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China’s import orders for cotton from Australia are slowing down though it continues to need premium grade fiber. With China importing less cotton, the challenge for Australia is to find alternative markets for its exports. At one time China used to consume about 70 per cent of Australia’s typical 3 meter-plus bale cotton crop.
The over-stocked global cotton industry is bracing for stiff competition from synthetic fabrics as 15 months of sliding oil prices have given polyester a selling advantage. Global prices are eroded by synthetics (derived from crude oil) and mountains of stockpiled cotton, mostly in China.
Chinese cotton reserves, currently about 64.5 million bales, are equivalent to almost two years of Chinese domestic consumption. More than 35 million bales are also stockpiled around the world, including at least 3,00,000 bales of Australian carryover from last year.
Prices paid by Chinese textile plants for purified terephtalic acid (PTA), the chemical synthesis of crude oil used to make polyester, fell 25 per cent in the past eight months.
Cotton and PTA outright prices generally contribute about 50 to 60 per cent to a manufactured garment’s final price. Spinning customers are using more man-made fibers in blended yarns.
The sharp fall in the rupee since the start of this year has put a break on cotton imports. The rupee that had appreciated nearly one per cent in December turned its course and has depreciated by 2.8 per cent so far in January, ending the financial viability of imported cotton, which was around three per cent cheaper in terms of landed prices. In fact, with a recovery in world cotton prices this month, the landed price of imported cotton is costlier by Rs 1000 rupees per candy or at a two to three per cent premium over domestic prices.
Meanwhile mills in southern India have resumed purchases of raw material from Gujarat after getting a quality assurance.
In December, mills in South India had temporarily suspended purchasing cotton from Gujarat due to increased instances of mixing cotton waste with cotton. Some mills in the coastal region resorted to imports from Ghana and Sudan, among others.
India is the world's top producer and the second largest exporter of cotton.
The sharp rise in domestic prices in November-December had forced Indian textile mills to source cheaper cotton available in west African countries.But now most mills in south India have resumed their purchases from Gujarat.
The textile industry in Pakistan is facing tough competition from regional competitors including Indonesia, Vietnam, Sri Lanka, Bangladesh, China and India.
The interest rate for the textile industry in Pakistan is six per cent against 7.5 per cent in Indonesia, 6.5 per cent in Vietnam, six per cent in Sri Lanka, five per cent in Bangladesh, 4.6 per cent in China and 6.75 per cent in India. There is no investment promotion scheme in Pakistan, which is a common feature of the textile industry in all competing countries.
Pakistan’s share in world textile and clothing exports was 1.6 per cent in 2014 against 2.23 per cent in 2005.
The installed capacity utilisation is 95 per cent in Vietnam, Bangladesh and China, 90 per cent in Indonesia, Sri Lanka and India but less than 70 per cent in Pakistan.
From 2011 to 2014 Indonesia registered a 0.43 billion dollar growth followed by 8 billion dollars in Vietnam, 0.75 billion dollars in Sri Lanka, six billion dollars in Bangladesh, 50 billion dollars in China and six billion dollars in India. But Pakistan showed a 0.5 billion dollar decrease.
Technology upgradation in India, China, Bangladesh and Vietnam is 100 per cent of looms with less than 10 years of age against 25 per cent in Pakistan and 22 per cent in Indonesia.
De-Brands, a new digital tool for the denim industry, is addressing the issue of shortage of time and money and help in quicker decision making. The web tool comes as an online fabric show, brought by denimsandjeans.com
Companies keep developing many fabrics and the time taken in arranging them to be sent to the right customers in the desired number of washes and looks is generally long. Often a customer may never get to see a fabric which a mill developed and which he may have wanted for the simple reason that the product was either not sent to him or the right washes or styles could not be sent due to physical limitations.
Often mills have beautiful fabrics which are lying down deep in the heap of the R&D department because the marketing department and the buyers are overwhelmed by many other developments and they themselves lose track of the developments that the company has done earlier.
On the other hand , buyers are looking for new and varied fabrics from mills around the world. However, given time, cost and physical limitations, it is not possible for them to see all the products which would interest them. It is not possible for buyers to explore too many suppliers at one time.
This digital tool aims at providing solutions to some of the predicaments buyers and suppliers face. It helps buyers to browse through denim products of five or more denim mills in over an hour and make a shortlist of the products that interest them.
Laser cutting is relevant to a large cross-section of apparel, accessories, footwear, and home furnishing manufacturers. Even within the category of apparel manufacturers, this technique encompasses a broad spectrum of applications—be it high-fashion women's or kids' wear or high-performance active wear.
Laser-cut designs are now showing up more often on mood boards and fashion ramps around the world.
Laser cutting is a value addition process. It is mostly carried out by dedicated service providers. Going beyond the archetypal georgettes, rayon, and poly blends, unconventional fabrics like denims and suede have entered into the space of laser cutting. Laser cutting felts and velvets is only at its initial stage, but it is still a major requirement with buyers for apparels, home furnishings, gift items, labels, and trims.
The market of laser cutting is expanding every day and this technology is being combined with several others to achieve a unique effect of its kind.
The time taken to furnish a design decides how much a laser-cut design will cost. The time taken is further influenced by the intricacy of the design and the material to be worked upon. For example, thicker fabrics like denim and suede are easy to handle, which brings down the cost, while sheer and fluid fabrics like silk and chiffon demand higher handling and time of operation, hence their higher cost.
Global Value Chains, also called GVCs, may represent a significant opportunity for African countries to improve their prospects for expanding non -commodity exports.
In the past, for a country to become an apparel exporter, it would need everything from design capabilities through to textile mills. But under GVC dynamics, a country can specialise in certain activities and import the necessary inputs.
GVCs have provided a first step for expansion of the economies of China and much of East Asia. In these regions, GVCs are at the heart of the open economy model that is responsible for the growth and poverty reduction success story of the region in recent decades.
With wages rising rapidly in China, parts of these GVCs are migrating elsewhere in the region and globally. Some estimates suggest that 85 million manufacturing jobs will migrate from coastal China over the next 20 years and Sub-Saharan Africa is expected to be a major beneficiary.
However joining GVCs is not enough. Countries must establish value-adding positions in these production networks and upgrade continuously if they are to use GVCs effectively as an instrument for inclusive growth.
The GVC spillover effects are the highest in Namibia, slightly lower in South Africa, and very low in Swaziland.
China’s overall economic growth slowed in 2015.The quarterly growth for 2015 was as low as 6.8 per cent. Though clothing categories and cosmetics recorded a 8.8 per cent increase in December.
In the physical space, online retail sales of food, clothing and commodities rose 40.8 per cent, 21.4 per cent and 36 per cent. Online retail sales of physical goods rose 31.6 per cent. Online retail sales of non-physical goods rose 42.4 per cent. Retail sales of consumer goods totaled rose 10.7 per cent over the previous year.
Retail sales of clothing, shoes and textiles increased by only 6.9 per cent in December 2015. Total retail sales were under 10 per cent, a record low for almost 30 years.
Market prices are higher today than they were in 2014, the year when China surpassed the US to become the world’s largest economy (in terms of purchasing power parity). But even at that time China’s economy was already slowing. The growth rate averaged 10 per cent in 1980-2010, but fell to seven to eight per cent from 2012 to 2014.
Moreover, China’s once seemingly inexhaustible surplus of rural labor willing to migrate to urban areas has largely disappeared, causing wages to rise and the country’s competitive advantage in labor-intensive manufacturing to weaken.
True Religion has turned to Aptos, a retail technology solutions company, to create an endless aisle for the Apple Watch app.
True Religion was challenged in offering its customers all washes, colors and cuts of its denim in its 1,500-square-foot stores. The brand didn’t want to risk turning away customers simply because they didn’t have the exact product shoppers desired in stock. Through Aptos’ endless aisle technology, True Religion is able to expand shelf space by connecting its complete catalog of products and ensure every opportunity for every sale is converted.
Through the app, sales associates in stores can access a comprehensive view of inventory and view, filter and quickly locate the exact size, style, color and wash they think the customer might like.
Once the associate finds the items they want, they can then cast the merchandise image from the watch to a large high-definition monitor for the customer to view. The image includes a bar code that allows sales associates to complete the sale by scanning the bar code via an Aptos mobile point of sale device. After the purchase has been completed, Aptos ensures the product is shipped directly to the customer’s home.
Through the app, True Religion hopes to meet the growing needs of customers and improve customer service.
www.truereligion.com/
Monsanto in cooperation with the Lubbock Economic Development Alliance (LEDA) is planning to begin construction of a new, state-of-the-art cotton seed processing facility in Lubbock, Texas. The construction of the new facility is expected to begin in March 2016 and be completed in the second half of calendar year 2017.
With a capital investment of $140 million, the new Lubbock is expected to employ 40 full-time personnel. The site will be established as Monsanto’s primary U.S. hub for all commercial cotton seed processing operations – to include cleaning, treating and bagging of cotton seed – while existing processing facilities will transition to support storage and warehousing, pre-commercial operations and research in various parts of the Cotton Belt.
According to Dave Penn, cotton manufacturing lead at Monsanto, the facility in Lubbock will boost collaboration and efficiency within the company’s manufacturing organization. Last October, Monsanto announced a number of strategic actions to help drive greater scale in its business and further enhance its overall operations. Location of the new hub facility, Monsanto’s established relationship with LEDA and the opportunity to leverage new production technology factored into the decision to consolidate and optimize its U.S. commercial cotton seed processing operations.
The company’s existing cotton seed processing facilities in Arizona, Mississippi and Texas will continue to support manufacturing operations until summer 2017, at which point they will transition to support storage and warehousing, pre-commercial operations or research. Manufacturing employees who are offered the opportunity to relocate will also have the option to receive a severance package in the event they choose not to relocate. All remaining affected employees will be offered enhanced benefits under Monsanto’s Separation Plan.
Indonesia’s garment and footwear manufacturers are hoping that the agreement with the European Free Trade Association (EFTA) will give them greater access to the European market. EFTA consists of Switzerland, Norway, Iceland and Liechtenstein. These countries are small in size and population but have high per capita incomes and exhibit strong fashion trends. So they are seen as holding great potential for Indonesian textile products through the four seasons of the year.
Indonesian textile products are currently subject to import tariffs between 11 and 30 per cent in these four countries. Reducing tariffs to zero per cent would make Indonesian goods more competitive. Indonesia is struggling to come out of a stubborn economic slowdown. Footwear and apparel are among Indonesia’s foremost export goods to the EFTA countries. Indonesian footwear exports to EFTA more than doubled in 2014, when they accounted for almost 18 per cent of total Indonesian exports to the four countries. Woven and knitted apparel contributed a further 20 per cent of Indonesian exports to EFTA countries.
Indonesia is seeking lower tariffs on processed agricultural goods from the EFTA countries this year. It is also seeking more investment from the four countries and transfer of technology and a greater involvement in the global value chain.
