Vietnam demand seen driving 2020/21 global cotton consumption higher

Robust growth in Vietnam’s cotton yarn and product exports is projected to drive 2020/21 cotton consumption to a record 7.3 million bales, 700,000 higher than the previous year’s downfall from COVID-19, the U.S. Agriculture Department (USDA) said in its latest monthly report.

Yarn exports in 2020/21 have already exceeded the previous year’s record by more than 10 percent through the first 11 months of the marketing year. Foreign demand has been primarily driven by China, with Vietnam’s cotton yarn exports to the country accounting for roughly 60 percent of Vietnam’s total cotton lint consumption, it said.

China is the world’s largest cotton yarn importer and Vietnam’s largest customer with the geographic proximity and foreign investment by Chinese companies driving record exports. China’s August to June imports of Vietnamese cotton yarn were a record (for the period) and equal to roughly 4 million bales of cotton lint consumption, the report added.

It said China’s robust demand is expected to persist with projected growth in China’s cotton fabric and product exports, in addition to greater domestic consumption of cotton products.

According to the USDA, The United States WRO (Withhold Release Order) on cotton lint from China’s Xinjiang region is further supporting current and future demand for Vietnam’s cotton yarn. Practically all cotton yarn spun in
Vietnam is produced with cotton lint imported from outside of China. Garment and textile manufacturers in China seeking to circumvent the WRO are likely substituting imported cotton yarn for domestic with roughly two-thirds containing Xinjiang lint, it said.

Greater domestic consumption in Vietnam of cotton yarn is also driving cotton consumption higher. Significant foreign and domestic investment in Vietnam’s garment industry has driven greater demand for cotton knitted fabrics and thus domestic consumption of cotton yarn by knitters.

According to Vietnam customs data, garment and textile exports in 2020/21 are expected to recover from the
previous year’s decline and rise to more than $30 billion; the garment industry is one of the country’s largest valued source for exports. Vietnam’s largest export market for cotton textiles and garments is the United States, which is also the world’s largest importer.

U.S. imports from Vietnam were a record in the first 11 months at more than $5 billion. Knitted cotton sweaters, pullovers, and other similar articles of clothing were the largest product category, accounting for roughly 30 percent of the total value of U.S. cotton product imports from Vietnam.

Leave a Reply

Your email address will not be published. Required fields are marked *