The Cotton Association of India predicets, India’s cotton production will decline by 4 lakh bales to 356 lakh bales during the 2020-21 season, reports Textile Beacon. Total supply till end of the 2020-21 season is estimated to be 477.50 lakh bales, including opening stock of 107.50 lakh bales, crop at 356 lakh bales and imports at 14 lakh bales. Domestic consumption is estimated to be 330 lakh bales, while cotton export will of about 60 lakh bales.

In October this year, India’s cotton exports surged by four times in volume to 6.84 lakh bales worth $170 million or Rs 1,238 crore. Bangladesh was the largest market for Indian cotton export during October, followed by China and Vietnam.

Export price realization for cotton averaged Rs 106 a kg or US cents 66.50 per pound during October. This was below Cotlook A index, the global spot price benchmark also compared with domestic spot price for benchmark Gujarat Shankar-6. During the month, Cotlook averaged $75.51 per pound and Shankar-6 at US cents 68.33 per pound, making Indian cotton more competitive in global market.

Bangladesh was the largest importer of Indian cotton with imports at an average prices of US cents 68.56 per pound in October 2020 as against US cents 75.97 per pound a year ago.

When 15 countries including the 10 ASEAN nations signing the Regional Comprehensive Economic Partnership (RCEP) deal on November 15 this year, India decided against participating as it perceived the deal could block India’s exports and spur imports, mainly from China. The China-backed deal would have accelerated China’s exports to India with duty free entry facilities. Additionally, its Rules of Origin failed to address the value addition norms and India’s widening trade deficit with China. The deal also did not cover the IT sector, which prevented India from being a part of it.

FTA with the US could stimulate exports

India has FTAs with many of RCEP members. However, it does not benefit from any of these. In fact, post signing these FTAs, India’s imports from these countries have doubled which triggered its vehement opposition to the RCEP. However, India can explore FTA with the US which would increase its exports to $660 billion by 2024-25. At the US-India Strategic Partnership Forum, Piyush Goyal, Minister of Commerce urged both countries to introduce new trade packages, after closing the pending gaps.

Even though US’s withdrawal of GSP benefits and high tariffs on steel and aluminum during the Trump regime threatened bilateral trade relations, India’s exports to the US continued to rise in 2019-20. The country mainly exported readymade garments, marine products and diamonds to the US. The US was also the biggest importer of IT services from India hence a FTA between the two countries would benefit both of them immensely, predicts studies by the World Bank and Peterson Institutes.

Help resolve trade disputes and boost investments

Studies urge India to initiate FTA with the US. This would help both countries resolve trade disputes and facilitate exports against stiff competition from member countries. India accounts for 40 per cent of US’s total textile imports, followed by Vietnam which is the second biggest exporter of readymade garments to the US. An FTA with the US could help India counter competition from Vietnam.

An FTA with the US could also spur trade related investments in India besides helping it to reduce trade deficit with other countries. Even though President-elect Joe Biden does not plan to rejoin the Trans-Pacific Partnership, he actively promoted its campaign during the presidency of Barrack Obama. In fact, during the election campaign he urged members to join the agreement, and lay adown trade rules for the 21st century.

VSF export of India totaled 54,000 tonneduring January-September this year and the import volume was 33,000 tonne for the same period, respectively down by 4 per cent and 3 per cent from the comparable 2019 level. The minor decline reflects that the import and export starts to further recover and we also maintain the expectation of rising apparent consumption of VSF around 30,000 tonne from India in 2020.

Rayon yarn import of India in Jan-Sep totals 47.2,000 tonne, up 46 per cent y-o-y, but export volume decreases by 18 per cent to 19.8000 tonne. The import of rayon single yarn increased by 41.4 per cent to 45.2,000 tonne and export amounted to 10.8000 tonne. The percentage of single yarn in imports improved further, which is 95per cent, 97.5 per cent and 98 per cent respectively from July to September. Rayon yarn apparent consumption growth of India can be 35000 tonne in 2020 and that of single yarn could be over 40,000 tonne, offsetting the expanding gap between blended yarn import and export.

A new research from Oxam has accused some of biggest Australian fast fashion brands of sustaining systemic inequality by purchasing clothing from factories where workers are paid poorly and forced to work long hours.

Oxfam found that of the major retailers in Australia, H&M was deemed to be the most equitable with its suppliers while Mosaic Brands – owner of Katies, Rivers and Crossroad – was deemed to be the worst.

The report, titled Shopping for a Bargain ranked 10 fashion retailers in Australia including Best&Less, Big W, Cotton On, H&M, Inditex (Zara), The Just Group, Kmart, Myer, Mosaic Brands and Target.

It found that retailers were accused of aggressively negotiating prices, providing short lead times and making last-minute changes to orders that directly impacted factory workers' lives.

All of the above retailers source their clothing from Bangladesh, who Oxfam approach to grade the retailers on how fair they were with their pricing, as well as their willingness to negotiate.Ranking in a four-star system, the Bangladeshi factories scored H&M the highest with 3 out of 4, followed by Big W, Kmart and Target who all scored 2.5 out of 4.

At the organization’s annual general meeting, Colette Garnsey, Chairman, Australian Wool Innovation (AWI), informed wool prices are seeing a rebound on the back solid underlying support. For the week ended November 20, the benchmark Eastern Market Indicator declined by 24 cents to $8.45 after an 18 cent pop to 8.69 a week earlier.

Garsney said, lower wool prices and other factors has resulted in a 45 per cent fall in AWI’s revenue in 2019-20. There remained a significant uncertainty in the global industry in the short term, particularly with large parts of Europe and North America heading back into lockdowns as they head into winter. However, she said the longer-term tailwinds for our fiber are undiminished given its sustainability, traceability, wearability and durability.

Stuart McCullough, CEO, AWI said, the demand for Australian wool overwhelmingly came from one place in 2020–China–although AWI was also pursuing other markets. He said, WI has also pursued an “Emerging Markets” strategy for eight years that has seen an increase in processing and consumption of wool in places including India, Vietnam, Bangladesh and Sri Lanka.

Invista Nylon Chemicals (China) has expanded capacity of its 40,000-ton per year nylon 6.6 polymer plant at the Shanghai Chemical Industry Park (SCIP) to 190,000 tons annually. As per Sourcing Journal, this is Invista’s fourth continuous polymerization line at SCIP, where the company now has 30,000-ton per year autoclaves and 160,000-tons annual continuous process nylon 6.6 polymer capacity.

The company is also developing an ADN plant at the Shanghai Chemical Industry Park that will deploy the company’s most-advanced, energy-efficient ADN technology in China. The plant will integrate with Invista’s existing HMD and polymer facilities to directly supply domestic customers with the key building blocks to produce nylon and other specialty materials, such as high performance polyamides and polyurethane coatings, in China and throughout the Asia Pacific region.

A subsidiary of Koch Industries since 2004, Invista brings to market the proprietary ingredients for nylon 6.6 and recognized brands, including Stainmaster, Cordura and Antron.

As per a Brand Finance report, value of intangible assets of the world’s most valuable companies has jumped to $10.8 trillion as of September 1. During the COVID-19 crash, this value had dropped by $1 trillion. The top 10 valuable companies in terms of intangible assets are: Apple, Amazon, Aramco, Microsoft, Alphabet, Facebook, Alibaba, Tencent, Tesla, and VISA, respectively. These companies have the ability to differentiate themselves with limited physical assets, defending price and demand, with 32 internet and software and technology & IT companies included in the top 100 ranking of companies with the highest total intangible value.

A few apparel and cosmetics companies made it to the list this year. LVMH Moët Hennessy Louis Vuitton was ranked 31st. The Paris-based luxury goods conglomerate – which owns over 70 luxury brands, including Louis Vuitton, Dior, Celine, Givenchy, and Loewe – has a total intangible value $233 billion, according to Brand Finance’s calculations, with that total intangible value accounting for 88 percent of the company’s overall enterprise value.

At the same time, Brand Finance notes cosmetics, pharma and healthcare companies continue to be highly intangible, due to the combined impact of branding and technology, which play a critical role in value-generation for these industries.

Nike ranks 49th with a total intangible value of $172 billion, which represents 94 per cent of the company’s enterprise value, and cosmetics giant L’Oreal is at number 55th spot (down from 53rd last year). Its total intangible value reached $166 billion this year, which is 90 percent of its enterprise value.

Brand Finance states the enormous volatility not just in the market but more specifically in terms of the intangible value of the world’s biggest companies suggests fundamental flaws in investor understanding of company assets. The London-based business valuation consultancy asserts that most investors do not fully understand the underlying value of the companies they invest in, leaving room for wildly fluctuating share prices and mass panic.

As per the Cotton Corporation of India (CCI), a large cotton export order between India and the Bangladesh is expected to be completed in December. The total size of this export order is 1.5 million bales. In 2019/20, CCI acquired 10.5 million cotton bales, of which 4.5 million bales remain unsold. Since 2020/21, CCI has acquired 1.1 million bales.

As per a report in the China Textile Magazine, Bangladesh currently imports 2.5-3 million bales (170 kg/bag) of cotton from India every year. In June this year, India began discussing its cotton exports with Bangladesh, China, Vietnam and Indonesia. The discussions revealed that Vietnam currently has sufficient stocks to last until December. The country imports 400-500,000 bales from India each year.

For the third quarter ended October 31, 2020, American fashion company Gap Inc reported a 5 per cent increase in its comparable sales as the retailer’s Athleta and Old Navy brands continued to shine. Net sales of the San Francisco-based company remained flat at $3.9 million compared to the same period in the prior year. Brick and mortar sales declined by 20 per cent which were offset by a 61 per cent increase in online sales.

The retailer’s Old Navy brand posted 15 per cent and 17 per cent increases in its net and comparable sales, respectively, with the acceleration of its online business making a significant contribution to this progress.

Net sales of Athleta increased 35 per cent, while its comparable sales rose 37 per cent. Its digital sales contributed more than 50 per cent of its revenues in the quarter, the brand also benefited from its recent expansion into selling masks.

In contrast, Gap’s eponymous flagship brand experienced a 14 per cent decrease in its quarterly net sales and a 5 per cent decline in its comps. Banana Republic’s net sales fell by 34 per cent, while the brand’s comparable sales dropped 30 per cent.

The company also appointed two new executives. Effective January 2021, Asheesh Saksena has been appointed as the group’s chief growth officer, a newly created position focused on leading the retailer’s growth initiatives. He previously served as president of Best Buy Health.

Sandra Stangl has been appointed as the new president and CEO of Banana Republic, a role in which she will help lead the brand’s repositioning efforts, starting December 2020.

Recent trade data from the HS Code reveals COVID-19’s impact and signs of recovery in the sector, says a USDA report. According to this report, China’s recovery has been fastest among all countries. However, the speed of recovery in consumer demand is uncertain, and the impact of working remotely is not known. In April and May, global apparel imports dropped dramatically with US imports dropping 55 per cent in May. Imports by EU and UK dropped over 40 per cent while imports by Japan declined 30 per cent during the same period.

This decline in textile and garment exports was noticed across all major markets, Exports by Bangladesh and India fell by 85 and 90 per cent respectively, while shipments from Pakistan, Turkey, and the European Union declined by 60 per cent.

The impact of COVID-19 hit both demand and supply at the same time. Lockdown restrictions slowed consumer spending while also halting cotton-related processing. Spinning mills’ operating rates in India, Pakistan, and the United States fell over 90 percent, while declines were slightly lower in China. Similar to the export data, Vietnam’s operating rate declined by only 30 percent.