Vietnam Cotton Association: Cotton Industry Promotes Risk Management

In recent months, due to the continuous increase in the export value of garments in Vietnam, the demand for cotton by domestic producers has become increasingly strong. However, due to the impact of international cotton price fluctuations and the reduction of domestic cotton planting area, Vietnam’s cotton industry is facing a serious crisis. According to relevant sources, the cotton industry in Vietnam focuses on risk management to avoid losses due to fluctuations in global market prices.

“Whether it is to adopt raw material cost-preservation measures, create future market strategies, or adopt value-preservation measures, it should aim to minimize risks.” Atam, the U.S. economic policy analysis agency and deputy chairman of the National Cotton Council, recently held in Ho Chi Minh City The seminar proposed that the Vietnamese cotton industry must take measures to reverse the passive situation affected by price fluctuations.

At present, Vietnam's cotton cultivation is mainly concentrated in the southern Ningshun and Binh Thuan provinces. Cotton cultivation in these areas is mainly carried out on a family basis. It is difficult to achieve the mechanization of cotton production, so the local cotton production efficiency is low; on the other hand, because the cotton price is lower than that of corn, cocoa and soybeans, the willingness of cotton farmers to grow cotton Gradually decreases. For two reasons, the cotton industry in Vietnam has been in crisis. Sui Hongjiang, secretary general of the Vietnam Cotton Spinning Association, said that Vietnam’s annual cotton production is about 3,500 tons, which only meets 1% of the local demand of 380,000 tons. Therefore, Vietnam’s cotton supply has to rely on imports, with 40% imported from the United States, 15% to 16% imported from India, and the rest from West Africa, the former Soviet Union, and Australia.

In order to reverse this heavy reliance, the Cotton Association of Vietnam encouraged cotton farmers to actively cultivate cotton and introduced corresponding support measures for cotton farmers. Adamham suggested: "Vietnam should look for suitable methods in the future market planning strategy. This method can neither increase their production costs but at the same time minimize the risk of price fluctuations. Some textile factories should be supplied with the wholesale of cotton. Business cooperation.

Adamham believes that Vietnam has great potential for exporting cotton textile products, especially exports to the United States. It is understood that last year Vietnam was the fifth largest supplier of cotton textiles in the United States, second only to China, Pakistan, India, and Bangladesh, accounting for 5% of the total cotton imports in the United States. Insiders pointed out that in order to increase the market share in the United States, Vietnamese cotton textile exporters should cooperate with the US retail brands and actively establish supply chain relations.