Peru's textile and garment industries could grow dramatically in the near future, according to a report by the Banco Wiese Sudameris, based in Lima.

Textile and apparel exports rose 57 per cent between 1994 to 2000, although Peru's economy was negatively affected by El Nino in 1998. Exports were up 21.56 per cent in 2000 to $700m, or 10.31 per cent of Peru's total exports and 66 per cent of total sales of Peru's textile and clothing industries.

In the short term, Peru should benefit from the high quality in its products, according to the report. In addition, Peru's textile chain is highly integrated from raw cotton to apparel.

Cotton's production declined from 1996 to 1998 before rising again in 1999 and 2000. Output was up 21 per cent last year to 163,000 tons. Peru produces high-quality fibres but is still forced to import cotton to satisfy its industry's requirements.

Last year's cotton imports fell to 34,000 tons, however, from 44,500 tons in 1998. The lack of cotton could curb the growth in textile and garment production, the report said.

Peru mainly exports cotton apparel to the United States which accounts for 50 per cent of total shipments. Duties could be removed by next December if the US Congress agrees in including textiles and garments in the so-called ATPA (Andean Trade Partnership Act).

The EU already offers duty-free entry to Peruvian products, accounting for 23 per cent of shipments.