Hanoi (VNS/VNA) - The Vietnam Textile and Apparel Association (VITAS)said the total export value of textiles, fiber, and cloth reached 25.7 billion USDin the first eight months of the year, up 8.6 percent year on year, including60.6 percent from foreign direct investment (FDI) enterprises.

The textileand garment industry spent 14.9 billion USD to import textile and garmentmaterials for production, up 2.3 percent year on year, including 62 percentfrom FDI enterprises.

Theindustry’s trade surplus in the first eight months reached 10.8 billion USD.

Accordingto the Ministry of Industry and Trade, domestic textile enterprises face manychallenges in production and business activities.

TheUS-China trade war has affected exchange rates, leading to higher prices ofprocessed goods in Vietnam compared to regional competitors such as theRepublic of Korea and China. That has also affected the number of export ordersfor local enterprises.

In thefirst eight months of this year, textile production and exports have grown overthe same period last year, but due to changing orders, local businesses need tohave solutions for production and business.

Industryexperts said export orders have fallen. Some businesses have only received 70 percentof new orders against the same period in 2018.

Consumptionof fibres and raw materials has struggled as Vietnam's major export market– China (accounting for 60 percent) – has cut import volume. Garment enterprisesalso saw a drop in orders.

In 2018,many large enterprises in the industry had export orders throughout the year,while this year, they could only sign monthly export contracts with smallvolume. Buyers are concerned the US-China trade war will escalate, so ordersare broken up instead of in bulk.

Phi VietTrinh, General Director of Ho Guom Garment Group, said the firm's orders havefallen against the same period last year. But there are still enough jobs forworkers. It expects by year-end, orders will increase because demand is higherin the last months of the year.

Nobenefit

As thethird quarter comes to an end, it is unlikely that Vietnamese textileenterprises will increase exports due to the on-going US-China trade waras some previously predicted.

In thetextile and garment industry, enterprises from the Republic of Korea and Taiwanin Vietnam have gained advantages from the trade war because they ownproduction factories under the value chain.

“Koreantextile and apparel companies in Vietnam are the biggest beneficiaries of thetrade war. This country’s 143 enterprises account for about 50 percent of Vietnam'stextile and apparel export value to the US,” FiinGroup, a financial andbusiness information provider in Vietnam, was quoted by the Dau Tu (Investment)newspaper as saying.

Vietnamhas not seen investment flows to the textile and garment industry due to theUS-China trade war, according to the Vietnam Textile and Garment Group(Vinatex). There have not been significant shift in production from China to Vietnam.

Theinvestment from a country to another depends on many factors, said a Vinatexleader.

NguyenThi Thu Trang, Director of the WTO Centre under the Vietnam Chamber of Commerceand Industry (VCCI), said Vietnam has not benefited from the trade war as manyforecasted, including the moving investment from China to Vietnam.

Anotherproblem is that although the export turnover is large, the domestic textile andgarment industry still lacks input materials. It has to import all cotton and80 percent of fabric and other material from China and India so the productcosts of domestic firms are much higher than FDI companies, she said.

Therefore,if local firms have increased garment exports, textile companies of China andIndia would benefit, because the local firms have to increase their imports ofraw materials./.