FW
According to the executive director of the Indonesian Synthetic Fiber Producers Association (Apsyfi) Redma Wirawasta, consumption of polyester fiber or polyester staple fiber (PSF) in Indonesia immediately improved after the imposition of anti-dumping duties in Q2/FY16. Production of synthetic fibers began to escalate due to the imposition of anti-dumping duties for the textile raw material. Synthetic fiber factory in Indonesia producing 180,000 tons of polyester fiber in the second quarter of 2016, an increase of production in the first quarter/2016 of 120,000 tons of polyester fiber.
At 300,000 tons in the first half PSF production in volume terms is higher than 200,000 tons of PSF produced in the first half of 2015. Meanwhile, the government imposed Anti-Dumping Duty for PSF products from India, China and Taiwan. The additional tax is an extension of a similar anti dumping duties which is valid for five years from 2011. Anti-Dumping Committee of Indonesia asses the volume of imports of PSF third country of origin continues to increase towards the end of the imposition of BMAD.
To promote investments in the garment and apparel sector, the Maharashtra government is working on a niche policy, looking at its job creation potential, and boost ‘Make in Maharashtra’ plans. The policy will focus on setting up garment and apparel units in the cotton-growing areas of Vidarbha and Marathwada, which are also known for agrarian distress and farmer suicides.
The economic benefits of value-addition to raw cotton would also percolate down to the farmers while generating direct and indirect employment. Apparel is a sector that is low on investments and high on manpower. They are also considering a special policy for the garment and apparel sector. They will promote such industries and units in Vidarbha and Marathwada, which would create a larger supplier eco-system and increase employment opportunities.
The policy will look at granting fiscal and non-fiscal incentives like land in Maharashtra Industrial Development Corporation (MIDC) areas, grant of FSI and allotment of plots for garment and apparel units in the ten textile parks to come up in Vidarbha and Marathwada. Though Maharashtra already has a policy for the textile sector, this niche, sectoral policy for garments and apparels will give a further boost to investments.
"The initial shock of Brexit is still sinking in across the world. Indeed, the ‘for’ campaigners are exulting as they see the referendum as a sort of reform to save the UK from an unstable EU grappling with migration, security and financial stability issues. Whether they like it or not, the fact is that it is a lot of East Europeans and Asians who work hard to keep the British economy growing."
The initial shock of Brexit is still sinking in across the world. Indeed, the ‘for’ campaigners are exulting as they see the referendum as a sort of reform to save the UK from an unstable EU grappling with migration, security and financial stability issues. Whether they like it or not, the fact is that it is a lot of East Europeans and Asians who work hard to keep the British economy growing. The local guys, instead of upping their game and remaining competitive, have decided to keep the EU guys away who actually work to make a living.
Formally notifying the intention to withdraw, triggering Article 50, sets a two- year clock running. After that, the treaties which govern membership would no longer apply to the UK. The terms of exit will be negotiated between the UK’s 27 counterparts, and each will have a veto over the conditions. Two vast negotiating teams could be created, far larger than those seen in British renegotiation. The EU side is likely to be headed by one of the current Commissioners. The negotiations would be tedious, as it would be hard agreeing to a new trading partnership, establishing tariffs and other barriers, and agreeing on other important issues. In fact, the complete exit would take about five years or more, because the EU wants to make conditions for exit really difficult to discourage others from following the same path.
Future of TTIP
Meanwhile, discussions are on in the academic community on the fate of the Transatlantic Trade and Investment Partnership (TTIP). Indeed, TTIP is an ambitious trade and investment agreement being negotiated between the US and EU. According to the United States Trade Representative (USTR), TTIP aims to bolster an already strong relationship to help boost economic growth and add to the over 13 million American and EU jobs already supported by the existing trans-Atlantic relations. TTIP is expected to provide greater compatibility and transparency in trade and investment regulation, at the same time, maintain high levels of health, safety and environmental protection. The UK and the US are important trading partners and there is skepticism that TTIP negotiations would get affected with Brexit. It is obvious that given the UK’s economic importance, the EU’s market for US products has potentially shrunk, making the EU a less attractive trading partner post Brexit. The first intervention came from USTR Mike Froman, who the day after the referendum emphasised that the “economic and strategic rationale for TTIP remains strong.” Much would also depend on the next US administration.
‘Euro-realists’ associated with the European Conservatives and Reformists (ECR) Group in the European Parliament, whose vision is to reform the EU by further liberalising the single market, may push for the finishing line. They are against hidden protectionism found in national labour laws or trade union practices. They argue, these weaken Europe’s ability to compete in the global market. Hence, if Euro-realism gathers momentum, the conclusion of TTIP could be a reality soon.
It is hard to predict the future course of TTIP negotiations. With three years into the negotiations, 30 chapters discussed and 14 rounds of negotiations complete, the deal is nowhere near completion. TTIP comprises three main blocks: market access for EU and US companies, cooperation on regulatory issues, and global rules of trade such as sustainable development or competition policy.
Striking a deal
However, TTIP has good offers from both the sides, which include 97 per cent of all tariff lines, the remaining 3 per cent is for so-called end-game. Both sides are working on improvements within the 97 per cent tariff lines for speedy removal of tariffs. On regulatory issues, there have been proposals for cooperation in chemicals, cosmetics, engineering, medical devices, pharmaceuticals, textiles and cars. The EU has initiated discussions on trade and sustainable development, including on labour and environment.
Meanwhile the President of European Council has urged member countries to continue with TTIP negotiations and conclude negotiations by the end of the year. On the contrary, it could happen that once Britain triggers Article 50 to quit the EU, both London’s and Brussels’ resources will be diverted on thrashing out a deal on what access the UK has to the single market, at the expense of working on TTIP. Another factor to slow down negotiations is elections in both Germany and France in 2017, where majority are opposed to TTIP. So, a clear picture will emerge only by the beginning of 2018. Though the timeline of end 2016 for TTIP is unlikely to be met, in the long run TTIP will be concluded and survive Brexit. After all, trade between the EU and US is already worth $4.7 trillion and TTIP provides a chance to the EU to increase it.
Cotton yarn price have increased a lot indicating that it has further upward momentum in short run. Price increment of cotton and cotton yarn was largely consistent recently, and cost stimulus to cotton yarn price has weakened unless cotton price surges again later. Spot supply of cotton is supposed to remain tight in short run if sales volume of reserved cotton is not raised and the time is not prolonged, which may push up cotton price. Therefore, cotton yarn price still has upward chance. However, if sales volume of reserved cotton is increased and the auction is extended, cotton supply tightness is expected to ease and cotton price may decline, which will weigh on cotton yarn price.
Profit of cotton yarn mills have improved after price increased recently, and profit margins enlarge. In view of spot profit, most cotton yarn plants are around cost line. Thus, spinners may have weaker support to revise up price.
Cotton yarn stocks are not high, especially carded 21S-40S. Price of cotton yarns with tight supply may be revised up, but price upward momentum of medium-to-high count cotton yarn is supposed to be weaker than that for medium-to-low count ones. Besides, short supply of imported cotton yarn made supply tightness of Chinese 21-40S hard to improve in short run, so price of Chinese 21S-40S is likely to rise further. Meanwhile, most cotton yarn mills still expect price of yarn to rise further in later period.
Hosiery manufacturers in southern India want the proposed knitwear board to be set up in Tirupur. Around 46 per cent of the knitwear exported from India originates from the Tirupur knitwear cluster. The Tirupur textile industry has units all along the value chain of knitwear starting from spinning, knitting, wet processing, printing, garment manufacturing and exports. In addition there are ancillary units supplying buttons, laces, embroidery, cones and yarn processing etc.
There are more than 500 production units involved in exports of knitwear from Tirupur. Tirupur accounts for nearly 80 per cent of basic circular cotton knit exports from India. The heartland of the knitwear industry in India, Tirupur has a supplier base which consists essentially of manufacturers who are mostly integrated forward or backward, if not vertical. There are a number of spinners of yarn integrating forward to set up knitting plants, textile process houses and then further integrating forward to become makers of garments.
If the vertically integrated unit is not wholly owned by the exporter, the exporter buys stakes or invests in a process house to become partners to ensure preference for their orders for the textile process and maintain standard quality as desired by their buyers.
The Brandix Group won two top awards at the Global Supply Chain’s 2016 Vendor Summit in Hong Kong recently. The first award was in recognition of Brandix’s contribution to Gap in business volumes, product quality, speed and flexibility, on-time delivery and response to in-market issues; the second award was for outstanding vendor performance – Bottoms.
Incidentally, the Group had also lapped up Gap Inc.’s 2015 Supplier Award for Product Innovation at an awards presentation held in San Francisco last year. One of the largest retailers in the USA with over $16 billion in sales, Gap has an extensive base of global vendors many of them considerably larger than Brandix. Gap which retails clothing, accessories, and personal care products for men, women, and children under the Gap, Banana Republic, Old Navy, Athleta and Intermix brands.
Ranked Sri Lanka’s most valuable export brand in Brand Finance’s 2016 ranking of the country’s leading brands, Brandix is the pioneer of the concept of ‘total solutions’ in Sri Lanka’s apparel sector and is a preferred supplier to some of the top retail brands in the US and Europe.
Brandix is also a benchmark and international award winner for eco-friendly apparel manufacture and commitment to environmental best practice. The Group employs more than 48,000 people in its manufacturing facilities in Sri Lanka at the Brandix India Apparel City in Andhra Pradesh and its large operation in Bangladesh.
Cheap imports are threatening Ghana’s textile industry. While West African prints have made it to fashion catwalks of Western world, yet at home the fabric industry is suffering because of cheap fake imports. In response, consumers are being exhorted to support the industry and promote their culture by wearing local fabrics.
Imitated designs and fabrics are displayed at fashion shows depriving the original owners of revenue. The cost of production in the country is very high and textile companies employ creative minds at a high cost to generate designs for the fabrics.
Textile manufacturing in Ghana consists of ginneries and textile mills producing batik, wax cloth, fancy printed cloth and Kente cloth. Firms have located in Ghana to serve local and regional markets with printed African patterned fabrics. The industry has shown signs of significant growth in recent years, promoting high-quality traditionally designed fabrics as "Made in Ghana" to niche markets, especially the US.
Ghanaian textile companies prefer to locate within designated industrial areas to take advantage of Ghana's free zone regime and stable operating environment. Today, Ghana's textiles industry include vertically integrated mills, horizontal weaving factories and the traditional textile manufacturing firms involved in spinning, hand-weaving and fabric-processing. The country’s textile exports include cotton yarn, cotton fabric, printed fabric, polyester fabric, blankets and bed sheets.
Direct-spun polyester staple fiber (PSF) prices in China increased in mid July driven by cotton and polyester yarn instead of polyester feed stocks, catching the industry unprepared. Viscose staple fiber (VSF) prices moved up rapidly in line with auctioned cotton price at the end of June. Direct-spun PSF also followed up during end of June and early July, while it was completely pulled by polyester feed stocks.
Since mid-July, bolstered by cotton and VSF prices, direct-spun PSF prices have surged up, partly because of widening demand from yarn mills, which have shifted to polyester staple fiber products under pressure from surging cotton and VSF prices. And partly because of the polyester yarn mills in Fujian who revised up offers boosted by good demand.
Relatively speaking, blended yarn in North China was weak. Direct-spun PSF plants were mostly free of inventories and some even could not fully cover orders. Nevertheless, downstream showed limited follow-up trends, so the market now enters a consumption period and the focus can be returned to polyester feed stocks.
Adding to the largely stable polyester feed stocks, cash flow of direct-spun PSF widened to 400 yuan per meter, close to the high level year-to-date.
Bangladesh’s garment shipment to the US grew only 3.41 per cent in the first quarter of the fiscal year. The US is Bangladesh’s single largest export destination. With the emergence of India, Bangladesh is now the sixth biggest apparel exporter to the US, down from fourth spot even a few months ago.
India’s garment sector is fast becoming a formidable opponent for Bangladesh on the global stage. After India gave a stimulus package for its garment sector and devalued its currency, the prices of apparel items of both Bangladesh and India are almost equal, although labor cost in India is higher than in Bangladesh. Many retailers have started sourcing garments in high volumes from India.
Bangladeshi exporters are handicapped by infrastructural challenges, due to which goods cannot be delivered to retailers on time. Apart from India, other countries like Vietnam, Pakistan and even Mexico are gaining ground in the market. Vietnam has been performing well in the US as many American companies invested in the Southeast Asian country after it was included in the Trans-Pacific Partnership free trade pact. The US has withdrawn from the pact but US investors have remained in Vietnam. Exports from Bangladesh have to face 15.62 per cent duty for entry to the US.
The upcoming 2016 edition of Irantex, to be held in Tehran from September 3 to 6 will feature a significant contingent of Italian textile machinery manufacturers. Nearly, 25 Italian companies will be exhibiting at the Italian Pavilion, the common area set up by the Italian Trade Agency and Association of Italian Textile Machinery Manufacturers (ACIMIT). The companies associated with ACIMIT to exhibit at the Pavilion are: Beta Machinery, Bianco, Bonino, Caipo, Cogne, Carù, Durst, Fadis, Ferraro, Fk Group, Itema, Jk Group-J Teck 3, Laip, Marzoli, Ramallumin, Rf Systems, Santex Group, Smit, Srs, Ssm Giudici, Stalam, Tessilgomma and Zonco.
International sanctions of the past years had delayed modernisation of the Iranian industry in 2004, Iran was ranked among the top 10 markets for Italian exports in the sector. After years of stagnation, Italian sales to Iran registered a recovery. In the first quarter of this year, Italian sales to Iran totalled €2 million, while 2015 sales were worth €8 million. Iranian demand is spread out over all types of production but Italian finishing and spinning machines are the primary exports.
Nearly 27 Italian companies participated in a roadshow and a series of technological workshops in Tehran, Yazd, Isfahan and Mashad. They held meetings with textile authorities and visited local companies. The next edition of Irantex, will give local companies an opportunity to get a close look at the excellence of Italian technology.
