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Chinese cotton imports are expected to fall to their lowest level in 13 years. The country is reducing its inventories amid declining domestic use and growing competition from foreign producers. Chinese mills will bring in 5.75 million bales from overseas suppliers in the 12 months from August 2015. That’s 31 per cent lower than a year earlier and the least since 2002-2003.
Total Chinese production will also be down. Output is projected at 25.3 million bales in the period compared with 29.9 million bales a year earlier. Cotton prices have dropped in the past two months amid concerns about demand, particularly in China, where the government is trying to reduce near-record stockpiles at a time of slowing economic growth. China has sought to cut imports this year to stimulate demand for domestic cotton after it halted a state stockpiling program that had previously bought up most of the Chinese crop.
Mills have already used about half their import quotas for 2015 and are expected to keep the rest for new crop cotton later this year. China may stop importing the fiber by 2018 and may become a net exporter the following year as the nation’s textile industry shrinks amid foreign competition and cheap polyester prices.
The Cotton Corporation of India (CCI) has sold about five lakh bales of cotton through the e-auction portal in the current cotton season. CCI places 25 small-sized lots every day and in response to the demand for smaller lots. The scheme seems to be working well for domestic prices. Since the launch of the portal in April 2013, the corporation has sold around 7.5 million bales through e-auction. However there has been a drop in domestic mill consumption because of a production slowdown and a pile up of yarn stocks.
With China liquidating its stock of cotton, India has a surplus. This, coupled with a slowdown in production, has resulted in prices decline. Cotton prices are at their lowest in last three years. Mills, which have been holding two or three months’ cotton inventory earlier, are now intent on reducing carrying charges. Their stock on hand is around 30 lakh bales. So there will be no shortage of cotton this season. hina seems to have accumulated a stock of about 12 million tons over the last four or five years. During the current cotton season CCI exported about 60,000 bales to Bangladesh through e-auction.
cotcorp.gov.in/
India, one of the most important ring spinning markets is soon to see a strong presence of the Saurer Group, which is keen on strengthening its operations in the country. Surer recently delivered a new plant built by Shah & Talati at Vadodara to the local management team. The new project houses world-class production facilities for two premium ring spinning brands of Saurer: Zinser and Texparts. The project, built to cater to the domestic and export markets includes a sourcing hub for the whole group and service stations for several units such as Saurer Embroidery.
Martin Folini, Saurer Group CEO, says since India is one of the most important ring spinning markets in the world, establishing the new facility in Vadodara, would help the company to cater to their customers’ needs in a better manner. Ralph Knecht, GM of Zinser Ring Spinning unit, who is closely associated with the project said that today the Indian textile market is highly sophisticated and has challenging customers. He believes the new project would allow India to blend German technology with Indian experience and provide their customers with latest world-class products combined with their passion for innovation and quality.
Knecht added that India has always liked Saurer’s products and it will be advantageous for them as manufacturing will be done at home, combined with world-class quality and much shorter delivery time.
"This is my second visit to India. I am here to understand the working of the Indian industry. The fact that the show has been taking place for four years is a sign the industry is on the move. But techniques have to improve. It is difficult to find technology and raw materials of international standards. Most Indians are oriented to the local market with basic products in terms of global standards,” says Marie-Laure Bellon Homps, CEO of Eurovet, a leading organiser of international events, with shows like Interfiliere, Salon International-De La Lingerie, Mode City, Absolute Summer, Curvexpo-Lingerie & Swim, Mode Lingerie & Swim in Paris, New York, Shanghai, Hong Kong, Las Vegas, and Moscow. She was in Delhi recently to be a part of Galleria Intima fair, dedicated to intimate wear industry.
Need for more focus to tap market potential
Homps feels while Indian intimate wear products are very creative, they are still basic and lack finish. “Indians have innate skills that are the envy of the world. But to attain quality standards, the workforce has to be trained. For instance, France has high wages with high productivity and that makes up for the high wages” she explains.
She felt the theme of Galleria Intima ‘India Makes for the World’ was fine, but it should be about catering to the domestic consumers before exporting since the domestic market is enormous at the moment. “China learnt to work through exports. But India has a lot of creativity. Indians are good at strategy and well educated. In exports one has to deliver variety and consistency, where Indian players falter. The workforce is not well trained, or motivated. In China it is different,” Homps opins.
She further adds, “India is a great country with no crisis. This is unlike what’s happening in the rest of the world. For you, double digit increase is not a problem. You are creative but have to get more organised and productive. You are a democratic country, so you have to decide whether to invest in the domestic market or in exports.”
Foreign players find Indian market lucrative
Many global players, says Homps, are willing to invest in India. “The elite in India have great communication skills and understanding of products. The world is keen on having India as a partner. India has as much variety as Europe. Brands would prefer to work in India through partnerships, something that’s not possible in China,” she points out. What’s holding their plans of coming to India is bureaucracy and taxes. But local partners can help global brands enter the market and in return learn international brands’ knowhow and techniques. Intimate wear needs heavy investment. People have to be trained. “In this respect China is good. There are good plants. There is a trained workforce. Everything is organised. Productivity is high. They invest heavily in technology. There is really no alternative to China for mass market manufacturing. India can work on its manufacturing. People are looking for proximity sourcing and domestic players can get the price as well. If they work on productivity and regularise quality and delivery, India can play a great role and attract international brands,” believes Homps.
Talking about Eurovet’s role she says, “We are putting in a lot of effort through our global events and by publishing technical leaflets, trend books on cosmetic textiles. We are investing a lot on the internet platform worldwide. The platform can be used for matchmaking. One can use it for making appointments before or after the show or in between two shows. We may also have a library in future displaying all our publications. We bring together people who are looking for a designer or who are interested in technology transfer. That’s the reason I am here.”
Changing preferences in intimate wear
Globally the quality of collections is climbing rapidly. Earlier there used to be a difference in quality between countries. Now the difference is almost gone. “Quality has gone up globally. Demand is for good and comfortable fabrics. The global trend is to invest in fabrics. Another trend is toward performance fabrics. Women want to mix seduction and comfort. In the past, Europe was for seductive, US and Asia for functional and Asia. But now French and European girls are discovering shape wear,” says Homps.
Homp says Chinese girls are the trendiest. They want a mix of functionality and fashion. They are looking for intimate wear that’s liberating. This is true about women in Brazil and India. “Fashion is a way for them to fight, to liberate themselves. Apparently European women are done with the fighting. I think lingerie has a great future because people everywhere are tired of show-offs. Now elegance is wearing a high end product that can’t be seen,” she says on an ending note.
H&M will introduce a fair wage method in 20 garment factories of Bangladesh this year to help improve productivity and factory conditions and combat unrest in the plants that make apparel for the Swedish retail giant. The move by Europe’s second largest clothing retailer comes as a part of a program for three of its Asian suppliers: Bangladesh, China and Cambodia.
H&M, which has 3,649 stores across 59 markets, is introducing the system to a total 68 factories in China, Cambodia and Bangladesh this year, a plan that seeks to boost workers’ pay, provide some discretionary income, and allow representation through trade unions. The retailer buys about 80 per cent of its products from Asia.
The method will ensure higher prices for the garment items the retailer buys from the factories -- a measure that will raise wages for workers. H&M has a plan to introduce the method for all of its sourcing factories by the end of 2018, which will focus on a well-functioning dialogue between employers and employees for settling disputes.
Implementation of the method will contribute to sustainable pay structures, more regular wage adjustments and enhanced communication and social dialogue between the management and workers’ representatives.
www.hm.com/
In 2014-15 Welspun India recorded its highest annual sales and profitability in its history. It also maintained its position as the number one home textile supplier to the US for the third consecutive year. During the year, Welspun completed a major part of its vertical integration project for increasing its spinning and weaving capacity. The spinning unit at Anjar, Gujarat, is expected to take the total spinning capacity of the company to over three lakh spindles, fulfilling nearly 70 per cent of its internal yarn requirements. It will further improve the company’s supply chain with less dependence on external sourcing.
A global leader in home textiles, the company supplies to 14 of the top 30 global retailers. It offers a wide range of home textile products in bath, bedding and flooring solutions. Welspun has a strong presence in the US, Canada, the UK and Europe. Almost 95 per cent of its production is exported. The company owns brands such as Christy, Spaces and Welhome, which constitute around 11 per cent of its sales.
The company has developed innovative technologies. Some of these include Hygro Cotton (ultrasoft, ultra absorbent, quick drying, etc.) and Flexifit sheets (fits a range of mattress sizes). Apart from product innovations, the company continuously works on process innovations and innovations in the supply chain.
www.welspunindia.com/
The depreciation of the rupee is expected to have a mixed impact on India’s textile exports as competition will increase from China following the devaluation of its currency. But the rupee depreciation will improve competitiveness of India’s cotton exports. India is the world’s second largest cotton exporter after the US.
The Indian currency has depreciated by about seven per cent since April. In apparels, export competitiveness depends on the relative currency movement of major exporters such as China, Bangladesh and Vietnam. As yuan has depreciated more than the rupee, and given that China enjoys a dominant position in international export markets, India will see increased pricing competition which will affect the profitability of Indian exporters.
However, given that the rupee has depreciated more than that of other competing countries, and India’s share in overall trade is relatively small, export volumes may not benefit a lot. Besides, in view of the fragmented nature of India’s fabric industry, exporters will have to pass on the benefits of the depreciated rupee.
Export competitiveness of Indian cotton yarn depends on the relative currency movement of the rupee with Pakistan’s currency since Pakistan is the major competitor in export of cotton yarn to China. As Pakistan’s currency has remained relatively stable, the depreciation of the rupee improves the competitiveness of Indian cotton yarn as well.
Spinning units in India want the duty on synthetic fibers which is presently at 12.36 per cent to be brought down on par with that of cotton. Right now synthetic yarn spinning units face an inconsistent supply of synthetic fibers from domestic manufacturers. And those mills which import the fiber are forced to pay 23 per cent duty, making the yarn less competitive in the domestic market.
Exporters say they are positioned well to manufacture and supply yarn and fabrics but that face inadequate export incentives. They want an export incentive of seven per cent to encourage consistent and substantial export volumes. For long the spinning industry has been wanting a reduction of the hank yarn obligation from 40 per cent to 10 per cent and that the Cotton Corporation of India should function as a bridge between the cotton farmer and the mill sector and not as a trading body.
Especially in Tamil Nadu the industry wants VAT reduction on cotton, cotton yarn and synthetic yarn from five per cent to two per cent, the end of the one per cent cess on sale of cotton and cotton waste, and establishment of processing centers in coastal areas for cost effective processing of yarn, fabrics and finished goods.
Indo Count, one of the three leading Indian suppliers of bed linen and the fourth largest bed sheet supplier to the US recorded 46 per cent higher turnover in Q1 of the current financial year compared to the same period last fiscal. Profit rose 122 per cent over that reported in the first quarter of 2014-15 and a 97 per cent growth over the profit in the immediately preceding quarter.
Indo Count is a global bed linen company. The integrated company manufactures yarn at one end to finished made-ups at the other. The company has one of the highest margins within the country’s integrated textile sector and one of the highest asset-turnover ratios. It makes bed sheets, flat sheets, fitted sheets and pillow cases, fashion bedding, comforters, quilts and coverlets, decorative pillows etc.
Within the home textiles segment, the company is focusing on niche bed linen. To strengthen its competitiveness in home textiles, the company expanded its capacity to 68 million meters per annum last year. This helped widen the presence of value-added products in its portfolio.
The company markets its products in 49 countries. Nearly 65 per cent of revenues are derived from the US, the company’s largest market. Other markets are the UK, Canada, Europe and Australia.
www.indocount.com/
India will not test textiles and textile articles originating from specific countries for the presence of azo dyes, says DGFT. The relevant countries are: Serbia, Poland, Denmark and China. These countries have banned the use of azo dyes in textiles and textile articles. India bans the import of textile and textile articles which contain specified hazardous dyes. Import consignments should be accompanied by a pre-shipment certificate from a textile testing laboratory accredited to the National Accreditation Agency of the country of origin.
In cases where such certificates are not available, the consignment will be cleared after getting a sample of the imported consignment tested and certified from an agency like the Textiles Committee of Ministry of Textiles or the Central Silk Technological Research Institute or the Central Silk Board. Azo dyes are a class of synthetic dyes used for coloring a variety of consumer goods such as foods, cosmetics, carpets, clothes, leather and textiles.
When certain azo dyes have prolonged contact with skin they can break down to form aromatic amines, some of which are known carcinogens. A carcinogen is a substance capable of causing cancer. Although banned in Europe, and restricted in the US, azo dyes are allowed in Australia.
