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The global fashion industry has a massive impact on the environment. This impact extends from the pesticides used to grow fibers such as cotton to the impact textile dyes has on water in countries where regulations tend to go unenforced. Since 2011, Greenpeace, has been approaching leading brands to eliminate hazardous chemicals from their supply chains. And yes, it did achieve some results. Seventy-six leading fashion houses made a commitment to the organization that they would detoxify their operations by the end of this decade.
In its third annual “Detox Catwalk,” the organization has lauded the companies that are changing their working ways while rattling the cages of companies it believes are doing nothing. So what are the comments of Greenpeace on this?
Inditex, (which operates the popular Zara chain), Benetton and H&M are the three companies that have sold Greenpeace their believable timelines and have promised strong action and hasten the execution of their plans. All the three companies have won plaudits for moving to eliminate toxins such as PFCs in making progress on their long-term “zero discharge” plans. According to Greenpeace, these three companies, which earn almost $50 billion in combined revenues, have backed up their promises with transparency and concrete plans.
However, several leading brands are apparently doing nothing, and according to the environmental organization, have failed to take responsibility. Among these companies are Armani, Bestseller, Diesel, Hermes and Versace that earn the equivalent of what Greenpeace would call an “F” grade in describing their efforts.
Yarnex and Fabrics and Accessories (F&A) will be held in New Delhi, July 21 to 23, 2016. The twin shows have attracted 139 upstream supply chain partners across fibers, yarns, fabrics, trims, embellishments and services from all over India and overseas. They help buyers establish linkages with suppliers across the textile value chain.
Major exhibit categories include: natural, man-made and specialty fibers, natural, manmade fibers, fancy and various blended yarns and various fabrics made from natural and synthetic fibers. Accessories on show include buttons, hangers, interlinings, labels, laces, motifs, stones, studs, tapes, sewing and embroidery threads, zippers etc. The shows will also have service providers who offer services like textile related CAD/CAM, design institutes, logistics, textile testing and certification etc.
The twin shows are expected to be visited by international buying houses, agents, composite mills, weavers, knitters, garment exporters and manufacturers, apparel brands, retail chain stores etc. Yarnex is also a platform for display and dissemination of information on new product development and innovation. It is now firmly entrenched as a prominent brand and an important cog in the sourcing and business networking cycle for the textile value chain. It attracts leading Indian and international manufacturing companies who have successfully reached out to their target customers, setting up enduring business linkages.
Exports of Indonesian textile and textile products are only expected to grow one per cent in 2016, below the three per cent target. Even in the domestic market Indonesia has trouble competing with imports of cheap textile and textile products from Vietnam and China. Indonesian textile producers now control a domestic market share below 30 per cent.
The textile industry is one of the oldest industries in Indonesia and is one of the industries that is considered most badly affected by the country's economic slowdown after 2011. Indonesia's textile exports to Europe are subject to import duties in the range of 11 to 30 per cent, while Vietnam can export its textile products to the European Union with zero import duties. This makes Vietnam’s products much more competitive.
Recently, electricity tariffs were cut in an effort to support domestic industries. However, this incentive is yet to have a positive impact. It will require much more structural changes in order to boost the domestic textile industry and prevent more bankruptcies as well as mass layoffs.
The Indonesian textile industry also needs to seek non-traditional export markets in order to expand its export base. For example Turkey and Iran are countries that could be a new target.
India’s blended spun yarns exports were down 5.8 per cent year on year. During April 2016, blended spun yarn export value was up 11.2 per cent year on year while volumes rose 19.5 per cent as compared to the same month last year. India exported15.3 million kg of PC yarns during May. Polyester cotton yarns were exported to 47 countries in May 2016, of which Bangladesh and Honduras were the largest importers of PC yarn from India in May followed by Colombia.
Philippines, Australia, Russia, Venezuela and Guatemala were the fastest growing markets for PC yarns while the Dominican Republic significantly reduced its import of PC yarns from India. Algeria and Indonesia were among the 11 countries that did not import any PC yarns from India during May. Belgium was the major destination among the seven new markets found in May.
In May, PV yarns were exported to 31 countries from India. Turkey continued to be largest importer of PV yarns from India with a 52.5 per cent share of the total volume exported from India during the month. Russia and Yemen were the new major markets for PV yarn while six countries did not import any PV yarn during the month, including the major ones like Peru, Israel and Czech Republic.
As losses continue to mount, following the sharp rise in cotton prices, textile mills in Tamil Nadu (TN) that account for about 46 per cent of the total installed spinning capacity in the country, have reduced their production. According to officials, small and medium textile mills with a capacity of up to 25,000 spindles have reduced their production by about 15-20 per cent since the advent of the month.
Prices of Shankar-6, the most popular cotton variety used by mills in TN, have come up by 42% since April and has currently crossed 49,000 per candy (a candy is 355 kgs). Prices have jumped by about Rs 6,000 per candy in the last ten days alone. Interestingly, mills in the state have started importing cotton as prices are ruling lower in the international market. Since the cost of imported cotton is lower by at least Rs 2,000 per candy, many spinning mills, including smaller ones with a capacity of 10,000 spindles, are importing cotton now.
With domestic cotton prices exceeding international cotton prices, the profitability of spinning companies in the second quarter of 2016-17 likely to get hit. This would adversely impact the yarn demand and export prospects of the spinning industry, a report of ratings agency, Investment Information and Credit Rating Agency of India (ICRA) said.
Domestic prices of ginned cotton have increased significantly from about Rs 90-92 per kg in April to around Rs 122 per kg now. Slow growth in domestic consumption and stagnation in exports are likely to negatively impact demand and export competitiveness of the Indian yarn, the agency added.
According to Anil Gupta, VP, corporate sector ratings, ICRA, slower cotton sowing and decline in cotton sown area apart from cotton stocking by intermediaries could be the reason that has led to this sharp rise in prices.
As per ICRA estimates, the profitability of spinning industry will be adversely affected because of the price rise as it faces challenges of slow growth in domestic consumption and high reliance on exports. ICRA points out, the stability in cotton prices is most critical for a profitable textile industry as it minimizes the risks of inventory losses and the need for a price hike for the existing and future orders. Gupta further said that both the factors are a challenge for the mills to sell their production. One can also see a decline in capacity utilization and also contribution margins to prevent inventory build-up.
The spinning players, who may have stocked inventories for four to five months from March this year, may witness improved profitability as they are likely to gain from higher yarn prices.
A giant industrial park mainly designed for textile manufacture, garment products and agro industry has come up in Ethiopia. This would help boost the country’s exports, it is said. Built on an area of 1.3 million square meters, it involved a cost of $250 million in completing. The mega project, built by a Chinese company, was completed in only 9 months time.
The new park has been built as part of the government’s plans to expand the industry development which plays a crucial role in realising the country’s dream to be Africa’s leading manufacturing powerhouse.
Speaking at the inaugural ceremony, Ethiopian Prime Minister Hailemariam Desalegn said that the giant park will have significant input in transforming the country’s economy. It will attract foreign direct investments and will play a pivotal role in transforming small-scale manufactures into a larger scale. The mega project named Hawassa Industrial Park is located in Hawassa town located some 275 km south of the capital, Addis Ababa.
The Hawassa eco-industrial park has 35 factories equipped with 1 stop service center and has its own renewable electricity sources to avoid power supply problems. Nearly 15 foreign companies from America, China, India and Sri Lanka as well as six local companies have finalized preparations to start operation at the Industrial Park.
Riding on the apparel sector that accounts for the biggest revenue source, the Bangladesh government has set an export target of $37 billion for fiscal year 2016-17. The set target is aimed at 8 per cent increase from the export achievement made last fiscal.
Bulk of the target is set for the readymade garment sector. The export target set for Bangladesh’s biggest export sector has been set at $30.3 billion, 8 per cent more than it was last year.
Apparel owners are optimistic of the industry’s future in Bangladesh and aims to gain $50 billion in garment exports by the end of 2021.
An official report on Bangladesh's ready-made garment industry shows poor compliance with regard to issuance of appointment letters and identity cards to the workers, preserving their service records and granting maternity leave and other lawful benefits to them. In the absence of appointment letters, service books and ID cards, the workers are deprived of their lawful rights and benefits. Such deprivation took place in the cases of Tazreen Fashion and Rana Plaza workers, labour leaders alleged.
The Department of Inspection for Factories and Establishment (DIFE) under the ministry of labour and employment has come up with the findings after it carried out monthly inspection in some 212 ready-made garment factories in May 2016. The report says, about 63 per cent of the apparel factories were found engaging their workers in extra hours of work without taking prior permission from the authorities concerned. Only 11 per cent of the factories not affiliated with BGMEA and the BKMEA met the requirements.
Out of the surveyed units, 145 were the members of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and 32 of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). Others are not allowed to join any trade unions because of this. Irregularities are more in apparel factories that are not the members of any of the two trade bodies, according to the report.
Across the world, cotton markets have soared reflecting a burst of speculative buying sparked by concerns about smaller stockpiles. ICE October cotton leapt as much as 5.6 per cent to 75.14 cents a pound on Wednesday, the highest price in two years. Open interest, or the number of contracts outstanding, in the US cotton futures market has grown by 11.5 per cent this week, reflecting an influx of new buyers.
Cotton had been one of the slowest commodity markets in recent years, with prices hovering in a narrow range. That abruptly changed this week, with ICE futures locking at price fluctuation limits on Tuesday and Wednesday.
Meanwhile, one trigger was the release of supply estimates by the US Department of Agriculture. The agency estimated global stockpiles would drop 9m bales on year to 91.29m bales by July 2017, 3.4m lower than its previous estimate on increasing Chinese demand. A cotton bale weighs about 500lb.
China’s textile mills sector makes the country the world’s largest cotton consumer. The cotton market has for years been capped by uncertainty over a bloated Chinese state reserve built up under a price support programme for farmers. This year, sales from the reserve have been ‘very strong’ with the base sale price reaching nearly 90 cents a pound, suggesting ‘demand is more broadly-based than previously considered,’ USDA said.
India, the largest cotton producer, has been importing bales to replenish supplies after exporting heavily last year. Cotton farmers in India have also been battling a damaging pest called whitefly.
