Vietnam is on track to generate $44 billion this year from garment exports, establishing itself as the second-largest exporter worldwide, according to reports from Vietnamese media.
This projection surpasses Bangladesh’s expected garment export revenue by $4 billion, as the country targets $40.48 billion for its overall exports, which includes garments as part of its broader export strategy.
The apparel and textile market in Vietnam is expected to experience significant growth, rising 11 percent year-on-year. Attributing this upswing to recent economic and political upheavals, the CEO of Vietnam National Textile and Garment Group (Vinatex), Cao Huu Hieu, shared insights during a press conference, stating, "Vietnam is set to generate $44 billion this year through garment exports." This marks a notable recovery for the sector, especially considering the challenges faced earlier this year.
Despite the underwhelming performance of Vietnam's garment exports during the first half of 2024— attributed to weak global demand and stringent order conditions—the scenario shifted dramatically as conditions warmed up. Factors such as rising political issues within Bangladesh reportedly redirected orders to Vietnam, allowing its garment sector to flourish" amid constraints faced by its neighbor.
Bangladesh’s garment industry is rife with challenges, particularly labor unrest, gas crises, and tax complications. These hurdles have made it increasingly difficult for the country to boost its export figures, according to Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). Hatem remarked, "There was no doubt Vietnam would surpass Bangladesh...because there was no labor unrest, gas crisis, or tax issue there." He outlined the inherent structural issues within Bangladesh's manufacturing paradigm, stressing the difficulties faced by exporters as they endeavor to increase production.
The comparative advantages enjoyed by Vietnam—including stability and lower operational disruptions—have proven attractive to global buyers, especially as the United States prepares to impose stringent tariffs on Chinese goods. Hatem pointed out the opportunity for new investments from China to evade these duties, but cautioned of numerous barriers existing within Bangladesh's investment climate.
Meanwhile, the garment export figures for Bangladesh reveal its struggles: for the last fiscal year, the country earned $36.15 billion, down 5.22 percent from the previous year. The knitwear sector contributed $19.28 billion, whereas woven garments accounted for about $17 billion.
While the turmoil affects Bangladesh, Vietnam seems to be capitalizing on its turmoil. There are signs of underlying strength within Vietnam's coconut export market as well, with revenue projections indicating they will surpass $1 billion next year. This sharp rise can be attributed to burgeoning demand from key markets such as China, which alone has annual requirements for approximately 2.6 billion fresh coconuts.
According to Nguyen Thi Thanh Thuy, director of Vietnam’s Department of Science, Technology and Environment, exports of fresh Vietnamese coconuts are expected to reach $250 million this year. The country’s coconut exports surged from $180 million in 2010 to over $900 million in 2023, marking the potential to become one of Vietnam's leading agricultural exports.
With this achievement, fresh coconuts from Vietnam gained access to Chinese markets through regular channels recently, following similar agreements with the United States last year. Notably, the country plans to expand its coconut cultivation area to 200,000 hectares to keep up with the increasing demand, focusing heavily on Vietnam's Mekong Delta region.
This planting strategy supports the current high standards set by both China and the European Union on pesticide residue limits, which are becoming increasingly stringent. Currently, around 30 percent of Vietnam’s coconut farms meet the VietGAP standards necessary for export, and the same percentage has been issued traceability codes.
The province of Ben Tre, often referred to as the “coconut capital” of Vietnam, holds 42 percent of the nation's total coconut cultivation area. Exports from this province are generating about $350 million annually, targeting multiple international markets beyond Asia, including the United States and Canada.
Despite its promising outlook on the global stage, Vietnam’s coconut sector still faces stiff competition from other palm-producing countries, including Thailand, Indonesia, Cambodia, and the Philippines. Each of these countries has been approved to export coconuts to China, increasing the competitive pressure on Vietnam's agricultural exports.
Looking forward, both Vietnam and Bangladesh are at pivotal crossroads. For Vietnam, its export figures shine brightly amid challenges, whereas Bangladesh's heavy reliance on garment manufacturing raises questions about resilience and adaptability under current market and political conditions. Both nations serve as case studies on how global export market dynamics can pivot unexpectedly, influenced heavily by social, economic, and political factors.
