To ease COVID triggered supply chain woes, fashion brands in the US plan to step up orders to the South this year. This may boost apparel exports from Latin America even as suppliers may face certain raw material shortages. As per News in America report, apparel sales in Latin American countries like Mexico are likely to rise 10 per cent this year as more US buyers engage in near sourcing. This will boost demand for Central American and Columbian garments, says Raul Garcia, Head, Mexico WTC.

Garcia predicts, garment shipments from Mexico may hit $7 billion this year. Most of this growth will be dominated by increasing sales of knitwear, T-shirts, polo shirts, lingerie, underwear and socks, he adds.

Denim exports to surge

This year, denim exports may also increase sharply, says Garcia. This will benefit denim makers in La Laguna industrial hub who manufacture make denims for brands like Levi’s and Wrangler, he adds. However, lack of synthetic yarn and thread may make it difficult for suppliers to meet orders. To mitigate this, the industry plans to negotiate more flexible rules of origin under the United States-Mexico-Canada Agreement (USMCA), a free-trade deal between the US and Canada, adds Garcia.

Suppliers face 15 per cent shortage in fabrics

Latin American suppliers are currently facing a 15 per cent fabric shortage in supplies. To meet requirements, they plan to boost imports from China, India and Pakistan by adjusting the yarn-forward rule, notes Garcia. Central American exporters are already stepping up shipments to the US by 10 per cent, says Juan Sánchez, Owner, Texsun. However, like Mexico, faces raw material shortages. Suppliers in Gautemala are facing yarn shortages as a result of US ban on yarn purchase from China’s Xianjiang Uyghur Autonomous Region, notes Sanchez. Despite this, US brands continue to step up investments in Latin America, says Sanchez. And most investments are being directed to textiles, yarn spinning and apparels. Investments in sportswear, notably custom or logowear are also increasing, adds Sanchez. Rising capacity and sophistication boost supplies

In the past decade, Latin American companies have become more sophisticated and added capacities, says Sanchez. Their response times have reduced to just eight- to 10-weeks of bagging an order compared to 12 to 15 weeks five years ago, he adds further. In 2021, garment shipments from Colombia grew 50 per cent to $900 million informed Lavia Santoro, President, ProColombia, an export lobby speaking at Colombiatex de las Américas textiles fair last month. The two-day event had attracted around 270 companies and generated $6.4 million in potential sourcing contracts.

Brazil also witnessed 17 per cent surge in textile and garment shipments this year as a weak real boosted orders from key buyers in Argentina, the US and Paraguay. This year, garment shipments from Brazil are likely to surge 2 per cent due to COVID related uncertainty, adds Pimentel. However, demand for beachwear and denims may rise during in summer, boosting exports. The situation may become clearer in the next two to three months, he concludes.