May 19, 2011

Bangladesh and Cambodia are set to be the USA’s fastest growing clothing suppliers in 2011


Bangladesh and Cambodia are set to be the fastest growing suppliers to the US clothing import market in 2011, according to a report, Trade and trade policy: the US clothing import market, published in the latest issue of Global Apparel Markets by the business information company Textiles Intelligence.

El Salvador and Honduras will also post strong growth, after achieving the fastest volume growth in 2010.

Significantly, Bangladesh, Cambodia, El Salvador and Honduras — along with Pakistan — were the cheapest of the USA’s leading ten clothing suppliers in 2010, and their success reflects the fact that US buyers continued to seek out low cost supplies as the recovery in the US economy remained tentative.

Moreover, all four countries have continued to achieve success in the first two months of 2011. Bangladesh was the fastest growing supplier as US imports from the country soared in value by 39%. Cambodia was the second fastest growing supplier as US buyers increased their purchases by 31%.

Impressive growth was also recorded in the case of El Salvador and Honduras with supplies to the USA up by 23% and 19% respectively. But growth in the case of El Salvador was slower than in 2010 and in the case of Honduras it remained the same — which is a sign that buyers are placing bigger orders with manufacturers in Asia as consumer confidence returns.

All four countries appear to have achieved growth in 2010 by supplying the US market at lower prices than their competitors — and this looks set to continue in 2011.

Admittedly, all four countries increased their prices in the first two months of 2011 — but so did their competitors, in response to the recent surge in raw material prices. In fact there was an increase in the average price of US clothing imports as a whole, following price falls in the previous four years.

Prices are expected to increase for much of 2011. Although the cotton price started to fall in April 2011, many clothing buyers have placed forward orders at prices which reflect the high cotton prices prevailing in 2010 and early 2011.

With margins stretched to the limit, all participants in the supply chain will cut costs wherever they can in an attempt to absorb the increase in raw material costs but it seems inevitable that much of it will be passed down the supply chain to the consumer.


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