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Latin American Apparel Exports Seen Growing 10%

Feb, 25, 2022 Posted by Gabriel Malheiros

Week 202208

Latin America’s apparel exports are expected to increase sharply this year as U.S. brands boost orders south of the border to help ease supply chain woes. However, a dearth of raw materials threatens to scupper those gains, experts said.

“We estimate a 10 percent increase in apparel sales as U.S. buyers continue to engage in near sourcing and seek competitive places such as Mexico, which is only 24 hours away by truck,” said industry expert Raúl García, adding that this phenomenon is also lifting demand for Central American and Colombian garments.

For Mexico specifically, Garcia predicted shipments could hit $7 billion this year after rising 6 to 8 percent in 2021. Brisk sales of knitwear, T-shirts, polo shirts, lingerie, underwear and socks are seen fueling those gains, he added.

He noted, however, that a lack of fabric, notably synthetic yarn and thread, is making it hard for suppliers to meet orders. As a result, the industry is moving to negotiate more flexible rules of origin under the United States-Mexico-Canada Agreement, or USMCA, free-trade deal with the U.S. and Canada.

“We have a 15 percent fabric deficit currently, though that’s better than the 30 percent we had last June,” added Garcia. “Suppliers are looking for an adjustment to the yarn-forward rule to bring more fabric from China or countries like India and Pakistan.”

Buyers’ interest in South America also remains firm. In Colombia, for example, garment shipments grew 50 percent to $900 million in 2021, export lobby ProColombia President Lavia Santoro said during the latest Colombiatex de las Américas textiles fair in Medellín. The two-day event last month drew 270 companies to source a range of textiles, including technical fabrics with antibacterial, solar shielding and impermeable properties, among others.

The event generated $6.4 million in potential sourcing contracts. There were 1,100 international buyers, mainly from the U.S., Ecuador, Mexico and Peru.

Not to stay behind, Brazil recently saw a spurt of orders with textile and garment exports surging 17 percent last year as a weak real boosted orders from key buyers in Argentina, the U.S. and Paraguay. That compares to a 27 percent decline to $151 million in 2020 during the height of the pandemic.

“We are growing in apparel as brands move into the international market and retailers like Renner expand in Uruguay and Argentina,” said Fernando Pimentel, president of industry lobby Abit.

This year, however, shipments could be much more subdued, rising around 2 percent as Omicron and other COVID-19 variants add uncertainty to the order book, according to Pimentel.

However, demand for Brazilian staples such as beachwear and denim could rise more than expected during the European summer. That, and the further stabilization of COVID-19 in the U.S., could prop up exports, he added.

Source: wwd

To read the full original article, please access:

https://wwd.com/business-news/business-features/latin-american-apparel-exports-10-percent-1235075854/

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