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Wednesday, November 25, 2020

Apparel sector expected to lose VND11 trillion in revenue due to coronavirus

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HCMC – The suspension and cancellation of export orders in the first quarter of 2020 is expected to cost the apparel sector VND11 trillion in lost revenues if Covid-19 is contained by late May and the economy recovers in June, according to Vietnam Textile and Garment Group (Vinatex).

In the first quarter of the year, many firms witnessed a drop in revenues by 20% year-on-year.

Apart from this, the time for opening a letter of credit doubled to 120 days, while multiple orders in March were delayed until April and May.

Also, a number of local apparel exporters remained stagnant in April, as they have yet to secure new orders for May.

The country’s apparel export revenues reached US$8.4 billion between January and March, down 2.02% year-on-year, Thanh Nien newspaper reported.

As the United States and the European Union started to close their borders due to the coronavirus pandemic from mid-March, Vietnam’s exports of textile and garment products to these markets were not heavily affected during the first-quarter period.

The second quarter is forecast to be the hardest-hit quarter for the apparel sector, trade activities are expected to return to normal in the fourth quarter.

For the most optimistic scenario, the country’s apparel sector will earn US$35 billion in export revenues this year, down 10% against 2019, while apparel export revenues will stand at a mere US$30 billion in the worst-case scenario, according to Vinatex.

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