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  • 6.9-MARKET PROFILES-VIETNAM

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  • Vietnam

    Chapter 6 - Market profiles - Vietnam 

     
     

    Viet Nam is a developing country situated in South-East Asia. It covers 330,000 square kilometres and has a population of 84.2 million. In 2006 its GDP was US$ 61 billion and per capita GDP was US$ 724.

    Viet Nam remains an agriculture-based country. About 74% of its population live in rural areas, and 60% of its labour force work in agriculture including fishery and forestry. However, textile and clothing products constitute Viet Nam's second-biggest export item after crude oil, accounting for 15% of total export value and contributing around 10% of the total GDP of the country.

    During 2003-2006, the textile and clothing sector recorded a strong growth that averaged 25% a year. This sector is dependent on imports of input materials: 80% of raw cotton materials are imported, as are 70% of synthetic fibre, 40% of short staple fibre, 40% of knitted woven fabric and 60% of shuttle-woven fabric. Domestic fibre and fabric production is far below meeting the requirements of production for export in terms of both quality and quantity.

    Viet Nam still imports cotton materials as both raw cotton and cotton yarn. Raw cotton accounts for most of this, up to as much as 70%, while imports of cotton yarn make up the remaining 30%.

    Based on the conservative assumption by the national consultant, the consumption of uncarded and uncombed cotton in Viet Nam will continue to increase at the low level of 11% per year recorded in 2006 (the increase was 32% in 2004 and 17% in 2005), the total consumption of uncarded and uncombed cotton in Viet Nam will be 215,571 tons in 2007, 239,284 tons in 2008, 265,605 tons in 2009, and 294,821 tons in 2010. (Table 20)

    Assuming conservatively again that over the next few years domestic production will continue to supply the same low level of 28,359 tons of uncarded and uncombed cotton per year recorded in 2006 (it supplied 35,128 tons in 2003, 28,002 tons in 2004, and 33,590 tons in 2005), Viet Nam will need to import around 187,210 tons of uncarded and uncombed cotton in 2007, 210,925 tons in 2008, 237,246 tons in 2009, and 266,462 tons in 2010.

    According to International Cotton Advisory Committee (ICAC) projections, the total consumption of raw cotton in Viet Nam will be 190,000 tons in 2007, 209,000 tons in 2008, 219,000 tons in 2009, and 230,000 tons in 2010.

    Also, according to ICAC projections, domestic production of raw cotton in Viet Nam will provide 11,000 tons in 2007 and 2008; 12,000 tons in 2009; and 14,000 tons in 2010. Therefore, Viet Nam will need to import 179,000 tons of raw cotton in 2007, 198,000 tons in 2008, 207,000 tons in 2009, and 216,000 tons in 2010.

     

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    The United States of America has been the dominant supplier of uncarded and uncombed cotton to Viet Nam for several years. It accounted for 77% of Viet Nam's total import value in 2002, 66% in 2003, 62% in 2004, and 50% in 2005.

    India has been the second-largest supplier of uncarded and uncombed cotton to Viet Nam. It supplied 5% of the total import value in 2003, 1% in 2004, and 23% in 2005.

    Suppliers of uncarded and uncombed cotton to Viet Nam from least developed countries (LDCs) mostly have to compete with suppliers from the United States, and to a certain extent with suppliers from India.

    Imports of cotton materials into Viet Nam follow the same customs procedures as other goods. There are no special requirements such as fumigation certificates or certificates of original certificates. There are no quotas, and no import tax is imposed on imports of raw cotton materials into Viet Nam.

    Vietnamese spinning mills and garment companies often import cotton materials directly from foreign suppliers and keep their own stock inventory, according to their production and trading needs. They have import and export units to deal with selling and buying products and materials. Contracts for sale and purchase are prepared by agreement between the buyer and seller, and vary case by case. The usual mode of payment is letter of credit (L/C) at sight and the usual delivery terms are CIF (cost, insurance, freight).

    There are no specialized trading houses or agents for the import and distribution of cotton materials in Viet Nam. For domestically produced cotton, the Vietnam Cotton Company is the only company dealing with trading and distribution activities.