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The Indian cotton spinning industry has been severely constrained in the current fiscal, being adversely impacted by the demand slowdown, unfavorable raw material prices and rising funding requirements.
Higher domestic raw material costs, with Indian cotton prices trading at a premium to international cotton, have also contributed to the loss of export competitiveness. While export volumes have seen some uptick in recent months, they remain lower than the levels seen in the preceding fiscal. Revenues are expected to fall by more than five per cent and operating profitability to contract by around three per cent for the fiscal. Cotton prices are likely to remain below the minimum support price level till March 2020 on expectations of a bumper crop production for cotton year 2020. Yarn prices and contribution levels are continuing to tread lower than the 2018-19 levels even though yarn prices have started moving up. There has been an increase in working capital debt levels by 15 per cent year on year, reflecting the inventory build-up amid a shortfall in earnings and limited capacity additions envisaged over the next 12 months.
Spinners are expected to register a revenue de-growth of around six per cent, with both volumes and realisations having come under pressure in the first half of fiscal 2020.
Fast Retailing aims at being the world’s largest fashion retailer by revenue in 2020. The owner of Uniqlo grew 7.5 per cent in 2018. Uniqlo’s international sales started in 2017. In 2018, the chain was once again the engine of the group, with a growth of 14.5 per cent. The Japanese company plans to add 300 stores in a year, reaching 3,745 stores in August 2020.
Fast Retailing has roped in Mujin and Exotec Solutions to improve efficiency in warehousing and distribution. Mujin is a Japanese robotics controller maker. Exotec is a French robotics startup. They will help introduce more automation at global warehouses, including in picking and shipping processes. Known for its affordable line of casual clothing, such as lightweight down jackets Uniqlo is currently enjoying strong growth in China. However, the unit has struggled with inefficiencies, occasionally blaming unseasonable weather for poor sales and excess inventory - an issue Fast Retailing hopes to address with shorter lead times and improved logistics. The hope is to avoid making, shipping or selling anything unnecessary. Fast Retailing in partnership with UN Women will champion women’s rights and empowerment in the apparel industry. Fast Retailing and UN Women will together promote safe and secure work environments, and advance empowerment for all women and girls.
Myanmar’s export revenues from the textile manufacturing sector make up nearly 10 per cent of the country’s export revenues. Myanmar exports its garments and textiles mainly to Europe, Japan and South Korea. If manufacturers make a shift from the Cut, Make, Pack (CMP) production system to a free on board (FOB) system, annual earnings could swell 10-fold should demand remain at the current level. Under a CMP system, all raw materials, such as fabric and buttons, are imported by local factories, which then assemble the garments for export. Under an FOB system, the exporter quotes a price that includes all costs, including delivery of goods aboard an overseas vessel. The local factory is responsible for the whole production process.
Employment in the industry is also expected to hit a million workers by 2024. Around 600 factories in the country now offer job opportunities to approximately five lakh workers. The boom in Myanmar’s clothing and textile industry comes at a time when wages in other regional production hubs such as Vietnam and Cambodia have risen, driving manufacturers to cheaper nations. The minimum wage in Myanmar is among the lowest in Southeast Asia. The European Union is working with more than a hundred garment and textile factories in Myanmar in expanding training and capacity building programs for social and environmental performance.
To be held from March 19-21, 2019 at the Bombay Exhibition and Convention Centre in Mumbai, the upcoming Fabrics & Trims Show will showcase innovations in the industry besides forecasting upcoming trends. The fair will feature product categories including textiles for apparel, trimmings, embellishments, accessories, and related products and services.
Manufacturers will have the chance to exhibit their wares and expand their distribution networks by meeting buyers from across India and abroad.
The trade show will run alongside four other textiles related trade shows, Denim Show, India Laundry Show, Digitex Show, and Gartex and Texprocess India. Fabrics & Trims Show expects up to 20,000 visitors according to its events profile.
The trade show is organised by events management business Mex Exhibitions which runs a number of business-to-business events including the Gifts World Expo. Its business’ director, Gaurav Juneja, was recently appointed as the treasurer of the Indian Exhibition Industry Association.
Bangladesh’s readymade garment exports fell by 7.74 per cent from July through November 2019. The garment industry has shrunk since July with dozens of factories closing down and at least 29,700 workers losing their jobs. Workers’ salaries remain an issue because manufacturers aren’t receiving a high enough price for their products. Another issue is of training and redeploying workers as the industry adjusts to automation through new technologies. One machine can do the work of seven people. So sector diversification has become important.
The country has not been able to take advantage of the US-China trade war, because its product categories are very different from that of Vietnam, so Vietnam has been a gainer. So, Bangladesh hasn’t been able to expand the type of garments it produces to compete amid a Sino-American trade war that has sent manufacturers fleeing from China to countries like Vietnam.
The readymade garment sector is the most dynamic in Bangladesh’s economy. Exports of readymade garments have nearly tripled over a ten-year period. Bangladesh’s garment industry which produces shirts, trousers, jackets, T-shirts and sweaters is the engine of the nation’s exports and accounts for 84 per cent of Bangladesh’s total export volume.
Economic slowdown, the trade war and the decrease in general consumption affected the consumption of cotton during the 2018-2019 season, which dropped by one per cent. This trend is expected to continue over the next few seasons due to uncertainty, coupled with the usual risks that agriculture faces. At the end of the season, the global cultivation area decreased by one per cent. Yield also fell, by two per cent. This means that world cotton production will reduce by three per cent.
China is the main consumer and the second largest producer of cotton and the United States is its main exporter. The sector started the year with an increase in prices, but throughout the season the prices of raw materials suffered ups and downs. Sustainability, meanwhile, continued to gain ground in cotton production. Organic cotton will account for a third of world production in 2020.
In addition, sustainable production has also been part of other raw materials, such as mohair wool, which in the last year laid the foundations for the certification of the production of this material in farms with high levels of animal welfare. As a whole, preferred fibers those that encompass more responsible and ecological methods in their production, have also gained ground in the last year, accounting for approximately 6.2 per cent of the total volume of fiber production, including materials such as viscose, acetate, lyocell, modal and cupro.
"A trend that made headlines during the year was that of tiny handbags. At the 2019 American Music Awards, American singer Lizzo sported a ridiculously tiny handbag. The 31-year-old Juice hitmaker stepped onto the red carpet decked in a peach, one-shouldered outfit by Valentino. Her statement Valentino bag completed her look at the show"
The fashion industry once again took centrestage in 2019 as several new trends and disruptive startups moulding and shaping the market made up the year.
A trend that made headlines during the year was that of tiny handbags. At the 2019 American Music Awards, American singer Lizzo sported a ridiculously tiny handbag. The 31-year-old Juice hitmaker stepped onto the red carpet decked in a peach, one-shouldered outfit by Valentino. Her statement Valentino bag completed her look at the show.
Neon green was the ‘it’ color as was evident from the first look of the Spring fashion 2019 itself. Several major labels – from Gucci, with its feathered neon gowns and Balenciaga with its fluffed-up sweater – embraced the shade in the beginning of the year with the trend further seeping down to red carpets and magazine covers as well.
Brands explore their wild side with cow prints
This year fashionistas scored with monochrome and minimalistic cow prints. The black-and-white cow print not only made a bold fashion statement but also added a playful vibe to the ensemble. Some of the most prominent celebrities like the Ducbess of Sussex and Victoria Beckham were seen dressed in this rather understated look from the animal print family.
Sneakers make a fashion statement
In the last couple of years, sneakers have become a fashion staple. Designers and stylists across the world are paring these sneakers with all types of outfits and using them for all kinds of outings. Some of the biggest names in fashion lend their own touch of innovation and luxury to sneakers last years. These ranged from prominent brands like Adidas by Stella McCartney to the Rhyton Gucci sneakers.
Conscious shift to sustainable fashion
In 2019, the apparel industry made a conscious shift towards sustainability. Globally, this wave was spearheaded by designers like Stella McCartney, Vivienne Westwood, and Kenneth Cole. In India, a host of home-grown brands are ensuring that the country does not miss out on these positive changes. For instance, designer Sujata Chatterjee has launched a new startup Twirl Store which rewards customers to buy upcycled products on its website. The brand also donated some of its collected clothes. Similarly, Chennai-based brand Rossebelle produces sustainable women’s wear and other products with eco-friendly material, deadstock fabrics, and re-purposed vintage fabrics.
Industry leaders hope that in future more brands, designers and labels adopt sustainability just as they accept new trends like tiny bags and small sunglasses.
The Bahamas Federation of Retailers has appreciated the government’s move to cut duty rates on imported clothing and shoes by 20 per cent. According to the federation, this duty cut has not only resulted in a ‘strong sales capped by “one of its best holiday seasons on record but also empowered the vendors to pass on their cost savings to customers.
The Federation now expects the government to codify the new policy into legislation and expand it to the rest of the wholesale and retail industry as it will significantly boost the local economy through increased domestic investment, increased local employment, increased domestic demand, increased selection & variety and therefore increased returns to the government via the resultant increases in NIB & VAT receipts generated.
This elimination of 20-25 percent Customs duty on footwear and apparel was unveiled in the 2018/2019 budget. Recognising that Bahamian retailers were struggling to compete with online shopping and south Florida merchants, the Government implemented the Customs duty waiver as part of its package of tax relief measures.
Bangladesh is the only country in the world, which is mainly dependent on cotton fiber. Other major textile- and garment-producing countries have diversified their production to manmade fiber like viscose. Bangladesh imports more than eight million bales of cotton a year and the consumption of cotton by the mills has increasing more than by 10 per cent year-on-year. Consumption of cotton will continue to grow in Bangladesh in the near future because of the high export of garments. Africa has become a huge source of cotton for Bangladesh. Last year, Bangladesh met 37.06 per cent of its cotton requirement from Africa. CIS (Commonwealth of Independent States) countries supplied 11.35 per cent of the cotton, 11.14 per cent from the US, 4.65 per cent from Australia and 9.65 per cent from the rest of the world.
Cotton prices are declining worldwide. This is good news for Bangladesh. Now Bangladesh cotton importers can either book a lot of cotton in the futures markets or import cotton. If spinners can purchase cotton at lower prices, they can supply the yarn and fabrics at lower prices to garment makers. Garment exporters in turn can sell the goods to western buyers at competitive prices.
Pakistan’s textile exports from January to November 2019 were five per cent higher than exports last fiscal. The industry has no surplus to boost exports and is sitting on obsolete technology and is inefficient. Textile exports have remained stagnant since 2012-13. The textile story, in fact, has been the same for over a decade. The industry is dominated by the spinning sector. Basic textiles have flourished on subsidies while the value-added sector is neglected.
Big players are involved in the basic textile sector, while in value-added textiles the exports are dominated by small players. There are thousands of such exporters but 90 per cent of bank finances go to the yarn and fabric sectors and the rest to the value-added sector that accounts for 60 per cent of Pakistan’s textile exports. Per unit rates in all subsectors of textiles are the lowest in Pakistan, compared with competing economies’.
Exporters are paying a premium because of the negative perception of their country abroad. In real terms Pakistan’s textile exports have remained stagnant in the last six years. During this period textile exports from Bangladesh and Vietnam increased at a compound rate of over 7 to 10 per cent. Pakistan’s share in global textile trade has declined from 2.2 per cent at the start of the century to less than 1.70 per cent.
