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USA denim market leaning toward nearshoring

According to recently published US Office of Textiles and Apparel (OTEXA), data and UVR Comparison of Denim Apparel Shipment to the USA from Major Destinations data showed a major transformation in denim consumption pattern in the pandemic period.

OTEXA data exposed that US retailers and brands have seen importing immensely from Mexico. As the country exported $471.78 million worth of denim attires to the USA in the first 9-month period of 2021, growing 46.53% yearly.

Figure: Onshoring and nearshoring this critical supply chain is essential.

OTEXA data also revealed that Asian denim manufacturing powerhouses like Bangladesh once again captured the top position by exporting $436.53 million denim in the USA market from January to September 2021 calendar period. Registering a whopping 31.40% yearly increase.

While the UVR Comparison of Denim Apparel Shipment to the USA from Major Destinations data depicted that denim price was $93.95 in January to September period of 2021. Signifying that the US consumers besides buying high-end denim also focusing on basic jeans merchandise and looking for low-cost sourcing countries.

The UVR Comparison showed that Mexico made the per-unit price of denim was $111.80 – grew by 1.25% from the pre-pandemic time.

The 46.53% jump in imports from Mexico in the first 9-month of 2021 implies that nearshoring trend for US brands in terms of high-end jeans is still the likely option.

“The Western Hemisphere supply chain for textiles and apparel is a core pillar of the partnership between the United States and the countries of the Dominican Republic-Central America-United States Free Trade Agreement,” Sarah Bianchi, Deputy United States Trade Representatives said at a recent roundtable discussion with senior U.S. textile executives.

Bianchi added, “The CAFTA-DR rules of origin provide the certainty needed by industry to invest and expand operations in a way that promotes economic opportunity for both US workers and those in the region.”

Kim Glas, President and CEO of the National Council of Textile Organizations, said the US textile industry has invested over $20 billion in the US and billions more in the hemisphere over the past decade to grow economic opportunities in the US and in the region.

Glas said “Onshoring and nearshoring this critical supply chain is essential,” and “further investments will be announced soon.”

On top of it the neighboring country recently resolved the issue of the United States-Mexico-Canada Agreement (USMCA), it will reap fruits from the pact. As apparel imported from the CAFTA countries and Mexico through the United States-Mexico-Canada Agreement are eligible for duty-free status.

Even though Mexico’s unit prices of denim are growing, it is becoming clear that Bangladesh is becoming the apparent sourcing choice for US denim consumers.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

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