Vietnam's cotton consumption grows, India eyes bigger share of exports
Vietnam's fast growing textile industry is pushing up demand and consumption of cotton, creating opportunities for major cotton exporters like India. Vietnam's cotton imports have been on a steady rise, reaching $2.744 billion in 2023. This trend is expected to continue, with imports already reaching $1.309 billion in the first five months of 2024. As the world's second-largest textile exporter, Vietnam's demand for cotton is outpacing its domestic production, which meets a mere 1 per cent of its needs.
US, China major cotton sources
The global cotton market is dominated by major players like China, the US, and India. While China leads in production, India and the US are significant exporters.
Table: Major global cotton players
|
Rank |
Country |
Production (2023) |
Share (%) |
|
1 |
China |
5,980,000 tonnes |
27.6 |
|
2 |
India |
5,700,000 tonnes |
26.4 |
|
3 |
United States |
3,871,000 tonnes |
17.9 |
|
4 |
Brazil |
2,540,000 tonnes |
11.7 |
|
5 |
Australia |
585,000 tonnes |
2.7 |
Source: Statista
Vietnam's major cotton import sources are the United States, Australia, Brazil, and China.
Table: Vietnam’s cotton sourcing
|
Rank |
Country |
Share in Vietnam's imports (2021-24) |
|
1 |
US |
35% |
|
2 |
Australia |
22% |
|
3 |
Brazil |
18% |
|
4 |
China |
15% |
|
5 |
Others |
10% |
India's cotton exports to Vietnam was $266.81 million in 2023. While India currently holds a smaller share of Vietnam's cotton import market, the growing demand presents a significant opportunity. India's competitive pricing and high-quality cotton can attract Vietnamese textile manufacturers.
What works in India’s favor is its competitive pricing compared to the US or Australia. Moreover, India produces a variety of cotton grades suitable for different textile applications. And its enjoys a cordial trade relation with Vietnam, facilitating smoother trade flows.
While the outlook is positive, India needs to address certain challenges to fully capitalize on this opportunity. First it needs to improve logistics and infrastructure to ensure timely and cost-effective delivery of cotton to Vietnam is crucial. Market intelligence is vital for growth. Staying informed about Vietnam's evolving cotton requirements and market trends is essential. And exploring opportunities for exporting value-added cotton products like yarn and fabrics can further enhance India's export earnings.
By addressing these challenges and proactively engaging with Vietnamese textile manufacturers, India can secure a larger share of Vietnam's growing cotton market. This collaboration will not only boost India's cotton exports but also contribute to the growth and development of both nations' textile industries.