Central America is clearly losing ground on US T-Shirt import market. Although still having very large market shares, Honduras and El Salvador were threatened by surging competition from India and Pakistan in the first quarter. US quotas on China's T-shirts did not fully protected Central American suppliers that were in addition affected by low implementation of the free trade deal with the United States.
Although still dominating the US T-shirt import market, Central America is again threatened by Asian competition this year.
In the first quarter, US T-shirt imports from Honduras declined 17 percent on the men's and boys' market. They had already suffered a 14 percent decrease in the past year.
Shipments from El Salvador even plunged 39 percent in the first quarter after declining 7.35 percent in 2005.
Suppliers in the two countries were not protected by limits that Washington reimposed on T-shirt imports from China in category 338 and 339 (cotton knit shirts). The new quotas mostly benefited Asian countries outside China.
Slow CAFTA implementation
The slow implementation of the new free trade deal between the United States and five Central American countries may have negatively affected sales, in addition.
Due to legal issues that had not been anticipated, exports from El Salvador did not enjoy the duty-free treatment anymore in the first quarter while not yet taking a full advantage of CAFTA implementation.
US imports from the tiny country may now be boosted in the second quarter, after the CAFTA was enacted.
T-shirts from Central America already benefited from a duty-free access on the US market before the CAFTA was concluded. Rules of origin will now be relaxed, however, with a possible use of regional yarns instead of only US yarns.
The new treaty also means that Tariff Rate Quotas on imports of T-shirts made from regional fabrics and US yarns will be lifted.
India and Pakistan, again
Whatever the factors behind the decline of Central America in the first quarter, Asian countries took advantage of the situation.
US imports of men's and boys' T-shirts from India rose 69 percent while shipments from Pakistan were growing by 29 percent.
On the female segment, products originated in India surged 177 percent in volume terms with Pakistani shipments only up 8 percent, however.
If imports from Guatemala were sharply lower in the quarter, other Central American origins have got higher market shares, such as Haiti, Nicaragua or the Dominican Republic.
China, meanwhile, has fallen from 4th last year to 16th in terms of market share after volumes dropped 85 per cent due to quotas.
Honduras cheapest leading supplier
Prices in the first three months remain similar to one year ago at US$21.71 per dozen.
Honduras managed a 14.34 per cent reduction in it unit values to $16.46 per dozen making it one of the cheapest of the leading suppliers.
It was beaten by Haiti ($14.08) but remained ahead of the cheapest Asian competitor, Bangladesh ($19.09).
Honduras was also the cheapest leading supplier of women's and girls' cotton T-shirts at $14.64 per dozen, down 12.26 per cent from one year ago.
Pakistan, at $14.52 per dozen, was cheapest of the smaller suppliers and easily lower than the $21.31 average.
