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Global Jeans Sourcing Showed Signs of Major Disruptions in January

It’s only one month and historically not one of the biggest for shipping, but clear new patterns of jeans sourcing began to set in during January.

There were many anomalies in play–like companies getting goods early ahead of threatened tariffs hikes on Chinese imports, plus the outbreak of coronavirus in China and elsewhere, and the Lunar New Year factory shutdowns in China that impacted supply chains throughout Asia.

With that said, the first month of the year saw a decline in overall denim apparel imports, 97 percent of which are jeans, that indicate the sector could be in for a difficult cycle. As Tricia Carey, director of global business development for denim at Lenzing, said, “There is a general market slowdown.”

A clear example of that is Wrangler and Lee parent company Kontoor Bands, which saw U.S. revenue in the fourth quarter fall 8 percent to $517 million, a decline it blamed partially on softness in broader retailer traffic during the holiday period partially offset by growth in digital, up 52 percent.

Jeans imports from the world to the U.S. fell 13.29 percent in value to $265.99 million in January compared to $306.78 million in the same month in 2019, according to the Commerce Department’s Office of Textiles & Apparel (OTEXA). For the 12 months through January, denim apparel imports were down 4.43 percent to $3.69 billion, backing up the down cycle conclusion, as there is little jeans manufacturing in the U.S. to feed domestic consumption.

There were major shifts among the Top 10 suppliers, patterns for which began to emerge last year and seem to have been magnified under the January microscope. This was particularly true in the four most prolific jeans-making countries.

U.S. jeans imports from No.1 supplier Mexico dropped 32.28 percent in January to $41.47 million in value, according to OTEXA data, which could be indicative of the slowdown in demand. At the same time, China’s shipments plummeted 60.17 percent to $33.94 million, clearly brought on by a combination of factors–the overall flight from China as a result of the U.S.-China trade war, the month’s holiday factory closings and the COVID-19 crisis. For the year through January, imports from Mexico decreased 5 percent to $782.78 million, while China’s shipments declined 31.05 percent to $644.66 million.

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The expertise and relative stability of the next two top supplies–Bangladesh and Vietnam–led to major gains, at least for the one month. Imports from third-place Bangladesh jumped 45.18 percent to $51.87 million in January. For the 12-month period, imports from Bangladesh increased 6.96 percent to $601.86 million and shipments from Vietnam rose 27.61 percent to $384.51 million, according to OTEXA.

“We’re seeing the surges from the production that moved from China to a number of different places,” Julia Hughes, president of the U.S. Fashion Industry Association, said.

Other major gainers in January among the top suppliers were Egypt, up 25.33 percent to $15.16 million; Cambodia, jumping 91.37 percent to $16.1 million, and Sri Lanka, gaining 18.22 percent to $6 million.

Top supplier countries with significant declines in the month were Nicaragua, with imports down 18.46 percent to $5.14 million, and Indonesia, falling 24.34 percent to $4.77 million. Pakistan held steady with an increase in shipments of 1.57 percent to $21.4 million for the month.