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Peru Hit Hard By Loss of Italian Business

Peru’s textiles and apparel industry is struggling as rising coronavirus cases in key U.S. and European markets dampen exports and fuel huge job losses, industry leaders tell Souring Journal.

“We have lost 150,000 jobs and our exports declined 25 percent to 30 percent last year to $300 million,” Raul Ortiz, who heads the National Industries Association (SNI)’s textiles unit, said. “Our fine wool and fabric sales to the U.S. and Europe have collapsed.”

Peru, known for its alpaca and vicuna fabrics to make high-end cashmere and wool sweaters, as well as pima cotton for fine polos, also recently lost orders with large customers from pandemic-stricken Italy, which buys the South American nation’s fabrics to make luxury apparel, putting many manufacturers on tenterhooks and forcing them to fire thousands of workers.

“We now have 550,000 workers instead of 700,000 before the pandemic,” Ortiz said.

2020 saw 40 to 50 small and midsize sewing shops shutter their business while five or six large manufacturers–most notably fabrics maker Universal Textile–also closed shop amid plunging orders, he added.

Meanwhile, Chinese and Indian imports continue to flood the Peruvian market. They surged as much as 15 percent last year and 56 percent in April alone, as the country imposed lockdowns to combat Covid-19, squeezing local firms and denting retail sales.

SNI, Peru’s Production Ministry, and several trade bodies have joined forces to ask Lima to launch anti-dumping measures against Asian shipments, which allegedly enter the country at sub-value prices, according to Ortiz.

“You have tons of finished cotton shirts coming in at lower prices than cotton fabric,” he said, adding that the industry plans to send antitrust watchdog Indecopy a formal request for the protective measures next week. The government is then expected to review the issue and decide on taking action within weeks, he said.

Ortiz would not venture a forecast for exports this year but noted business is unlikely to rise much amid uncertainty surrounding U.S. and European demand in the face new Covid-19 strains and lockdowns to contain them.