HANOI: At $ 12.8 billion, Vietnam’s textile and garment exports increased by 6% in the first half of 2016, but exporters are apprehensive that they might not be able to achieve the targeted $ 31 billion earnings for the year in the wake of Brexit and a near 30 % fall in fresh orders. According to the Ministry of Industry and Trade, exports to US went up by 5.9 % clocking $4.29 billion; while those to Japan saw an increase of 2.9 % to register $1.04 billion; and exports to South Korea were 15.58 % higher at $764.9 million.
Yet the mood among exporters is not upbeat. According to one exporter Tran Van Khang, there has been a lack of orders since the beginning of the year, triggering stiff competition among domestic manufacturers for customers. His firm saw a 30% drop in the number of orders in the first five months of 2016, which he attributed to overstocking and falling demand in import markets. Also, export prices have plunged by 10-15 %, while he still has to pay wages, insurance and transportation costs, which are on the rise.
Another official of Ho Guom Garment SJC, said his company’s overseas orders fell significantly in March and April, and had begun to look up only in June. They cited Brexit and preferential trade regimes of US and EU with rivals such as Myanmar, Laos and Cambodia as reasons for foreign clients to turn towards countries with reduced import duties and more tariff advantages.
Also, the much publicised Trans-Pacific Partnership (TPP) and Vietnam-EU Free Trade Agreement, from which Vietnam exporters can benefit, have not yet come into effect. Meanwhile, the Ministry of Industry and Trade has proposed the development of large textile and garment industrial zones (IZs) to attract FDI in dyeing, and fabric and yarn production for making for high-end products.
