It is expected that the total global textile and garment demand in 2024 will reach about 714 billion USD, a slight increase compared to 2023 but still lower than in 2022. In addition, input costs such as electricity prices, transportation costs, minimum wages, etc. will increase, which will be barriers to business development.
Statistics from the Vietnam Textile and Apparel Association show that the total export turnover of Vietnamese textiles and garments in the first three months of this year reached nearly 10 billion USD, up nearly 10% over the same period. At present, most garment enterprises have orders until June; the yarn industry also has many customers negotiating and making transactions for the following months. These are positive signals, contributing to helping enterprises boldly invest in equipment, increase production and business scale.
However, according to businesses, although textile orders have increased compared to the same period last year, prices have still decreased, with some orders decreasing by 40-50% compared to before. In addition, geopolitical factors in the world are still unpredictable, which can cause disruptions in the supply chain, increase costs... affecting Vietnamese textile businesses. Therefore, businesses still expect market demand to improve.
According to forecasts, cotton prices will trade around 90 cents/lb until the end of July, fiber prices will not fluctuate much around the range of 1-1.05 USD/kg. Fiber prices tend to improve by 10-15%, as China increased imports by 55% compared to the same period, however, this is only short-term when the country's fiber inventory tends to increase. Along with that, Indian fiber prices are still 10-15 cents/kg lower than Vietnamese fiber. Therefore, fiber businesses are still facing difficulties when fiber prices have not improved and cotton prices are high.
However, as China expands its textile industry and the market shows signs of recovery, yarn producers can take advantage of the opportunity to seek orders from this market. At the same time, businesses also need to proactively and carefully calculate options for purchasing cotton and fiber for production.
It can be seen that the textile and garment industry will continue to receive many orders in the coming time, but the processing price will be relatively low. Garment enterprises will have a clear differentiation, in which strong enterprises will receive enough orders, but weak enterprises with low productivity may still face many difficulties and challenges. Therefore, units need to regularly follow the market, customers, and production plans to make quick decisions in receiving orders and converting products according to market demand in conditions suitable to the production resources of each enterprise; proactively balance orders and production plans, ensure to maintain labor resources, and meet production requirements when the market recovers.
In addition, textile and garment enterprises need to focus on managing inventories, debts, and balancing cash flows to limit liquidity risks, especially balancing foreign currency sources to pay for raw material purchases on time; researching new products and new markets to anticipate the trend of advanced green production, meeting the standards of customers and large markets, thereby creating a competitive advantage for Vietnamese textile and garment in the export market.
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