Between January and April of this year, the São Paulo, Brazil, textile industry produced 5% less than it did over the same period last year.
According to the president of the Textile Industry Syndicate (Sinditêxtil-SP), Rafael Cervone Neto, one of the factors impeding the sector’s growth is the exchange rate.
“Many entrepreneurs are having to comply with contracts signed last year, when the dollar was on a higher plateau.”
Other problems identified by Cervone are the rise in interest rates and excessive taxation, but he affirms that one of the main obstacles is competition from Chinese products.
The president of the industrial association says that textile firms are very eager for safeguards against Chinese products to be regulated.
The text, which was approved by the Foreign Trade Chamber (Camex) of the Ministry of Development, Industry, and Foreign Trade, will be sent to the Presidential Chief of Staff’s Office and is expected to be turned into two decrees, which are still without definite dates to go into effect.
Despite the deceleration in the São Paulo textile industry, the balance indicates that exports are up 8.1%, maintaining the state’s national leadership in the sector, with a volume of US$ 173.5 million.
The 3,400 companies affiliated with the Sinditêxtil earned a total of US$ 4.54 billion in 2004, and, between January and May of this year, their earnings amounted to US$ 1.89 billion, 1% more than during the same period last year.
Exports came to US$ 415.77 million in 2004 and US$ 173 million in the first five months of this year, which corresponds to an 8% increase.
Imports, on the other hand, totaled US$ 379.44 million last year and US$ 166 million in the first five months of this year, which represents a 20.5% increase.
ABr – www.radiobras.gov.br