USDA – Cotton. World Markets and Trades, Feb 2025

The report by USDA "Cotton. World Markets and Trades" explores Vietnam's record cotton imports and consumption projected for 2024/25, driven by strong garment exports and foreign direct investment. Vietnam's cotton imports for 2024/25 are projected at a record 7.4 million bales, surpassing the previous year by over 10%. This increase is fueled by a record pace of garment exports and increasing foreign direct investment (FDI). Fabric and garment exports, crucial for economic growth, accounted for roughly 10% of Vietnam's annual export values, with a substantial increase recorded from August to December 2024. The United States remains Vietnam's largest destination for fabric and garment exports. U.S. and EU retailers have increased apparel orders from Vietnam, shifting away from China and Bangladesh. Vietnam's competitive advantages include a skilled labor force, strategic location, numerous free trade agreements, and an integrated textile supply chain. Chinese companies are redirecting U.S. cotton to Vietnamese mills, facilitated by zero import duties and no tariff-rate quota on cotton lint. The Uyghur Forced Labor Prevention Act (UFLPA) has further incentivized Chinese firms to outsource textile production to Vietnam, enhancing Vietnam’s position in the global cotton market.