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Despite remaining stable during earlier forecasts, India's cotton production is projected to remain lowest in five years during the marketing year (MY) 2024/25 at 25 million 480-pound bales.
Driven by a reduced cultivation area of 11.8 million hectare, cotton production in the country is projected to decline despite improvement in yields to the highest levels in four years to 461 kg per hectare.
Over the past month, domestic ex-gin cotton prices have fallen by 9 per cent to 82 cents per pound, compounded by a 4 per cent dip in the Cotlook-A Index. Slow domestic demand, subdued export prospects, and lower international prices are pressuring farmgate prices, prompting many farmers to phase their market arrivals. To stabilise the market, the Indian government has ramped up procurement under the Minimum Support Price (MSP) program, purchasing 176,000 bales so far.
At the same time, global price competitiveness has spurred a notable increase in cotton imports, particularly from Australia and the United States. Shipments increased by 479 per cent in Oct’25 Y-o-Y in value, reflecting shifting trade dynamics and a preference for high-quality imports.
However, the textile industry continues to demonstrate resilience amid these challenges. Cotton-based yarn and garment exports have grown by 7 per cent and 35 per cent, respectively, signaling robust international demand. Yet, the sector faces headwinds domestically, with declining apparel production and higher input costs limiting mill consumption, which is forecasted at 25.5 million bales.
Looking ahead, the upcoming Bharat Tex event in February 2025 aims to spotlight the sector's adaptability and growth potential. While India’s cotton sector grapples with reduced production and subdued prices, government interventions and export opportunities are poised to offer critical support during this challenging period.
Bonneterie, a renowned Brazilian luxury knitwear manufacturer, has transformed its production process through the integration of the Production Planning System (PPS) powered by Stoll and KM.ON. Founded in 1987, the company has long been known for its sophisticated and high-quality garments. As part of its ongoing modernization efforts, Bonneterie sought to streamline its operations and improve efficiency, opting to implement the PPS alongside its ERP system.
Before adopting the PPS, production at Bonneterie was hindered by manual processes, including handwritten notes for production and yarn management, leading to errors, miscommunication, and excessive setup times. This inefficiency was exacerbated by operators managing multiple machines, resulting in increased downtime and reduced productivity.
The PPS system has brought significant improvements to Bonneterie’s production workflow. By providing real-time insights and automating key tasks, it eliminated the need for manual input, improving accuracy and allowing operators to manage more machines with ease. The system’s remote access feature also enables managers to oversee operations from anywhere, ensuring better decision-making and faster response times.
The results speak for themselves, efficiency has increased by 20 per cent, stockpiling has decreased, and production is more closely aligned with demand. With access to detailed reports and historical data, Bonneterie can now pinpoint inefficiencies and make data-driven decisions with confidence.
Thanks to its collaboration with Stoll, Bonneterie has successfully modernized its production processes, enhancing its ability to deliver high-quality knitwear with precision and reliability.
Bangladesh’s garment sector has seen female participation drop to 53 per cent in 2023 from 56 per cent in 2014, according to a study by the Bangladesh Institute of Development Studies (BIDS). Women, who once made up over 80 per cent of the workforce, are increasingly moving to home textile and woven industries, while participation in jacket manufacturing has seen a sharp decline.
The study, ‘Technology Upgradation of the RMG Industries in Bangladesh,’ cites mechanization and gender-biased technological transitions as key factors. Automation has displaced 2.15-4.13 workers for every $1 million invested in new equipment, reducing roles in operations but creating opportunities in management and supervision. Additionally, second-generation workers show declining interest in factory work.
Another study revealed that Bangladesh could lose 10.8 per cent of garment exports by 2031 due to EU tariffs, which may rise to 9.6 per cent post-LDC graduation. This could shrink the GDP by 0.38 per cent and cause a 14 per cent drop in apparel exports.
Research highlighted intergenerational effects on workers’ education and the role of unions in improving wages and empowering women. However, the overall share of female leaders and manufacturing workers continues to decline.
These findings were discussed at the BIDS Annual Development Conference in Dhaka, with experts emphasizing the need for strategies to address automation, gender disparity, and post-LDC economic challenges.
WoodspinOy, a joint venture between Spinnova and Suzano, has signed a Letter of Intent (LOI) with global sports brand Puma SE to secure access to Spinnova’s sustainable wood-based Spinnova fibre for future collections. This non-binding agreement guarantees fibre volumes from Woodspin over the coming years, supporting the growth of Spinnova’s innovative technology.
The collaboration aims to incorporate Spinnova fibre into Puma’s Sportstyle products, marking a significant step toward enhancing the sustainability of the fashion industry. The fibre is produced through an environmentally friendly process that uses water instead of chemicals, setting it apart from traditional manmade cellulosic fibres.
Shahriare Mahmood, Spinnova’s Chief Product and Sustainability Officer, expressed excitement about partnering with a global brand like Puma. He emphasized that the agreement is a crucial milestone in scaling both the fibre and Spinnova’s technology. JariAittakari, Sales Director at Woodspin, highlighted that the partnership reflects the transformative potential of sustainably sourced materials in encouraging more sustainable choices in fashion.
Howard Williams, Director of Global Innovation for Apparel & Accessories at Puma, praised Spinnova’s cutting-edge fibre technology, which provides a new avenue for MMCF production, focusing on sustainability and renewable resources. This partnership underscores the growing importance of sustainability in the fashion industry, with Puma leading the way in adopting innovative, eco-friendly solutions.
The Confederation of Indian Textile Industry (CITI) has raised concerns over the proposed GST rate revisions on ready-made garments, warning of significant disruptions to the textile sector, employment, and the economy.
Under the proposal, garments priced up to Rs1,500 will retain a 5 per cent GST rate. However, those priced between Rs 1,500 and Rs10,000 will face an 18 per cent rate, while garments above Rs10,000 will attract a steep 28 per cent GST.
CITI fears the hike will push consumers and businesses toward informal markets, severely impacting the formal retail sector. The increase is also expected to exacerbate price inflation, disproportionately affecting price-sensitive consumers and slowing down demand, particularly for festive and celebratory garments.
Additionally, CITI flagged the ongoing issue of an inverted duty structure (IDS) in the man-made fibre (MMF) segment. Current GST disparities across the value chain block working capital and hinder growth. For example, while GST on MMF fibre is 18 per cent, yarn is taxed at 12 per cent, and fabrics at 5 per cent, creating financial strain for businesses.
To address this, CITI reiterated its recommendations to reduce GST on raw materials like PTA and MEG from 18 per cent to 12 per cent, which would resolve the IDS issue without hurting government revenues.
Chairman Rakesh Mehra emphasized the broader implications of the proposed hike: “Higher taxes will reduce consumption, disrupt the sector, and threaten livelihoods in SMEs involved in spinning, weaving, and manufacturing.”
CITI urged the government to reconsider the revisions, calling for policies that promote growth in India’s textile sector, which provides employment to millions and serves as a cornerstone of the economy.
Compared to the previous year, Japan's cotton yarn imports declined by 15.9 per cent to 40,000 tons in volume in 2023. As per the estimates by IndexBox, the value of cotton yarn imports by Japan declined to $182 million in 2023.
Collectively accounting for 71 per cent of total imports, Indonesia (11,000 tons), Vietnam (9,000 tons), and Pakistan (8,200 tons) remained Japan’s leading cotton yarn suppliers in 2023. Over the 2013-2023 period, Japan’s imports from Vietnam grew at a CAGR of 27.4 per cent while imports from other major suppliers declined.
In terms of value, Indonesia ($41 million), India ($41 million), and Vietnam ($33 million) emerged as the top suppliers, comprising 63 per cent of total cotton yarn import value. Vietnam also led in value growth with a 26.3 per cent CAGR, while other suppliers experienced declines.
The dominant product imported during this period was cotton yarn (other than sewing thread) containing 85 per cent or more cotton by weight. This category accounted for 93 per cent of total imports in volume (37,000 tons) and 90 per cent in value ($165 million). In contrast, yarn containing less than 85 per cent cotton or retail-ready yarn made up smaller portions of the imports, with declining growth rates of -3.7 per cent and modest growth of 1.4 per cent, respectively, in volume.
The upcoming conference in Cologne, Germany, on March 12-13, 2025, will explore pathways to a sustainable textile industry, featuring over 40 expert-led presentations. Experts from nova-Institute, CIRFS, The Fiber Year, and other leading organizations will provide insights into transforming the textile sector amid changing market conditions.
Key discussions will focus on the future of cellulose fibres and strategies for reducing reliance on fossil fuels. Michael Carus from nova-Institute will highlight the long road ahead in adopting fossil-free textiles, while Dieter Eichinger from CIRFS will propose ‘Cellulose’ as a unified standard to streamline fibre terminology and foster sustainability. This standardization aims to simplify the market, promoting transparency and enabling eco-friendly innovations.
Another critical topic will be the impact of slow demand growth on manufacturing, with Andreas Engelhardt of The Fiber Year discussing its effects on traditional sales channels and production strategies. The Lyocell market’s rapid growth will also be a focal point, as Simone Seisl and Hawkins Wright explore its potential driven by increasing demand for sustainable alternatives and investments in production capacity.
The conference will also feature Marina Crnoja-Cosic from the European Technology Platform for the Future of Textiles and Clothing (Textile ETP), showcasing its role in driving textile innovation and sustainability. With over 300 member organizations and 1,200 experts, Textile ETP is a key player in advancing European textile research and fostering collaboration.
This event promises to be a critical platform for discussing innovative solutions and strategies to navigate the evolving landscape of the textile industry.
The Lenzing Group, a global leader in regenerated cellulose fibers, celebrates a major milestone in its collaboration with CPL Prodotti Chimicisrl and Oniverse, owner of the Calzedonia fashion brand. Central to this partnership is Lenzing Acetic Acid Biobased, a sustainable by-product of Lenzing’s wood-based pulp production.
CPL, the first licensed partner for Lenzing Acetic Acid Biobased, will use this innovative product in various industrial processes, including textile dyeing for Oniverse. This collaboration underscores Lenzing's commitment to a circular economy, offering products with significantly lower carbon footprints and greater environmental benefits.
Elisabeth Stanger, Senior Director of Biorefinery& Co-Products at Lenzing, emphasized that the alliance reflects the strong trust in Lenzing’s sustainable solutions. She explained that their biobased acetic acid plays a key role in reducing industrial carbon emissions.
Marco Lanzetti, owner of CPL, praised the long-standing partnership with Lenzing, noting that combining quality with sustainability reflects shared values. Federico Fraboni, Head of Sustainability at Oniverse, emphasized the importance of this initiative in showcasing how interconnected supply chains can minimize waste and environmental impacts.
Lenzing’sbiorefinery process efficiently transforms renewable wood into valuable products like Lenzing Acetic Acid Biobased, which boasts an 85 per cent lower carbon footprint than fossil-based alternatives. The product is widely applicable across industries, including textiles, food, cosmetics, and pharmaceuticals, strengthening Lenzing's position as a leader in sustainable innovation.
The European Union and South America's Mercosur bloc announced a long-awaited free trade agreement, concluding 25 years of negotiations. European Commission President Ursula von der Leyen, speaking in Montevideo alongside her Mercosur counterparts, called the deal a ‘political necessity’ amid rising global protectionism.
The agreement aims to reduce EU reliance on China and shield the bloc from potential US trade tariffs. However, it faces significant hurdles, requiring legal formalization and approval from EU member states. France leads opposition, citing environmental and agricultural concerns, with French farmers fearing competition from South American imports.
The updated pact includes amendments on public procurement, auto trade, critical minerals, and environmental safeguards to address South American concerns. Brazilian President LuizInacio Lula da Silva welcomed the milestone but noted challenges ahead. Paraguayan President Santiago Pena echoed this caution, highlighting the need for further work.
Supporters, including Germany and Spain, argue the deal diversifies EU trade and bolsters its green transition. Critics, like France and Italy, remain steadfast in their objections. Approval requires backing from 15 EU states representing 65 per cent of the population and a simple majority in the European Parliament, leaving its future uncertain.
Sri Lanka's recent reaffirmation of its commitment to the EU's Generalized Scheme of Preferences Plus (GSP+) program underscores its critical importance to the island nation's economy, particularly for its textile and apparel industry. This trade program grants Sri Lanka preferential access to the lucrative European market, offering duty-free entry for thousands of products, including vital textile and apparel exports.
The GSP+ program isn't just about economic benefits; it's tied to Sri Lanka upholding 27 international conventions on human rights, labor standards, environmental protection, and good governance. This makes GSP+ a powerful tool for promoting sustainable and inclusive development in the country.
Sri Lankan textiles and apparel exports
The textile and apparel industry is a significant contributor to the nation's economy, providing employment for hundreds of thousands of workers, predominantly women. In 2023, Sri Lanka exported a total of $3.63 billion worth of goods to the EU and the UK, which was almost 30 per cent of its total exports. Of this, the textile and apparel sector accounted for a lion's share, with the EU and UK being the destination for over half (54.9 per cent) of Sri Lanka's total apparel exports.
Table: Sri Lanka’s total apparel exports to the EU, UK
|
Year |
Total Exports to EU & UK ($ bn) |
Apparel Exports to EU & UK ($ bn) |
Total exports in per cent |
|
2019 |
3.28 |
2.15 |
65.50 per cent |
|
2020 |
2.95 |
1.88 |
63.70 per cent |
|
2021 |
3.31 |
2.05 |
61.90 per cent |
|
2022 |
3.5 |
2.1 |
60.00 per cent |
|
2023 |
3.63 |
2.25 |
54.90 per cent |
Source: Sri Lanka Export Development Board
GSP+ advantages and challenges
The GSP+ program provides Sri Lankan exporters with a significant competitive edge by eliminating tariffs on many goods. Without GSP+, these exporters would face the EU's Most Favored Nation (MFN) tariffs, which can be substantial. For the apparel sector, this difference (known as the preference margin) is often more than 10 percentage points.
However, utilizing GSP+ benefits is not without its problems. Complex rules of origin, which dictate the minimum local content required for a product to qualify for preferential treatment, can be challenging and costly to comply, particularly for the apparel sector which often relies on imported fabrics and yarns. This is reflected in the utilization rates:
Table: Sri Lanka’s utilization rates
|
Product category |
Exports to EU & UK ($ mn) in 2019 |
GSP+ utilization rate |
|
Knitted or crocheted apparel |
1,310 |
52.30 per cent |
|
Non-knitted apparel |
842.45 |
52.30 per cent |
|
Rubber products |
340.95 |
96.40 per cent |
Source: ‘Who Stands to Lose? Examining the Fallout of GSP+ Preference Erosion in Sri Lanka’
Losing GSP+ would have a devastating impact on Sri Lanka's apparel sector. A study by the Institute of Policy Studies (IPS) estimates that reverting to MFN tariffs could lead to a decline in overall exports of $1.23 billion (36.7 per cent compared to 2019 levels), with the apparel sector bearing the brunt of the loss ($996.38 million, or a 44.63 per cent drop). This decline in exports translates to significant job losses. The IPS analysis suggests that 73,574 workers could be at risk of losing their jobs if GSP+ is withdrawn, with 87.1 per cent of those workers coming from the apparel sector. Women, who make up 70.5 per cent of the apparel industry's workforce, would be disproportionately affected.
Take the example of leading apparel manufacturer in Sri Lanka, Hirdaramani Group which has been a vocal advocate for GSP+. The company, which employs over 10,000 workers, has leveraged GSP+ to expand its exports to the EU. However, they have also highlighted the challenges posed by rules of origin, particularly for high-value products like lingerie, where sourcing specific components within the region can be difficult. They stress the need for greater flexibility in these rules to maximize the benefits of GSP+.
The road ahead
Maintaining GSP+ is crucial for Sri Lanka's economic stability and the livelihoods of its workers. The government must continue to demonstrate its commitment to the 27 conventions and work towards improving GSP+ utilization rates. This includes:
Enhanced cumulation: Increasing the cumulation of non-originating materials, as seen in the recent EU approval of cumulation between Sri Lanka and Indonesia, can significantly benefit the apparel sector.
Rules of origin reform: Advocating simpler and more flexible rules of origin that reflect the realities of global supply chains is essential.
Long-term strategies: Exploring options like a free trade agreement with the EU can provide a more permanent solution for preferential market access, especially as Sri Lanka potentially moves towards upper-middle-income status, which would disqualify it from GSP+.
The GSP+ program is a lifeline for Sri Lanka's textile and apparel industry, supporting jobs, promoting inclusive growth, and driving sustainable development. By addressing the challenges and maximizing its utilization, Sri Lanka can ensure that GSP+ continues to be a powerful engine for its economic future.
