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The National Cotton Council thinks the Phase 1 trade deal with China signed today by President Trump could bring in trade boost to U.S. cotton exports.
The Phase 1 agreement states a chapter on agriculture with Chinese purchases of U.S. products intended to reach at least $40 billion per year starting in 2020. Hence, the overall impact for cotton remains uncertain as commodity-specific details have not been released.
NCC Chairman Mike Tate, an Alabama cotton producer who was at the White House for the signing, said, “While we welcome Phase I and are hopeful about the potential for future increased sales to China, U.S. cotton producers continue to face a challenging economic climate. As such, we encourage President Trump and USDA to follow through with the third tranche of MFP payments as quickly as possible.”
Tate was referring to the Administration’s $16 billion trade assistance package through the Market Facilitation Program to help mitigate China’s retaliatory tariffs. He said this assistance, administered by USDA, has been very timely with U.S. cotton’s economic health deteriorating as market share in China is being lost to Brazil and Australia. The first MFP tranche of payments came in August and the second tranche in November.
“Since the middle of 2018, the ongoing trade dispute between the United States and China has been front and center in any discussion of the cotton market,” Tate said. “Cotton prices remain well below pre-dispute levels due to China’s imposition of a 25 percent retaliatory tariff. That’s why removal of these tariffs should be a high priority for any upcoming dialogue between the two countries.”
"United States will reduce the 15 per cent tariffs imposed on a wide range of Chinese consumer goods by half and also cancel another round of tariffs implemented in December. On its part, China will buy an additional $12.5 billion worth of agricultural products from the US in the first year and $19.5 billion worth of goods in second year. These purchases will be a part a broader $200 billion package that includes manufactured goods and energy exports by 2021"
Recording a milestone world-trade history, United States and China finally signed a preliminary trade deal that ended the 18-month long trade conflict between the two countries. The deal was signed between the US President Donald Trump and Chinese Vice President Liu He.
What’s in the deal
The deal states henceforth, United States will reduce the 15 per cent tariffs imposed on a wide range of Chinese consumer goods by half and also cancel another round of tariffs implemented in December. On its part, China will buy an additional $12.5 billion worth of agricultural products from the US in the first year and $19.5 billion worth of goods in second year. These purchases will be a part a broader $200 billion package that includes manufactured goods and energy exports by 2021. They will continue beyond the two-year deal into 2022 through 2025. Some of the products that China has promised to buy include soybeans, wheat, cotton and pork.
These changes will take effect within 30 days of signing of the pact. The deal protects American companies from thefts of intellectual property and trade secrets by imposing anti-counterfeiting measures on them. It also removes a barrier in the sale of US technologies and loosens up the requirements of Chinese banks wanting to operate in the country. However, while China has agreed to purchase more US products, it has not made any specific commitments to reduce tariffs imposed on the US.
NRF welcomes the deal
US’ National Retail Federation has welcomed the signing of this trade agreement. “We support the US administration’s efforts to address the unfair trade practices adopted by China,” said Matthew Shay, CEO of the federation hoping that this is the first step taken by the government towards eliminating all tariffs imposed over the past two years. “The trade war won’t be over until all of these tariffs are gone,” he added.
Thumbs down from apparel industry
However, the apparel and footwear industry isn’t too pleased with this deal. “It provides the apparel and footwear industry with very limited tariff relief following the biggest tariff increase since the Great Depression,” said Steve Lamar, President and CEO of the American Apparel & Footwear Association (AAFA). “Tariffs will continue to hit all our products including 92 per cent of the apparel, 53 per cent of the footwear, 68 per cent of the home textiles, and all of the travel goods and accessories that are imported from China, which is the primary source of these products. Not only does the deal retain the tariffs on key imports of materials and machinery used to make clothing, footwear, and textiles in the US, it also allows China to impose huge retaliatory tariffs on American exports of cotton, hides, leather, textiles, shoes, and clothing,” added Lamar. The tariffs can thus be used as an enforcement mechanism, leading to new tariffs at any time. “It cannot be an effective way to change policies and practices in China,” highlighted Lamar.
Established in 1967, Kingtex is a Taiwan-based textile machinery manufacturer involved in making knitting and sewing machines. Yutin Wang, Special Assistant to the President, elaborates on the company’s operations and its future plans.
“Knitting is our core strength area,” says Yutin Wang, Special Assistant to the President of Kingtex-a Taiwan based textile machinery manufacturer. The company manufactures knitting and sewing machines from its unit in Taiwan. “We manufacture all our machines in Taiwan, which ensures a more superior quality than of machines made in China,” adds Wang.
The prices of these machines are also lower than those made by Japanese manufacturers though their quality is on par with Japanese machines. “Taiwanese employees are also more loyal than Chinese employees. Each of our employees has been working with us for over 20 years,” states Wang.
Kingtex’s business is spread across the world. “Besides selling in Ethiopia, we also operate in the South Asia, China, Thailand and Vietnam market. We now aim to increase our visibility in the Indian market where we have been operating for the last 30 years,” notes Wang.
Kingtex will embark on its Indian expansion by selling its machines in the Tirupur market. “Tirupur is more accepting than the Ludhiana market which is not aware of our quality and brand,” says Wang. “To make headway into this market, we need to acquaint our customers in the city with the advantage of collaborating with us,” she adds.
For Kingtex, the Indian market holds great significance as it enables the brand to establish itself faster. However, the Chinese and US markets are also improving, The brand believes that the business mood in 2020 will be same as in 2019. “There won’t be much of an improvement as of now,” says Wang.
"Giving tough competition to Bangladesh, Ethiopia has emerged strong as a sourcing destination for apparels. However, how much Bangladesh needs to fear its new rival is a question being raised by many experts. The Ethiopian government is investing lots of efforts in promoting its apparel industry. The country is investing in various economic incentives including construction of industrial parks for garment manufacturing besides positioning itself as one of the world’s top exporters of textile and garments."
Giving tough competition to Bangladesh, Ethiopia has emerged strong as a sourcing destination for apparels. However, how much Bangladesh needs to fear its new rival is a question being raised by many experts. The Ethiopian government is investing lots of efforts in promoting its apparel industry. The country is investing in various economic incentives including construction of industrial parks for garment manufacturing besides positioning itself as one of the world’s top exporters of textile and garments.
These efforts are reaping rich benefits as a range of international apparel brands including H&M, Calvin Klein and Tommy Hilfiger are setting up their factories for manufacturing low-cost garments in the new industrial parks. This has also boosted the country’s clothing exports aiming for to $30 billion a year by 2035 from its current $145 million.
Producing ethical, sustainable and eco-friendly products
The Ethiopian industry also needs to be applauded for offering abundant opportunities to its 105 million population wrecked by much publicised civil war, famines and
droughts over the last 40 years. In this respect, the industry bears similarity to the Bangladesh RMG industry which has recorded exponential growth since its inception in the 1980’s.
Ethiopia has made rapid advances in producing ethical, sustainable, environmentally-sound apparel products. It has made significant investments in the sector over the years and has now reached a stage where it no longer needs to chase the bottom dollar on the product. Its garment exports are worth around $145 million which has taken the country several years of extremely hard promotion of its textile industry to reach such figures.
Low base wages, bureaucratic red tape pose challenge
However, the apparel industry in Ethiopia also faces several challenges. Government’s eagerness to attract foreign investment has led the country to promote the lowest base wage in any other garment-producing country. It has also promoted the availability of over three million acre for cotton cultivation so far. Out of this, 148,000 acres are being used as local farmers for manufacturing sugar, sesame, and other crops that yield higher cash. Hence, most local manufacturers are still compelled to import raw materials to make finished apparels.
The bureaucratic red tape, which was supposed to be untangled at the manufacturing parks in the country, still remains much in evidence. Exporters in the country are not allowed to consolidate smaller orders into one shipping container which results in shipment of partially full containers leading to a rise in transport costs.
Though, everything may not be currently right with the Bangladesh industry, its logistics including ports and associated infrastructures are exemplary. It now needs to improve product quality and integrity, enhance its sustainability initiatives and environmental credentials besides improving its logistical and infrastructural facilities.
Lenzing initiated a project in Albania designed to promote sustainable forestry and improve local living conditions. As a best practice example, 20 hectares of degenerated land will be recultivated with forest and fruit trees in cooperation with the local population and various NGOs. Moreover, concepts for sustainable forestry will be developed with local schools.
Cooperation with local communities and NGOs
Within the context of the project, the local community will be actively involved in the process in order to ensure a comprehensive transfer of knowledge. The pupils at the Forest School of Shkodra will actively take part in the entire process as a means of learning more about reforestation. Employees of Eco-Social Farm, a facility for people with disabilities located directly below the reforestation area, will take care of the irrigation of the seedlings.
Furthermore, an interdisciplinary cooperation will be carried out with the Austrian school in Shkodra. The reforestation project will serve as the basis for the diploma thesis of the pupils there. In turn, this will contribute to sustainably raising the awareness of pupils and the general public with respect to current challenges in forest management.
The project underlines the commitment of the Lenzing Group to promoting sustainability and enables the company to establish best practice examples for the industry and at the same time to learn for future projects and similar CSR-related activities.
EUROJERSEY brings Sensitive Fabrics a new collection called "conscious tech". A new feeling, a new sensation of rediscovered wellbeing packed with optimism and pronounced spontaneity for multifunctional fabrics endowed with sustainable and innovative technical performances.
Crease-resistant and breathable Sensitive Fabrics connects with the body shape to deliver maximum comfort, adapting to each movement in perfect synchrony with the most diversified everyday activities, thanks to their three-dimensional elasticity. Easy to care for and machine washable, they are quick drying and wrinkle-free, without any need for ironing.
The acctual fabrics for creating easy-care outfits for a dynamic lifestyle, for living in total comfort in any context, whether downtown or on the road, without any compromise in terms of fashion. In fact, digital printing enhances prints and decorative details which, thanks to 3D PRINT technology, manages to create patterns and natural looking textures as well as photographic effects. Colours and graphic designs are printed onto the ultra-flat surface of Sensitive Fabrics with a perfect chromatic rendering and a three-dimensional optical illusion.
All Sensitive Fabrics collections spring from the same virtuous industrial model able to promote a set of good practices and technologies which reduce the use of water, energy resources, chemical products and waste. EUROJERSEY was the first company in the textile industry to declare its environmental footprint called PEF (Product Environmental Footprint), expressed in 16 indicators, with PEF 010/19 Certification awarded by CERTIQUALITY in April 2019.
Saurer’s to bring more extensive spinning offerings, at the exhibition which will enable customers to process a wide range of fibres depending on their needs using ring, worsted and compact or rotor spinning technologies. Autoairo, the group’s new double-sided air-spinning machine, will also be introduced to prospective clients.
Saurer is keen to provide customers from the region with information on Epoca 7, its shuttle embroidery machine. Developed with over 150 years’ experience, this technology enables embroidery plant owners to embellish fabrics to their clients’ specifications, creating an array of designs ranging from traditional to haute couture. Additional attachments for the application of cords, ribbons and sequins as well as for laser-cutting patterns further broaden the variety of possible creations.
The Saurer team is eager to provide visitors with in depth look at the group’s latest offerings at the Swiss Pavilion at Millennium Hall, Addis Ababa, from February 14th to 16th 2020.
Saurer Group is a leading globally operating technology group focusing on machinery and components for yarn processing. As a company with a long tradition, Saurer has always been a leader in innovation.
Kornit Digital (Nasdaq: KRNT), a global market leader in digital textile printing technology, announced that the company will be introducing two new digital direct-to-garment (DTG) print systems at the upcoming Impressions Expo Long Beach event, taking place January 17th to 19th in Long Beach, California.
Vulcan Plus: DTG Mass Customization, Improved for 2020
Kornit will introduce Kornit Vulcan Plus, it’s next-generation system for DTG mass customization at Impressions Exposable to deliver more than 2,000 retail-quality impressions in a 12-hour shift, Vulcan Plus builds on the success and feedback from customers using Kornit Vulcan, a 2017 SGIA Product of the Year. The eco-friendly system, which has undergone beta testing by Kornit customers in both the United States and Europe, represents the highest-capacity DTG print system in Kornit’s product portfolio and the broader marketplace.
Storm HD6 Lite: Completing the Retail-Ready DTG Portfolio
Kornit will also introduce the Storm HD6 Lite system, enabling print shops of all sizes with on-demand DTG printing that meets the retail quality and sustainability standards of the world’s largest and best-known retail brands. With a production capacity of up to 60,000 impressions annually, Storm HD6 Lite provides DTG printing for smaller print operations, such as commercial printers moving to the industrial market and analog printers broadening their production capabilities. Storm HD6 Lite effectively replaces Kornit Storm II.
Kornit’s Breadth of Capabilities
Kornit’s exhibit will reflect and build upon the momentum the company achieved in 2019, a year in which multiple game-changing systems were introduced. In addition to presenting Vulcan Plus and Storm HD6 Lite, Kornit welcomes visitors to observe live demonstrations of the brand’s eco-friendly Atlas, Avalanche Poly Pro, and Storm HD6 systems for on-demand DTG printing
Sportswear celebrated company PUMA has entered into a new long- term partnership with PSV Eindhoven, one of the Netherlands most successful football clubs. Under the terms of the deal, PUMA will become the official kit supplier of the club, starting in July 2020.
PSV Eindhoven have won twenty-four league titles and nine domestic cups having also achieved great success in Europe winning both the European Cup and the UEFA Cup.
The PUMA and PSV Eindhoven partnership builds on the shared values of innovation and cooperation, evident by the club motto ‘Unity Is Strength'. The club is deeply connected to Eindhoven, referred to as ‘The City of Light’, a city vibrant with culture, collaboration and global influence. Both PUMA and PSV Eindhoven’s ambitions are strongly aligned as they look to pushboundaries on and off the pitch, connecting with the city and the fans in new and exciting ways.
PSV Commercial Director Frans Janssen said: “PUMA and PSV share the will to be better every day, that ambition is the foundation of this partnership. Their motto ‘Forever Faster’ is something that we recognize and embrace. We are very proud to team up with a global brand that gives us the opportunity to stay unique.
Comfort, styling and quality are the main components in sportswear. These are all in the PUMA DNA. PSV is much honored to be welcomed into the PUMA family, joining great clubs such as Manchester City, AC Milan, BVB Dortmund and Valencia.”
Cotton consumption in Central Asia is expanding significantly. These countries are curbing exports as major cotton producing countries in the region such as Uzbekistan, Turkmenistan, and Tajikistan have sought to secure greater domestic supplies for inward processing and downstream exports e.g. cotton yarn, fabric, and garments. The region’s share of exports has dropped and 2019-20 shipments are projected to be less than half of the region’s exports just four years earlier. Uzbekistan banned exports starting this month. Tajikistan proposes to establish a full cycle of processing cotton by 2025. The country has recently expanded spinning capacity. Turkmenistan, the region’s second-largest producer, temporarily embargoed exports in 2018-19 so as to ensure adequate supplies for domestic consumers.
Companies are implementing a more fully integrated supply chain. They are improving efficiency of lint production via drip irrigation and machine harvesters, expanding spinning mills’ operating capacity, and further developing fabric and garment manufacturing as they shift to exports of value-added cotton products versus unprocessed lint. Expanded capacity is evident with record first quarter cotton yarn exports in the region.
Challenges with regard to expanding exports of processed products include consistent and sufficient domestic crops, affordable electricity, reliable and timely transportation for exports, and mill access to financing.
