Vietnam’s cotton yarn export is a “late bloomer”

According to customs statistics, my country imported 159,000 tons of cotton yarn in June 2016, of which 52,000 tons were imported from Vietnam, accounting for 32.6% of the total imports, followed by India and Pakistan, accounting for 21.3% and 18.4% of the total imports respectively. %. From January to June 2016, my country’s cumulative import volume of Vietnamese cotton yarn accounted for 29.02% of China’s total import volume, ranking first. From March to May 2016, my country’s imports of Vietnamese cotton yarn accounted for 28.7%, 31.6%, and 30.8% of the total cotton yarn imports in that month respectively. Vietnam’s cotton yarn has taken the lead for four consecutive months. What is the reason that caused Vietnamese yarn to “come from behind” and surpass Pakistan and India to occupy the “throne” of China’s largest imported yarn?

1. Vietnamese yarn mills are gradually recognized by Chinese buyers in terms of equipment, worker proficiency and yarn quality. Vietnam is not a cotton-producing country, and its raw materials mainly come from the United States, India, Africa, Central Asia, Brazil, Australia, etc. India’s high-quality cotton exports decreased significantly in 2015/16, and Indian cotton FOB, CNF, and CIF quotations have been significantly higher since March. By late July, the increase was more than 55%, which was completely “inverted” with the quotation of machine-picked US cotton without “three silks”; the procurement focus of Vietnamese yarn mills in 2016 fully shifted to US cotton, West African cotton and some Australian cotton, The quality of Uzbekistan cotton has been greatly improved. The quality of C21S-40S is ahead of the cotton yarn produced in India and Pakistan in terms of strength, hairiness, CV value, breakage rate per 100 meters and other indicators, and is on par with the quality of large and medium-sized yarn mills in China.

2. The zero-tariff policy for importing Vietnamese cotton yarn makes Vietnam fully demonstrate its advantages under the same CNF and CIF quotations. According to the China-ASEAN Free Trade Area Tariff Agreement, China’s import of Vietnamese cotton yarn has zero tariff, while cotton yarn from India and Pakistan is subject to 5% and 6% tariffs when entering China. For example, on August 1 and 2, the CNF quotations of India and Vietnam C32SA+ in the Qingdao Free Trade Zone were 2.91 US dollars/kg and 2.94 US dollars/kg respectively. The costs after customs clearance were 23,650 yuan/ton and 23,100 yuan/ton respectively. Although the CNF quotation of Vietnamese yarn was higher than that of India The price of yarn is US$0.03/kg, but the RMB quotation is more than 500 yuan/ton lower than that of Indian yarn. The price advantage is very obvious.

3. China invested and built factories in Vietnam, and more than 80% of the cotton yarn was sold back to the country. Since Vietnam borders my country and its preferential measures in terms of workers’ wages, production costs and taxes are quite attractive, about 30-40% of the cotton yarn exported to China in Vietnam comes from Chinese cotton spinning companies with factories in Vietnam, and with the recent In the past two years, mainland enterprises have been building and acquiring spinning mills in Vietnam with increasing frequency, and the proportion of Vietnamese yarn sold back to China will become larger and larger. In addition, because Vietnam’s current domestic spinning production capacity is seriously higher than its weaving capacity, yarn “oversupply” has made cotton yarn exports the mainstay of foreign exchange earnings.

4. Although Vietnamese yarn mills are relatively small in scale, their good reputation, short transportation distance, and flexible trade operations are also important reasons for attracting Chinese buyers. Judging from the survey, except for dozens of large-scale (more than 50,000 spindles) cotton textile enterprises in Vietnam, about 85% of the yarn mills in Vietnam have a scale of less than 20,000 spindles or even 2,000-5,000 spindles. Compared with India, Spin mills in traditional textile countries such as Pakistan have limited order-taking capabilities and insufficient one-time supply capabilities. The companies mainly focus on customized spinning and production and bonded sales. They basically set prices according to the market. They have a good reputation and can easily claim for quality problems. Compared with India For cotton mills in China, Pakistan, Indonesia and other countries, Vietnamese companies have strong performance capabilities. Vietnam’s cotton yarn exports are “late bloomers”

AAA

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