According to the estimates of the textile and garment exporters of Thailand, the severe impact of the EU debt crisis could cause their exports to contract by 15 percent this year.
As per Thai Garment Manufacturers’ Association (TGMA) statistics, the country exported garments worth US$ 1.21 billion during the first five months of the current year, which is a year-on-year fall of 9.2 percent. The highest contraction of 22 percent was experienced in April, but then a recovery was seen in May.
Textile exports for the January-May period totalled US$ 1.75 billion, depicting a year-on-year fall of 18.8 percent. Besides other reasons, the decline in exports was also because buyers from Asia-Pacific market cut down their fabric purchases as their exports to the EU markets slowed down considerably.
Overall, Thailand shipped out US$ 2.96 billion worth of textiles and garments during January-May 2012, which is about 15.2 percent less than exports made during the corresponding period of 2011.
While the EU holds to be Thailand’s key garment export destination, considering debt problems faced by Italy, Spain, Greece and Ireland, TGMA envisages the flow of orders for garments from the EU to remain slow during September and October. Meanwhile, orders for children’s wear from Greece have already halted.
Last year, Thailand exported garments worth US$ 999 million to 27 EU member nations, which equalled almost 31 percent of the country’s total garment exports worth US$ 3.27 billion.
Textile exports for 2011 totalled US$ 4.89 billion, with Spain, Italy and France - Thailand’s key export destinations in the EU - accounting for 45 percent of the total exports to the region.
According to TGMA, the country’s textile and garment exports may contract by 15 percent during current year, mainly due to euro-zone debt crisis. Clothing exports alone are projected to shrink by seven to eight percent.
However, there has been a rise in apparel exports to the US, mainly due to a deceleration in value of baht.
In addition to rise in the daily minimum wage to 300 baht and labour crisis, higher prices of raw materials is also impeding the country’s textile and garment exports, causing the domestic companies to shift their production bases to China, Vietnam and Laos.
Fibre2fashion News Desk - India