Robust growth in Vietnam’s cotton yarn and product exports is projected to drive 2020-21 cotton consumption to a record 7.3 million bales, 700,000 bales higher than the previous year’s drop due to COVID-19. Yarn exports in 2020-21 have already exceeded the previous year’s figures by more than 10 per cent in the first 11 months of the marketing year, according to a US department of agriculture (USDA) report.
Foreign demand has been primarily driven by China, with Vietnam’s cotton yarn exports to the country accounting for roughly 60 per cent of Vietnam’s total cotton lint consumption.Robust growth in Vietnam's cotton yarn and product exports is projected to drive 2020-21 cotton consumption to 7.3 million bales, 700,000 bales higher than the previous year's drop. Yarn exports in 2020-21 have already exceeded the previous year's figures by more than 10 per cent in the first 11 months of the marketing year, says a US government report.#
China is the world’s largest cotton yarn importer and Vietnam’s largest customer with the geographic proximity and foreign investment by Chinese companies driving record exports.
China’s August to June imports of Vietnamese cotton yarn were a record (for the period) and equal to roughly 4 million bales of cotton lint consumption. China’s robust demand is expected to persist with projected growth in China’s cotton fabric and product exports, in addition to greater domestic consumption of cotton products.
The US Withhold Release Order (WRO) on cotton lint from China’s Xinjiang region is further supporting current and future demand for Vietnam’s cotton yarn. Practically all cotton yarn spun in Vietnam is produced with cotton lint imported from outside of China, the USDA report said.
Garment and textile manufacturers in China seeking to circumvent the WRO are likely substituting imported cotton yarn for domestic with roughly two-thirds containing Xinjiang lint.
Greater domestic consumption in Vietnam of cotton yarn is also driving cotton consumption higher. Significant foreign and domestic investment in Vietnam’s garment industry has driven greater demand for cotton knitted fabrics and thus domestic consumption of cotton yarn by knitters.
According to Vietnamese customs data, garment and textile exports in 2020-21 are expected to recover from the previous year’s decline and rise to more than $30 billion.
The country’s largest export market for cotton textiles and garments is the United States, which is also the world’s largest importer. U.S. imports from Vietnam were a record in the first 11 months at more than $5 billion.
Knitted cotton sweaters, pullovers and other similar articles of clothing were the largest product category, accounting for roughly 30 per cent of the total value of US cotton product imports from Vietnam.
This particular category has historically been dominated by China. However, two factors have driven Vietnam’s market share of US imports higher—the 2020 and 2021 WROs and the ongoing tariffs specific to China. Both have lowered US imports of such items from China by nearly 20 per cent thus far in 2020-21 (August-June) despite US imports of this product category rising by over 10 per cent year over year during the same period.
Robust export prospects for both cotton yarn and products are expected to boost 2021-22 cotton consumption even higher to 7.6 million bales, and further support Vietnam’s rise as a major global cotton importer as well as exporter and consumer of cotton yarn and products, the USDA report added.
Fibre2Fashion News Desk (DS)
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