Apparel exports from Vietnam have taken an unexpected hit and are likely to decline further in the second half of this year due to the rising cases of COVID-19 in the country. Exports rose consistently in the first quarter due to the efforts of industry stakeholders, implementation of sustainable strategies, vaccination drives and improved product quality.

Vietnam’s monthly average for apparel exports was $2.42 billion in the last quarter of 2020. It increased slightly by 4.05 per cent to a monthly average of $2.51 billion in the first quarter of 2021 but dropped again by 15.12 per cent to a monthly average of $2.13 billion in the second quarter of 2021, according to Fibre2Fashion’s market analysis tool TexPro.

Vietnam’s apparel exports are expected to decline further by 18.45 per cent to a monthly average of $1.74 billion in the second half of 2021.

The EU-Vietnam Free Trade Agreement (EVFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the UK-Vietnam free trade agreement (UKVFTA) helped the nation to boost trade amid the pandemic. The UKVFTA that officially came into force on May 1, 2021, increased Vietnam's apparel exports to the UK as it removed almost all customs duties between the two countries.

Vietnam developed policies for low-cost manufacturing that boosted the production index. It sought new raw material suppliers from India, South Korea and European countries and reduced the dependency over China for raw materials.

The demand from western markets has been increasing from the beginning of 2021. The Vietnam Textile and Apparel Association (VITAS) developed three strategies to boost apparel exports – reviewing the changes in consumer demand in key export markets; adoption of advanced production technologies to save fossil energy, cut gas emissions and increase recycling; and investing in product development. Better compliant processes and improved human rights also drove Vietnam’s exports.

However, the country is currently dealing with the rising cases of COVID-19 and low rate of vaccinations. The new wave has suspended the textiles supply chain and forced manufacturing units to close.

VITAS has requested the government to vaccinate textiles and apparel workers on a priority basis and has asked to buy the vaccine directly from suppliers.

By Fibre2Fashion 
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