Textile and garment producers are struggling from a lack of export contracts and market difficulties due to the ongoing public debt crisis in the EU, said the Vietnam Textile and Apparel Association (Vitas).

Deputy chairman of Vitas Pham Xuan Hong said that only large textile and garment exporters have received contracts for the third quarter. Many small-and medium-sized producers have been forced to narrow production due to a lack of demand.

Hong said that consumption demands in the EU decreased sharply in past months, and export orders fell roughly 20-30 percent over the same period last year.

According to the General Statistics Office, the industry growth rate was only 8.7 percent in the first half of the year, much lower than the rising rate of 30 percent last year.

If the situation continued, textile and garment producers will be forced to make workers redundant, and roughly 20 percent of them will lose their jobs, Vitas said.

Hong said besides the reduction in export orders, local textile and garment producers, especially smaller enterprises, have also faced major challenges to meet with stricter regulations on quality and social responsibility required by European markets.

To meet the regulations, producers will have to pay higher input costs which will make it difficult to price their products competitively, Hong said.

Vietnamese textile and garment exporters are also having to compete with fierce competition from China , Cambodia , Bangladesh and Myanmar . Together with Cambodia and Bangladesh , Myanmar 's textile and garment exports to the EU will soon enjoy tax exemption.

The devaluation of the euro against the US dollar has also reduced profits for Vietnamese exporters who have to pay for imported raw materials from mainland China, Thailand and Taiwan in US dollars while receiving payment from European customers in euros.-VNA