FW
China is undertaking supply side reforms in a bid to sustain the growth momentum seen over the last few years. Over the last three decades there was a focus on the demand side. The rapid growth witnessed by Chinese economy during the last 30 years had capital investment, exports and consumption as its focus areas, which are all generally considered demand side parameters.
In 2008, following the sub-prime crisis in the US, China announced a four trillion yuan stimulus package to increase investment in infrastructure projects, and thereby create jobs and stimulate demand for materials used in construction. The rationale behind such a package also included a thought that wages paid to workers in newly created jobs would be spent on essentials and business would flourish. In the process, however, issues such as income distribution, rising home prices, and overcapacity were not paid attention.
By focusing on the supply side, which means stimulating economic growth through reducing barriers to production especially through tax cuts, wealth owners will be enticed to invest in things that increase supply. These may be in the form of launching new businesses or innovative goods and services. This is expected to generate sustainable, quality growth.
Pakistan is likely to see a fall in cotton consumption by 12 per cent this year. By consuming 2.2 million tons of cotton it would be exporting around $13 billion of textile products. Bangladesh and Vietnam with a 22 per cent and a 13 per cent increase in their cotton use would generate exports worth $54 billion. This means value addition in these two non-cotton producing countries is over four times higher. Both Bangladesh and Vietnam are among the low value-added textile product exporters.
China, Turkey, Sri Lanka and Tunisia add much more value to their textiles. The ongoing drop in polyester prices has caused a reduction in the share of cotton in the global market, particularly in China where polyester has been favored over cotton in the recent season.
Cotton consumption in China is forecast to go down five per cent in 2015-16, though it still remains the world’s largest consumer of cotton. When cotton prices dropped at the start of 2014-15, the gap between international cotton prices and polyester prices in China, which accounts for 72 per cent of the world’s polyester production, narrowed significantly and greatly improved the competitiveness of cotton.
However, this only lasted for a few months, as polyester prices continued to drop, while cotton prices stabilised. In 2015-16, the gap continued to widen.
As the Trans Pacific Partnership free trade deal that covers 12 Pacific rim countries including the United States and New Zealand deal gets signed it is expected to significantly boost trade. But for the pact to take force, each country must now ratify it through its domestic political process.
The agreement covers a region responsible for about one-third of all world trade, although noticeably missing from the agreement is China, which is forging ahead with its own trade deals. Proponents say the agreement will increase trade and make it more equitable by eliminating most tariffs and other barriers. But opponents say it will erode national sovereignty and hand too much power to US corporations. The countries who have signed the deal are Japan, Canada, Mexico, Australia, Malaysia, Singapore, Peru, Chile, Vietnam and Brunei.
Whether the politically divided US will agree to it remains an open question. Many people in New Zealand remain opposed to the deal, and hundreds protested outside the Auckland venue where it was being signed, blocking traffic on some streets, while others protested in the capital, Wellington.
In the US, the agreement has been at the center of President Barack Obama’s trade agenda, but while it is supported by business groups and many Republicans, Senate Majority Leader Mitch McConnell has not yet backed it and has suggested Congress shouldn’t vote to ratify it until after the November elections.
In 2014, US clothing imports from sub-Saharan Africa reached $986 million, up nearly six per cent from 2013, as countries such as Lesotho, Kenya, Ethiopia and Tanzania participated in the African Growth and Opportunity Act (AGOA) program. The program expands the list of products which eligible sub-Saharan African countries may export to the United States subject to zero import duty under the Generalized System of Preferences (GSP).
While general GSP covers approximately 4,600 items, AGOA GSP applies to more than 6,400 items. AGOA came into law in 2000. It offers incentives for African countries to make efforts to open their economies and promote free trade. AGOA GSP provisions are in effect until September 30, 2015.
In June 2015 the US renewed the AGOA for another 10 years. The trade agreement will end in 2025. To build upon the success of the (AGOA), the US and its African partners launched the ‘Trade Africa’ initiative with the East African Community in 2013. This is a multifaceted cooperation agreement focused on compliance with WTO standards on trade facilitation, sanitary and phytosanitary measures, and technical barriers to trade.
The US is currently working to expand the ‘Trade Africa’ initiative to involve new partners, including Cote d’Ivoire, Ghana, Mozambique, Senegal, and Zambia.
Scoop International the London tradeshow that took place from January 31 to February2, celebrated its 10th outing this season, bringing together some 250 exhibitors across apparel, accessories, jewelry and lifestyle products. According to visitors, the show is a joy to visit, partly due to its inspiring Saatchi gallery setting, which spreads over three floors and 12 individual spaces. Coinciding with London Fashion Week later this month, the venue will also play host to the next edition of Scoop London (February 21-23).
During the show, Dutch label Humanoid brought its distinctive lux-casual offering to Scoop International for the first time this season. J. Lindeberg has updated its bestseller shoe with a pointier toe for AW16. It’s been given yet another twist with tribal-themed embossing, synching it with the collection as a whole.
At the show, Young Irish jewelry name Chupi harnessed the vibe with delicate pieces cast from a swan feather found along a Dublin riverbank. Many a Scoop exhibitor offered products with green credentials. Founded in 2012 by Angie Sam, Ultra Tee crafts its well-cut tops from organic cotton, applying prints inspired by the natural world. The pomegranate and horse chestnut motifs made for unusual and rather compelling prints.
In another highlight, the Canadian name Matt & Nat’s vegan accessories appeal to consumers with modernist and green inclinations.
Between 2016-20 the global nanofiber market is expected to grow as the production system is forecast to show improvement with the vendors striving to achieve economy of scale and reduce the breakeven point. Many solution providers such as FibeRio technology, Elmarco are coming up with improved technology and new techniques, showcasing their capabilities to provide comprehensive nanofiber solutions.
According to analysts, the global nanofiber market will grow at a CAGR of 24.12 per cent during the period 2016-2020. The increased adoption of nanofibers in technical textile is the primary growth driver for this market. Technical textiles that include nonwovens make up around 25 per cent of the global fiber consumption and have huge demand in areas like medical devices, water purification, and responsive fibrous system.
During 2015, the filtration application segment dominated the market with a market share of around 59 per cent. However, the electronics application segment is expected to see the highest CAGR during the forecast period. Material cost is an important market driver of nanofiber in electronics application. Nanofibers have a structural advantage such as enhanced conductivity over other materials and are being used as deposits on the pre-patterned SiO2 substrate in field effect transistor (FET). These transistors and other logic circuits find huge application in the electronics sector.
Milano Unica New York was held from January 24 to 26, 2016 when the region was facing a massive snow blizzard. But despite that, booths were busy with attendees till the final hours of the fabric show. The show stressed on the importance of Italian fabrics.
The current exchange rate makes Italian fabrics more affordable for US manufacturers and designers are looking for better fabrics with quality of made-in-Italy production. Milano Unica recently partnered with the Council of Fashion Designers of America (CFDA) to launch a new fabric-development program. The program will pair three up-and-coming designers with Italian textile mills. Each will go to Italy, identify a mill to work with and create fabrics. They will then get 10 meters to work with in their next collection.
CFDA has already selected a women’s wear designer, Ryan Roche, and an accessories designer, milliner Gigi Burris, for the program. A men’s wear designer will be announced at a later date. Many new players in the US apparel market have never had the opportunity to work with Italian fabrics and mills before. In fact, many Italian mills have agents in the US and several US customers. They are looking to expand their US business.
www.milanounica.it/MU/index.php/en/fairs-eng/mu-ny-en
The recently concluded Munich Fabric Start and Blue Zone, held from February 1 to 3, 2016, at the MOC Messe Zentrum was visited by many fashion and textile industry players. The fair heralded a positive atmosphere with all its halls filled with visitors.
The area focusing on denim and casual fabrics ‘The Blue Zone’ disclosed some novelties. The new trend area has been completely redesigned and moved inside the exhibiting area, close to the entrance. New displays showed a mix of products, photo collages and a wall of Polaroid prints from catwalk shows featuring denim pieces providing extra inspiration.
Novelty at the show was Blue Zone's booth display characterized by semi-transparent white fabric walls. Another novelty will be seen at the September 2016 fair: ‘Kesselhaus’, the area just opposite the Zenith Halle where Blue Zone took place, will host a new pavilion measuring about 2,500 sq., mt. aimed to present new projects and product categories.
Among the most significant trends presented were jacquard denims and chambrays in bright or darker blue hues (Bossa) but also in some shades of green (Bossa, ITV, Berto). Camouflage effects, microstructures, herringbone stripes and paisley motives decorated many fabrics.
Exploitation has become the dominant business model in global trade, says a global trade union study by the International Trade Union Confederation (ITUC). More than 160 million workers make up the hidden workforce. They are employed indirectly in supply chains and subject to labor abuses but help big companies earn trillions of dollars.
Some of those workers are in Cambodia, where low wages are the major attraction to businesses. Transparency is lacking in the multiple layers of contractors and subcontractors employed by major companies. There are no safe, secure, regulatory environments that provide fundamental rights.
In 50 major companies, including Nestle, Coca-Cola, General Electric and Walmart, only six per cent of the workers in their supply chains are directly employed. The 50 companies have combined revenues of $3.4 trillion. Big companies have to work toward ensuring supply chain transparency, safe and secure work, a living wage and collective bargaining rights for all workers.
The situation for workers is made worse in countries like Cambodia because of domestic regulatory systems that are weak thanks to an unwillingness among governments to hold large companies accountable. If countries where multinationals are headquartered were to legislate to mandate due diligence, then it’s possible to prosecute companies across borders.
Cotton producers in the US plan a seven per cent increase in plantings this year. Producers want to return some of the acreage back to cotton after bad weather at planting and low prices slashed acreage by 22 per cent last year to the smallest since 1983. All-cotton plantings are pegged at 9.19 million acres, compared with 8.58 million last year and 11.04 million acres in 2014.
Some tradersʼ estimates have ranged from 125,000 to 225,000 running bales in US upland export sales for the week ended January 28. Cotton futures retreated from an eight-session high to finish lower in spot March Wednesday, touching the low in the late going, while December settled higher.
Futures settlements during the reporting week ranged from 62.45 cents to 60.86 cents, basis March, and averaged 61.54 cents. May dipped 34 points to close at 62.41 cents, July eased off 11 points to 62.77 cents and December gained 21 points to 62.62 cents. World production is projected to increase 2.8 per cent, with consumption up a mere 0.2 per cent. Global stocks would amount to 81 per cent of consumption.
World ending stocks are estimated to decline five per cent following a seven per cent decline this season. An additional decline in world stocks is forecast for 2016-17.
