Argentina's textile industry operated at just 24% of installed capacity in January 2026, a level trade groups say reflects the steepest contraction in the available data series dating back to 2016.

The Argentine Textile Industries Federation (FITA) said in a March report that the textile industrial production index fell 23.9% year on year in January. "Fabrics and finishing" and "cotton yarns" segments each dropped more than 30%, against a 3.2% decline for overall manufacturing. The Pro Tejer Foundation's economic bulletin added that textile production was down 27.8% against two years earlier.

What does the 24% capacity figure mean for sourcing?

The 24% reading compares with an economy-wide industrial capacity use of 53.6%. The gap frames Argentina as a structural loser in regional fabric and garment sourcing: domestic mills running far below breakeven, finished-goods imports filling the shelves, and yarn/fabric imports collapsing because factories have less to make.

• Finished clothing imports: Up 54% in volume and 27% in value in February 2026, per FITA. Over the first two months of the year, apparel imports rose 82% in tonnes and 53% in dollars.
• Inputs imports: Yarns, raw materials and fabrics fell more than 35% in volume and more than 50% in value — FITA's reading is that producers are buying less because they are producing less.
• Container data: Datamar recorded a 39% surge in inbound TEU volumes for fabric garments in January and February 2026.

How exposed are local jobs?

Textiles, apparel, leather and footwear shed 12,000 formal positions over the past year, taking the segment to 100,000 jobs as of December 2025. Pro Tejer said the cumulative loss since late 2023 now exceeds 20,000 jobs, and that the sector posted the largest percentage employment decline across Argentina's private economy.

Where are the imports coming from?

The cross-border channel is concentrated on Chinese marketplaces. The Argentine Chamber of E-Commerce (CACE) and Kantar annual e-commerce study found 47% of Argentine online shoppers bought from abroad in 2025. Temu led at 41% of cross-border buyers, followed by Shein at 31%, ahead of traditional platforms, the study showed.

China was identified as the main source of the import threat by 73.3% of industrial SMEs surveyed by Observatorio Pyme. The foundation said 88% of small and mid-sized firms in apparel cite falling sales as their main problem, and 68.4% name "import threat" — the highest reading across industrial sectors.

Pro Tejer reported total textile and apparel imports of 332,696 tonnes in the first 10 months of 2025, up 89% year on year. Made-up goods rose 217%, garments 166%, both record highs by volume. Observatorio Pyme said 37% of industrial SMEs lost domestic market share to foreign competition, the highest reading since 2007.

What is the compliance picture?

FITA warned of widespread under-invoicing on textile imports, stating that more than 70% of incoming products were declared at values well below historical references and, in many cases, below the cost of the main raw material. Citing case data, FITA listed:

• Cotton T-shirts imported for under US$0.01 per unit
• Towels declared below US$0.30 per kilogram
• Jeans declared below US$1 per unit

How is demand shifting?

Argentina's e-commerce market expanded 55% in 2025, against inflation of 31.5%. Tiendanube, a regional e-commerce platform, reported nominal revenue for non-sports apparel fell 14%, attributing most of the drop to the rise of Chinese platforms. The clothing, leather and footwear price index posted no monthly change in February 2026; Pro Tejer read that as negative profitability, with sales taking place below cost as consumption weakens and demand migrates to imports.

What sourcing decision does this force?

For buyers that had been eyeing Argentina as a near-shoring option for Latin America, the data argues the opposite move: capacity is idle precisely because finished goods are arriving cheaper by container than local mills can price them. The compliance hook sits in customs valuation. With more than 70% of textile imports declared below historical reference prices — and below the cost of the principal raw material in documented cases — FITA's evidence hands customs authorities a basis for reference-price reviews and anti-undervaluation enforcement. Sourcing managers should price that enforcement risk into any Argentine sourcing plan, and treat local mill capacity as a residual rather than a primary option until reference-price action is visible.