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Denim Imports Show Signs of a Shifting Sourcing Strategy

The denim industry has become a microcosm of the diversification of apparel sourcing catalyzed by the tariff-infused trade war between the U.S. and China.

Asian sourcing powerhouses Bangladesh, Vietnam, Cambodia and India all posted double-digit percentage gains for U.S. imports of blue denim apparel for the year to date through November, according to belated data released by the U.S. Commerce Department’s Office of Textiles & Apparel (OTEXA).

The report, delayed roughly one month due to the partial federal government shutdown, revealed that imports of the category–95 percent of which are jeans–from China increased just 1.4 percent in value to $871.97 million the first 11 months of 2018. This keeps China in the top supplier slot, but leaves many countries quickly gaining ground.

In the same period, denim apparel imports from Vietnam jumped 44.53 percent to $277.37 million, while Bangladesh’s shipments rose 12.34 percent to $536.54 million. Imports from Pakistan gained 12.18 percent to $227.6 million, Cambodia’s shipments increased 23.65 percent and imports from India rose 45.58 percent to $34.01 million. Imports from high-end supplier Japan were up 13.16 percent for a value of $18.66 million.

Speaking on a panel at the recent Bluezone in Munich, designer Shirley Zheng of House of Gold, which operates denim mills in China, said, “we definitely took a little hit” from the U.S.-China trade war.

While the mill’s European customers are still buying textiles from China, she said prices for packaging and manufacturing in China are getting too high for most, so House of Gold is looking outside of China for large-scale production in countries like Pakistan, Bangladesh, Vietnam and Mauritius.

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The broader approach to sourcing of denim magnifies the overall production strategies for apparel away from China’a dominance just a few years ago to include a wider range of options to control prices, incorporate speed-to-market and include more local for local manufacturing.

The Western Hemisphere is a prime example of those trends and remains a player in denim production.  Imports to the U.S. from the Western Hemisphere increased 3.87 percent in the period to $957.81 million.

Mexico remains the No. 2 denim apparel supplier with imports in the first 11 months of 2018 rising 3.1 percent to $757.81 million. This despite the geopolitical gyrations surrounding renegotiation of the North American Free Trade Agreement into the U.S.-Mexico-Canada-Agreement, which is pending approval by legislators in the three countries.

Nicaragua’s shipments were up 10.09 percent to $100.93 million, imports from Colombia advanced 39.61 percent to $56.81 million and Guatemala’s shipments rose 17.16 percent to $30.08 million.

African countries also continue to gain momentum as denim apparel suppliers. Imports from Lesotho rose 9.88 percent in the 11 months to $75.56 million, while Madagascar’s shipments were up 11.68 percent to $22.21 million and Tanzania’s increased 31.78 percent to reach $11.85 million in value.