The Changeable Attractions of Denim | — Panjiva
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The Changeable Attractions of Denim

  • By Christopher Rogers
  • · August 26, 2016
  • ·

The U.S. and U.K. have been growth markets for Chinese denim over the past five years, with China’s global exports rising 12.5% in dollar terms in June 2016. The U.S. is not a growth market more generally though, with imports of denim apparel falling 6% in July, dragged down by kids clothes. One bright spot is denim fabrics – the U.S. is a net exporter, and the surplus is 13% above recent lows.

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Looking globally, Panjiva data shows China has become a major force in denim exports, with exports rising 12.5% in the 12 months to June 2016 from June 2014. While German and Japanese retailers appear to have turned their back on Chinese suppliers, with a 12.5% and 11.8% decline respectively, the U.S. and U.K. have been growth markets for China in dollar-terms.

CHINESE DENIM SHRUGGED OFF IN JAPAN, PUT ON IN U.S.
20160826 Denim 1
Analysis based on keyword search for ‘denim’, filtered by country 
Source: Panjiva

Shorter term trends in the U.S. are less encouraging. In shipment terms U.S. imports of denim apparel fell 6.3% in July vs. a year earlier, the third straight month of declines at that level according to Panjiva data. This includes a 10.7% decline in imports of denim kidswear for the 12 months to July vs. a year earlier – a trend that may continue during back-to-school shopping. This shows a contrast with adult clothing, which fell only 3.9% and has been broadly unchanged since early 2015, suggesting a shift in fashion tastes rather than simply supply chain changes.

U.S. KIDS IN DENIM DENIAL
20160826 Denim 2
Import analysis based on keyword search for denim, filtered by for age-specific qualifiers Source: Panjiva

Delving into the supply chain, the U.S. runs a denim fabric surplus (ie exports less imports)in dollar terms. The net surplus with Mexico is notable as it likely reflects cross-border supply chains that could be disrupted in the event of a review of NAFTA. The surplus expanded 25% in June, and on a 12 month average basis is 13.5% above its January trough. American denim may be making a comeback, even if American kids won’t wear it.

AMERICA’S DENIM SURPLUS RISES, NOT SERGE-ING
20160826 Denim 3
Search based surplus of exports over imports for HTS 5209.42 and 5211.42 Source: Panjiva

 

This post was first published in the Panjiva Daily, which features global trade news and data-driven insights and is free for all Panjiva subscribers. To find out more email sales@panjiva.com.

 

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