In the first seven months of this year, cotton imports surged 34 per cent in volume and 36.3 per cent in value year-on-year to a record 458,000 tonnes valued at US$919 million.— Photo commodityonline.com

HA NOI (Biz Hub) — The domestic garment and textile sector has to import a large quantity of cotton as the country's cotton output met only 1 per cent of local producers' demand.

Ho Thi Kim Thoa, Deputy Minister of Industry and Trade, told a conference on the garment and textile industry here on Wednesday that the sector lacked cotton because the total land area planted to the crop in Viet Nam was reduced from 30,000 ha to 10,000 ha.

Cotton has been the industry's principal raw material, and Viet Nam needs more than 400,000 tonnes to meet rising demand, Thoa said. She added that imports would continue to be the main source of cotton for the industry.

Thoa said cotton growers had to face numerous difficulties, though the Prime Minister had approved a cotton development programme to be implemented from 2015 to 2020. "Farmers are earning more income from the planting of other crops and have become indifferent to cotton," she added.

"The Viet Nam National Textile and Garment Group (Vinatex) has established areas for cotton plantations that will provide them with the raw material," the Deputy Minister said. "The projects are being implemented in Ninh Thuan and Dak Lak and will give farmers there the experience that they need."

Tran Quang Nghi, Vinatex Chairman, said the group would learn lessons from unsuccessful pilot projects implemented in the central highland province of Lam Dong.

Nghi said Vinatex had allocated land for cotton plantation, but people in some localities had reclaimed the areas, causing difficulties for the group.

It was for this reason that the group had been seeking ties of co-operation with residents of localities, he added.

Nghi proposed that the country establish cotton farms and invest in machines that could help spark a breakthrough in cotton output and productivity.

He also urged the Government to encourage garment and textile enterprises to cultivate and maintain close ties with cotton producers to ensure higher cotton output.

Sharing his ideas, Do Huu Huy, Deputy Head of the Ministry's Africa and South West Asia Market Department, said the Vietnamese textile and garment sector, which exhibited rapid and sustainable growth in recent years, remained overly dependent on foreign raw materials and paid inordinately high prices for these.

Huy said most of the raw materials for the sector came from Africa and were sold to Vietnamese manufacturers through intermediary French, Swiss and Indian wholesalers.

The garment and textile sector would benefit tremendously if it developed a direct international supply chain with African nations, Huy added, noting that this would eliminate the middlemen and lead to increased price competitiveness in the global marketplace.

A spokesperson for the Viet Nam Cotton and Spinning Association (VCOSA) echoed Huy's views and revealed that his group had been moving to strengthen trade promotion activities with African countries to help increase cotton supply and enhance the sector's supply chain.

The spokesperson cited a recent meeting held at the International Trade Centre (ITC) for Vietnamese manufacturers and its partners from eastern and southern African countries as an example. Numerous prospects for increased direct trade between the two sides were opened up at the meeting and would benefit the industry in the future, the spokesperson said.

Viet Nam currently imports raw cotton from 19 of 55 African markets. Besides Malawi, Mozambique, Uganda and Tanzania, it buys the raw material from Zambia and Zimbabwe. African cotton is of fairly good quality, reasonably priced and suitable for yarn production.

Voice of Viet Nam (VOV) quoted Marco Charles Mtunga, acting Managing Director of Tanzanian Cotton Board, as saying that the association was working with ITC to implement better management measures related to cotton contamination. Along this line, the association will offer training courses for farmers and cotton processing factories aiming to improve the quality of cotton in the future.

According to the General Department of Customs, in the first seven months of this year, cotton imports surged 34 per cent in volume and 36.3 per cent in value year-on-year to a record 458,000 tonnes valued at US$919 million.

According to the association, the industry currently has 5.1 million spindles with a production capacity of around 700,000 tonnes of fibres per year.

Nguyen Hong Giang, VCOSA General Secretary, said the Trans-Pacific Partnership Agreement (TPP)'s original requirement for "yarn forward" would create favourable conditions for exponential growth in the global marketplace for Vietnamese manufacturers.

With the prospects created by the TTP and the momentum for the development of a direct supply chain for raw materials with African partners, the prospects for continued rapid and sustainable growth in the garment and textile sector remain bright, say industry insiders. — VNS