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China Continues to Lose U.S. Apparel Import Share to Vietnam and Bangladesh

Apparel imports from Vietnam and Bangladesh have grown at double-digit rates so far in 2013, allowing the two countries to widen their share gains in U.S. apparel from both China and the CAFTA-DR countries.

Total apparel imports have grown 3.9% on a dollar basis through October compared to the first ten  months of last year. Total unit volume, measured on a square meter equivalent basis, has increased 5.3% in the year-to-date period, driving the average cost per SME lower by 1.3%.

Apparel imports from Vietnam have totaled almost $6.9 billion year-to-date, according to the most recent data published by the US Department of Commerce’s Office of Textiles and Apparel (OTEXA), and have grown by over 13%, six times faster than those from China so far this year on a dollar basis, though the total volume is just over a quarter the size of China’s.

Vietnam’s year-to-date share of U.S. imported apparel is 10.1%, a gain of .8 percentage points of market share so far this year compared to the same period in 2012. The cost per SME of apparel imported from Vietnam has edged down only negligibly.

Vietnam has maintained its strong number two position thanks to increases in men’s cotton knit and women’s cotton woven tops, women’s cotton pants, men’s and women’s manmade fiber shirts and blouses, men’s and women’s manmade fiber pants, and manmade fiber dresses. There were decreases in some categories of innerwear (bras and nightgowns) but increases in others (underwear and pajamas).

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Total apparel imports from Bangladesh so far this year are $4.3 billion, up 12% from last year. The cost per SME of apparel imported from Bangladesh fell by 1% in the month. Bangladesh’s share of U.S. apparel imports for the first ten months of 2013 is 6.3%, a gain of .5 percentage points over the same period in 2012.

Bangladesh is now the third largest source of U.S. apparel, having replaced Indonesia in the number three spot on both a dollar and unit basis. Key product categories from Bangladesh include men’s woven cotton shirts, and men’s and women’s cotton and manmade fiber pants. However, recent legislation in Bangladesh that significantly increased the minimum wage there might alter considerably the country’s cost advantage vis-à-vis China and Vietnam, and could slow its growth.

U.S. apparel imports from China totaled $25.5 billion through October. Year-to-date units (on a square meter equivalent basis) rose 4.8%, driving the cost per unit lower by a higher-than-average 2.3%. China’s share of U.S. apparel imports is 37.5%, .6 percentage points behind the same period last year.

Product categories from China that have seen the biggest increases so far this year include women’s and men’s manmade fiber knit tops, women’s cotton tops, hosiery, manmade fiber bras, and other intimate apparel. These increases were offset by declines in many other categories, including outerwear and cotton and manmade fiber skirts and dresses. Women’s cotton knit tops and pants remain among the largest categories, and have seen above-average growth on a dollar basis so far this year.

Sri Lanka has accelerated its apparel exports to the U.S. So far this year, shipping over $1.2 billion dollars worth of apparel, 10.3% ahead of last year, and the second fastest growth rate after Vietnam’s, putting it ahead of Pakistan as one of the top U.S. trading partners in dollar volume. One reason for this is a 3.4% fall in the value of the Sri Lankan rupee compared to the U.S. dollar. Key product categories from Sri Lanka include women’s bras and men’s and women’s cotton pants, two areas in which Sri Lankan clothing makers have developed specific capabilities.

Mexico, Honduras, Cambodia and Indonesia have suffered significant share losses in U.S. apparel as well. CAFTA has lost share to South Asia and ASEAN. CBI imports, which are up by double digits on both a dollar and unit basis but only slightly on a share basis, are almost exclusively cotton tee shirts and underwear from Haiti.