significantly high.
Analysts are trying to find out the reason behind the increment, as Vietnam is making attempts to lessen the shortfall in trade by slicing the import revenues and increased imports of any such good, which can be manufactured locally.
Import revenue of apparel materials has never reached such levels as during the first months of 2010. As per the Ministry of Industry and Trade, till date, apparel firms have spent over $5 billion to import materials, including $2.8 billion worth of fabric, a rise of 27 percent and $350 million in cotton, gone up by 75 percent, during the corresponding period in 2009.
Apparel manufacturers are currently putting their stand across mentioning that the time had come to further diversify imports. It was now a must for the apparel industry to increase the production to fulfill rising numbers of orders. Many clothing firms had procured orders from foreign importers, owing to recovery in the world economies.
Increased import revenues were also attributed to the steep rise of material cost. Companies aver that, the steepest increase in the last seven months was observed in cotton, at more than 40 percent, whereas fibre prices have increased by 30 percent.
Vietnam Textile and Apparel Association's (Vitas) Chairman, Le Quoc An also assured that, since apparel material prices have been going up, firms must purchase more cotton, fibre and fabric to ensure export growth rate of 15-17 percent and also complete the signed contracts.
As economic analysts warned about the increasing cost of materials, Vitas has informed the member firms to import important materials as soon as possible.
Further informed about Vietnam's apparel industry, Chairman of X20 Garment Company, Chu Dinh Quy informed that, Vietnam, per say, has now turned in to a factory for the world's outsourcing plans. And hence, if it needs to export more goods, it needs to import more materials too. More so, as per Quy, the domestically produced number of goods remained around 30 percent.
However, Vinatas said that, export returns of apparel goods in 2010 are likely to touch $1 billion, a rise of $200 million over June. The industry has exported $5.8 billion in goods during the first seven months already.
While exports to US have gone up by 23 percent, to Japan it has shot up by 15 percent and to ASEAN nations by 30 percent. Exports to South Korea witnessed a rise of 80 percent as compared to the same period in 2009. Also, exports to EU have registered slight increase of 1.5 percent.
As per Sean Doyle, Head of the EU delegation to Vietnam said that the EU market is not likely to recover completely by the end of 2010, as confidence of consumers has fallen with respect to public debt crisis.
Vitas on the other hand believes that, the target of $10.5 billion in apparel export revenues was within the reach for the year 2010.
Fibre2Fashion News Desk - India