Required Report - public distribution

**Date:** 6/11/2008

**GAIN Report Number:** VM8038

VM8038

**Vietnam**

**Cotton and Products**

**Annual Report**

**2008**

**Approved by:**

![](media/image1.wmf)Valerie Ralph

U.S. Embassy

**Prepared by:**

Truong Minh Dao/Bui Thi Huong

**Report Highlights:** Demand for cotton remains strong as Vietnam's
textile industry continues to expand. Domestic cotton production
declined significantly in 2007/08 due to a huge decrease in production
area. Vietnam's 2007/08 crop could only meet about 2 percent of total
demand. Cotton imports for 2007/08 are estimated to increase by 7% to
240 thousand metric tons. U.S. cotton exports to Vietnam in 2007 reached
record levels at 66.7 thousand metric tons, making the United States the
top supplier to Vietnam.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Unscheduled Report

Hanoi \[VM1\]

\[VM\]

**Table of Contents**

[SITUATION AND OUTLOOK 3](#situation-and-outlook)

[STATISTICAL TABLES 3](#statistical-tables)

[Table 1: Vietnam's Cotton Production, Supply and Demand (PS&D table)
3](#table-1-vietnams-cotton-production-supply-and-demand-psd-table)

[Table 2: Import Trade Matrix 4](#table-2-import-trade-matrix)

[Table 3: Cotton Import Price Table
4](#table-3-cotton-import-price-table)

[PRODUCTION 5](#production)

[Table 4: Vietnam's cotton production by region, 2005 -- 2007
5](#table-4-vietnams-cotton-production-by-region-2005-2007)

[Vietnam's 2007/08 Cotton Production
5](#vietnams-200708-cotton-production)

[Table 5: Vietnam's cotton production (2005-2008)
6](#table-5-vietnams-cotton-production-2005-2008)

[Vietnam's 2008/09 Cotton Production
6](#vietnams-200809-cotton-production)

[PRICES 6](#prices)

[Domestic prices 6](#domestic-prices)

[Import prices 6](#import-prices)

[Table 6: Vietnam's average cotton import prices
6](#table-6-vietnams-average-cotton-import-prices)

[TRADE 7](#trade)

[Table 7: Vietnam's cotton imports, MY2006/07 and 2007/08
7](#table-7-vietnams-cotton-imports-my200607-and-200708)

[Vietnam's Primary Cotton Suppliers
7](#vietnams-primary-cotton-suppliers)

[Table 8: Sources for Vietnam's Cotton Imports, 2004-2007
8](#table-8-sources-for-vietnams-cotton-imports-2004-2007)

[Table 9: U.S. cotton exports to Vietnam
8](#table-9-u.s.-cotton-exports-to-vietnam)

[CONSUMPTION 8](#consumption)

[POLICY 8](#policy)

[Tariff on Cotton 8](#tariff-on-cotton)

[Vietnam approves strategy for garment and textile development through
2020
8](#vietnam-approves-strategy-for-garment-and-textile-development-through-2020)

[Biotech Cotton in Vietnam 9](#biotech-cotton-in-vietnam)

#  SITUATION AND OUTLOOK

Vietnam ranks among the top ten garment and textile-exporting countries
in the world. Exports for 2007 increased by 33% to \$7.7 billion up from
the \$5.8 billion earned from exports of garment and textile in 2006.
Exports to the United States were valued at \$4.5 billion or about 57%
of Vietnam's total garment and textile export earnings for 2007. Export
targets for 2008 including earnings increase of 23% for an anticipated
total of \$9.5 billion, with export sales to the United States expected
to reach \$6.1 billion.

Vietnam's cotton lint production declined sharply in 2007/08 to only
5.88 tmt; a decrease of 44.3%, attributable to both lower crop area and
yields. Cotton imports continue to rise to meet the increasing demand
from the garment and textile industry. Vietnam's cotton imports for the
first nine months of the market year (August-April) were 178.15 tmt, a
10%increase over the same period of MY 2006/07. Cotton imports for
2007/08 will undoubtedly continue to climb in response to continued
expansion in the textile sector; the year-end total is projected to
reach as high as 240 tmt. In 2007, the United States was Vietnam's
leading supplier of cotton, with a market share of 31% by volume.

# 

# STATISTICAL TABLES

## 

## Table 1: Vietnam's Cotton Production, Supply and Demand (PS&D table)

<table style="width:100%;">
<colgroup>
<col style="width: 20%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 10%" />
<col style="width: 7%" />
<col style="width: 10%" />
<col style="width: 3%" />
<col style="width: 6%" />
<col style="width: 4%" />
<col style="width: 3%" />
<col style="width: 4%" />
<col style="width: 4%" />
<col style="width: 5%" />
<col style="width: 2%" />
</colgroup>
<tbody>
<tr class="odd">
<td><strong>Country</strong></td>
<td colspan="2"><strong>Vietnam</strong></td>
<td></td>
<td></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td></td>
</tr>
<tr class="even">
<td><strong>Commodity</strong></td>
<td colspan="2"><strong>Cotton</strong></td>
<td></td>
<td></td>
<td colspan="9">(HECTARES)1000 480 lb. Bales(PERCENT)(KG/HA)</td>
</tr>
<tr class="odd">
<td></td>
<td>2006</td>
<td>Revised</td>
<td></td>
<td>2007</td>
<td>Estimate</td>
<td colspan="2"></td>
<td colspan="2">2008</td>
<td colspan="2">Forecast</td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td colspan="2"><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td colspan="2"><p>USDA</p>
<p>Official</p></td>
<td colspan="2"><p>Post</p>
<p>Estimate</p></td>
<td colspan="2"><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
</tr>
<tr class="odd">
<td><strong>Market Year Begin</strong></td>
<td></td>
<td>08/2006</td>
<td>08/2006</td>
<td></td>
<td>08/2007</td>
<td colspan="2">08/2007</td>
<td colspan="2"></td>
<td colspan="2">08/2008</td>
<td colspan="2">08/2008</td>
</tr>
<tr class="even">
<td>Area Planted</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td colspan="2">12.5</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">13</td>
</tr>
<tr class="odd">
<td>Area Harvested</td>
<td>22</td>
<td>0</td>
<td>22</td>
<td>23</td>
<td>0</td>
<td colspan="2">12.5</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">13</td>
</tr>
<tr class="even">
<td>Beginning Stocks</td>
<td>163</td>
<td>0</td>
<td>163</td>
<td>212</td>
<td>0</td>
<td colspan="2">212</td>
<td colspan="2">214</td>
<td colspan="2">0</td>
<td colspan="2">214</td>
</tr>
<tr class="odd">
<td>Production</td>
<td>49</td>
<td>0</td>
<td>49</td>
<td>52</td>
<td>0</td>
<td colspan="2">25.5</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">28</td>
</tr>
<tr class="even">
<td>Imports</td>
<td>900</td>
<td>0</td>
<td>900</td>
<td>950</td>
<td>0</td>
<td colspan="2">950</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">1058</td>
</tr>
<tr class="odd">
<td>MY Imports from U.S.</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
</tr>
<tr class="even">
<td>Total Supply</td>
<td>1112</td>
<td>0</td>
<td>1112</td>
<td>1214</td>
<td>0</td>
<td colspan="2">1187.5</td>
<td colspan="2">214</td>
<td colspan="2">0</td>
<td colspan="2">1300</td>
</tr>
<tr class="odd">
<td>Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
</tr>
<tr class="even">
<td>Use</td>
<td>900</td>
<td>0</td>
<td>900</td>
<td>1000</td>
<td>0</td>
<td colspan="2">925</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">1092</td>
</tr>
<tr class="odd">
<td>Loss</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
</tr>
<tr class="even">
<td>Total Dom. Cons.</td>
<td>900</td>
<td>0</td>
<td>900</td>
<td>1000</td>
<td>0</td>
<td colspan="2">925</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">1092</td>
</tr>
<tr class="odd">
<td>Ending Stocks</td>
<td>212</td>
<td>0</td>
<td>212</td>
<td>214</td>
<td>0</td>
<td colspan="2">214</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">208</td>
</tr>
<tr class="even">
<td>Total Distribution</td>
<td>1112</td>
<td>0</td>
<td>1112</td>
<td>1214</td>
<td>0</td>
<td colspan="2">1139</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">1300</td>
</tr>
<tr class="odd">
<td>Stock to Use %</td>
<td>23.556</td>
<td>0</td>
<td>23.55556</td>
<td>21.4</td>
<td>0</td>
<td colspan="2">23.13514</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">19.0476</td>
</tr>
<tr class="even">
<td>Yield</td>
<td>485</td>
<td>0</td>
<td>485</td>
<td>492</td>
<td>0</td>
<td colspan="2">444</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">469</td>
</tr>
</tbody>
</table>

Source: FAS, Official USDA Estimates, post estimates

## 

## 

## Table 2: Import Trade Matrix

  ------------------- ------------------ ------------- -------------------
  **Country**         Vietnam                          

  **Commodity**       Cotton                           

  Time Period         Jan-Dec            Units:        MT

  Imports for:        2006                             **2007**

  U.S.                37771              U.S.          66713

  Others                                 Others        

  Africa              62500              Africa        54454

  India               34720              Taiwan        15278

  Mexico              8500               India         26790

  CIS                 6500               Mexico        2751

  Australia           2800               Indonesia     2037

  Pakistan            2200               CIS           5509

  China               500                Brazil        5202

  Iran                1800               Australia     1962

                                         Korea         1828

                                         Pakistan      1595

  Total for Others    119520                           117406

  Others not Listed   32709                            26992

  Grand Total         190000                           211111
  ------------------- ------------------ ------------- -------------------

Source: Vietnam Customs office, Traders & Post estimate

## Table 3: Cotton Import Price Table

  -------------------- ------------- -------------------- ----------------
  **Country**          Vietnam                            

  **Commodity**        Cotton                             

  Prices in            \$US          per uom              MT

                                                          

  Year                 2007          2008                 \% Change

  Jan                  1231          1429                 16%

  Feb                  1225          1493                 22%

  Mar                  1228          1502                 22%

  Apr                  1253          1566                 25%

  May                                                     

  Jun                                                     

  Jul                                                     

  Aug                                                     

  Sep                                                     

  Oct                                                     

  Nov                                                     

  Dec                                                     

                                                          

  Exchange Rate        16500         Local Currency/\$1   

  Date of Quote        06/05/2008    MM/DD/YYYY           
  -------------------- ------------- -------------------- ----------------

Source: Vietnam Customs Office

# PRODUCTION

Vietnam's commercial cotton production is concentrated in the Central
Tay Nguyen Highlands and the southeast of the country. About 40 to 50
percent of Vietnam's cotton production is grown in Dak Lak, Dak Nong and
Gia Lai provinces in the Central Highlands. The second largest cotton
growing areas are in the southeast in Dong Nai, Binh Thuan, Binh Phuoc,
Ba Ria and Vung Tau provinces. (Table 4)

Cotton production in Vietnam is highly susceptible to weather conditions
as more than 80% of the cotton production area is rain-fed, with
planting initiated in the rainy season, June - August, and harvesting in
November - January. In areas with irrigation, cotton can be planted in
the dry season (November/December) allowing for harvesting from April
through June. Irrigated cotton areas continue to decline in the face of
strong competition for this resource from the more lucrative corn, beans
and vegetable crops.

## Table 4: Vietnam's cotton production by region, 2005 -- 2007

  --------------- ------ ------- ------------ ------ ------- ------------ ------ ------- ------------
                         2005                        2006                        2007    

  Growing regions Area   Yield   Production   Area   Yield   Production   Area   Yield   Production

                  1000   mt/ha   tmt          1000   mt/ha   tmt          1000   mt/ha   tmt
                  ha                          ha                          ha             

  **North East**  0.4    0.8     0.3          0.3    0.8     0.2          0.3    0.7     0.2

  **North West**  3.2    0.7     2.2          4.0    0.8     3.2          3.0    1.0     3.0

  **North Central 0.2    0.5     0.1          0.2    0.5     0.1          0.2    0.5     0.1
  Coasts**                                                                               

  **South Central 2.0    1.9     3.7          2.0    2.0     4.0          2.4    1.7     4.1
  Coast**                                                                                

  **Central       9.6    1.5     14.1         8.3    1.6     13.1         3.6    1.4     4.9
  Highland**                                                                             

  **South East**  7.2    1.2     8.5          6.8    1.3     8.5          3.1    1.3     3.9

  **Total         22.6   1.3     28.9         21.6   1.3     29.2         12.5   1.3     16.1
  Vietnam**                                                                              
  --------------- ------ ------- ------------ ------ ------- ------------ ------ ------- ------------

Source: Ministry of Agriculture and Rural Development (MARD)

## 

## Vietnam's 2007/08 Cotton Production 

The production area for Vietnam's 2007/08 cotton crop was 43 percent
less than the previous crop year at only 12.4 thousand hectares (tha).
Cotton growing areas were reduced in all regions, and particularly in
the key cotton growing areas of the South Central Coast, Tay Nguyen
Central Highlands and South East. In the Tay Nguyen Central Highlands,
the cotton growing area was reduced from 8.3 tha in the last crop year
to only 3.6 tha in 2007/08. Similarly, in the South East region, the
growing area for the 2007/08 crop was only 3.1 tha or about 45% of the
cotton growing area for the 2006/07 crop. In the current climate of
significantly increased food prices, many cotton farmers now find it
more profitable to grow crops such as corn, coffee, rice or even
vegetables, which now have a much better return than cotton. Post
revises Vietnam's cotton growing area in 2007 down to 12.5 tha from the
previous estimate of 23 tha. (PS&D Table)

The average cotton yield for the 2007/08 crop was 1.3 metric ton (mt)/ha
of seed cotton, down slightly from the 1.34 mt/ha for the 2006/07 crop
due to a decline in inputs as a result of increased prices for pesticide
and fertilizer. Seed cotton production in 2007/08 was an estimated
16.120 tmt or 5.9 tmt of cotton lint at a ginning rate of 36.5 percent.
(Table 5) Post revises Vietnam's 2007 cotton lint production to 5.9 tmt
or 25.5 thousand bales.

## Table 5: Vietnam's cotton production (2005-2008)

## 

+-------------------------+---------+--------+---------+-------------+
|                         | **20    | **200  | **20    | **2008/09** |
|                         | 05/06** | 6/07** | 07/08** |             |
|                         |         |        |         | **(         |
|                         |         |        |         | estimate)** |
+-------------------------+---------+--------+---------+-------------+
| Crop area (THA)         | 22.6    | 21.60  | 12,400  | 13,000      |
+-------------------------+---------+--------+---------+-------------+
| Crop yield (MT/HA)      | 1.28    | 1.34   | 1.30    | 1.35        |
+-------------------------+---------+--------+---------+-------------+
| Seed cotton production  | 28.9    | 28.94  | 16.120  | 17.550      |
| (TMT)                   |         |        |         |             |
+-------------------------+---------+--------+---------+-------------+
| GOR                     | 36.0    | 36.5   | 36.5    | 36.5        |
+-------------------------+---------+--------+---------+-------------+
| Cotton fiber production | 10.40   | 10.56  | 5.88    | 6.41        |
| (TMT)                   |         |        |         |             |
+-------------------------+---------+--------+---------+-------------+

Source: GSO, VCC and Post estimate

## 

## Vietnam's 2008/09 Cotton Production

According to agronomists and the industry, it will be difficult to
expand cotton growing areas in next cotton crop, or even over the next
few years. Rising food prices will encourage farmers to switch their
land to food crop rather than growing cotton. Therefore Post estimates
Vietnam's cotton area in 2008/09 will be only slightly increased to
13,000 tha, a somewhat better crop yield of 1.35 mt/ha. The cotton lint
production in the 2008/09 crop is estimated at 6.42 tmt or 28 thousand
bales (see P&D table)

# PRICES 

## Domestic prices

The Vietnam Cotton Company (VCC) has been buying seed cotton at an
average price of VND 8,600/kg (\$0.52/kg or \$0.24/lb), a 28%increase
over the previous year's prices. VCC is selling cotton fiber to textile
mills at VND 24,000-25,000/kg (\$1.44-1.49/kg or \$0.66-0.68/lb).

## Import prices

Vietnam's Customs Department reports the average import price of cotton
fiber for the first four months of 2008 was \$1.49/kg equivalent to US
cent 67.6/lb, a year-on-year increase of 20% as reflected in Table 6
below.

## Table 6: Vietnam's average cotton import prices

+----------------+---------+--------+------------+----------+--------+
| Cotton fiber   | **J     | **Ja   | **         | **Ja     | *      |
| Prices         | an-June | n-June | Jan-June** | n-June** | *Jan-A |
|                | 2004**  | 2005** |            |          | pril** |
|                |         |        | **2006**   | **2007** |        |
|                |         |        |            |          | **     |
|                |         |        |            |          | 2008** |
+----------------+---------+--------+------------+----------+--------+
| \$/kg          | 1.4     | 1.1    | 1.18       | 1.21     | 1.49   |
+----------------+---------+--------+------------+----------+--------+
| cents/lb       | 0.635   | 0.499  | 0.535      | 0.562    | 0.676  |
+----------------+---------+--------+------------+----------+--------+

Source: trade sources *(VND16,600 to \$1 as of May 30, 2008)*

Current indicative offer prices (CIF Ho Chi Minh City Port) for West
African cotton (equivalent to Strict Middling 1⅛") and U.S. cotton (EMOT
Fibermax GC 21-2-36 G5) are \$0.75/lb and \$0.77/lb, respectively.
Traders noted that offer prices for U.S. cotton have softened recently,
improving the prospects for selling U.S. cotton to Vietnam in the coming
months. This may however be somewhat constrained by current high
interest rates of 18% p.a. for buyers' loans from Vietnamese banks.

# TRADE

Customs Office data indicate that in MY 2006/07, Vietnam imported over
224 thousand metric tons (987 thousand bales) of cotton fiber, valued at
\$279 million, which suggests a rate of \$1.24/kg or \$0.56/lb. Cotton
imports for the first 9 months (August--April) of MY 2007/08 were 178
thousand metric tons or 784 thousand bales, a year-on-year increase of
11% in response to strong demand from the textile industry (Table 7).

Cotton imports for 2007/08 are expected to increase by 5 to7 percent.
Post estimates Vietnam's 2007/2008 cotton imports will increase to 240
thousand metric tons (1.058 million bales) to keep pace with increasing
demand from Vietnam's vibrant and expanding textile industry.

## Table 7: Vietnam's cotton imports, MY2006/07 and 2007/08 

## 

  --------------- ------------- ------------- ----------- ------------------- ------------- -----------
                  \'2006/07                               \'2007/08                         

   MY begins      8/1/2006                                8/1/2007                          

                  Quantity (mt) Value         Price       Quantity (mt)       Value         Price
                                (\$1,000)     (\$/mt)                         (\$1,000)     (\$/mt)

  August          16,420        20,065        1,222       13,500              17,190        1,273

  September       17,000        20,995        1,235       19,000              24,450        1,287

  October         24,850        31,560        1,270       17,000              24,000        1,412

  November        16,000        20,112        1,257       14,000              18,350        1,311

  December        16,600        20,883        1,258       14,300              19,200        1,343

  January         23,220        28,175        1,213       28,000              40,000        1,429

  February        17,110        20,961        1,225       22,500              33,600        1,493

  March           17,382        21,344        1,228       24,500              36,800        1,502

  April           13,504        16,925        1,253       25,350              39,700        1,566

  May             18,465        23,500        1,273       n/a                 n/a            

  June            20,500        25,400        1,239       n/a                 n/a            

  July            23,150        29,009        1,253       n/a                 n/a            

  **Total         **162,086**   **201,020**   **1,240**   **178,150**         **253,290**   **1,422**
  (Aug-April)**                                                                             

  **Total**       **224,201**   **278,929**   **1,244**   **240,000^\*\*^**   ** **         ** **
  --------------- ------------- ------------- ----------- ------------------- ------------- -----------

Source: Customs Office and FAS estimates

^\*\*^ estimated data

## Vietnam's Primary Cotton Suppliers

Table 8 provides estimates of Vietnam's cotton imports for calendar
years 2004 to 2007. In 2007, Vietnam imported around 211 thousand metric
tons (tmt) of cotton, 11% more than the year prior. The United States,
for the first time, was the largest single supplier of cotton to Vietnam
in 2007 with over 66 tmt, which accounted for almost one third of
Vietnam's total cotton imports. For the previous four years West Africa
had been the largest single supplier, but in 2007, cotton imports from
West Africa totaled 54 tmt or 25.8 percent, making it the second largest
supplier. India ranked third with a market share of 12.7%.

## 

## 

## Table 8: Sources for Vietnam's Cotton Imports, 2004-2007

  ----------------- ------------- ------------- ------------- -------------
  Country/Region    **2004**      **2005**      **2006**      **2007**

  West Africa       70,660        66,000        62,500        54,454

  USA               43,618        39,000        37,771        66,713

  Taiwan            n/a           n/a           n/a           15,278

  India             3,125         8,500         34,720        26,790

  Mexico            5,028         6,000         8,500         2,751

  Indonesia         n/a           n/a           n/a           2,037

  CIS               1,560         6,000         6,500         5,509

  Brazil            n/a           n/a           n/a           5,202

  Australia         n/a           2,500         2,800         1,962

  Korea             n/a           n/a           n/a           1,828

  Pakistan          n/a           n/a           2,200         1,595

  Iran              n/a           n/a           1,800         1,396

  Syria             652           894           n/a            n/a

  China             285           1,432         500           3,109

  Turkey            n/a           n/a           n/a           983

  Canada            n/a           n/a           n/a           502

  unknown           10,972        22,000        32,709        21,002

  TOTAL             **135,900**   **150,000**   **190,000**   **211,111**
  ----------------- ------------- ------------- ------------- -------------

Source: Vietnam Customs, trade sources

## Table 9: U.S. cotton exports to Vietnam 

  --------------- ---------- ---------- ---------- ---------- --------------------
                  **2004**   **2005**   **2006**   **2007**   **2008 (Jan-Marc.)**

  Quantity (mt)   43,882     37,967     36,701     66,713     21,201

  Value (\$1,000) 66,458     46,647     45,864     88,216     32,519
  --------------- ---------- ---------- ---------- ---------- --------------------

Source: BICO, US Department of Commerce, U.S. Census Bureau, and Foreign
Trade Statistics

# 

# CONSUMPTION

Vietnam's domestic cotton consumption continues to increase to meet
strong demand from the expanding textile industry. Demand for textiles
is strong, both for domestic use and for export. Domestic cotton
consumption continues to increase at an average rate of 10-15% per year.
Post estimates domestic consumption for 2007/08 will increase by around
14 to 15% to 1,058 thousand bales (239 tmt) from last year's consumption
of 925 thousand bales (210 tmt).

# POLICY

## Tariff on Cotton

There is no tariff on imported cotton, but there is a 10% value added
tax.

## Vietnam approves strategy for garment and textile development through 2020

## 

On March 14, 2008, Prime Minister Nguyen Tan Dung signed Decree
36/2008/QD-TTg to promulgate Vietnam's strategy for the development of
the garment and textile industry to 2015 and 2020. Included are
ambitious targets to grow the industry at increased production rates of
16-18% from 2008 to 2010 and 12-14% from 2011 to 2020. There is also
provision in this scheme to increase local cotton production through
capital investments in irrigation and other inputs so as to produce
about 20 tmt of cotton lint in 2010; 40 tmt in 2015 and 60 tmt in
2020.With regard to exports, Vietnam expects an annual growth of 20%
between 2008 and 2010, and continued growth at 15% annually between 2011
and 2020.

## Biotech Cotton in Vietnam

The Ministry of Agriculture and Rural Development (MARD) has completed
draft regulations for field trials and biosafety management of biotech
crops. [VM8005](http://intranetapps/GainFiles/200801/146293488.pdf)
These regulations were reported to WTO in January 2008 and MARD has now
completed its revisions, after taking into account the comments from
various countries including the United States. The final regulations
have not yet been approved. Reportedly as much as 80 percent of the
commercial cotton production in Vietnam may be Bt cotton. It is
uncertain how farmers acquired the seeds as there is currently no legal
trade of GM seeds. Specific data on Bt cotton are unavailable.

#