The unexpected rise suggests a recovery in the textile sector, but experts recommend not to get carried away.

The Association of Exporters (ADEX) reported the unexpected growth of Peruvian clothing exports to Venezuela amid the crisis in our main markets, USA and the European Union, and have therefore urged caution against the possibility of a bubble having generated an apparent economic boom, hiding the true picture in the textile sector.

According to figures from Peru’s Business Intelligence System ADEX DATATRADE, Peru exported garments to Venezuela worth US$ 283.7 million between January and July this year, 160% more than the same period last year (US$ 109.2 million). With these figures, Venezuela ranked as the second destination in this subsector, behind the USA.

The first unusual element to Venezuela’s growth is the high price recorded in export operations, averaging US$ 70/Kg versus an overall figure of US$ 48/Kg. However, experience shows that growth rates based on price do not last long.

The truth is that if Venezuela is excluded, the average price fetched by Peruvian exporters is US$ 41/Kg, which means that the sector cannot be said to command high prices and thus be able to face a series of cost overruns caused by a lack of competitiveness and, above all, by policies that raise costs.

The other element to be analyzed more carefully is that 56% of exports to Venezuela is accounted for by 305 companies who are just starting their exports to this market this year. Although these data may well reveal the emergence of a new clothing market, experts recommend calm while waiting for the market to stabilize this growth.

Source: RPP