SA prices to rise on China import quotas

JOHANNESBURG – South Africa’s plans to restrict cheap textile and clothing imports from China will lead to higher prices and empty shelves over the holiday season, food and clothing retailer Woolworths said.

Woolworths said at the weekend that the government had said it planned to impose quotas aimed at protecting the local textile industry from September 28 for two years. Retailers have seven days to respond to the proposal.”We urge the DTI (department of trade and industry) to consult more widely with all stakeholders, particularly those closest to the consumer, before implementing this potentially inflationary and job-eroding measure,” Woolworths Chief Executive Simon Susman said in a statement.Woolworths – South Africa’s equivalent of Britain’s Marks & Spencer – said quotas would drive up prices, particularly in areas like children’s clothing, which could go up by 20-25 per cent.It said that because orders are placed as much as nine months in advance, the new quotas would stop retailers from getting their hands on goods they had already paid for, and could lead to empty shelves over the crucial Christmas period.Susman has said Woolworths’ imports from China account for around one third of revenues at its clothing and home unit.China and South Africa agreed in June that the Asian powerhouse would cap textile and clothing exports to South Africa to allow the local industry to develop.Burgeoning Chinese exports have become a hot political issue in Africa’s biggest economy as local producers are increasingly shut out of their own market amid a flood of cheap Chinese-made goods.An estimated 150 000 jobs have been lost in South Africa’s textile industry over the past 10 years while clothing imports from China are estimated to have surged 110 per cent since 2003.Nampa-ReutersRetailers have seven days to respond to the proposal.”We urge the DTI (department of trade and industry) to consult more widely with all stakeholders, particularly those closest to the consumer, before implementing this potentially inflationary and job-eroding measure,” Woolworths Chief Executive Simon Susman said in a statement.Woolworths – South Africa’s equivalent of Britain’s Marks & Spencer – said quotas would drive up prices, particularly in areas like children’s clothing, which could go up by 20-25 per cent.It said that because orders are placed as much as nine months in advance, the new quotas would stop retailers from getting their hands on goods they had already paid for, and could lead to empty shelves over the crucial Christmas period.Susman has said Woolworths’ imports from China account for around one third of revenues at its clothing and home unit.China and South Africa agreed in June that the Asian powerhouse would cap textile and clothing exports to South Africa to allow the local industry to develop.Burgeoning Chinese exports have become a hot political issue in Africa’s biggest economy as local producers are increasingly shut out of their own market amid a flood of cheap Chinese-made goods.An estimated 150 000 jobs have been lost in South Africa’s textile industry over the past 10 years while clothing imports from China are estimated to have surged 110 per cent since 2003.Nampa-Reuters