A survey by the Abit (Associação Brasileira da Indústria Têxtil e de Confecção – Brazilian Textile and Clothing Association) has found that sector prices had a very small influence on inflation since the beginning of the Real Plan in 1994, when Brazil changed its currency and brought inflation under control.
The director superintendent of Abit, Fernando Pimentel, says that while consumer prices (as measured by the IPC-Fipe) rose 161.48% between July 1994 and May 2005, clothing prices rose only 12.72% . “That works out to around 1% per year,” he said.
According to Pimentel, the clothing-textile sector is an “inflation anchor,” where investments in productivity and quality have “resulted in a high level of competitivity,” while prices have not gone up.
He points out that there are 30,000 firms in the sector, producing some 1.2 million tons of fabrics (800,000 tons of cotton) and investing US$ 1 billion annually. Total sector revenue reached US$ 25 billion last year, with exports worth over US$ 2 billion.
Pimentel said most of the clothing used in Brazil is produced domestically. The country is the world’s seventh biggest clothing producer, its second biggest denim producer and third biggest producer of knitted goods.