EnCambodia’s Garment Manufacturing Association has asked the government to suspend the industry’s $190 per month minimum wage, Nikkei reports, as the sector struggles with a loss of orders due to COVID-19. That’s a similar challenge faced by Bangladeshi exporters, as outlined in Panjiva’s research of June 10.
The apparel industry has been one of the worst performing consumer discretionary sectors in terms of U.S. imports due to store closures being compounded by reduced spending and financial failures of several retailers.
Panjiva’s data shows that U.S. seaborne imports of apparel from Cambodia may be pulling out of their dive. Shipments in the first half of June dropped by 23.8% year over year while total U.S. imports of apparel fell by 30.5%. By comparison imports from Bangladesh and India fell by 76.6% and 65.4% respectively. Cambodia has nonetheless lagged Vietnam and China which have seen imports fall by just 19.3% and 15.9% respectively.
Source: Panjiva
Cambodia’s better performance versus its regional peers may be in part due to continued purchasing growth from three major buyers. U.S. seaborne imports linked to Hennes & Mauritz surged 214% higher year over year in Q2 through June 15, admittedly compared to minimal purchases a year earlier. Imports linked to Adidas meanwhile climbed 58.0% in Q2 so far after a 3.5% dip in Q1. Levi Strauss related shipments have grown more steadily with a rise of 36.1% in Q2 after an 80.2% rise in Q1.
On a sequential basis though the picture is less strong with Levi Strauss and H&M imports down by 43.5% and 63.5% respectively (admittedly with 2 weeks of the quarter remaining) while Adidas’s rose by 29.5%. The latter supports prior comments from CEO Kasper Rorsted that the firm has “a deep responsibility for the extended supply chain to ensure that they will be around when the crisis goes away“.
Source: Panjiva
