Switch in supply from China places heavy demands on importers

Forming new buyer/seller relationship takes time ALAN PEAT WHILE THE imposition of the SA import quota system on certain Chinese textile and clothing products – agreed between the two governments in a memorandum of understanding (MoU) – has been delayed from September 15 to January 1, the necessary adjustment of supply sources is still not going to be painless for SA importers, according to an industry authority who talked to FTW. On the affected list are 31 textile items – six types of fabric; 24 categories of clothing; and one made-up textile product in the form of curtaining. It’s in the clothing area where the most impact will fall, and our source acknowledged that it was likely to force up prices and/or cut down margins in the retail trade. Also he thinks that the switch-over in supply sources will take time. “There’s a need to form a new buyer/seller relationship,” he said, “and this doesn’t happen overnight.” He also disputes the fact that the alternative suppliers of “cheap” clothing are up to par on quality. “The likes of Bangladesh and Cambodia might offer the right sort of prices,” he said, “but I wouldn’t say they’re too high on quality – and that’s an area of production that the Chinese are certainly getting better at.” The idea of “re-labelling” to disguise goods of Chinese origin as coming from another source is certainly a possible way round the quota problem, but our authority feels that it’s not something for the “reputable” importers. And the disreputable are already there, and it’s only one other practice in which they might indulge. He also doesn’t see re-routing through other Southern African Customs Union (Sacu) countries, and back into SA, as being on the cards. “The big retail chains and other major importers are not likely to risk anything like this,” he said. “Anyway, these goods for other Sacu members almost all come in via SA. And, if customs suddenly saw dozens of extra containers of clothing products bound from China to Lesotho, say, they’d question how that market could suddenly take such large quantities for home consumption.”