The latest figures to come from the US Office of Textiles and Apparel (OTEXA) for April reveal Pakistan is becoming an increasingly important partner to the region, now overtaking Honduras and Mexico to become its seventh-largest supplier of apparel.

According to an analysis of OTEXA data, US apparel imports during April rose 29.73% on the same month last year to 2.68bn million square metres (MM2), with Bangladesh proving the most popular apparel sourcing destination during the month, with shipment growth of 51% year-on-year.

Of the top ten apparel suppliers to the US, only El Salvador saw shipment volumes decline.

US April imports —  number crunch

• Bangladesh booked the highest growth in apparel shipment volumes at 51% year-on-year to 288 MM2. Neighbouring India saw the next largest rise in shipment volumes at 43.36% to 167 MM2.
• Indonesia and Cambodia closely followed with rises of 40.97% and 40.01% respectively, to 159 MM2 and 133 M2.
• Pakistan saw the fifth-largest increase in shipment volumes during April at 38.17% to 88 MM2.
• China, the largest exporter of clothing to the US, saw shipment volumes grow 28.46% to 706 MM2. While US imports of apparel from China were lower than other destinations during the month, the other nations pale in comparison when looking at the overall figures in actual volume terms.
• Indeed, its closest competitor, Vietnam, booked shipment volume growth of 24.15% to 471 MM2.
• Meanwhile, Honduras saw a 14.58% year-on-year rise to 76 MM2, followed by a 0.4% rise in shipment volumes from Mexico to 70 MM2.
• El Salvador was the only country to experience a decline in apparel shipment volumes during April, with exports to the US falling 11.9% to 47 MM2 compared to the same month last year.

In value terms, the US imported $8.12bn worth of apparel in April, up 43.2% year-on-year.

Looking at the top three apparel importers to the US, apparel shipment value from China grew 39% to $1.36bn for the month. From Bangladesh, the US imported $820.5m worth of apparel, up 74.3% year-on-year. And from Vietnam, it imported $1.56bn worth of apparel goods, up 38.3% year-on-year.

According to a Just Style analysis of the OTEXA data, during 2021, Vietnam was the costliest destination for the US to source apparel coming in at $3.28 per unit, despite falling 0.9% year-on-year. China was the cheapest at $1.76, a year-on-year fall of 1.7%.

Total textiles and apparel shipment volumes from all sources to the US during April, meanwhile, were up 65.26% to 10.18bn MM2.

Again in actual volume terms, China leads the way at 2.80bn MM2. This is a 15.7% year-on-year rise. For textiles alone, global import volumes rose 83.17% to 7.50bn MM2 in April.

The fact that we see no notable growth from the Western Hemisphere could indicate that the Biden Administration’s vision to ramp up near-sourcing and reduce its reliance on other countries is still far from reality – well, at least where apparel is concerned.

But a vision we are seeing come to fruition, and at a reasonably accelerated rate, is the US’ desire to lower its leverage on China. Apparel imports have gradually declined from the superpower. The value of US apparel imports from China fell 21.3% on pre-pandemic levels.

Pakistan proves popular

On the other hand, Pakistan’s popularity when it comes to apparel sourcing has surged in recent months.

In terms of the actual amount it ships to the US, Pakistan’s share of the US apparel market is small. But it is growing.

In March, an analysis from Just Style revealed along with India, Pakistan has seen the largest increase in US apparel import market share during 2021 with an 11.4% rise giving it a 3.04% share of the market.

It’s attractive to buyers since it provides the fabrics the garment industry requires at competitive prices. As the industry is local, there are no shipping costs and despite the global logistics crisis, there are no added lead times.

Pakistan’s textile industry recognises that today their most important customer is the apparel industry. It has worked hard to meet the needs of the sector and provides quality goods at reasonable prices.

It offers flexible minimum order quantities (MOQ), which is an important service during these difficult times but will become even more important as the apparel industry moves away from basic commodities to higher-value-added fashion.

Another point of attraction is its increasing stability. The Pakistan government has ensured a level playing field between the local textile sector and the apparel industry, working with industry to limit disruption during the height of the Covid crisis, while still making every effort to limit new outbreaks.

The government has worked to solve electric power shortages and allowed duty-free access to new machinery. And its policies encourage factory development both by bringing new people into the industry but also by encouraging existing factories to expand.

And, after China, it is still the cheapest place for US buyers to source apparel from on a per-unit basis.

China’s per-unit price of garments was the lowest at US$1.76 from $1.79 a year earlier – a fall of 1.7%. Pakistan’s per-unit cost of apparel rose by 11.7% to $2.48 in 2021. 

A bright future for Bangladesh

Bangladesh, which also saw healthy shipment growth to the US in April, appears to be taking all the right steps to remain relevant to US apparel buyers.

Its focus on environmental and social sustainability has increased substantially.

At the recent Sustainable Apparel Forum in Dhaka, Tipu Munshi, the commerce minister, said he was committed to ensuring the green growth of Bangladesh’s apparel industry. While BGMEA president Faruque Hassan said: “Today our clothing factories are not only safer, but also have become more dynamic, modern, energy-efficient and environment-friendly. Bangladesh has by far the highest number of green garment factories in the world. US Green Building Council (USGBC) certified a total of 160 Bangladeshi factories as LEED (Leadership in Energy and Environmental Design), among them 48 are LEED platinum-rated. 40 out of the world’s top 100 garment factories are in Bangladesh. Moreover, 500 more factories are in the pipeline for certification.”

He added: “BGMEA joined the UN Fashion Industry Charter (UNFCCC) with an ambition to reduce GHG emissions by 30% by 2030.”

And in March, it took a step forward in eliminating child labour, ratifying the International Labour Organisation (ILO) Minimum Age Convention, 1973.

What the April numbers tell us about US apparel imports overall

Dr Sheng Lu, associate professor at the department of fashion and apparel studies at the University of Delaware, shares his thoughts on the latest data set:

“While US apparel imports continue to grow, the pace has significantly slowed down. Particularly, seasonally adjusted data shows that US apparel imports in April 2022 went up 2.8% in quantity and 3.0% in value from March 2022, much lower than 9.3% and 11.9% a month ago (i.e., March 2022 vs. February 2022). The notable slowed import growth reflects the negative impact of inflation on US consumers’ clothing spending. According to the Census, the value of US clothing store sales marginally went up by 0.8% in April 2022 from a month ago, also the lowest so far in 2022.

“Second, US apparel imports from China in April 2022 significantly dropped by 26.7% in quantity and 24.6% in value from March 2022 (seasonally adjusted). China’s market shares also fell to a new record low of 26.3% in quantity and 16.8% in value in April 2022. The zero-Covid policy and new lockdown undoubtedly was a critical factor contributing to the decline. Fashion companies’ concerns about the trajectory of the US-China relations and the upcoming implementation of the new Uyghur Forced Labor Prevention Act (UFLPA) are also relevant factors. For example, only 10.5% of US cotton apparel imports came from China in April 2022, a further decline from about 15% at the beginning of the year. Given the expected challenges of meeting the rebuttable presumption requirements in UFLPA and the high compliance costs, it is not unlikely that US fashion companies may continue to reduce their China exposure.

“Third, as US fashion companies source less from China, they primarily move their sourcing orders to China’s competitors in Asia. Measured in value, about 74.8% of US apparel imports came from Asia so far in 2022 (January-April), up from 72.8% a year ago. In comparison, there is no clear sign that more sourcing orders have been permanently moved to the Western Hemisphere. For example, in April 2022, CAFTA-DR members accounted for 9.3% of US apparel imports in quantity (it was 10.8% in April 2021) and 10.2% in value (was 11.4% in April 2021).”

By Just Style