FW
The outlook for Indian cotton textiles for financial year 2016-’17 is expected to be stable. This will be led by a marginal expansion in the cotton space on the back of lower cotton prices, even as revenue growth will be slower, mirroring lower sales realisations.
Most revenue growth is expected to come from higher production efficiency rather than significant capacity additions. However, the cotton textile sector faces key risks also. A cotton or yarn price crash led by uncertainty from China on the buying or stocking of cotton or yarn is a key risk, and could lead the outlook revision to negative for cotton textiles. Uncertainty stemming from China’s policy and production strategy remains a threat.
Revenue growth in financial year ’17 is likely to be driven by the enhanced domestic consumption of fabrics, apparels and home textiles in view of lowering interest rates, rising discretionary income, favorable demographics and moderating inflation.
The outlook for synthetic textiles for financial year ’17 is negative because of continuing overcapacity, falling capacity utilisation, dumping from China, and continuously falling raw material prices, which could translate into inventory losses. India is likely to lose competitive advantage against peers such as Vietnam, which has duty-free access to Europe, and possibly to the US upon the passage of the Trans-Pacific Partnership.
Cotton farmers in the United States are expected to boost acreage by 6.2 per cent this year as weak market prices for competing crops including corn and soybeans lead them to devote more area to the fiber. Last year, farmers planted 8.6 million acres of cotton. That was the lowest level since 1983. With an abandonment rate of 11 per cent, just 8.1 million acres of cotton were harvested last year in the US.
While cotton prices had changed little over the past year, drops in grain prices, which compete with the fiber for acreage, would likely encourage farmers to plant cotton. Prices have traded in a tight range for much of the past one and a half years amid uncertainty about China’s plans to release its massive cotton stockpile.
Front-month corn prices closed 2015 down nearly 10 per cent and benchmark soybean futures closed the year down nearly 15 per cent. Both are still trading well below year-ago levels. Price ratios of cotton to competing crops are a bit more favorable than in 2015.
Plantings in the world’s biggest exporter are expected to rise to 9.1 million acres in 2016, slightly lower than median expectations of 9.7 million acres.
Textile Exchange and the Organic Trade Association have entered a joint effort to strengthen the North American organic textile industry. The two groups will work together on legislative advocacy, public outreach and consumer education initiatives.
A major goal of the partnership is to boost outreach to North American consumers on the benefits of organic fiber and textiles, particularly the environmental and social benefits of growing and processing them. US organic fiber sales were the fastest growing non-food sector, reaching $1.1 billion in 2014, up 18 per cent from the previous year. The leading organic fiber is cotton. In 2014, US growers planted organic cotton on 18,234 acres, the largest number of US acres devoted to organic cotton since 1995.
Global sales of organic cotton products reached an estimated $15.7 billion in 2014, up 10 per cent from 2013. Founded in 2002, Textile Exchange is a global non-profit that works with all sectors of the textile supply chain to find the best ways to minimise and reverse the negative impacts on water, soil, air and the human population created by this $1.7 trillion industry. Organic Trade Association is the membership-based business association for organic agriculture and products in North America.
textileexchange.org/ https://www.ota.com/
Bangladesh’s exports rose 10.4 per cent in January from a year earlier to $3.18 billion, driven by stronger sales of garments. Exports for July to January period, in 2015-16 financial year rose 8.3 per cent from a year earlier to $19.27 billion. Garment sales, comprising knitwear and woven items, totaled $15.76 billion in July to January, up nine per cent from a year earlier.
Garments are a key foreign exchange earner for the South Asian nation, whose low wages and trade deals with western markets have helped make it the world’s second largest apparel exporter after China. The top export destinations of Bangladesh are the United States, Germany, United Kingdom, France and Spain. The top exports of Bangladesh are non-knit men’s suits, knit T-shirts, knit sweaters, non-knit women’s suits and non-knit men’s shirts.
Exports account for about 6.2 per cent of total Bangladeshi economic output. The country’s top ten exports accounted for 96 per cent of the overall value of its global shipments. Clothing shipments alone represent 84.7 per cent of Bangladeshi exports. Bangladesh’s flagship clothing exports appreciated by 95.2 per cent for non-knit or crochet articles and by 84.3 per cent for knit or crochet clothing.
SRF will set up a plant at Indore. The proposed facility is set to have a capacity of 30,000 TPA and a metallisation capacity of 8,000 TPA. More than 60 per cent of the proposed project output of flexible packaging will be used in the food packaging and beverages industries. The project will thus support the expansion of the processed foods industry and enhance food security by reducing food spoilage. SRF is a leading producer of biaxially-oriented polyethylene terephthalate film. The proposed investment will be backed by the International Finance Corporation.
The project aims to create 100 direct jobs and a similar number of indirect jobs in ancillary units and supply chain. In 2012, the IFC financed SRF's greenfield projects in Thailand and South Africa. The current proposed investment complements these earlier investments.
SRF has interests in technical textiles, chemicals and polymer and packaging films. The company has existing operations in Madhya Pradesh, Rajasthan, Uttarakhand, Tamil Nadu and Gujarat. It has plants in three countries and exports to 75 countries. It is a multi business manufacturing entity—fluorochemicals, specialty chemicals, and engineering plastics. Among its products are laminated fabrics, industrial yarns, refrigerants, engineering plastics, tyre cords, packaging films.
www.srf.com/
"With 21 countries displaying their products to visitors of Texworld Paris, the event will showcase some other interesting specialities among exhibitors - fibres from Lenzing (Austria), Indonesian and Italian silky aspects, Thai lace and embroidery, English prints and, of course, American cotton, represented by the organisation Cotton USA."
This is the season for textile exhibitions and shows in Paris. Moreover, France is investing more and more in reconciling the textile industry with new technologies and fashion. Incidentally, three major shows Apparelsourcing Paris, Avantex Paris and Texworld Paris are happening simultaneously this year.
Apparelsourcing Paris aimed at RMG, accessories
Apparelsourcing Paris will welcome manufacturers of ready-to-wear fashion and accessories to Le Bourget, Paris, from February 15 to 18 to establish the No. 1 European trade fair for garment sourcing. Apparelsourcing Paris will share its space with ‘Shawls and Scarves’, the accessories show case, whose offer will fulfill the expectations of buyers, and collection and production managers in an ideal way.
Following the successful event in February 2015 which attracted almost 50 additional exhibitors, the latest edition has seen an enormous 30 per cent increase in registering totaling 230 exhibitors, a previously unheard-of level. The high point of this fair will be the presence of five Moroccan businesses introduced by Maroc Export, the public body charged with promotion of the export of Moroccan products and services in association with AMITH, (the Moroccan Association of Textile and Clothing Industries). This is an offer which favours the poorly-represented short cycle at the fair but which is able to meet much more fundamental needs. Moreover, Apparelsourcing Paris will host the first annual symposium of Dialog Textil Bekleidung to be held outside Germany.
Apparelsourcing Paris is offering customers a platform of garment production solutions covering all the items in any man’s, woman’s or child’s wardrobe.
Avantex Paris: A new acclaimed event
The second Avantex Paris trade fair will be held from February 15, to 18 2016 at Le Bourget, Paris, dedicated to high-tech fashion fabrics and R&D in the industry. The fair, will build on the great interest shown by visitors in the first event, in September 2015. Messe Frankfurt France wants to renew and reinforce this powerful dynamic, mixing fashion and high-tech fabrics.
According to Michael Scherpe, CEO of Messe Frankfurt France , the purpose of the Avantex concept is to bring high-tech textile businesses, designers and fashion product managers together around innovative textiles, to create intelligent collections and conquer new markets with Intelligent, connected fabrics, materials combining nanotechnology and cosmetics, and astounding finishes and coatings - in short, the best of high-tech R&D.
The textile and garment offer by exhibitors at Avantex Paris combines numerous innovative functions: all-season, moisture transfer, quick-drying, UV protection, impermeable, breathable, waterproof, windproof, antistatic, insulating, anti-bacterial and with a cool feeling (like cosmetic fibres).
Texworld Paris: A unique palette full of discoveries The 38th Texworld Paris trade fair, too will be held at Le Bourget Exhibition Centre from February 15, 16, 17 and 18 2016. The fair will continue to make its mark as the definitive international fashion trade fair for fabrics, sundries and accessories, and as a bridgehead for the French and western market for a high number of large and medium-sized export-oriented manufacturers. The February trade fair, dedicated to the Spring/Summer seasons, follows the logic of fashion with a slightly narrower offer than the September event, which is dedicated to autumn and winter. The February 2016 is showing that exhibitors’ interest in the unique European platform which Texworld Paris provides is growing, as more than 630 exhibitors will take up space exceeding an entire hall for the first time.
With 21 countries displaying their products to visitors of Texworld Paris, the event will showcase some other interesting specialities among exhibitors - fibres from Lenzing (Austria), Indonesian and Italian silky aspects, Thai lace and embroidery, English prints and, of course, American cotton, represented by the organisation Cotton USA.
On the fringes of the range of textile solutions, Texworld Paris is arranging practical improvements and fringe promotions which will supply essential information, food for thought and dreams to help to make a better choice. A clearer distinction between sectors will group exhibitors by their manufacturing specialism.
Sri Lanka’s apparel sector associates are to be supported by the country’s largest private bank with an exclusive debit card that confers special benefits, under a partnership between the Commercial Bank of Ceylon, the Joint Apparel Association Forum (JAAF) and Channel 17, the company tasked with managing an employee loyalty program for the sector. The aim is to retain and reward workers of the apparel industry which is a vital constituent of Sri Lanka’s export economy. The debit card will enable them to manage their finances better and at the same time receive a host of other benefits.
The JAAF membership targeted Commercial Bank – MasterCard issued Ransalu Privilege Card will be available free of charge to any member of the JAAF operated Ransalu Loyalty Program who has or opens an account with Commercial Bank. The debit card will make its owners eligible to receive the extensive collection of discounts and offers normally enjoyed by Commercial Bank debit card holders, in addition to the benefits they are entitled to under the Ransalu program.
The card will also serve as identification for them to claim benefits from the Ransalu loyalty program, which targets a membership of over 3,50,000. The Ransalu privilege loyalty program already offers its members discounts on essential consumer items, hospitalisation, pharmaceutical products and clothing.
Pakistan replaced Bangladesh to emerge as the largest buyer of Indian cotton in the October-December quarter. Pakistan suffered crop damage due to the white fly virus. India’s cotton exports to other countries are also likely to remain significantly up this year. Around a third of the crop in Pakistan was damaged. So textile mills there imported cotton from India to meet their requirements.
India transports cotton to Pakistan primarily through the Wagah border. Meanwhile, the global scenario is also changing due to a slowdown in demand from China, which contributed to 24 per cent of India’s overall cotton exports in 2014-15. This year, however, China’s share is likely to decline.
China’s cotton imports may fall by 40 per cent this year due to a fall in consumption and lower domestic cotton prices. If the pace of its imports remains steady, Vietnam may overtake China as the largest importer of cotton in the world in 2015-16. Cotton imports by Vietnam are estimated to rise by 17 per cent. Imports by Bangladesh are forecast to increase by 12 per cent.
Consumption in both Vietnam and Bangladesh is increasing steadily, due to lower production costs, but both produce very little cotton, and instead must rely on imports to meet demand.
To draw up its third five year plan, the apparel industry is in the process of discussion among key stakeholders. With preparations underway to draft the next five year plan the industry is carrying out discussions on a number of issues particularly the trade concessions with the European Union (EU), a new US backed trade partnership with 12 countries, and the bilateral trade agreement with the Chinese authorities. According to the officials, the apparel industry is waiting for the egaining of the EU trade concessions of GSP plus that will be forthcoming most likely by the end of the year.
Once the fish ban on Sri Lanka is lifted the country would soon thereafter submit their application to obtain the trade concessions from the EU. The recently signed Trans Pacific Partnership agreement between 12 other countries is currently being discussed among members of the industry. The apparel industry is trying to understand the implication of the said agreement as it involves a partnership of 12 countries which command 45 per cent of the world GDP that has custom territories.
According to the officials, countries like Vietnam have already engaged in negotiations to gain concessions from the TPP which is likely to be granted in about two years. In the wake of these developments it was pertinent that Sri Lanka looks at its implications on the apparel sector based on issues relating to purchasing of yarn and fabric from countries within the grouping
The Bangladesh Jute Mills Corporation (BJMC) has once again sought a large amount of funds from its government to make its ailing mills profitable. The request came at a meeting between the textiles and jute ministry and Finance Minister AMA Muhith where the high officials of BJMC were also present.
The request of about Tk 1,800 crores is for paying staff salaries and various dues and purchasing jute. According to Humayun Khaled, chairman of BJMC the prospects for jute have expanded and its demand on the market is on the rise. About 5,500 employees have retired in the last few years and BJMC is unable to provide their dues, he said. However, no decision on the matter was taken at the meeting. Muhith has directed the finance division and the textiles and jute ministry to hold separate meetings to take stock of the situation and make recommendations.
According to finance ministry official, only after finding a way to make the 25 mills profitable would a decision on paying their dues would be taken. Since 2009, BJMC has been given more than Tk 6,000 crores for buying jute, paying dues and staff salaries. The funds were given under various conditions such as turning the jute mills into holding companies.
However, this time, funds will be provided only after the mills meet the conditions. In the last nine years, the mills suffered losses every year, save for one, in fiscal 2010-11, when a slight profit of Tk 14 crores was made. From fiscal 2006-07 onwards, they made losses of Tk 66 crores to Tk 700 crores each year.
