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Denim Sourcing Scene Shifts as Political Forces Take Toll

As one door closes, another one opens.

With the U.S. closing its door on denim manufacturing and open trade, some traditional suppliers are seeing their market share shrink and others are using the opportunity to take their place.

The U.S. imported more jeans in the first half of 2018 compared to last year. This is likely attributed to the popularity of the most American of wardrobe staples and the lack of U.S. manufacturers, with the closing of key domestic factories in the last year.

Overall denim jeans imports increased 9.2% to reach $1.66 billion in value for the first six months, according to data from the Office of Textiles and Apparel, OTEXA.

The shifting sourcing scene for denim jeans is seeing Made in Vietnam, Bangladesh, Cambodia and several Central American countries increase in popularity, while Mexico and China as country of origin is downtrending. Some African nations are also making inroads as suppliers for the denim sector.

China still shipped the most women’s and girls’ product, increasing 2.88% to $291.89 million, while its men’s and boy’s shipments rose 6.35% to $98.97 million and a third place spot in the top suppliers. The somewhat tepid gains are likely due to companies limiting their exposure during the tariff crisis.

Top men’s and boys’ supplier Mexico saw its shipments to the U.S. fall 2.22% to $315 million and drop 5.21% in women’s and girls’ to $44.07 million. Mexico’s decline as a key supplier for denim has been ongoing but exacerbated by concern over the North American Free Trade Agreement’s (NAFTA) status, and as companies wanting to maintain Western Hemisphere production build relationships with countries falling under the Central American Free Trade Agreement (CAFTA). By doing this, they keep the duty-free status and avoid the potential risks of a NAFTA collapse.

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Among the CAFTA countries, Guatemala, Colombia and Nicaragua all showed signs of becoming key players in jeans manufacturing. Imports from Guatemala of women’s and girls’ denim bottoms rose 57.13% to $10.14 million in the first half, Colombia’s shipments increased 60.96% to $10.24 million and Nicaragua’s grew 14.41% to $9.5 million. In men’s and boys’, imports from Colombia jumped 49.3% to $18.93 million in the period, but Nicaragua’s shipments fell 9.71% to $33.13 million.

Among the Asian powerhouses, Vietnam, Bangladesh and Cambodia are establishing themselves as major suppliers of jeans to the U.S. market. In the first half, Bangladesh held the No. 2 spot as a supplier of both women’s and men’s denim to the U.S. In men’s and boys’, Bangladesh’s shipments increased 16.88% to $132.75 million, while women’s and girls’ rose 16.19% to $104.17 million.

Vietnam’s shipments of women’s and girls’ jeans jumped 46.9% to $75.43 million in the period, while men’s and boys’ rose 33.3% to $32.23 million. Imports of Cambodia’s women’s and girls’ jeans grew 32.7% to $40.2 million, as the country’s shipments of men’s and boy’s product were up 35.19% to $9.64 million.

Pakistan, which counts many top denim mills and vertical operations, remains a key source for denim jeans, but its results in the first half were mixed. Shipments of women’s and girls’ blue jeans were up 24.1% to $61.54 million, but imports of men’s and boy’s declined 0.47% to $40.97 million.

Turkey, which also has a portfolio of top denim mills and jeans makers—though it has fallen on difficult economic and political times of late—saw its shipments to the U.S. of women’s and girls’ jeans increase 25 percent to $14.17 million, but men’s and boy’s fell 16.09% to $7.67 million.

Several African nations are also showing indications of becoming players in the denim market. Imports of Egypt’s women’s and girls’ jeans rose 9.34% to $29.79 million and its men’s and boys’ shipments increased 5.31% to $42.94 million. Lesotho’s men’s and boy’s jeans shipments were up 2.14% to $30.45 million, while women’s and girls’ product increased 15.63% to $6.09 million. In men’s and boys, jeans imports from Madagascar in the period rose 11.62% to $8.93 million.