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US textile buyers diversifying their sourcing base

"For the past many years, two of the biggest global textile buyers, US and European, have been following the China + 1 or China + many sourcing strategies. Among these +1 or +many would be Asian countries, viz., Bangladesh, Vietnam, India, Sri Lanka. However, recent OTEXA statistics reveal even though US imports from these countries remain the highest they have not clocked in the highest growth rates. Rather imports have enhanced from Turkey, Myanmar, Cambodia, AGOA countries for mass apparel as well as from Italy, France, and Spain. The reason for this is the consumers’ growing thrust on high value clothing rather than mass produced low end commodities."

 

US textile buyers diversifying their sourcing base 002For the past many years, two of the biggest global textile buyers, US and European, have been following the China + 1 or China + many sourcing strategies. Among these +1 or +many would be Asian countries, viz., Bangladesh, Vietnam, India, Sri Lanka. However, recent OTEXA statistics reveal even though US imports from these countries remain the highest they have not clocked in the highest growth rates. Rather imports have enhanced from Turkey, Myanmar, Cambodia, AGOA countries for mass apparel as well as from Italy, France, and Spain. The reason for this is the consumers’ growing thrust on high value clothing rather than mass produced low end commodities.

China’s dominance stays

US apparel imports from China from January-March 2018, at $5802.021 million, were 0.87 per cent higher than in the same period of 2017. In volumeUS textile buyers diversifying their sourcing base 001 terms, Chinese exports to the US amounted to 2482.089 million SME, an increase of 3.74 per cent during the period under review. In 2017, China’s apparel exports to the US fell 3.17 per cent to $27030.289 million, which was still 33.67 per cent of total apparel imports of the US in terms of value, and 42 per cent in volume. In the first three months of 2018, China’s share remains the highest, but the share seems to be on downfall. In value, China's share in US apparel imports was 30.17 per cent, and in volume, 38 per cent. If experts are to be believed, Chinese imports are set to fall further owing to ongoing tariff and trade wars. Having said that even after an overall 25 per cent tariff increase by the US on imports of Chinese apparel, China will still be far more competitive than its counterparts. Vietnam, Indonesia and India will still remain costly affairs barring Bangladesh, which is set to boost the country’s exports in near term.

Other countries’ share

Vietnam is the second largest apparel supplier to the US. Apparel inports from Vietnam during January-March 2018 were $2858.357 million, an increase of 3.32 per cent compared to the same period in 2017. The US imported garments worth $1356.166 million from Bangladesh during January-March 2018, a drop of 0.92 per cent. In 2017, imports from Bangladesh were down by 4.46 per cent. The fourth largest supplier to the US market, Indonesia, has fell further 5.78 per cent to $1149.891 million. In 2017, imports were Indonesia were down 3 per cent. While India’s share remained stagnant. During January-March 2018, US imports of apparel from India at $1036.066 million, were marginally lower by 0.79 per cent, compared to CPLY. In 2017, India’s apparel exports to the US registered an increase of 1.17 per cent.

Emerging sourcing destinations

Latest statistics indicate Cambodia can emerge as an important apparel sourcing destination for the US. While it offers the lowest prices, it does not have the capacities to match the demand of the US buyers. US imports from Cambodia went up 12.52 per cent to $587.715 million. In volume terms too, imports registered a similar increase of 12.75 per cent to 262.845 million SME. US imports from Myanmar are quite negligible but growing at a fast pace. During January-March 2018, US apparel imports from Myanmar amounted to $33.785 million. Moreover, there has been an increased sourcing pattern from Turkey over the years. During January-March, US apparel imports from Turkey at $147.996 million were 21.75 per cent higher than in the CPLY. In 2017, the US imported apparel worth US$ 526.546 million from Turkey, which were 11.51 per cent higher than in 2016.

Egypt also indicated high demand. During January-Marcy 2018, imports from Egypt were up 15.78 per cent, to $203.355. In 2017, imports from Egypt at $726.547 climbed 5.13 per cent compared to 2016. Imports from Italy rose 20.52 per cent during the first three months of 2018. Imports from France recorded a growth of 11.24 per cent, to $41.756 million. Top exporting countries from AGOA include: Kenya, Lesotho, Madagascar, Mauritania, Morocco, Ethiopia and Tanzania. While most of these countries registered double-digit export growth to the US this year, Ethiopia’s apparel exports grew 101.58 per cent during January-March 2018. US buyers imported apparel worth $21.955 million from Ethiopia.

 
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