According to projections, global demand for textiles and garments in 2024 is expected to reach approximately $714 billion, a slight increase compared to 2023 but still lower than in 2022. In addition, rising input costs such as electricity prices, transportation fees, and minimum wages will be obstacles to business development.
According to statistics from the Vietnam Textile and Garment Association, Vietnam's total textile and garment export turnover in the first three months of this year reached nearly 10 billion USD, an increase of nearly 10% compared to the same period last year. Currently, most garment businesses have orders booked until June; the yarn industry is also negotiating and trading with many customers for the following months. These are positive signs, contributing to encouraging businesses to invest in equipment and increase production and business scale.
However, according to businesses, although textile and garment orders have increased compared to the same period last year, prices have still decreased, with some orders falling by as much as 40-50% compared to before. In addition, geopolitical factors around the world remain unpredictable, potentially causing supply chain disruptions and driving up costs, affecting Vietnamese textile and garment businesses. Therefore, businesses are still hoping for a more positive market demand.
According to forecasts, cotton prices will trade around 90 cents/lb until the end of July, while fiber prices will remain relatively stable at around $1-1.05/kg. Yarn prices are trending upwards by 10-15%, driven by a 55% increase in imports from China compared to the same period last year; however, this is only a short-term improvement as China's yarn inventory tends to increase. Furthermore, Indian yarn prices remain 10-15 cents/kg lower than Vietnamese yarn prices. Therefore, yarn businesses continue to face difficulties as yarn prices have not improved and cotton prices remain high.
However, as China expands its textile industry and the market shows signs of recovery, yarn manufacturers can seize the opportunity to seek orders from this market. At the same time, businesses also need to proactively and carefully consider options for purchasing cotton and fibers for production.
It is evident that the textile and garment industry will continue to receive many orders in the coming period, but processing prices will remain relatively low. There will be a clear differentiation among garment businesses; strong businesses will receive sufficient orders, while weaker businesses with low productivity may still face many difficulties and challenges. Therefore, businesses need to constantly monitor the market, customers, and production plans to make quick decisions regarding order acceptance and product diversification according to market demand, within the scope of their production resources; proactively balance orders and production plans, ensuring the retention of labor resources and meeting production requirements when the market recovers.
Furthermore, textile and garment businesses need to focus on managing inventory, accounts receivable, and cash flow to mitigate liquidity risks, especially balancing foreign currency sources to ensure timely payment for raw material purchases; researching new products and markets to anticipate advanced green production trends, meeting the standards of major customers and markets, thereby creating a competitive advantage for Vietnamese textiles and garments in the export market.
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