Honduras continues to hurt
29th October 2009 19:14

Four months after the political upheaval that saw the Honduran president forced into exile, the country seems no nearer to finding an end to the dispute.

Talks between ousted Honduran President Manuel Zelaya and the country’s new interim government are making little progress, and until a settlement is reached the political crisis looks set to continue to affect trade across Central America.

The situation isn’t helped by the mixed messages being broadcast about the country’s apparel industry. While Honduran suppliers continue to say that there has been no impact whatsoever on business, trade groups representing US textile firms, retailers and importers are painting a very different picture.

In a letter to Secretary Hillary Clinton they say the situation is causing permanent damage to what once was the most economically vibrant textile and apparel trade platform in the CAFTA region.

US  imports of apparel from Honduras are down 39% in September they warn, credit is at a record low, and there are “increased plant closures, job losses and the crippling of a once booming trade sector.”

It’s hard to tell whether these changes are due to buyer concerns with political stability, or more simply a symptom of disappearing raw material facilities, regional uncompetitiveness, or China’s growing ability to provide fast response in smaller quantities.

But what is true is that while uncertainties regarding the political situation in Honduras are still hanging in the air, buyers will always be cautious about doing business there.

Yes, having a balanced supply chain is a fundamental rule of sourcing, and most firms are constantly assessing their production, but until the US clarifies its stance on the situation in Honduras, the impact on the region as a whole will continue to reverberate for a long time to come.

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