FW
Pakistan’s cotton production may fall this year. Among the reasons are: high power tariff for tube wells, water shortage, absence of a support price and substandard and fake seeds. In most cotton-producing zones, the water table is either down or water has turned saline.
Cotton ginners say, the country’s cotton production can be raised up to 15 million bales if the Cotton Control Act is properly implemented. They have urged the government to extend support to each ginning factory and introduce upgraded ginning technology for production of clean cotton. It is estimated each of the 1300 ginning factories in Pakistan needs an investment of at least Rs 5 million for upgradation.
Pakistan aims to boost cotton production and increase its cultivation area by 45 per cent by 2025. Research funding will be provided. Cotton research will be revitalized. Partnerships may be initiated for variety development and marketing. The Seed Act and the Plant Breeder Rights Act may be implemented. Sub-standard cotton seed and BT cotton varieties may be regulated. The cotton sector may be regulated by rationalizing over 700 seed companies and disallowing cotton imports during the cotton picking season.
Spinning and ginning may be improved through better technology, shifting of the current weight based pricing to a quality based system, and bale labeling by ginners showing quality features.
Accord is a platform of western buyers and has been undertaking workplace safety activities in the country’s readymade garment sector. Accord, has a coalition of more than 200 global apparel brands, retailers and rights groups, has so far inspected fire, electrical and structural integrity in some 1,600 garment factories.
Of these, some 172 completed full post-inspection flaw fixing work while 171 faced business termination due to their failure to fix safety flaws. A total of 89 per cent progress has been recorded in all factories. The tenure of existing Accord ended in May this year and it was given a six-month extension.
Pressure for further extension of Accord, however, is mounting from different quarters mainly to complete the tasks and continue with the ongoing safety culture for long-term sustainability. The Bangladesh readymade garment industry is undoubtedly safer, and lives have been saved.
After the 2013 Rana Plaza tragedy, global apparel brands no longer ignore dangerous working conditions at their supplier factories. Five years on, Bangladesh Accord stands as a model for industrial relations, and shows that brands and unions can work together to solve systemic problems.
"After having fallen by over 12 per cent this year, the Indian rupee has hit an all-time low against the US dollar. Though a weakening rupee is in favor of exporters, stalwarts of Indian apparel industry are skeptical about how it will benefit trade. Harish Ahuja, Managing Director, Shahi Exports believes the depreciating rupee benefits as the apparel industry gets more orders. The depreciation has been only against the dollar, and not against other currencies. Dollar exports from India is only around 40 per cent."
After having fallen by over 12 per cent this year, the Indian rupee has hit an all-time low against the US dollar. Though a weakening rupee is in favor of exporters, stalwarts of Indian apparel industry are skeptical about how it will benefit trade. Harish Ahuja, Managing Director, Shahi Exports believes the depreciating rupee benefits as the apparel industry gets more orders. The depreciation has been only against the dollar, and not against other currencies. Dollar exports from India is only around 40 per cent.
Opinion divided on depreciation
HKL Magu, Chairman, Apparel Export Promotion Council (AEPC), feels the rupee depreciation will help the industry to get more orders. Although big buyers or top stores ask for this adjustment, they understand currency fluctuation is in nobody’s control and this trend will continue in future.
PMS Uppal, MD, Pee Empro Exports, Faridabad and President, Okhla Garment and Textile Cluster (OGTC),
Delhi, believes the situation will benefit small and medium exporters. The company plans to grow at 20 per cent and a weak rupee helps to consistently achieve this target. However, Raja Shanmugham, President, Tirupur Exporters’ Association (TEA), and MD of Warsaw International, disagrees with this. He says Indian exporters can’t get too much benefit as buyers ask for bonus money in such a case; especially in repeat orders. Lalit Thukral, President, Noida Apparel Export Cluster and MD of Maharana of India, Noida also seconds the opinion that plummeting rupee benefits exporters.
Other countries too sees currency depreciation
Anil Peshawari, MD, Meenu Creations, Noida points out Chinese Yuan depreciated nearly 10 per cent while Turkey’s Lira depreciated more than 50 per cent. Turkey, which earlier was doing mainly knitted garment, is now focusing on woven garments also. Moreover its proximity to Europe is also boosting imports. Bangladeshi Taka depreciated just 2 per cent, in recent months. But Dhaka already has a lot of advantage over India. India’s exporters were already working on nominal margins. Now, to get orders, they are passing or have to pass the minor benefit of rupee depreciation to buyers. If the US imposes tariffs on Chinese apparel, China will move more aggressively to EU, and can also supply apparel at extremely low cost as they have to keep their capacities occupied.
Long-term benefits of hedging
A strong dollar leads to exporters being involved in hedging. HKL Magu believes most big exporters have hedged their currency and got Rs 67 or Rs 68 against the dollar. This will benefit in the long run when exporters will hedge the dollar for Rs 75 after one year. Medium level exporters who normally don’t hedge also have an eye on the situation. Most will hedge only if the rupee goes above Rs 75.
For the first nine months of 2018, Vietnam’s exports increased 17.5 per cent year-on-year, higher than the 15 per cent jump posted in the first quarter.
The domestic sector’s positive export performance contributed to a yearly rise of 15.4 per cent in the country’s nine-month export turnover, nearly double the growth target set for the whole year.
In the period, the US remained Vietnam’s biggest export market, with spending up 13 per cent year-on-year, followed by the EU (up ten per cent) and China (up 27 per cent).
Export of 26 commodities made up 90.3 per cent of the country’s total export revenue.
The country’s import value of commodities in the period saw a modest surge of 12 per cent. Of the sum, the foreign-invested sector’s contribution was up 12 per cent while the domestic sector’s contribution was up 11.7 per cent.
Key import items included electronics, computers and components, equipment and machinery, telephones and components, fabric, iron, steel, plastics, oil and gas, metal, footwear, chemicals, and garment and textile materials.
China was Vietnam’s largest exporter during the period with the turnover up 12.5 per cent year-on-year. South Korea’s turnover was up 1.4 per cent year-on-year while Asean countries’ turnover was up 13 per cent.
US tariffs on imports from China will impact companies in the US, and consumers too. Since it is not yet clear what percentage of the tariffs the companies would pass on to consumers. There might be a split in terms of the company taking part of the hit and passing on part of the cost to consumers as well. Starting from January 1, the tariffs will go from ten per cent to 25 per cent.
China is the largest supplier of textile and apparel to the US market, accounting for about 40 per cent of American imports in the sector. The industry relies on sourcing from China to provide American consumers with affordable and varied choices.
Chinese exporters are feeling the pain as trade tensions between the world’s two biggest economies worsen. China’s surplus with the US has risen to a record while its overall export growth has slowed.
With further large-scale US tariff measures imminent, Chinese exporters will be hit hard and China’s GDP growth rate in 2019 is likely to be dented.
If the US keeps ramping up its tariff measures against China, the export sector will face a long, hard road ahead despite government measures to mitigate the impact.
The textile and clothing sector in Tunisia accounts for 35 per cent of the country’s GDP and offers 161,425 jobs.
Also 95 per cent of Tunisia’s textile and clothing exports are aimed at Europe. Similarly, 82.7 per cent of companies located in Tunisia are totally exporting.
Tunisia was the first country along the southern coast of the Mediterranean to have achieved free trade with the European Union. In the 1990s, Tunisia signed a free trade agreement with the EU to facilitate economic exchanges between the two shores of the Mediterranean.
The textile and clothing industry in Tunisia plays a critical role in the socio-economic development of the country.
Tunisia is among the top 15 garment suppliers in the world, and has the advantage of being close to the European market. It is the fifth largest supplier to the European Union as well as the leading trouser supplier to the EU. Other important products are work wear and lingerie. The main foreign investors in the apparel sector in Tunisia are France, Germany, Belgium and Italy.
EU countries are the main customers of Tunisia for textiles with 36 per cent for France, 32 per cent in Italy, 10 per cent in Germany; followed by Belgium, the Netherlands, the UK and Spain.
The next edition of the Transformers Denim Summit, which will be held in Amsterdam on October 23 and New York on November 27, will focus on innovation. The conference, launched by Andrew Olah, a denim industry veteran, will welcome speakers from a slate of companies that includes Lenzing Fibers, VF Group and Indigo Mill Designs.
The summit will focus on how those companies that survive adapt to new circumstances, create new workflows and influence those around them—all while sticking to their ideals.
Olah has characterised the rate of change in the denim market as sluggish. The show, since its inception around a decade ago, has evolved greatly. Earlier there were green rooms and segments at shows, which although a marketing ploy, was adopted y all companies.
Sanjay K Jain has been re-elected chairman, Confederation of Indian Textile Industry (CITI). T Rajkumar is deputy chairman. D L Sharma is vice chairman.
TT managing director Sanjay Jain has been part chairman of the Textile Sector Skill Council, Northern India Textile Research Association and the Northern India Textile Mills Association and is on the committees of Texprocil, the South India Mills Association and the Cotton Association of India. He is young, dynamic and very articulate in dealing with the core issues of the textile industry. His priority would be to strongly pursue important issues so that the Indian textile industry becomes a significant global player.
T Rajkumar is chairman of the Kerala-based Sri Mahasakthi Mills.
DL Sharma, managing director of Vardhman Yarns and Threads, is also TSC vice chairman and a member of the Confederation of Indian Industry National Committee on Textiles.
CITI has also signed two memoranda of understanding. One is with the National Stock Exchange to create awareness on managing currency risk and raising of equity capital for micro, small and medium enterprises through the stock exchange platform.
The second is with ZDHC for creating awareness among textiles and clothing industry players on zero discharge of hazardous chemicals and addressing environmental issues in a sustainable manner.
ROICA Eco-Smart Family, a range of the world's first responsibly made premium stretch fibers, have created ROICA smart yarns that offer sustainable solutions and awarded with the following certifications:
Global Recycled Standard (GRS) certificate awarded by Textile Exchange for ROICA being constructed with over 50 per cent pre-consumer recycled content. Cradle to Cradle Certified Gold Level Certificate for Material Health Product and Ingredients: For this certificate ROICA yarn was evaluated throughout the supply chain for lower impacts on human and environmental health.
Hohenstein Environment Compatibility Certificate for breaking down without releasing harmful substances.
At the corporate level, ROICA was awarded with the following certifications: Oeko Tex 100, ISO 14001:2004, ISO 9001:2008. Moreover, ROICA mills in Germany achieved the certification of ISO 50001:2001.
Première Vision Paris trade show experienced an 8.3 per cent decline in visitors in September 2018, falling to 55 497 visitors, in comparison to the number of visitors seen in September 2016.
The organisers believe the drop was due to Yom Kippur, which caused the event to be held Wednesday to Friday, as well as due to a change in behavior among brands. As a result, Première Vision SA recommended a tighter and more direct operational teams as well as shorter visit times, while professionals adapt to market instabilities.
This edition, the international attendance was recorded at 72 per cent. This included 11 per cent visitors from was Italy, 7 per cent from UK followed by Spain, Germany, Belgium, the Netherlands and Portugal. The organisers also noted a strong presence of Swedish and Danish visitors. Asia, which represented 14% of total visitors, was represented by a strong Chinese, Japanese and South Korean presence.
North America, for its part, registered a slight decrease with 2,269 visitors, 1918 of whom came from the United States. Turkey also experienced a fall of its presence directly linked to its monetary and economic problems.
