By  on October 4, 2007

MILAN — Italian exhibitors unfurled new fabric trends at Milano Unica, while currency issues cast a shadow over the fair's four-day run as the dollar fell to an all-time low against the euro, at around $1.40.

Expressing frustration over the dollar's latest decline at the textile show, Italian fabric executives said the weakened currency threatened 2007's sales upturn and expected increases in 2008.

News of the depreciated exchange rate dampened statistics released by the Italian Federation for Textiles and Fashion, showing Italian textile exports grew 2.3 percent for the first quarter of 2007, compared with the same period in 2006, to total 1.6 billion euros, or $2.23 billion.

The figures prove the Italian textile sector, which had managed to fight its way out of a five-year battle to survive in the face of cheaper Asian production and the euro's robust value, has managed to stay on the road to recovery mapped in 2006, when sales rose 1.5 percent to hit just over 9 billion euros, or $12.5 billion.

In light of the exchange rate, many mills increased fabric prices by as much as 30 percent or cut profit margins.

"We raised prices last year," said Davide Crotti, chief executive officer of Silanco. "Now they're stable, but it's really hard to sell to the Americans today. In the past, when the market was at a peak you could predict for how many years it would last. Now everything is uncertain."

Beppe Pisani, president of Ideacomo and mill Serikos, said, "Some mills are sacrificing profit in order to keep American sales, but it's only a matter of months they can keep that up. For us and other silk producers, the exchange rate has seen the American bridge market customers disappear."

Many mills reported stronger demand from the domestic and other European markets helping to recoup lost American and Japanese market sales.

"It's not only the dollar, but also the yen, which also affects the Korean market," said Riccardo Marini, president of Prato-based Marini Industrie. "But Europe is going very well, our summer 2008 orders were up. I've seen some American clients here and they placed orders. They appreciate the product quality, so they buy because they have no other alternative."

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