Peru is eyeing the European market. The country’s share of exports to Europe is growing at 13.1 per cent, much faster than exports to the US, which is at 9.4 per cent.

Peruvian clothing manufacturers specialise in the manufacture of knitwear made of alpaca wool and Pima cotton. So far they produced mainly for the US market, but now are attracting the attention of European labels.

Peru’s textile industry is one of the country’s most important manufacturing industries, employing nearly 3,00,000 people. Manufacturers do not try to compete with major textile suppliers like Bangladesh or India, but are instead positioning themselves in the higher end clothing segment with high-quality native fibers like Pima cotton and also to an increasing degree in the area of sustainability. For many years, alpacas in Peru, which have been raised for their wool for thousands of years, were subject to a ban on exports. Today, nearly 80 per cent of the total alpaca population lives in Peru and produces 25,000 kilograms of wool a year. Communities in the Andes raise the animals; their wool is then collected, selected and classified by middlemen. They sell the wool to yarn manufacturers in Peru, who supply manufacturers in the country. As a result, value creation takes place mainly within a single country.