The impact that the crisis will have on companies related to the textile, leather and clothing sector in Central America is estimated to be explained, to a greater extent, by the expected drop in sales of carpets and curtains.
The "Information System for the Impact Analysis of Covid-19 on Business", developed by the Trade Intelligence Unit of CentralAmericaData, measures the degree of impact that the crisis will have on companies according to their sector or economic activity, during the coming months.
In 2016 Central American countries imported $28 million worth of footwear and parts from Mexico, 7% more than in 2015.
Figures from the information system on the Central American Market for Footwear and its parts, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with the graph"]
In the first quarter of this year, exports of pineapple, manufactured leather and timber goods recorded increases of over 200% compared to the same period in 2016.
Pineapples, fresh oranges, leather goods, timber, cocoa, scrap metal, confectionery and pharmaceutical products are some of the export items which recorded significant increases compared to the first quarter of 2016.
In 2015 Panama led the importation of footwear and related materials in the region, with $234 million, followed by Costa Rica, which imported $155 million, and in third place Guatemala, with $154 million.
Data from the report Foreign Trade Office on Shoes, similar articles and related materials,prepared by Business Intelligence Unit at Centralamericadata.com shows that in 2015 the countries of the region imported $757 million, corresponding to a volume of 84,484 tons.
Coffee, textiles, clothing accessories and leather are some of the products that have opportunities for being sold in the European country.
In addition to traditional products such as coffee, textiles, leather and accessories, representatives of the Franco-Nicaraguan Chamber of Commerce identified opportunities in the French market for other non-traditional export products such as chia.In 2015 the country exported $32 million worth to the European country and imported goods worth $110 million, according to central bank figures.
The footwear industry in 2015 manufactured a record 9 million pairs of shoes with revenues above $50 million.
The 1,300 leather workshops that operate in Nicaragua generated revenues of $50 million in 2015, reaching a production of 9 million pairs of shoes, according to figures from Alejandro Delgado, president of the Chamber of Leather and Footwear and Allied Businesses, published by Elnuevodiario.com.ni.
Reversing the trend of previous years, increased leather stocks have allowed the industry to project a 20% growth in annual production of shoes this year.
The growth in inventories comes in addition to an improvement in the quality of leather being received by shoe manufacturers, who say that this is mainly due to the fact that the leather they now mostly get comes from the processing plant belonging to the Mexican company SuKarne which started operating this year.
In 2014 imports of leather goods and saddlery amounted to $1,647 million, a growth rate averaging 7% a year.
From a statement issued by the Costa Rican Foreign Trade Promotion Office (PROCOMER):
Leather has resurfaced as one of the leading fashion styles, both on Canadian catwalks and in retail stores, being recognized for its softness, durability and luxuriousness.
In the first nine months of the year $15.9 million worth of footwear was exported, which is 26% more than in 2013.
The sector's competitiveness in terms of labor costs, incentives to industry, preferential access to key markets and strategic location of the country, are the main factors attributed to the growth in exports of Nicaraguan footwear.
The Investment Promotion Agency of Nicaragua, told Elnuevodiario.com.ni that "...
As part of the controls to combat smuggling, between May and July 29 companies were suspended from the list of importers, which represents 60% of the total volume of pairs of shoes entering the country.
In order to detect and prevent irregularities in the import of footwear, the General Administration of Federal Tax Audit Tax Administration Service of Mexico carried out 31 audits "...
The sharp rise in the world price, generated by increased demand and shortage of tanning skins is turning traditional shoe leather into a luxury product.
The rise in price due to scarcity and increased demand has started to create the perception that leather is a commodity which is too expensive to use for mass shoe production and is more geared towards a higher segment.
It has been announced that a tax of 25% to 30% will be applied to imports of footwear, as part of the suspension of tariff reduction implemented by the previous government.
In addition to the tariff, shoes "... may only be imported through nine customs offices, instead of the previous 33: Lazaro Cardenas, Manzanillo, Mexico, Guadalajara, Veracruz, Tijuana, Mexico City International Airport, Ciudad Hidalgo and Nuevo Laredo. "
The purchase agreement for 100,000 square feet of leather between Guatemalan and Nicaraguan companies reflects the growth in demand for this product in Guatemala.
The tannery La Fuente, located in Granada, Nicaragua, reported that it has finalized a contract with a Guatemalan company to provide 100,000 square feet of leather and added that they have asked to have a local distributor in order to access the product more directly.
In order guarantee the supply of raw material for the manufacture of footwear and other leather items, 10 thousand semi processed skins will be distributed among SME manufacturers.
Apart from the purchase of raw materials, the amount will go to "... improvements in infrastructure and implementing production techniques" for the shoe manufacturing sector.
North American entrepreneurs in the footwear sector have emphasized the advantages of the Nicaraguan industry as providers of high heel shoes for ladies.
Surpassing China, Vietnam, Cambodia, Indonesia and Bangladesh and ranking below average in cost of quality leather shoes ($ 3.30 per pair), manufacturing soles ($ 0.43) and the development of a pair women shoes ($ 8.17), Nicaragua has become highly attractive as a destination for industry manufacturers and a candidate for a strong manufacturer and exporter of women's shoes.
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