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Garment exporters on razor's edge
22
Dec '08
Mauritius though a small country in the Indian Ocean, has a very vibrant textile and garment industry. The sector contributes 6.5 percent of GDP and generates employment for 11 percent of the country's workforce. It has exported US $550 million worth of products in the period January-September in 2008, thereby accounting for 42 percent of the island country's total exports.

But the global economic meltdown has now exporters from the sector worried. In the initial months of 2008, it was the rising crude oil prices resulting in a hike in key raw material prices which was affecting them. Now, the recessionary trends in their major markets are now giving them sleepless nights. To add to their woes, the beginning of 2009, heralds the end of the European Preferential Trade Deal.

The country's garment exporters supply clothing to top end apparel retailers across the European Union and the US. According to reports, sales of these retailers has slumped by as much as 10-15 percent and to compensate this loss in sales they are trying to get competitive prices from their suppliers, which is breaking the backs of the exporters. But the sector which is now already surviving on razor thin margins is unable to accede to the demands of its buyers.

The main reason being the appreciation of the Mauritian rupee against most of the global currencies in which trade is conducted by the exporting community. The Mauritian currency has appreciated sharply against both the Euro and the Pound which results in lower returns to the exporters. But the situation has somewhat improved in the current month, after the Central Bank of the country made some interest adjustments. But the exporters are not satisfied and want more rate cuts.

Fibre2fashion News Desk - India

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