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The latest edition of "Cotton: Review of the World Situation" delves into a critical issue shaking the foundations of the cotton value chain: traceability legislation. While it may seem innocuous, the policies under development wield the power to reshape not only the cotton sector but the entire realm of natural fibers.
At the heart of the matter lies the indispensable link between sustainability and traceability. With over half of environmental claims made by companies found to be ambiguous or misleading, governments worldwide are rightfully crafting policies to ensure transparency, empowering consumers and rewarding genuine sustainability efforts.
Yet, the textile industry's intricacies present a challenge for legislators, risking the creation of legislation that fails to establish a level playing field for all fibers, both natural and synthetic.
This 35-page issue of the Review tackles the issue comprehensively, featuring insights from the four Permanent Committees within the ICAC's Private Sector Advisory Council (PSAC), spanning from producers and ginners to brands and retailers.
Additionally, contributions from industry experts such as Dalena White, Lorena Ruiz, Nate Herman, and Peter Wakefield offer diverse perspectives on the pressing issue.
As the cotton industry braces for regulatory changes, this issue serves as a roadmap for navigating the complexities of traceability legislation, ensuring a sustainable and equitable future for all stakeholders involved.
In a potential boost to global digital trade members of the World Trade Organization (WTO) have tentatively agreed to extend a moratorium on tariffs on electronic commerce for another two years, according to a draft document released last week. However, the decision still requires formal approval from all 164 member states.
As per the document: "We agree to maintain the current practice of not imposing customs duties on electronic transmissions until the 14th Session of the Ministerial Conference. The moratorium and the Work Programme will expire on that date." Ministerial conferences are held by the WTO every two years, with the next one scheduled for 2026. This temporary extension would allow further discussions on the future of e-commerce within the organization.
Boost to free flow of goods
This move comes as a relief to businesses and consumers who rely on the free flow of goods and services across borders. The moratorium, originally established in 1998, has been periodically extended since then, fostering the growth of e-commerce and the digital economy.
Proponents of the moratorium argue that it has fostered the growth of the global digital economy by reducing barriers to trade and encouraging innovation. They also emphasize its potential to support economic recovery efforts in the wake of the COVID-19 pandemic.
While the draft document signifies a positive step towards continued duty-free online trade, it is crucial to note that formal approval from all 164 WTO members is still necessary.
However, the decision to extend the moratorium is not without its critics. Some countries argue that it prevents them from raising revenue to support domestic industries. Others call for further negotiations to clarify the scope and application of the moratorium.
Overall, the potential extension of the moratorium has been met with optimism by industry leaders and advocates who view it as essential for fostering the continued growth of the global digital economy. They believe it would prevent potential disruptions and increased costs for businesses and consumers alike.
Representatives of the Punjab Dyers Association recently convened with officials from the Union ministries of textiles and industries and commerce to convey the urgent need to mitigate the adverse impact of unrestricted fabric dumping from China on the Indian textile sector.
During the meeting, they highlighted the disparity in import duties imposed on Chinese fabrics, which they deemed unjust and detrimental to the domestic market. Advocating for a fair competitive landscape, they urged the implementation of a minimum import price on Chinese fabric imports.
The delegation emphasised that Chinese fabrics, valued at Rs 400 per kg, were being significantly undervalued at Rs 40-50 per kg upon importation, resulting in substantial losses for the government. Bobby Jindal, Representative, Punjab Dyers Association, underscored the adverse effects of unfair dumping practices on the Indian textile industry. He emphasised the dire consequences, including job losses, diminished revenue, and decreased production capacity, caused by the undue pressure exerted on domestic players.
To be held from Mar 06-08, 2024 at the National Exhibition and Convention Center (NECC) in Shanghai, Yarn Expo Spring will welcome over 500 exhibitors from 11 countries and regions, including Bangladesh, China, Germany, Hong Kong, India, Indonesia, Pakistan, Singapore, Taiwan, United Arab Emirates and Vietnam.
The exhibition will showcase a wide spectrum of the latest innovations across seven feature zones spanning 27,000 sq. m.
Some of these major zones include the Cashmere Yarn Zone, Fancy Yarn Zone, Chemical Fiber Zone, Linen Yarn Zone, Cotton Yarn Zone, Wool Yarn Zone, and Overseas Yarn Zone, which includes the India Pavilion and Pakistan Zone. The exhibition will host a series of seminars, forums and panel discussions concurrently to dive deeper into industry trends, a series of seminars, forums and panel discussions.
The show will offer unmatched sourcing opportunities for buyers with a strong international and domestic exhibitor lineup showcasing the latest yarn and fiber innovations, says Wilmet Shea, General Manager, Messe Frankfurt (HK).
The Overseas Yarn zone will host over 70 suppliers from 11 countries and regions. It will display a wide range of products focused on sustainable characteristics.
The exhibition will also host an India Pavilion featuring over 30 of the country’s top suppliers in the cotton yarn industry. Products to be featured in this zone include pure cotton carding, pure cotton combing along with compact spinning, woven yarn, air-jet yarn, fancy synthetic filament yarn, Lyocell linen, Modal linen and Tencel, among others.
The Pakistan Zone will host 11 suppliers presenting cotton yarns and unfinished fabrics, as well as Apex Industries, showcasing organic cotton options.
Other notable international exhibitors at the event include Blinks International from Pakistan, specialising in raw cotton, cotton yarn and grey fabrics; PT Bintang Makmur Sentosa Textil Industri from Indonesia, highlighting spinning, weaving and finishing products; and Rütex GmbH from Germany, specialising in all standard yarns to specialties and development-intensive yarns.
The Export Development Board (EDB) collaborated with Sri Lanka Missions in the US to organise the Sri Lanka country pavilion at the Sourcing at Magic Exhibition in Las Vegas, US. This event featured the participation of 11 esteemed Sri Lankan companies.
One of the globe’s largest fashion marketplaces, ‘Sourcing at Magic Las Vegas’ offers a dynamic fashion experience. The fair is held biannually in February and August at the Las Vegas Convention Centre and serves as a hub for fashion enthusiasts and industry professionals alike.
The Sri Lanka pavilion showcased the diverse offerings of renowned companies such as Timex Garments, Aitken Spence (Garments), Eskimo Fashion Knitwear, Trendywear Adhikarigama, Nobleswear, Garment Services Meegoda, Colmans Garments, Nasna Impex Garments Industries, Rainco Industries and Insomnia.
These companies highlighted and promoted a broad spectrum of apparel products to the US market, including ladies' dresses and blouses, active wear, work wear, men’s shirts, underwear, children's wear, and raincoat capabilities.
Indika Liyanahewage, Chairman, Sri Lanka Garment Exporters Association, actively participated in the country focus session held concurrently with the exhibition. His presence aimed to shed light on Sri Lanka’s commendable strides in sustainable and ethical manufacturing practices within the garment sector, showcasing the country's ongoing improvements and commitment to responsible production.
In the midst of a retail landscape characterised by dwindling consumer foot traffic and cautious inventory management, India's apparel retail sector is witnessing a strategic shift among major players like Aditya Birla Fashion & Retail and Arvind Fashions. Led by influential figures such as Ashish Dikshit and Shailesh Chaturvedi, these companies are moving towards minimising discounts to safeguard profit margins, signaling a deliberate focus on profitability amidst challenging market conditions.
Following a surge in activity during the post-pandemic recovery phase, the apparel retail sector has encountered a notable slowdown, prompting industry leaders to reassess their strategies. Ashish Dikshit, Managing Director, Aditya Birla Fashion & Retail, revealed the company's decision to reduce reliance on discounts, a move that notably bolstered margins in the recent quarter. Similarly, Arvind Fashions has opted to forgo early end-of-season sales in favor of full-priced sales and increased investments in marketing, resulting in improved profitability.
The deliberate reduction in discounting has not only strengthened the bottom line for these retailers but has also catalysed a broader trend towards premiumisation among consumers. Aditya Birla Fashion & Retail witnessed a significant expansion in its EBITDA margin, reaching 14.5 per cent, while Arvind Fashions reported an 18 per cent growth in EBITDA last quarter, attributed to disciplined discounting policies and effective inventory management. This strategic shift reflects a nuanced understanding of market dynamics and consumer behavior, with retailers prioritizing brand equity and product value over short-term sales boosts.
Despite initial concerns, consumer response has been largely positive, with companies like Shoppers Stop's Intune reporting higher than anticipated full-price sell-through rates. This evolving consumer mindset, where value and brand reputation outweigh the allure of discounts, signals a maturing retail market embracing sustainable purchasing practices. However, questions persist regarding the sustainability of this trend amidst ongoing economic pressures and evolving consumer expectations.
As retailers navigate through this period of adjustment, the industry stands at a critical juncture. The move towards reduced discounting and enhanced profitability may herald a new era in retail, one that balances consumer desires with financial prudence. Yet, maintaining this delicate equilibrium amidst an ever-changing market landscape poses significant challenges, making the road ahead both intriguing and uncertain.
Despite relentless pressure from the US and its Western allies since 2020, the Xinjiang's cotton industry continues to thrive, says Liang Yong, Member, CPPCC and Director, Xinjiang Cotton Industry Development Leadership Office.
Highlighting the industry's sound development and rising competitiveness, Yong says, despite a decline in exports to the US, China remains a global leader in cotton consumption, production, and importation.
Tech innovation and large-scale cultivation have propelled Xinjiang's cotton industry forward. Mechanisation rates for harvesting have surged to 89 per cent in 2023, up from 21 per cent in 2014. Moreover, Xinjiang's cotton yield per unit area rivals that of top-producing countries like the US and Australia, reaching 143.85 kilograms per mu. In 2023, Xinjiang accounted for 91 per cent of China's cotton output and a significant portion of global production.
Looking ahead, Liang aims to establish a homegrown quality tracing and certification system while fostering domestic cotton brands. The Xinjiang cotton industry is also expanding into Belt and Road Initiative (BRI) partner markets to stabilise the global textile supply chain. Liang's proposal for a joint cotton market with Shanghai Cooperation Organisation (SCO) members seeks to counter US-led measures and enhance China's cotton industry influence globally.
Xinjiang's strategic geographic position, along with policy support and relatively low production costs, positions it as a potential hub for China's western textile industry cluster. With the recent launch of the Xinjiang Pilot Free Trade Zone (FTZ), the region anticipates increased trade opportunities. Textile exports from Xinjiang surged by 34.6 per cent to 107.59 billion yuan in 2023.
Furthermore, Xinjiang aims to become a core area of the Silk Road Economic Belt, leveraging the Belt and Road Initiative to enhance regional cooperation and facilitate China's westward opening-up process. With its 20 border ports and pivotal role in China-Europe freight transportation, Xinjiang anticipates accelerated development in the next five years.
Sri Lanka's apparel industry is making strategic moves to stay relevant amid impending legislative changes affecting the global fashion and apparel sectors.
Collaborating with organisations like GS1, the Asian Development Bank (ADB), and the International Financial Reporting Standards (IFRS), Sri Lankan manufacturers are embracing transparency and traceability initiatives.
In a proactive effort, Sri Lanka's apparel manufacturers have announced the implementation of QR code tags on all apparel items. These QR codes will provide stakeholders and consumers with comprehensive information, including details about the brand, materials used, care instructions, supply chain traceability, and end-of-life guidelines.
Nick Allison, GS1 New Zealand emphasised the enhanced capabilities of these QR codes, which will offer dynamic data updates on apparel items. This initiative aims to meet evolving Environmental, Social, and Governance (ESG) information requirements, thereby facilitating export market access.
Despite a slight decline in apparel exports from Sri Lanka in 2023 compared to the previous year, optimism remains high. The Ceylon Chamber of Commerce reported that 39 per cent of Sri Lankan exporters anticipate moderate growth in the country's economy in 2024.
The decision to implement QR code tags was not driven by legislative mandates in Sri Lanka but rather by a forward-looking approach to align with global trends. With increasing regulations in major markets like the United States, United Kingdom, and European Union focusing on supply chain transparency, Sri Lanka's initiative positions it ahead of regional competitors.
For instance, regulations such as the US Uyghur Forced Labor Prevention Act (UFLPA) and the UK Modern Slavery Act highlight the growing importance of supply chain traceability and accountability. In Europe, ongoing debates surrounding the EU's Corporate Sustainability Due Diligence Directive (CSDDD) underscore the urgency for companies to demonstrate responsible sourcing practices.
By proactively addressing these regulatory trends, Sri Lanka's apparel industry aims to enhance its global competitiveness and attractiveness to international brands. Initiatives like digital passport-style tags, already adopted by brands like Mara Hoffman and Coach, signify a broader industry acknowledgment of the importance of supply chain transparency.
Signaling a concerted effort to integrate sustainable textile solutions into Athleta products, Gap Inc. and Ambercycle have unveiled a groundbreaking partnership.
Known for its commitment to sustainability and inclusivity, Athleta is collaborating with Ambercycle to revolutionise its product offerings. The partnership will include the integration of Ambercycle's cycora regenerated polyester to replacing traditional polyester in Athleta's lineup. This bold move positions Athleta as a pioneer in embracing cycora on a large scale, commencing in 2026.
With a focus on designing apparel tailored for women by women, Athleta's range prioritises inclusivity and functionality, catering to various aspects of women's active lifestyles, from yoga and training to travel and recovery.
Chris Blakeslee, CEO, Athleta, emphasises the brand's commitment to sustainability and quality. He says, the brand is dedicated to reducing environmental impact by integrating recycled materials like cycora into its products. This not only aligns with the brand’s core values but also upholds its uncompromising standards of quality.
Ambercycle's innovative molecular regeneration technology is instrumental in transforming discarded polyester into cycora, a high-performance material that rivals virgin-grade polyester in quality while mitigating greenhouse gas emissions and reducing dependence on landfilling or incinerating end-of-life textiles.
Shay Sethi, CEO, Ambercycle, adds, together, the companies are propelling the circular fashion movement forward.
Gymshark has recently introduced its upscale athleisure line named 'everywear' in collaboration with its inaugural wholesale partner, Selfridges.
This exclusive collection finds a permanent home within Gymshark's retail space on Level 3 of the Womenswear Body Studio and Level 1 of the Menswear Designer Street Room at Selfridges Oxford Street. Additionally, it is accessible both online and at Selfridges Trafford in Manchester. Until early to mid-April, the department store will solely carry these items.
Traditionally, Gymshark has solely released products through its initial physical retail outlet and its official website. However, this summer, plans are underway to inaugurate a second Gymshark location.
The ‘everywear’ range epitomises the ultimate leisure attire by blending sportswear with contemporary lifestyle trends. With lifting-inspired technical elements, on-trend muted tones, and luxurious heavyweight fabrics, it exudes a timeless streetwear aesthetic.
Noel Mack, Chief Brand Officer, Gymshark says, during the collection's conceptual stages, the brand aimed to unveil it in a location as equally captivating.
Bosse Myhr, Director-Menswear & Womenswear, Selfridges, adds, Gymshark enriches the company’s brand basket and offering customers access to cutting-edge activewear.
