FW
"With consumption slowing down, world cotton imports are forecast to decline by 3 per cent to 7.4 million tons in 2015-16, which would constitute the fourth consecutive season in which import volume declined after peaking at 9.8 million tons in 2011-12. China’s imports are expected to shrink by 33 per cent to 1.2 million tons. Imports by Vietnam during the first two months of 2015-16 are up 63 per cent from the same period last season and may reach 1.1 million tons by the end season."
"World cotton production is forecast to fall by 12per cent to 23.1 million tons, which is 1.3 million tons lower than projected demand in 2015-16. Decreases are expected in all five top producing countries."
China lowers imports, countries focus on domestic markets
The report states that despite optimism from the narrowing gap between polyester prices and cotton prices at the start of 2014-15 and falling domestic cotton prices, cotton consumption in China remained unchanged from 2013-14 at 7.5 million tons. With the latest revision, mill use in China is now forecast at 7.3 million tons in 2015-16. As China’s spinning sector continues to decline, mill use in Asia has grown.
India, the world’s second largest consumer of cotton lint may see mill use rise by 3 per cent to reach 5.5 million tons in 2015-16. Pakistan, which had in previous years benefited from the growing demand for cotton yarn in China, is expected to see mill use decrease this season by 10 per cent to 2.2 million tons. In addition to reduced demand from China, factors like an ongoing energy crisis, high energy costs, and high taxes that greatly add to the cost of production have caused many mills to reduce operations, and in some cases to shut down entirely.
Turkey’s consumption is projected to increase by 5 per cent to 1.4 million tons, due in part to expanding private consumption in the EU and political after its most recent elections. Lower production costs and favourable government policies for the textile sectors in Bangladesh and Vietnam will encourage consumption growth in these countries. Mill use in Bangladesh is forecast to rise by 10 per cent to just over 1 million tons while in Vietnam, by 20 per cent to 1.1 million tons.
With consumption slowing down, world cotton imports are forecast to decline by 3 per cent to 7.4 million tons in 2015-16, which would constitute the fourth consecutive season in which import volume declined after peaking at 9.8 million tons in 2011-12. China’s imports are expected to shrink by 33 per cent to 1.2 million tons. Imports by Vietnam during the first two months of 2015-16 are up 63 per cent from the same period last season and may reach 1.1 million tons by the end season.
Production dips in major producing countries
World cotton production is forecast to fall by 12per cent to 23.1 million tons, which is 1.3 million tons lower than projected demand in 2015-16. Decreases are expected in all five top producing countries.
India’s production may decrease by 4 per cent to 6.3 million tons due to reduced plantings and pest problems. China is in its fourth consecutive season of declining production, and its volume in 2015-16 is projected down 19 per cent to 5.3 million tons. In the United States, a 13 per cent reduction in harvested area and lower yields are expected to cause production to fall by 18 per cent to 2.9 million tons.
Pakistan’s production is forecast to touch around 1.9 million tons in 2015-16 while in Brazil, it is projected to decease by 6 per cent to 1.5 million tons. World ending stocks are expected to fall by 6 per cent to 20.7 million tons, which represents about 85 per cent of the volume needed for world mill use in 2015/16. Stocks in China are projected to be just under 12 million tons at the end of 2015/16, while stocks outside of China are forecast down by 4 per cent to 8.7 million tons.
www.icac.org
Kenya’s apparel industry is small, with an estimated 30,000 workers, versus the industry in Bangladesh that employs 4.2 million people. In Kenya, the industry comprises only six per cent of the small manufacturing sector. The country is now trying to grab a larger slice of the global clothing market. Textile manufacturers are being lured with subsidies and reduced power costs.
However, Kenya has competition closer home. In Ethiopia, energy and labor costs are lower than those in Kenya. Ethiopia has also set up functioning business parks for factories. However, Ethiopian workers are unused to life in a factory and labor retention beyond six months is difficult. In contrast, Kenyans are expert clothes makers.
The death of several workers in Bangladesh factory collapses is also forcing global buyers to re-evaluate their sourcing. Since Kenya is the door to East Africa, many international companies have selected Kenya as their regional center. In Kenya, there is a robust private sector consisting of a large number of foreign investors.
Kenya’s textile industry can be divided into cotton growing and ginning, yarn and thread production, fabric and apparel manufacture. There are some 35 textile mills in the country. Demand for textiles in the country is growing at 3.8 per cent a year.
The Federation of Hosiery Manufacturers’ Association of India (FOHMA) has formulated a path breaking strategy for Indian manufacturers to break the ice and be updated on real value of raw products. Named FOHMA Hosiery Cost Index (HOSEX), it aims to assist industry in becoming world class and organised to benchmark itself against the best in the world. It is designed to calculate the average movement in costing for a particular basket of hosiery goods over a period of time. The index would be updated at the beginning of every year. For instance, if the cost was Rs 100 in January 2010, and the index is 132 today, it means over period the cost for the industry has gone up by 32 per cent.
It is a step towards making the industry more aware of its costing and profitability. The index is expected to create a win-win and balanced scenario for both buyers and sellers. It wants to make the fragmented Indian textile market more organised and render bargaining power to buyers and sellers. India is an inflation prone country due to its structure and phased process of development. In such a scenario, it gets difficult for brands and companies to convince buyers for a price hike. On the other side it will also provide directions to buyers and help them in ensuring a correct pricing for them.
Turkey’s exports declined by 10.5 per cent in November to $11.44 billion year on year owing to currency fluctuations and geopolitical risks, according to temporary data revealed by the Exporters’ Assembly of Turkey (TİM) on December 1, 2015.
The country’s exports declined by 8.6 per cent to around $132 billion in the first 11 months of the year compared to the same period of the previous year, according to the TİM data. Turkey’s 12-month exports saw a decrease of around 7.8 per cent to $145.2 billion, according to a statement from the association. The largest amount of exports was made by the automotive sector in November at around $1.92 billion in November, followed by the ready-made clothing sector and the chemical materials sector, both of which, however, saw a 6.3 per cent decrease and 12.8 per cent decrease, respectively, in November compared to the same month of 2014.
While its exports to Africa increased by 0.7 per cent, its exports to the European Union regressed by 0.9 per cent, to North America by 11.2 per cent and to the Middle East by 19 per cent. Exports to Russia declined by 38 per cent to $3.5 billion in the first 11 months of the year compared to the same period of 2014.
www.tim.org.tr
The government of India has issued a draft notification to control the massive pollution caused by the textile industry. It has directed the industry players to adhere to the 'Zero Liquid Discharge' (ZLD) norms which make it mandatory for them to recycle all effluents released by the factories. However, experts argue that the cost involved in implementing the method will lead to small players shuttering their units and sludge dumped by the factories making an harmful impact on the environment defeating the whole purpose.
According to the draft notification, all textile units - dyers, cotton or wool processors, integrated factories - that generate over 25 kilo litre effluents daily must install ZLD effluent treatment plants. After the notification is approved, the units will have 30 months to set up the treatment plants. They won't be allowed to operate if they fail to comply. The units that already have effluent treatment plants will be required to make them ZLD compliant.
Experts point out that while the government is taking this measure to clean the mess created by textile factories, even though the effluents are treated in a ZLD plant, sludge remains, which will be dumped, which cannot be released into the ocean since it will be too concentrated. As Rajesh Gajra, an environmental consultant with expertise in setting up effluent treatment plants exclaims that the big question the government will face of handling dumping of this sludge when it's struggling with municipal solid waste management.
Executive Director (Economic Division) of Taipei Economic and Cultural Centre in India Guann-Jyh Lee recently visited the two-day Taiwan Textile Fair organised by Taiwan Textile Federation, in association with the Tirupur Exporters Association (TEA), and the Confederation of Indian Textile Industry (CITI). While speaking to the media during the event, he said that Taiwan has succeeded in the production of recycled PET bottle textiles.
Bottles collected from different sources are first crushed and then converted into staple fibres for spinning, or into filament yarns for weaving, and these yarns result in a ready-to-wear product. According to the Environmental Protection Administration, 90,000 tonnes of PET bottles are reclaimed in Taiwan every year, which are equivalent to 4.5 billion drinking water bottles. The production of recycled PET bottle textiles in Taiwan is easily achieved through reclamation scheme. Consumers are encouraged to recollect used bottles with over 67,000 religious and environmental volunteers contributing to the cause of reclaiming resources from waste.
According to Lee, because of a complete and comprehensive production system, Taiwan has achieved the status as the kingdom of polyester textiles. The production and application of recycled PET bottle polyester fibers are optimised with the upstream spinning technologies for functionality, micronisation and compound effects, and the downstream finishing technologies of weaving, dyeing, coating and lamination.
Taiwan's position as the most reliable source for functional and ecological textiles is supported by the fact that various international sporting event such as 2014 FIFA World Cup Brazil, had many teams wearing jerseys made from recycled PET bottle textiles developed by Taiwanese textile companies.
www.textiles.org.tw
The readymade garment factory owners in Bangladesh have expressed their displeasure over the delay in approving detailed engineering assessment (DEA) reports of the RMG factories by Accord and Alliance – two platform active in the country under European Union and North American brands and retailers.
According to the factory owners, approval of the DEA reports is being put on hold by these platforms since factory assessments were not carried out by the firms nominated by them. Factory owners have now raised concerns over the intention of officials belonging to Alliance for Bangladesh Worker Safety and Accord on Fire and Building Safety in Bangladesh.
As of August 31, 2015, Accord, a platform of EU retailers has received DEA reports from 610 factories but has approved only 70 out of them. Alliance, on the other hand, a consortium of North American buyers and brands had asked its 176 supplier factories to conduct DEA. Despite out of 176 factories, 115 submitting the reports to Alliance, only 27 have been approved.
RMG factory owners have said that unnecessary delay in approving DEA reports is impacting the remediation works as well as the production at their factories. According to them, those factories that are not conducting DEA with the firms nominated by engineers of Accord and Alliance are facing the delay and issues. Some are even asked to conduct fresh DEA.
Contrary to this, according to Alliance, Some 226 factories were asked to conduct DEA in line with the Corrective Action Plan (CAP), 147 submitted their reports, and 39 have been approved till date. Some players, according to them, delay in submitting the report fearing poor findings and then face scrutiny by the committee.
A report by Accord indicates that till August, around 610 DEA reports by factories and brands were submitted for the Accord's approval but only 70 reports have been approved so far by the Chief Safety Inspector (CSI. Acknowledging the DEA review a slow process, the report says that the Accord's primary focus has been on red and red/amber factories, and these do not experience major delays in review. DEA review of factories of less concern takes longer. The Accord also hired six new structural engineers recently to expedite the approval process.
Bangladeshaccord.org
www.bangladeshworkersafety.org
With heavy-rainfall and floods hitting the domestic cotton crop, Pakistan has turned its attention to India to fulfil the domestic demand. It is buying more cotton than expected from the country, which has boosted cotton exports from India that has been dealing with the issue of rising cotton stockpiles.
After China rolled back its cotton stockpiling policy and began releasing stocked cotton for its own consumption, India’s cotton exports were hit hard and farmers have been struggling to get rid of the piling inventories. However, recently rising demand from Pakistan has helped in boosting cotton prices in India to above a state-fixed support price in most regions, which has also reduced the pressure on the government.
Earlier China was a major importer with almost 50 per cent of cotton exports from India to the country, however now Pakistan has emerged as the lead importer with half of the two million bales exported this marketing year that started on October 1, 2015 going to the country.
Industry experts expect the total cotton imports by Pakistan to rise more than triple this marketing year. Pakistan's overall cotton imports are increasing to at least four million bales in the year that started on August 1, 2015, from 1.2 million bales a year ago.
According to the Investment Coordinating Board (BKPM), it has been assigned the task of overseeing investments from China in Indonesia’s textile sector. China has expressed its desire to invest $ 1.9 billion in the country.
One on one meetings were held between parties from both these countries in co-operation with the Consulate General of Indonesia in Shanghai last week. The rising interest in the country’s textile segment, BKPM feels, indicates that Indonesia remains an attractive country for investments in labour-intensive sectors such as textiles and textile products (TPT).
BKPM sights Vietnam as its main competitor. It says that as per the data released by the Financial Times, between September 2010 to September 2015 period, five projects were initiated by China worth $470 million in Vietnam, which is a major competition to Indonesia as far as attracting foreign investments are concerned.
www.bkpm.go.id
According to the latest estimates by agencies like Cotton Advisory Board (CAB) indicate that cotton output in the country will be 25 lakh bales less than the previous year. The latest estimate received by Maharashtra Cotton Growers' Federation shows that the national production is expected to be at 350 lakh bales.
In Maharashtra, projections have been reduced to 60-65 lakh bales from over 75 lakh bales earlier from the national and state production at 375 lakh and 80 lakh bales respectively reported last year.
However, national research agency Central Institute of Cotton Research (CICR) anticipates the output to be at least equal to the last year. From the regional perspective, both Vidarbha and Marathwada areas, prime cotton growing regions faced a severe drought this year that impacted the cotton produce. And while the production is expected to be higher in Vidarbha compared to Marathwada, traders in Marathwada are offering around Rs 4,200 a quintal, as against Rs 4,150 in Vidarbha because of the quality.
The situation is slightly better than the last year in Yavatmal, known for suicides by cotton farmers. But as compared to the general average yield, even this year's harvest is too less. Farmers may reap 7 to 8 quintals a hectare, as compared to an average of 12 quintals.
Cotcorp.gov.in
