Mauritius exported textiles and apparel worth MUR6.57bn (US$185.7m) to the UK in 2015

Mauritius exported textiles and apparel worth MUR6.57bn (US$185.7m) to the UK in 2015

Revenue generated by exports to the UK from Mauritius will be down by around 10% this year following the Brexit vote, according to the country's export association.

In a report released last week, the Mauritius Export Association (MEXA) says there will be a drop of around 10% in its exports to the UK as a consequence of "the fall in consumerism level in the UK coupled with the depreciation of the pound."

With the UK representing 13.5% of total exports from Mauritius and 1% of the country's GDP, the UK is the Indian Ocean island nation's main export market.

Its shipments of textiles and apparel to the UK amounted to MUR6.57bn (US$185.7m) in 2015, of which exports of apparel and yarn amounted to MUR6.32m and MUR246m respectively.

The four main apparel products exported to the UK are T-shirts, pullovers, trousers and shirts but, thanks to the development of Mauritian spinning mills, the country is now also exporting yarn to the UK.

Now, following the outcome of last month's referendum, MEXA says since clothing is "not a basic necessity" the sector will be the worst hit by Brexit.

"[Brexit] will definitely have a significant impact on the Mauritian economy as it is the largest export sector of the country," says MEXA in its latest report, 'Aftermath of Brexit and its impact on Mauritian Exports.'

The report also claims Mauritian textile and apparel companies exporting to the UK, which count for around 20,000 jobs, are the "most vulnerable" following Brexit.

MEXA adds there will be a 10% decrease in volume of exports and a 10% drop in export revenue from UK, resulting in a fall of MUR 0.64bn in exports of textile and apparel to the UK, a drop of 4% in total exports of textiles and apparel, and a 2% fall overall in total exports from Mauritius.

"Unfortunately, this may also lead to a fall in employment in the trade and apparel sector to a certain extent," adds the export group.

MEXA says 90% of all revenues from exports of textile and apparel to the UK are in GBP, while imports are made in US dollars. Now, the export body says Mauritian exporters are facing a "double whammy effect" with their "profitability being squeezed both in terms of exports and imports". Export revenue will be depleted thanks to the depreciation of the pound and costs being inflated with the appreciation of the US dollar.

In terms of future orders, MEXA says prices "may be readjusted upwards" but by how much is, for now, uncertain. "As a matter of fact, if the present exchange rate level of the pound against the Mauritian rupee is maintained, the prices of Mauritian products will remain 8-10% more expensive than the period before Brexit," it adds.

"In the short run, uncertainty about Britain's future relationship with the EU, its largest trading partner, would add on to the slowdown in the UK economy. As a consequence, UK being the largest export market of Mauritius, it will definitely be having ripple effect on Mauritius and mainly our trade patterns with UK," it says.

The export group says it is awaiting UK and EU negotiations on market access and Mauritius will "follow [suit]" accordingly. 

Last month industry executives told just-style the Indian Ocean island nation is keener than ever to build on its strengths through investment in innovation and geographic expansion. 

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