Taking advantage of existing FTAs, Australian cotton businesses see opportunities from the Vietnamese market

An Australian cotton trade delegation visited Vietnam with the aim of enhancing cooperation between Australian cotton producers and Vietnamese textile factories with activities in Ho Chi Minh City, Hue and Hanoi from August 7-11.

Tận dụng các FTA sẵn có, doanh nghiệp bông Australia nhìn thấy cơ hội từ thị trường Việt Nam

Australian cotton businesses attend a workshop introducing cooperation opportunities with Vietnamese manufacturers. (Source: Australian Embassy in Vietnam)

This is the second visit to Vietnam in 12 months by the Australian cotton industry – highlighting the importance of the Vietnamese market to Australia; especially in the year of the 50th anniversary of the establishment of diplomatic relations between the two countries.

In 2022, Vietnam was the largest importer of Australian cotton with a 38.8% market share. Based on current trends, Vietnam is likely to continue to lead the market share in the coming years. From 2020 to 2022, cotton imports from the Australian market to Vietnam increased from AUD 78 million to AUD 1.69 billion. Key supply factors such as favorable weather conditions, competitive prices and geographical proximity are the main advantages that help promote Australian cotton exports to Vietnam.

Currently, there are three FTAs supporting Australian cotton exports to Vietnam, including the ASEAN-Australia/New Zealand Free Trade Agreement (AANZFTA), the CPTPP Agreement and the Regional Comprehensive Economic Partnership Agreement (RCEP). Australian raw cotton, when meeting the conditions stated in relevant international agreements, will enjoy preferential import tariffs under these agreements.

Ms. Rebecca Ball – Senior Trade and Investment Counsellor, Australian Trade and Investment Commission (AUSTRADE) said: “We are delighted to welcome representatives of the Australian cotton industry back to Vietnam with a larger and more diverse delegation this year; including long-standing ‘iconic’ brands as well as innovative young brands, workwear and schoolwear brands, and leading cotton experts from CSIRO.

Australian businesses visit the factory during a market survey trip to Vietnam. (Source: Australian Embassy in Vietnam)

Australian cotton has a story we are very proud of, representing modern Australian agriculture – with many sustainable practices, the industry has significantly reduced the use of pesticides and water to produce this premium cotton. The Vietnam Week is an opportunity to show our appreciation, strengthen existing relationships and build and connect new ones."

The Australian Cotton Business Week in Vietnam is organised by the Australian Cotton Association (ACSA) and Cotton Australia with support from the Australian Trade and Investment Commission (AUSTRADE); including factory visits and a series of seminars in Ho Chi Minh City, Hue and Hanoi.

The seminar series will share information about the Australian cotton industry, updates on the 2023 crop, brand demand; as well as provide Australian cotton producers with a deeper understanding of Vietnamese textile mills.

Mr. Rob Cairns, Export Marketing Consultant of ACSA shared: “The Australian cotton industry wants to build a deeper relationship with the Vietnamese textile and garment industry to meet the growing needs of the market in the coming years.

This visit was the first to include full representation from ACSA, Cotton Australia, brands and CSIRO researchers to fully convey why Australian cotton is the most suitable fibre for the Vietnamese textile industry.

According to Ms. Ashley Hollis, Brand Relations Manager of Cotton Australia, through this trip, businesses will meet representatives of Vietnamese textile factories. In addition, the participation of Australian brands has opened up valuable discussions, sharing information about Australian cotton to Vietnam, especially about product traceability strategies, quality, social and environmental impacts. These are the reasons for the growth in Vietnam's demand for importing and using Australian cotton.

The Australian cotton trade delegation included representatives from brands Sportscraft, Struddys, Big W, AS Colour, Modibodi, Workwear Group, New Romantic and Michell Wool.

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