Asian textile market continues to be severely affected by COVID-19

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In recent months, the COVID-19 pandemic has closed outlets, manufacturing sites and international borders across the world. Supply chains are in disarray and few industries are expected to emerge from the crisis unscathed. And as growing evidence from Asia suggests, the textile industry, which runs everything from high fashion to housewares, has also been badly affected.

Logistical complications and declining demand have sent shockwaves through all levels of the textile supply chain in Asia, with some industry players not expecting a return to the status quo anytime soon. This tightening will be felt everywhere, from Mongolian cashmere markets and Vietnamese factories to Chinese traders and transoceanic shipping routes. As with the coronavirus itself, the challenges first emerged in China, gradually spilling outwards. According to a report by the Center for Global Workers’ Rights cited by the South China Morning Post, commodities began to accumulate in China at the start of the year. By the time this problem could be resolved, reduced demand and canceled orders put fabric manufacturers and textile producers at a standstill.

This is certainly true in Vietnam, which relies on china for the majority of its fabric imports. The suspension of Chinese fabric manufacturing caused serious production problems. Subsequently, a Fair Wear report on the Vietnamese Textile and Clothing Association (VITAS) observed that retail brands “ha[d] abruptly postponed or canceled all orders and storage systems in March and April, ”even though many of the country’s textile manufacturers had already paid for the production inputs needed to fulfill those orders. According to a survey of VITAS members in late March, 74% said they lost 30% or more of orders they once expected to fill.

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Even in Mongolia, a country where proactive containment measures have amounted to less than 150 cases reported in total, the economic impacts of the pandemic are inevitable. The country’s goat herders, who produce around 40% of the world’s cashmere fiber, are feeling a serious crisis as demand from China dries up. The Asian Nikkei Review notes that cashmere prices per kilogram are down more than 100% in some cases, with canceled international orders also to blame.

Inevitably, the drop in demand will return and affect furniture retailers across the Pacific as well. According to Home textiles today, “blank crossings” (an industry term for canceled ocean freight trips) on transpacific routes increased by 32% between April and May. As ocean freight schedules are often price driven, these cancellations are an attempt to limit supply and reinforce the prices that shipping lines may charge. Both for American manufacturers who need raw materials and for brands that produce overseas, there could be a greater degree of uncertainty about when they can get what they need and how much it will cost. Especially as struggling home goods retailers regain the ability to operate their physical locations, there is a potential import bottleneck that could leave some to face higher prices. As Peter Giorgio, President of Global Logistics Solutions LLC, put it Home textiles today“Importers that have been shut down for an extended period will no doubt face potentially higher shipping rates to bring their inventory levels back to where they are needed to meet anticipated pent-up consumer demand. “


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