USA has been seeing an uptick in its denim apparel imports; however, the unit prices of imported apparels have been shrinking significantly, as per an analysis done by Apparel Resources.
In Jan.-Sep. ’19, unit prices per dozen of the imported denim apparels by USA were US $ 98.26, which shrunk to US $ 95.10 in the same period of 2020 and prices further reduced to US $ 93.95 in the 9-month period of 2021.
This decline of 4.38 per cent in the 2-year period signals towards the fact that US buyers are sourcing more of basic jeans commodities and searching for low cost destinations.
In the quest for low prices, the US buyers are seemingly moving from Mexico to Bangladesh as the major difference between two is the prices they are offering to USA.
As Mexico’s unit prices of denim apparels are increasing, Bangladesh is becoming the obvious choice for the US denim buyers.
The unit prices of Made in Bangladesh denim apparels were US $ 78.33 per dozen in Jan.-Sep. ’21 (down by 2.46 per cent from pre-pandemic period), while Mexico shipped per dozen denim apparels in US $ 111.80 (up by 1.25 per cent from pre-pandemic time).
In an era of massive cost-competitiveness, high and rising UVR from Mexico as against USA’s average UVR for per dozen denim apparel import is definitely hurting its exports despite being in close proximity to the USA and getting an advantage of ‘zero’ duty rates for jeans shipped to USA under USMCA.
By further analysis of the data, it is found that China’s dominance has come to an end despite it offering the lowest unit prices amongst top 5 shippers all because the buyers are reducing their dependency on Chinese cotton.
China stood 2nd in the tally till Jan.-Sep. ’19 and the average UVR of the shipped denim clothing were US $ 97.14 per dozen, that are now reduced to US $ 75.24 per dozen (down 22.54 per cent), while the country has further slipped to 5th position in the tally.
The advantages from China’s decline seem to be grabbed by Pakistan that has silently been making strong footprints in denim apparel exports to USA.
UVR Comparison of Denim Apparel Shipment to USA from Major Destinations:
S. No |
Country |
UVR (in US $ per dozen) |
||
Jan.-Sep. ’19 | Jan.-Sep. ’20 | Jan.-Sep. ’21 | ||
1 | World | 98.26 | 95.10 | 93.95 |
2 | Bangladesh | 80.31 | 78.70 | 78.33 |
3 | Mexico | 110.43 | 112.97 | 111.80 |
4 | China | 97.14 | 90.09 | 75.24 |
5 | Vietnam | 100.67 | 100.90 | 106.37 |
6 | Pakistan | 92.39 | 88.40 | 87.86 |
Source: OTEXA
Compiled by: Apparel Resources