Sri Lanka's garment exports to key markets slowed in the first quarter, as price pressures and competition ate into industry growth.
Total clothing exports in the first quarter this year grew just 1.1 percent over 2005, compared to the 11.2 percent increase in 2005 over 2004, industry apex body, the Joint Apparel Association Forum (JAAF) said Tuesday.
Export growth was also a higher 9.7 percent in 2004 over 2003.
Cheaper clothes from China to Sri Lanka's main markets the United States and Europe has been partly to blame, an official with JAAF told LBO.
US imports of apparel in the first quarter were worth 569.4 million dollars, a 0.3 percent increase in value over the previous quarter, but quantities were down 0.9 percent.
"Exports to the EU recorded a negligible gain, while those to the US dropped 6.5 percent in April over March."
Value of overall exports in April also dropped 4.1 percent over March.
Earnings from main knitted and woven clothing categories to the US was 121.8 million dollars in April, over 130.3 million dollars in March.
The United States is Sri Lanka's biggest market for its high quality clothes and lingerie, but with the end of global clothing quotas in 2004, Sri Lanka has been struggling to maintain ground.
Competition from countries like China with its cheap prices and even Vietnam that is negotiating a trade deal with the US is catching up.
In the EU, earnings in April reached 91.1 million dollars from 90.7 million dollars in March and 90.2 million dollars in February this year.
Despite clinching a duty free trade deal with EU this year under the Generalised System of Preferences Plus scheme (GSP+), full benefits are yet to kick in.
The GSP+ has set high domestic value added requirements or Rules of Origin for apparel at high 50 percent levels, only top tier domestic exporters are able to meet.
The EU is to revise the rules of origin level downwards to around 35 percent levels so more exporters are eligible for the scheme, but the changes are only expected towards the end of this year, the European Commission has said.
Performance in April however, year on year has been strong at 222.2 million dollars, up 21.5 percent over the 182.8 million dollars in April last year.
