Aug 27, 2009
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Fair Trade expanding in recession, adds apparel

Aug 27, 2009

NEW YORK (Reuters) - Fair Trade Certified clothing will soon be on store shelves in the United States, TransFair USA Chief Executive Paul Rice said Wednesday 26 August, as the trend for such products grows despite global financial woes.

"This is a break-through because it's taking Fair Trade for the first time from the farm to the factory," Rice told Reuters in a telephone interview from Oakland, California.

TransFair USA audits and certifies Fair Trade Certified products in the United States.

Three pilot factories in India, Rwanda and Costa Rica aim to use Fair Trade Certified cotton and begin manufacturing apparel ranging from T-shirts and blue jeans to bedding by the end of 2009. The products should be on shelves in the United States in 2010.

Certified farms must meet specific economical, environmental and socially sustainable criteria. In turn, the producers are paid a premium, which is typically passed along to the consumer.

Fair Trade Certified factories will ensure improved working conditions, waste management and wages, Rice said.

"The Fair Trade premium in the case of the apparel workers, right now, looks like it will ultimately double the wage of the factory worker," Rice said.

This will be the case when factories operate at full capacity as workers will be paid a bonus pegged to the number of products produced. For the consumer, this is likely to cost a couple extra dollars for a pair of jeans, he said.

Fair Trade Certified products have been growing at a rapid pace in recent years, as a growing number of consumers purchase them and retailers seek more products.

Despite the recent global economic downturn, demand for certified agricultural products like coffee and banana continues to climb.

In 2008, Fair Trade Certified coffee imported into the United States grew by 32 percent to nearly 88 million pounds, up from around 66 million pounds in 2007, Rice said.

Rice projects this will grow by 20 to 25 percent to nearly 100 million pounds in 2009.

Certified imports of bananas grew by more than 250 percent to nearly 25 million pounds in 2008, up from about 7 million pounds in 2007, TransFair data shows.

Rice didn't have a specific forecast for growth of banana imports for 2009 but said it will be "significantly higher" because Sam's Club, a low-priced retail chain and one of the largest volume U.S. retailers of the product, is expected to double its purchases.

Other certified products in the United States include cocoa, nuts, tea, sugar, wine, flowers and sports balls.

Total certified U.S. retail values were roughly $1.2 billion in 2008, up from $1 billion in 2007, and compared with global retail sales of nearly $4 billion, Rice said.

Rice expected U.S. retail value to climb to $1.4 billion to $1.5 billion in 2009 as major companies continue to look to the long-term trend.

Grocery store chain Safeway Inc will add Fair Trade coffee to it's O Organics line in October, when American Airlines will add the Fair Trade wine Koopmanskloof One World Pinotage from South Africa to some of its flights.

In September, food service giant Sodexo will offer certified coffee, tea and sugar at 1,000 of its kiosks at locations like schools and hospitals.

By Marcy Nicholson

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