FW
Pakistan's textile exports have started showing progress in the EU due to its GSP plus facility. Exports have recorded an increase, especially in apparels by 24 per cent in volume and 30 per cent in value terms from January to December 2014. The European Union has granted Generalised System of Preferences Plus (GSP Plus) status to Pakistan from January 1, 2014 for 10 years.
The GSP Plus status allows almost 20 per cent of Pakistani exports to enter the EU market at zero tariff and 70 per cent at preferential rates. EU trade concessions will benefit Pakistan’s textile and clothing industry to compete with those of regional rivals like Bangladesh, which already have duty-free access to the bloc’s market. The increase in exports is expected to facilitate economic growth and help in generation of additional employment.
GSP Plus status is extended to countries that have applied for the tariff scheme and implemented the 27 international ratified conventions. GSP Plus is granted to those countries that ratify and implement international conventions relating to human and labor rights, environment and good governance. The preferential trade status is subject to review every two years. GSP is a facility granted to developing countries by certain developed countries. It is not negotiated with them. The preferential treatment is non-reciprocal.
Bangladesh will increase tax at source on export proceeds from the apparel sector in the coming fiscal year. The rationale is: the sector receives a lot of benefits from the government and now it is time for exporters to give back -- at least something. The tax at source on export receipts had been reduced to 0.3 per cent for this fiscal from 0.8 per cent in the previous one.
If the rate is increased, the government feels it can collect a large amount of revenue from the sector. Day laborers and people with low income are seen to be the segments hit the hardest by inflation. The government will review subsidy allocations for different sectors, including garments. It will rationalise subsidy allocation and, possibly, there will be changes in the distribution and measures to avoid its abuse. Considering the limited resources, there will be a review of the issue of cash incentives.
Since the garment sector enjoys half of the total cash incentives, there is a feeling the thrust sectors should get these facilities. The size of the budget has increased by 18 per cent in the last five years, but real growth will be just around 10 per cent if inflation is taken into account.
Garment manufacturers and exporters in Bangladesh say Accord is involved in wrongdoing against a number of country’s apparel factories. They say, the EU entity is getting involved in labor management issues to create problems with factory management and engaging in activities beyond the purview of worker safety.
Accord on Fire and Building Safety in Bangladesh is a platform of European Union retailers. Alliance for Bangladesh Worker Safety is an entity of North American buyers. Accord and Alliance were formed following the Rana Plaza collapse.
There are allegations the Accord platform is threatening to declare some factories non-compliant, which is destroying export business. Accord is supposed to have got engaged in activities which are beyond the purview of worker safety. Factory owners say Accord’s activities should be monitored under the country’s laws. They say the platform should stick to its mandate of improving worker safety in garment factories where Accord signatory companies source apparel products.
Their main grouse is: Accord is trying to influence workers of some factories to communicate with labor leaders and participate in trade unions, activities it’s not supposed to engage in. Accord is also accused of getting involved in labor management issues, such as payment of wages to workers, when a factory is closed down due to safety risks.
bangladeshaccord.org/
Falling cotton stocks made the Pakistan cotton market mind-numbing as ginners raised rates. The official spot rate was unchanged at Rs 5450. In the ready session, only 2,000 bales changed hands between Rs 4,350 to Rs 5,700. Seed cotton rates in Sindh were unchanged at Rs 2,000 to Rs 2,600 and in Punjab prices registered at Rs 2,400 to Rs 3,100.
Prices are expected to go up in the coming days as mills and spinners are trying to grab lint cotton despite soaring prices. If petroleum prices go up, it may result in a slight rise in cotton rates. Rains are not expected to play havoc in the Punjab cotton belt in times to come.
Prices are firm in international market due to strong demand. Local prices are also moving in a tight range because of this. July cotton contract on ICE Futures US was down 1.1 per cent.
On global front, ICE cotton extended losses , falling to a one-week low, after the US government projected year-end inventories for the 2015-16 crop year would be the second highest on record in its first supply and demand forecast for the upcoming crop year.
The International Wool Textile Organisation is meeting in China from May 18 to 20, 2015. This is an annual event and is one of the highlights of the wool industry’s calendar. Co-organised by IWTO member China Wool Textile Association (CWTA), the meet will be the fourth congress to take place in China, the world’s largest wool processing and wool consuming country.
The IWTO Congress is a unique opportunity for all in the wool textile pipeline to meet, exchange ideas and help formulate IWTO policy for the coming year. With the goal of working together to build a professional and sustainable industry, IWTO Congress participants include growers, traders, primary processors, spinners, weavers and garment manufacturers, together with retailers and other organisations involved in the wool pipeline. IWTO Congresses are attended by high level management representatives.
IWTO’s mission is to connect all parts of the wool supply chain to strengthen wool’s credentials as the world’s leading sustainable fiber and represent the wool industry at the international level. Among its activities are communicating the benefits and values of wool to both internal and external stakeholders; documenting and disseminating the science that supports wool’s unique natural properties; linking members and international agencies and organizations; and governing the trading standards and regulations for wool across the world.
www.iwto.org/
The United Nations Working Group on business and human rights has said that “the lessons of the Rana Plaza disaster have still not been learned.” The Group reacted after a fire in a shoe factory in Manila last week, allegedly claimed over 70 lives. “The tragic death of factory workers, mainly women, is a stark reminder of the urgent need for action to protect workers in the garment industry, despite of the Bangladesh Accord for Fire and Building Safety, created two years ago, on the same date as the Manila shoe factory fire,” said Michael Addo, who currently heads the expert group.
After the collapse of the Rana Plaza building with more than 3,000 garment workers inside in 2013 followed by fire at Tazreen Fashions factory in Bangladesh, the world woke to the harsh reality about disastrous working conditions in such factories. The Bangladesh Accord, signed by over 150 corporations from 20 countries, global and local trade unions, NGOs and workers’ rights groups is currently evaluating factory conditions in the country.
The Rana Plaza disaster also led to progress, supported by the International Labour Organization (ILO), on labour law reform, labour inspection, workplace safety and compensation for injuries to take steps to strengthen inspections of working conditions in factories. Government efforts have been undertaken in collaboration with the Accord and with another initiative, the Alliance for Bangladesh Worker Safety, led by 26 mainly North American companies.
www.un.org
Yarn Expo Autumn 2015 that will take place in the National Exhibition and Convention Center, Shanghai for the first time, a venue closer to China’s textile manufacturing hubs, from October 13 to 15, expects more trade visitors during the event. Buyers were of the opinion that the venue’s close proximity to China’s manufacturing units makes it easier for them to visit factories after attending the show.
Over 7,000 trade visitors from 62 countries and regions attended the last autumn show, representing an increase of 18 percent over the previous year. Attracted by the busy visitor flow at the 2014 fair, the Indian Pavilion, co-organised by the Cotton Textiles Export Promotion Council (TEXPROCIL), has also confirmed their participation again this year. The pavilion witnessed around 30 per cent of the total visitors coming from overseas destinations, and 70 per cent from Mainland China. The association was also buoyant about the participation since almost 30 percent visitors that visited the pavilion, actually booked orders with the suppliers after the fair.
China’s cotton yarn market, one of the biggest in the world, has been relatively quiet since the country ended its cotton stockpiling policy last year. However, exhibitors at the spring indicated that the market is starting to pick up. Yarn Expo Autumn 2015 will be held concurrently with another three textile trade events, namely Intertextile Shanghai Apparel Fabrics 2015, China International Fashion Fair 2015 (CHIC) and PH Value. The fair will showcase a wide spectrum of natural and blended yarns including cotton, wool, flax / regenerated flax, and man-made fibres and yarns as well as specialty products including elastic, and fancy and blended yarns.
www.messefrankfurt.com
Pitti Uomo 88, a leading international menswear event organised by Pitti Immagine, announced a game as a pre-cursor to soccer, with players dressed in Renaissance-style costumes. To be played on June 15, at Piazza Santa Croce, which also happens to be the opening evening of Pitti Uomo, and will revive a Florentine tradition dating back to 1530? Colour will be a major theme at the next edition of Pitti Uomo.
For its summer edition, to be held from June 16-19, the event is set to host 1,150 brands, as compared to 1,100 last year, including 460 from international destinations. The 88th edition's theme and slogan is 'That's Pitticolor!' Dedicated to the transgender trend that has been emerging on catwalks in recent seasons, Pitti Uomo has decided to get rid of Pitti W, the mini show dedicated to women's pre-collections held as part of the larger event. In its place there will be a new space called ‘Open’, which will host twenty brands, offering ‘accessories and clothing designed to be worn by either him or her’.
‘Touch!’, the space dedicated to men’s avant-garde brands, in the former pavilion occupied by Pitti W will bring together nearly 100 exhibitors, including 70 per cent from abroad. The section Futuro Maschile, meanwhile, devoted to classic contemporary, is doubling its size to welcome around 80 brands. Pitti Immagine has also announced a new collaboration with an international brand: American Saks Fifth Avenue, which will celebrate ‘The Sartorial Italian Style’, showcasing Italian SME collections in the vitrines of its 40 stores for three weeks beginning from June 21. A similar project was launched two years ago with the Japanese brand Isetan that has been extended for two years.
Countless initiatives are expected at Pitti Uomo 88. As previously announced, the guest of honor is Moschino Homme, which will show on the evening of Thursday, June 18. There will be two additional special installations at the show – one by young British talent, Thomas Tait and the other by sculptor-designer Carlo Brandelli for the brand Kilgour.
www.pittimmagine.com
Nearly 900 textile units near Jaipur have been ordered by the High Court to close down. Up to 18 million liters of untreated chemical water are being discharged into the Drayvawati river every day. The Rajasthan State Pollution Control Board (RSPCB) issued closure notices to 893 facilities for failing to install common effluent treatment plants.
These emissions have the potential to adversely affect quality of both surface water and groundwater resources and could contribute to water-borne diseases like cholera and dysentery. The HC has ordered 213 units to shutter by May 31 and the remainder by June 30.
Tests conducted in 2012 on the units, known for hand-block dyeing and printing, found that 650 textile units were discharging 12.3 million liters of untreated wastewater on a daily basis. However the RSPCB says more than 17 million liters are being dumped.
In 2003 the HC had told the Textile Unit Owners’ Association to set up a wastewater treatment plant and when the association claimed it couldn’t afford to cover the estimated cost of up to Rs 120 crores, the court then asked the state and central government to split the expense with the association.
Sri Lanka will set a minimum wage for all private sector workers, including those in the garment industry. The legislation will see wages backdated to May 1. Under the plans, private sector workers will see their wages increase by 15 to 35 per cent. The increase is a step to reduce the huge gap between private sector employees and state sector employees.
Garment worker salaries are based on market conditions and are higher than the rates set by national wage board for state employees. The garment industry is the second largest forex earner. Women constitute about 85 per cent of the country’s industrial workforce, and majority of these are between 25 and 30 years of age.
The industry initially flourished on the basis of low cost labor, but an increase in the cost of living has made factory work much less attractive for workers. At one time, foreign garment buyers were asked to pay a few cents more for garments bought from Asian countries, including Sri Lanka, to help pay decent wages to garment workers.
Big western retailers like Walmart, Carrefour control large shares of the western garment retail markets. This gives them bigger bargaining power on how much they pay local factories for garments they buy from Sri Lanka and other Asian countries. Right now there is growing pressure on local factories by big buyers to reduce their selling prices.
