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There is a growing trend of orders shifting from China and Bangladesh to Vietnam.Multinational groups have realized that outsourcing in China is no more the optimal solution. Production costs in Vietnam are obviously lower than in China. A Vietnamese worker earns half of what a Chinese worker earns.
Brands have been scaling down production in China while expanding in Vietnam. The largest technology groups of the world have also poured billions of dollars into their production bases in Vietnam, though they also have large scale factories in China.
The percentage of Japanese enterprises in China planning to scale up production in China dropped from 73 per cent in 2010 to 57 per cent in 2013. Meanwhile, the figure increased from 27 per cent to 30 per cent in Vietnam.
From humble beginnings since the reunification of its northern and southern regions, Vietnam has become a strong player in the global textile market. State-owned enterprises make up just 0.5 per cent of Vietnam's businesses; however, 75 per cent are joint stock or limited companies.
Vietnam has advantages: only small investment capital required; a quick payback period because of short capital turnover; and lots of preferential policies from the state.
The Transatlantic Trade and Investment Partnership (TTIP) is a proposed free trade agreement between the EU and the US.This is a deal involving the world’s two biggest economies.
Some say the agreement would result in multilateral economic growth and raise incomes in the EU and the US. While some say it would increase corporate power, is an agenda driven by international business that threatens environmental, health and safety standards and would make it more difficult for governments to regulate markets for public benefit.
Among the issues raised are labeling requirements over the care instructions, the fiber names disclosed in a garment composition label and the use of the super S scheme for the labeling of wool products.Concerning consumer safety requirements, the European industry raises questions on children’s products and on flammability requirements that apply to clothing and other textile products such as home textiles and personal protective equipment.
TTIP will help unlock opportunity for American families, workers, businesses, farmers and ranchers through increased access to European markets for American made goods and services. It is a cutting edge agreement aimed at providing greater compatibility and transparency in trade and investment regulation while maintaining high levels of health, safety, and environmental protection.
Bangladesh has announced incentives for jute exports to India.However jute mills in India are not amused. They are planning to file an anti dumping case. They feel such subsidized exports to India from Bangladesh will hurt the Indian market.
Bangladesh has been offering 10 per cent export subsidy on all jute products. The country’s jute mills and exporters receive 40 per cent and 20 per cent of their fund requirement, respectively, from government banks. Also, China is collaborating with the Bangladesh government to fund modernising initiatives for 23 jute mills.
Meanwhile, Indian jute exporters are facing stiff competition. During the April-September period this year, the volume of exports fell 11 per cent compared to the year-ago period. In recent months, exports have fallen due to higher exports by Bangladesh and instability in West Asia, a major market for Indian jute exporters.
Indian mills say imported jute bags and jute cloth are being used to package food grains, a violation of the Jute Packaging Materials Act , 1987. Between April and August this year, the import of jute yarn and twine increased 65 per cent year-on-year. Import of jute bags was up 28 per cent and jute cloth and related products seven per cent.
Spinexpo Shanghai, held at the Shanghai World Expo Exhibition & Convention Center of Pudong, Shanghai from September 2 to 4, 2014 witnessed a lot of business activity and rise in number of international visitors, asserting its international leadership in the field of fibres, yarns, knitwear and knitted fabrics. With a stable and consolidated visitors attendance and a strong increase in business activity, the 24th session of the show hosted 225 exhibitors from 15 countries and welcomed 11,052 visitors, and 14,211 re-entries.
Knitwear companies – highlight of the show
The event has established itself as a unique exhibition by virtue of its strategy and its vision of a world moving rapidly towards globalisation. This was the theme for this 24th session where the Main Trend Area, directed by Sophie Steller and titled ‘Sensing the Motion’ showcased a larger than ever number of partner companies exhibiting at the show and helped revitalize various concepts of fashion bringing a real stimulus for international visitors looking to revive their market share.
Other Trend Areas included a brand new innovative display, ‘Denim Couture’ that continues 
with the concept of ‘sensing’ by looking beyond knitwear and reaching further into the world of what inspires us, exploring a multitude of creative and expressive techniques that combine to make a rich display that looks at denim in a whole new light. The idea of using denim came about because as a very traditional and historically casual fabric it offered the ability to challenge some international leading designers to look at it in a totally new, more glamorous and creative way.
New talent – A true showcase of creativity
The graduates’ work from Nottingham Trent University was on display within the ‘What’s In’ area. The garments and fabrics exhibited were created by students working in collaboration to develop designs of fabrics and garments for the emerging trends and concepts using yarns from a variety of spinners. ‘What’s In’ also showcased a range of garments that have been developed through student sponsorship and live projects with spinners throughout the year.
These sponsorships have evolved after many years of the successful collaborations with Spinexpo. The University also had its own area where more work from the students could be seen.
A number of events took place during the 24th session, starting with a presentation of Mohair South Africa that launched its branding at the show. South Africa is driving global mohair production to new heights, backed up by a growing interest in fashion for the fibre. South Africa is home to the largest mohair handling and marketing facility in the world with over 50% of all mohair produced originating from the angora goat farms on the beautiful plains of the Karoo in South Africa.
A seminar titled ‘International Cashmere Industry Development’, organised by Xuerun Cashmere Products spoke of the healthy and sustainable development of the cashmere industry, comprehensive analysis of the current status of cashmere and an in-depth analysis of Chinese cashmere products market, quality status and rebreeding of the original cashmere goats.
Woolmark Company celebrated ‘50 years of the Woolmark Brand’ and the logo’s purpose of acting as an independent quality assurance of every product it adorns. The company has gained its reputation as being the global authority for quality woollen products, developing close relations with the fashion world and its rich tradition of nurturing fresh talent within the industry. New seasonal guide to the best wool trends and products, created to inspire and inform fashion and textile professionals regarding the infinite potential of merino wool was unveiled on the occasion.
The next session of Spinexpo will return to the Shanghai World Expo
Exhibition & Convention Center from February 3 to 5, 2015.
Pakistan wants to formulate an aggressive policy for export of readymade garments and for attaining maximum benefits under the GSP Plus status. The European Union granted duty free access to Pakistani made-ups under the Generalised System of Preference Plus status in January this year. Under this scheme Pakistan's textile products can be exported duty-free or on a preferential duty basis for the next tenyears.
Exporters want the government to relax import duties blocking access to raw materials, especially artificial fiber. They say this relaxation will enable them to diversify product lines so that they can take full advantage of the facility. They also want water and energy supplies to be improved so that an increase in demand through GAP Plus can be met.
Pakistan has effectively utilized only a handful of the 73 textile categories that have been given duty-free access. The country has weak domestic supplies of raw materials, except cotton, with high duties on inputs forcing the Pakistan garment industry to produce low-value-added garments. The industry feels the removal of duties of up to 11 per cent on clothing exports would allow the country’s products to be more competitive in the EU market.
The local garment industry comprises small to medium-sized units. Such manufacturers are unable to import the raw material required to diversify their product lines because of their small scale.
The England-based International Cotton Association (ICA) used to expel members that deal with companies that are blacklisted for defaulting on contracts.But now mediation services will be introduced. This will help resolve disputes over reneged contracts. Mediation is seen as a speedier tool to resolve disputes in addition to the current methods of negotiation and arbitration.
Mills that agreed to buy raw cotton from trading houses when prices were high then refused to honor those deals when prices plunged. The problem has become common in the industry in periods of high price volatility.Some defaulting companies had approached ICA, requesting to be removed from the list and mediation was thought of as a suitable way to achieve that.
If both sides agree to mediation, ICA can provide a professional mediator to help resolve a dispute. The two parties share the costs.ICA is the first commodities association to offer mediation services.
The process is quicker than arbitration as most mediations usually take only one day. It provides a forum for the two parties to resolve their disputes. The beauty of mediation is that it is a win-win situation as both parties have to agree, and both parties want to find a solution that they are happy with. With arbitration, one party loses at the end.
www.ica-ltd.org/
The share of readymade garments in Bangladesh's export basket currently stands at around 80 per cent.The country provides satisfactory levels of quality, especially in value and entry-level mid-market products. Competitive price level is clearly the prime advantage of Bangladeshi garment products.
With around 5000 readymade garment factories employing about 3.6 million workers out of a workforce of over 75 million, Bangladesh is clearly ahead of comparable suppliers from southeast Asia.In the medium term, Bangladesh looks set to be the sourcing country of choice for European and US buyers. During 1995-2010, Bangladesh’s share of apparel imports into Europe and the USA more than doubled.
European and US buyers will continue to increase their sourcing activities in Bangladesh in the mediumterm. In addition, new buying markets in other regions are increasingly becoming important as sourcing customers for Bangladesh.
Mid-market brands, which generate around 13 per cent of their sourcing value in Bangladesh today, plan to raise their share to 20 to 25 per cent in the medium term. This growth will be driven by not only an increase in the volume of current product categories but also by broadening the sourcing strategy to more complex, more fashionable or increasingly sophisticated items. These imply that the value market will be the key volume contributor, while the midmarket will demonstrate a more dynamic growth.
Germany is fast catching up with the US as the leading destination of Bangladesh's garment products on the back of higher demand and duty benefits.Last fiscal year, Bangladesh’s garment exports to Germany were up 19.02 percent year-on-year. In contrast, garment exports to the US showed an increase of just 3 percent over fiscal 2012-2013.
The reason for the spike in ordersis that German retailers are diverting their custom from China, where production costs are escalating.Furthermore Bangladesh’s exporters enjoy duty-free access to the European Union -- of which Germany is a part -- owing to the Generalised System of Preferences scheme introduced in 1971, a privilege not enjoyed in the American market.
In the absence of any duty benefits, garment exporters pay 15.61 percent duty upon entry to the US market.Around 828 million dollars was paid to the US customs last year and 3.41 billion dollars over the last five years.
Bangladesh however expects orders from the US to rise as well in the coming days, given the clean chit given to the majority of the factories following inspections. Retailers are coming with higher volume of work orders.Garment exports to the US are tipped to pick up with the rebounding American economy.
The United States and Brazil have closed a 12-year-old fight over US cotton subsidieswith the US paying 300 million dollars to the Brazilian Cotton Institute to settle the trade battle.Brazil has agreed to end its World Trade Organization case against the world’s largest cotton exporter and to not lodge any new actions as long as current US policies remain in place.
The US, meanwhile, must hold to the conditions under its current farm support policies, which Brazil, the world’s fourthlargest exporter, took aim at first in 2002 due to US subsidies ruled in violation of WTO rules.
That includes keeping limitations on how Washington’s export guarantees are provided to cotton exporters, so as not to give them unfair advantage in the global marketplace.
Thisagreement brings to a close a matter which put hundreds of millions of dollars in US exports at risk.
The WTO ruled in Brazil’s favor in 2005 and again in 2008 in the case, allowing the country to impose countermeasures against US trade.That had raised worries about US market access and intellectual property protection in Brazil, as well as the United States’ 28 percent share of the global cotton trade.
What led to the deal was an interim agreement in 2010 for Brazil not to take retaliatory action and then the passage of a new farm bill by the US Congress in February this year that tightened US cotton support programs and export guarantee programs.
Punjab province in Pakistan has beaten all previous records and produced 32.35 per cent more cotton than preceding years. However Sindh produced 1.60 per cent less cotton this year.
A total of 763 ginning factories are operational in these two provinces.
Cotton trading has remained firm amid strong physical price and higher cotton prices. Since the textile mills have increased the buying of cotton to meet the demand of the European market after attaining the status of GSP Plus, the rates are stable.
Ginneries received 1,384,533 bales during the fortnight of September 16 to October 1. Unsold stock is 663,966 bales which is more than last year when it reached 587,883 bales. Ginners were expecting better prices for their lint but prices have fallen way beyond their expectations.
The country has also been losing some 10 to 15 per cent of the value of its cotton due to poor quality. Improper picking, adulteration of cotton, missed grades and seed varieties and improper packing, storage and means of transportation are responsible for the poor quality of the fiber.
The option of increasing area under cultivation cannot be exercised because of the lack of irrigation water. The two major cotton growing provinces, Punjab and Sindh, are already at their maximum level.
