Exports of textile to US surge 12.4%

April 22, 2008 - El Salvador

According to data from the Department of Commerce of the United States, El Salvador registered an annual growth in export values in his bid textiles to the United States to 5.1% in 2007 and experienced a surge of 12.4% from January to February of this year in relation to same period last year.

China, by contrast (dominant country in this industry globally) for the first time since the abolition of quotas on textile trade, experienced a negative change in their clothing exports to the United States between the period January-February 2008 , said the Minister of Economy, Yolanda de Gavidia.

Some of the key factors that have diminished the relative competitiveness of the Asian country were: the appreciation of the yuan and the rapid increase in production costs, including costs and labor shortages, ironically factors given by the same economic boom, the official explained.

He added that in the case of El Salvador, following its dollarization, the country goes hand in hand with the depreciation of the dollar, which represents advantages in export.

Another point in favour, is the entry into force of the FTA with the United States (CAFTA-DR by its initials in English) and expanding accumulation of inputs (cloth) that give rise, especially from other partner countries, such as Mexico.

It is noteworthy that the total imports of garments have experienced a slight decline in recent months in the United States, coinciding with the economic slowdown that prevails in this country, but El Salvador has been positioned in market segments in which it have enabled a gradual recovery of its market share, considered the Minister for Gavidia.

The Minister explained that the strategy implemented with the textile sector is already yielding results, and that after two years hard for the industry it has consolidated its growth. Urged to take advantage that we have as a country in relation to China.

The Minister said that although the recession in the United States could affect El Salvador, the fact that the textile sector and in this consolidated gives the pattern to exploit some advantages that other countries do not have as is the case with China. In this regard stated that the proximity could be an advantage for the textile and garment orders because they are faster.

Hence, the minister felt that companies like Fruit of the Loom, Hanes Brands and Pettenati are betting invest in the sector with a clear vision of the long term, while he reflected that the recession in the United States would be only a "bump in the road "and therefore should not be lost sight and the potential for long-term investment in the field.

According to a press release internationally, other Asian countries maintained their growth textiles to the USA, especially Vietnam, which recorded a positive change of 43% in the first two months of this year, registering a 7.5% Bangladesh and India a 8.26% during the same period.

While for the latter, there are already signs that the appreciation of its currency (rupiah) is negatively affecting the garment industry in India, where they estimate that 350000 jobs have been lost. Another country in decline is Pakistan.

By the close of the year 2007, export figures in textiles and clothing in El Salvador reached $ 1455 million to the United States, according to preliminary data of the Central Reserve Bank of El Salvador.

Among the Salvadorans export textile products fastest growing manifest clothing and fibers with higher value added, such as:
• Shelters
• Bedding
• Suéteres of synthetic fibres
• Clothing and accessories for baby
• Synthetic Fabric

Despite the growth of the maquila textile remains is important to view the diversification of markets, especially with the advantages that would have the Association Agreement with the European Union; region as a whole, exceeds the market value of American imports of garments dress, remarked Minister Gavidia.