Peru’s textile industry is one of the largest in the world.
With production accounting for almost half of its gross domestic product, it has become a key export market for the world’s major economies.
The country’s textile production reached $6.4bn in 2016, up 20 per cent on the year before.
But this is a small part of Peru’s overall textile industry.
Textiles account for around 7 per cent of Peru “sales, but they make up only 5 per cent” of Peru exports, said Alberto Barrales, director general of the Confederation of Peru Textiles (CPTPP).
The textile industry has become one of Perus largest export markets for the global economy, he added.
The CPTPP has issued a report on Peru’s textiles trade and the effects of climate change on the textile industry, highlighting the negative impact of climate-related disasters on Peru, including extreme weather events and floods.
Peru’s textile sector was hit by the 2015-2016 El Niño, when large swaths of the country experienced extreme heat, with temperatures hitting up to 110 degrees Celsius (200 Fahrenheit) in some regions.
The extreme weather led to the collapse of some textile factories, leaving thousands of workers homeless.
A recent study by the CPTPP found that the loss of textile production and export revenues has contributed to the ongoing economic crises in the country.
“It is clear that the collapse in textile production has been a factor of concern for Peru, as it has contributed substantially to the devastating impact of the El Niño on Peru and other countries in the region,” Barralas said.
El Niño-related damages to the textile sector have also led to a large increase in poverty in Peru, said Barralases co-author, Jorge Bautista, who is the director general for CPTPP.
“The loss of jobs has resulted in people having to look for alternative ways of making ends meet.”
The economic impact of El Niño is still being assessed by the International Monetary Fund and the World Bank, and the impact on Peru is still unclear.
“The effects of El Niños are still being studied, but the impacts of climate disasters, like the flooding that occurred in 2016 and 2017, are also having an impact,” Bautistas said.
“Peru needs to consider the impacts in a broader context, and not just for its textile sector.”
As a result of the ongoing El Niño impacts, Peru has experienced an unprecedented wave of migration to neighbouring countries.
In October 2018, the US Census Bureau reported that a record 9,300 migrants from the neighbouring country of Ecuador crossed the border into the US.
The arrival of Ecuadorians to the US in 2018 is the highest number recorded in the past six years.
In October 2018 the CPTP reported that the number of migrants crossing the border to the United States from Ecuador increased from just under 4,000 in 2017 to nearly 9,000 this year.
However, it is unclear whether the migration surge has had any direct impact on the number and type of jobs in Peru’s domestic textile industry or the impact of Ecuador’s migration on wages in the domestic textile sector.
According to the CPTSP, the impact has been limited in terms of wages, with wages for domestic textile workers in Peru only about 10 per cent higher than in the US, according to the Bureau of Labor Statistics (BLS).
“We are not sure that this is sustainable, and we will be looking into that,” Barras said.
“If we want to have the impact that we want, we will have to start looking at different avenues.”
However the CPTF and the CPTRP’s Barralales noted that the impact could be mitigated by more direct investments in domestic textile industries.
Barralasa said that the government could also look into ways of supporting domestic textile producers through the use of loans, rather than imports.
As the CPTPs report stated, the domestic production of textiles is largely reliant on imported raw materials, and that many domestic textile manufacturers rely on imported materials, especially cotton, to make their products.
It is important to note, however, that these imports are expensive, and they often require the importation of labour from overseas.
The costs of these imports have been on the rise due to rising global food prices, the CPTTPs report added.
One of the ways that policymakers could increase domestic textile production is by focusing on the supply chain.
The use of technologies like carbon capture and storage (CCS) and the production of organic textiles are examples of steps that could help boost the domestic industry’s capacity to meet the needs of the local population.
But the CPTCP and the CTPP report also pointed to a number of other policies that could benefit domestic textile manufacturing.
For example, they argued that local governments should be more transparent in their efforts to identify and protect vulnerable communities.
“Local governments should have the flexibility to choose which activities to engage with,” Barra said