In the first quarter of the year, imports of yarns and textile supplies in Central America totaled $127 million, registering a 10% drop compared to the same period in 2017.
Figures from the Information System on the Textiles and Textile Supplies Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]
Salvadoran textile companies state that the costs of labor, security and delivery times have made the sector's operations more expensive.
The recentincrease in the minimum wageis one of the factors that has had a direct impact on the cost structure of Salvadoran textile companies. Added to this are logistical difficulties in customs offices, which have caused companies from neighboring countries to obtain contracts that were originally planned for El Salvador.
Salvadoran textile companies report that between January and October exports of textiles and clothing grew by 3%, but the maquila sector went down by almost 9% compared to the same period in 2016.
Patricia Figueroa, executive director of the Chamber of the Textile, Clothing and Free Trade Zone (Camtex), explained to Laprensagrafica.com that"...
Companies in the Asian country are looking to provide Guatemalan textile workers with accessories, threads and synthetic fabrics with finishes.
Textile companies in Guatemala envisage the possibility of generating more value in their supply chain with products that can be provided by Chinese companies that specialize in accessories and other necessary inputs for the textile production chain.
In 2016, the value of imported yarns and textile raw materials in the region amounted to $328 million, equivalent to 89 thousand tons, 6% more than the volume purchased in 2015.
Figures from the information system on the Central American Market for Yarns and Textiles materials, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption="Clic para interactuar con la gráfica"]
The new plant, which a Honduran and Salvadoran consortium have started building in Choloma, will have capacity to produce 200,000 tons of synthetic yarn per year.
In the construction and commissioning of the plant manufacturing synthetic yarn, the company Unitexa has invested $73 million and it is expected that it will start operating within one year.
The sector expects to close the year with a decline in the value of exports due to low international prices, but with an increase of about 10% in total production.
Textile entrepreneurs estimate that they may end the year withclose to the planned target of 500 million square meters of production, but below the $1.5 billion in export value.
A report by the Business Intelligence Unit at CentralAmericaData.com notes that in 2015 Central American countries imported $318 million worth of yarns, filaments and textiles, led by El Salvador with $157 million.
El Salvador was the main importer of synthetic filaments, strips and materials similar to synthetic textiles last year, according to data on the Textiles and Raw Materials Market compiled by the Business Intelligence Unit at CentralAmericaData.com.
To compensate for the loss of market which is expected once the Transpacific Agreement takes effect, the textile industry intends to resume FTA negotiations with the northern country.
A free trade agreement with Canada would allow the exporting textile companies to enter a market with high potential, since according to theexecutive director of Camtex, Patricia Figueroa, the country imports more than $14,000 million a year in textiles products and confection of synthetics such and towels, carpets, curtains and tablecloths. "
At the end of the first half of the year maquila textile exports to the United States grew by 13% compared to the same period in 2015.
Figures from the biannual report by the US Office of Textiles and Clothing (OTEXA) show that between January and June Nicaragua sold 255 million square meter equivalents (SME) to the United States generating revenues of $708 million.
Efforts are growing to minimize the impact of the possible signing of the Trans-Pacific Partnership Agreement, and a tariff reduction program with long deadlines for sensitive products has been proposed.
As negotiations proceed to sign the Trans-Pacific Partnership Agreement (TPP), the textile industry in El Salvador is stepping up its efforts to maintain the conditions of the CAFTA treaty and minimize the impact that the TPP will have on the sector in the long term. One of the main risks is that "... Vietnam could introduce products from China and then export them tariff-free to the United States, which would give them a huge competitive advantage. "
In the first half of the year sales of textiles and clothing totaled $1.247 billion, with a noteworthy annual increase of 21% in exports of textiles.
Data from the Chamber of Textiles, Clothing and Free Zones of El Salvador (Camtex) indicates that "... textile exports totaled $155 million, 21% more than in the first half of 2014, while ready-made apparel reached $1.092 million, up 5%. "
On August 11th and 12th 10 Indian companies will be exhibiting their products to local companies interested in forging business alliances.
The participating companies are mostly in the sectors of textiles, clothing for both children and women as nightwear, sheets and all types of fabrics and textiles.
The Indian companies that will be taking part in the event organized by the Chamber of Importers on August 11 are Bhumi International, Manjeet Engg Works, Sun World Trade Linkers, Naresh Enterprises and Tanindera International, while on Wednesday 12 those taking part are Juvan Jyoti Over Seas, Multi Trade Impex, R.S. International, Greezly Enterprises and Rahul Handicraft
Falls in sales of textiles, machinery and transport equipment accounted for the 6% annual contraction in manufacturing activity in May this year.
In the case of textiles, a reducicón of 8.7% in industrial production in May is attributed to lower production of knitted or crocheted fabrics, clothing and leather production. In the machinery and heavy equipment sector, which fell by 48%, a reduction in demand from the Mexican automotive industry is, according to Central Bank data, the reason for the poor performance.
Six companies lead the list of textile importers in the country, where 14% of total imports correspond to nonwoven man-made or synthetic fibres.
The Costa Rican Chamber of Importers reports that "... this type of fabric (nonwoven synthetic filaments), weighing only 25 grams or less per square meter is 12.5%, followed by dyed fabrics with 3.3%. " The remaining 46.8% is represented by the heading 'other', which does not specify the type of fabrics in this group.