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Textile and apparel orders returning to Southeast Asia

2021-12-22 08:03:41 CCFGroup

After the outbreak of COVID-19 in 2020, the pandemic in Vietnam, Bangladesh, Cambodia and other Southeast Asian countries was serious, and epidemic control measures were taken, so exports dropped sharply. At the same time, with the gradual effect of epidemic control and the stable and complete supply chain in China, some textile and apparel orders originally sent to Southeast Asia flowed into China. Operating rate of China's domestic textile and apparel mills also rebounded sharply and exports surged.

Exports of textiles and apparels amounted to US$285.29 billion in Jan-Nov 2021, up 7.7% y-o-y. It marked an increase of 15.56% percent from the 2019 level and grew faster than expected for the second straight year. The continuous higher-than-expected export growth was the result of both the surging overseas consumer demand and returning production orders. Thanks to the American Rescue Plan in March, the consumer demand of US residents has greatly stimulated. At a time when the consumption of services has been hampered by the pandemic, a large amount of demand poured into the consumption of goods, resulting in particularly strong demand in overseas markets. Meanwhile, the problem of resumption of work and production caused by the pandemic in Southeast Asian countries has brought textile and apparel orders back to China, and China's share effect combined with the total effect has jointly boosted the high-growth export data in 2021.

However, in recent months, the pandemic in Southeast Asia has slowed down, pandemic controls have been relaxed, and production have begun to resume. With the price advantage, some textile and apparel orders are returning to Southeast Asia. Judging from the export of the major textile and apparel exporters in Southeast Asia, the textile and apparel export of Pakistan, Bangladesh, India and Vietnam have successively returned to the pre-Covid level, especially Indian apparel exports and Vietnamese textile and apparel exports did not begin to recover to the pre-Covid level until the last month or two.

Pakistani textile and apparel export

Bangladesh' s textile and apparel export

Indian textile and apparel export

Vietnamese textile and apparel export

It is understood that Southeast Asian countries have been in lockdown for a long time because of the pandemic, so their export trade rebounded up obviously at the beginning of the lockdown. But there was also a sharp rise in local transport prices. Since Nov. 9, prices have soared from more than $1000 to between $3000 and $4000 now. It is worth mentioning that the local freight rate was only $300-400 before the outbreak, which is 10 times lower than at present.

In conclusion, in recent months, the mills in Southeast Asia have resumed production gradually. Also, after the dual controls in China, various production costs increased, and some textile and apparel orders returned to Southeast Asia. However, despite the COVID situation in the China and other parts of the world continues to evolve, China's advantages in epidemic control still exist. For many overseas businessmen, China with a stable supply chain is still their first choice, and the customer stickiness of orders still exists. Therefore, although some orders have returned to Southeast Asia, they will not become mainstream for the time being. Pay attention to the COVID situation, especially that in Southeast Asia.

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