Vietnamese garment and textile exports plunged by 18.63% to US$8,701 billion during the first three months of the year, according to figures released by the Vietnam Textile and Apparel Association (Vitas).

Vietnamese garment and textile exports plunged by 18.63% to US$8,701 billion in the first quarter of the year. March alone witnessed the industry rake in US$3.298 billion from exports, representing a year-on-year fall of 12.91%.

Cao Huu Hieu, general director of the Vietnam National Textile and Garment Group (Vinatex), attributed the sharp decline to the ongoing Russia-Ukraine conflict, a factor which has caused a global economic slowdown and tightened monetary policies, as well as negatively impacting business production.

Furthermore, the lingering impact of the COVID-19 pandemic has also affected the national economy and the garment industry in particular.

Despite its export turnover rising 10% last year to US$44 billion, the industry began to confront with a fall in export orders in the fourth quarter due to the world’s economic downturn, high inflation, and rising interest rates.

The garment industry has been going through a sticky patch for months and this difficult period is forecast to last in the second quarter due to a sharp decrease in purchasing power from major markets such as the US, the EU, the Republic of Korea, and Japan, said industry insiders.

Moreover, China’s reopening is anticipated to pose a number of challenges as local firms will have to compete with Chinese businesses that have returned to operation after a long hiatus caused by the COVID-19 pandemic.

However, there are a wealth of opportunities ahead for exporting yarn, particularly as China is one of the key importers of Vietnamese yarn.

There remain other hurdles faced by the industry, including high input costs, lending interest rates for businesses, as well as bottlenecks occurring in capital disbursement, said Cao Huu Hieu, Vinatex general director.

Yarn making is forecast not to recover until the end of the second quarter of the year due to low demand coupled with high yarn inventories globally, he added.

It is likely that the shortage of orders and low unit prices in the garment industry will continue until the end of the third quarter, with garment orders expected to drop by between 25% and 30% compared to the same period last year.

To overcome the challenging period, Hieu advised local enterprises to optimise production, improve productivity and product quality, and closely monitor market conditions to devise flexible and timely policies.

VOV