The cotton market in Vietnam has shown a noticeable improvement in 2020-21. The growth in Vietnam’s cotton yarn and product exports has been robust during the above mentioned period hence the USDA this month has raised its global 2020/21 global cotton consumption estimate, to a record 7.3 million bales, which if turns out to be correct, then it will be around 7 lakh bales above the previous year.
Consumption was adversely affected in 2019-2020 from the COVID-19 outbreak. As per the monthly report released by the USDA the yarn exports in 2020/21 had already surpassed the previous year’s record by more than 10 percent through the first 11 months of the marketing year. The global demand growth was mainly driven by China, with Vietnam’s cotton yarn exports to this nation, contributing nearly 60 percent of Vietnam’s total cotton lint consumption. China is the world’s largest cotton yarn importer and consumer for Vietnamese cotton.
As there have been noticeable investments by foreign as well as domestic players in Vietnam’s garment industry, demand for cotton knitted fabrics and thus domestic consumption of cotton yarn has accelerated in 2020-21. The garment and textile exports of Vietnamese cotton are expected to recover in 2020-21 from the previous year’s decline and rise to more than $30 billion according to Vietnam customs data.
The countries with the highest volumes of cotton yarn consumption in 2020 were China (8.2M tonnes), India (4.3M tonnes) and Pakistan (3.3M tonnes), with a combined 74% share of global consumption.
Turkey, Bangladesh, Brazil and South Korea followed next, accounting for another 13%. The countries with the highest volumes of cotton yarn production in 2020 were China (6.5M tonnes), India (5.4M tonnes) and Pakistan (3.7M tonnes), with a combined 72% share of global production.
These countries were followed by Turkey, Viet Nam, the U.S. and Brazil, which together accounted for 16 % share. In value terms, China ($2.3B) remains the key foreign market for cotton yarn exports from Viet Nam, comprising 79% of total exports. The second position was occupied by South Korea ($224M), with a 7.8% share of total exports. Third was Hong Kong SAR, with a 1.9% share.
The USDA expects China’s robust demand to persist with projected growth in China’s cotton fabric and product exports, in addition to greater domestic consumption of cotton products.
The present and future demand for Vietnam’s cotton yarn is also driven by the United States WRO (Withhold Release Order) on cotton lint from China’s Xinjiang region. US cotton imports from Vietnam were a record in the first 11 months at more than $5 billion. As per reports the knitted cotton sweaters, pullovers, and other similar products contributes roughly 30 percent of the total value of U.S. cotton product imports from Vietnam.
