Bangladesh’s garment exports to the US rose 5.83 per cent year-on-year in the nine months to September. The growth of garment export to the US indicates that Bangladesh is becoming a lucrative destination for American retailers and brands.

US retailers expect strong demand this year and are prepared with a wide array of merchandise while offering strong deals and promotions during the busiest and most competitive shopping season of the year. Holiday retail sales in November and December are expected to be up between 4.3 per cent and 4.8 per cent over 2017. US consumers will spend in three main categories during the holidays – gifts, non-gift holiday items such as food, decorations, flowers and greeting cards, and other non-gift purchases that take advantage of the deals and promotions throughout the season.

Bangladesh expects a 10 to 15 per cent growth in garment exports to the US as the economy is rebounding there. Bangladesh has been sending garment products facing a 15.62 per cent duty whereas the duty for other garment exporting nations is relatively low. Even then the country is competitive in the US markets.

For many years, the US was the single largest garment export destination for the country, but last year Germany became the number one destination.

"A new market report by Transparency Market Research titled ‘Knitwear Market – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2018-26 reveals the global knitwear market is expected to expand at a CAGR of 5.3 per cent from 2018 to 2026 reaching $817,402.7 million by 2026. In terms of volume, the market is expected to expand at a CAGR of 5.0 per cent from 2018 to 2026 reach 26,208 million units in 2026. The market share of Asia Pacific in the global knitwear market is expected to increase during the forecast period."

A new market report by Transparency Market Research titled ‘Knitwear Market – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2018-26 reveals the global knitwear market is expected to expand at a CAGR of 5.3 per cent from 2018 to 2026 reaching $817,402.7 million by 2026. In terms of volume, the market is expected to expand at a CAGR of 5.0 per cent from 2018 to 2026 reach 26,208 million units in 2026. The market share of Asia Pacific in the global knitwear market is expected to increase during the forecast period.

Preference for low-cost Asia Pacific markets

Global knitwear brands such as Gap and Abercrombie & Fitch and major activewear brands such as Adidas AG and Nike continue to focus on research and development, design, logistics marketing and branding, and service to improve their position in the market. These brands outsource their manufacturing to low-cost Asia Pacific countries such as China, Bangladesh, and India. Adidas AG manufactured only 2 per cent of its apparels in US and only one per cent in Europe in 2017; outsourcing almost 97.0 per cent production to Asia Pacific.

Similarly, Nike manufactures all its apparels through independent contract vendors. The apparel contract factories in China, Vietnam, and Thailand manufactured 26.0 per cent, 18.0 per cent, and 10 per cent, respectively of the company’s total apparel production. China, Bangladesh, India, Pakistan, and other South Asian and East Asian countries are major exporters of knitwear products across the globe.

Although, knitwear is still manufactured in Europe, its quantity has declined. The unit cost to manufacture knitwear is high in the UK due to high wages, yet British designers prefer to manufacture locally due to short lead time and flexibility in minimum order quantity.

Rising demand for branded knitwear

North America on the other hand, imports almost all of its knitwear products from Asia Pacific. Although R&D and designing of these is majorly done outside Asia Pacific, manufacturing is mostly done in China, India, Bangladesh, and Vietnam. The knitwear market in India is also rising due to a growth in the number of organised knitwear retailers selling branded knitwear products. Demand for branded knitwear is also rising in the Middle East. With approximately 62.0 per cent of its population being young and middle-aged, the region imports knitwear products worth US$ 3.5 billion annually. Knitwear exporters such as Bangladesh export knitwear to the UAE to increase its knitwear revenue.

Cotton knitwear products are in demand in South American countries. There is growing demand for cotton knitwear products in Brazil and other South American countries. In 2016-17, Brazil imported approximately $11.47 million of T-shirts, singlets and other vests made of cotton. Almost half of the knitwear imports in Brazil are from China.

India’s rank in the Ease of Doing Business 2019 survey climbed 23 places to 77 among 190 countries surveyed, making it the only country to rank among the top 10 improvers for the second consecutive year. India saw a similar improvement in the “trading across borders” section to 80th position from 146th a year ago. This improvement was made possible by reducing the time and cost to export and import through various initiatives, including the implementation of electronic sealing of containers, upgrading of port infrastructure and allowing electronic submission of supporting documents with digital signatures under its National Trade Facilitation Action Plan 2017-2020.

India has registered huge improvement in six out of the 10 indicators and has moved closer to international best practices. The biggest improvements have been in the indicators related to construction permits, in which India’s ranking improved by 129 points, and trading across borders, in which it rose by 66 points. Areas where the country still needs to improve are starting of business, in which the country ranked 137, paying taxes and enforcement of contracts.

As per Pakistan Bureau of Statistics, the country exported readymade garments worth $599.260 million in the first quarter of current financial year as compared the exports of $608.688 million of the corresponding period of last year. Exports of readymade garments during the period under review in dollar terms decreased by 1.55 per cent as compared the exports of first three months of last year.

During the period from July-September, 2018-19, about 10,235 thousand dozen of readymade garments exported as compared the exports of 8,939 thousand zozen of same period of last year.

However, the knitwear exports during the period from July-September, 2018-19 grew by 9.80 percent as over 30,912 thousand dozen of the knitwear worth $710.210 million exported as compared the exports of 25,587 thousand dozen valuing $648.805 million of same period of last year. On month on month basis, the exports of knitwear grew by 6.66 percent bedwear by 3.26 per cent.

Sri Lanka is in danger of losing its duty-free access to the EU. The European Union is worried the return of Mahinda Rajapaksa as prime minister could derail the progress made toward national reconciliation. Under Generalised System of Preferences Plus status, Sri Lanka's top exports of garments and fish get lucrative concessions in the world's largest single market.

Trade is key to Sri Lanka’s economy and the EU is its biggest export market, accounting for nearly a third of exports in 2017. Sri Lanka regained the GSP plus preferential treatment in 2017. Its exports to the EU have since jumped 18 per cent. Sri Lanka had promised the EU in 2016 it would work toward reconciliation with Tamils, who mostly live in the north and east of the predominantly Buddhist nation. The country also pledged to provide justice and reparations to victims of human rights violations committed during the 26-year civil war.

The EU warning on trade is the strongest yet from western powers. On the other hand, China, which has invested billions of dollars during Rajapaksa's presidency, has called for non-interference and said Sri Lanka could tackle its own problems. Sri Lanka’s garment industry is its second biggest hard currency earner.

Indorama Ventures is acquiring Brazilian company M&G Fibras. The transaction is expected to be completed in the fourth quarter of 2018 and fills an important gap in IVL’s global footprint in fibers by establishing capacity in Brazil. It also offers IVL an opportunity to participate in the domestic market along with strategic and logistic advantages from established free trade agreements with other Latin America countries. The demand in Brazil is expected to grow in response to a recent recovery in consumption.

IVL will also be in an advantageous position to expand more into nonwoven applications which are growing strongly in Brazil, supported by the presence of global brands. As a world leader in the service of the hygiene sector, the presence of global brands will allow IVL to offer its customers an extensive portfolio of products to serve their needs.

Brazil has a very innovative textile industry and its relatively high consumer purchasing power is driving the growth in nonwoven and filling fibers. IVL’s strategy is to continue to serve the growing needs of the existing customers of M&G as well as the needs of IVL’s global branded customers in this fast-growing economy and stay ahead of the curve in introducing quality products.

Vietnam’s textile industry is heavily dependent on imported raw materials and accessories. In the first nine months of this year, cotton imports surged 30.3 per cent, fabric imports increased 13.5 per cent and yarn imports were up 34.6 per cent.

If this dependence continues, Vietnam’s textile industry will not be able to take full advantage of free trade agreements like the Europe-Vietnam free trade agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

Particularly, when these take effect at the end of this year, with tax lines cut to zero, Vietnamese garment and textile products will have opportunities to expand their market share in Canada, New Zealand and Australia. However, the two deals set high requirements in terms of thread and fabric origin, which poses barriers to the industry, when it is productive in terms of final products but grinds to a halt in the production of materials.

Textile firms in Vietnam produce 0.8 billion meters of fabric a year, meeting only around 13 per cent of the total demand. And this amount can’t be used to make high-quality products. In fact, many businesses have to import more than 90 per cent of their material to satisfy production. However, some domestic firms have invested heavily in weaving and dying and this is expected to provide the sector sufficient material.

A Cotton USA-sponsored seminar on the cotton and apparel market and how the industry is moving ahead with re-industrialisation was attended by nearly 100 partners throughout the Hong Kong textile supply chain. The seminar was organised by Hong Kong Association of Textile Bleachers, Dyers, Printers and Finishers in collaboration with the Textile Council of Hong Kong and Clothing Industry Training Authority.

The seminar was launched by Karin Malmstrom, Director of China and Northeast Asia, Cotton Council International (CCI) by sharing cotton market developments under the current dynamic trade conditions and CCI's “what’s new in cotton?” initiative. Jimmy Rowe, Manager of Strategic Analysis from Cotton Incorporated, elaborated on consumers’ and retail insights in the U.S. and China following their recent research, as well as their perception of sustainability when they are purchasing apparel.

Professor Philip Yeung, Executive Director of Clothing Industry Training Authority, introduced the re-industrialisation project commissioned by the HKSAR government and how small-to-medium enterprises in Hong Kong's fashion industry will benefit from this project. Karen Ho, Head of Corporate and Community Sustainability at WWF, also introduced its “making sustainability fashionable” project and how sustainable practices can pave the way for strategic success across the apparel and fashion industry.

"Kanoria Chemicals & Industries, which manufactures two million meters of denim fabric per month plans to ramp up its capacity to 27 million meters per month in the next three years. “We serve all mainstream brands such as: Otto Group, Inditex, TCP, TEDDY, H&M, Levis, VF Corp, and niche markets of the world with our wide range of denim,” Ashish Agarwal, Group CEO. KCIL produces denim fabric in the weight range of 4 oz to 15 oz. “Our fabrics are made of 100 per cent cotton denim, cotton stretch, cotton mercerised, cotton poly stretch, cotton rigid, over dyed,” he says. The company operational for the last two years also has a state-of –the-art plant in Ethiopia."

Kanoria Chemicals & Industries, which manufactures two million meters of denim fabric per month plans to ramp up its capacity to 27 million meters per month in the next three years. “We serve all mainstream brands such as: Otto Group, Inditex, TCP, TEDDY, H&M, Levis, VF Corp, and niche markets of the world with our wide range of denim,” Ashish Agarwal, Group CEO.

KCIL produces denim fabric in the weight range of 4 oz to 15 oz. “Our fabrics are made of 100 per cent cotton denim, cotton stretch, cotton mercerised, cotton poly stretch, cotton rigid, over dyed,” he says. The company operational for the last two years also has a state-of –the-art plant in Ethiopia. The company’s product development team works round the clock to feed to large appetite of the fashion industry.

From a miner’s uniform to fashion garments

Talking about denim fabric trends in India, Agarwal says, “Denim fabric, in the last few decades has shifted from being the miner’s work wear to fashion product.” The fabric has undergone several innovations. The recent trend is of stretch comfort jeans with more structure in weaving for domestic market. International brands are opting for stretch fabrics, light weight and dark shades with coating, pitching, printing on high end fabrics. Recycle, cotton made in Africa, BCI are few sustainable denims in demand in the European market.

“Stretch denim usually incorporates an elastic component such as elastane into the fabric to allow a degree of stretchability,” Agarwal explains. “This requires dedicated effort which only a few out of the total 55 denim companies have. The rest merely copy the product from others,” he adds.

High scope for development

The scope for denim wear is increasing and its worldwide market share has increased unpredictably in the last few decades Agarwal points out. “India is a leading denim fabric manufacturer in the world with a capacity of about 1,500 million meters per annum. The country’s denim fabric manufacturing capacity, in 2006, was 260 million meters per annum and currently is 1,500 million meters, with another 150 million meters in the pipeline, currently 75 to 85 per cent of the capacity is consumed domestically ,” he informs

Demand-supply gap

The country has about 55 denim fabric mills with a capacity ranging from 10 million meters per annum to 110 million meters per annum. Almost 85 per cent of this is dominated by men, with 10 per cent coming from women segment and 5 per cent kids segment. Of late, denim production is more than demand, creating a push rather than pull situation. “To add to this, GST and demonetization has impacted the business. However, demand will increase every year by not less than 10 per cent CAGR,” Agarwal observes.

World manmade yarn exports dropped 36.28 per cent in the second quarter. The drop was 36.25 per cent if compared to the corresponding period last year. Manmade filament yarn exports fell 32.25 per cent over the previous quarter and 24.50 per cent over the corresponding period of last year. Manmade staple fiber yarn exports witnessed a drop of 47.41 per cent over the previous quarter and a 45.75 per cent drop over the corresponding period of the last year.

India’s manmade yarn exports grew 3.02 per cent in the second quarter over the previous quarter and compared to the same period last year the growth climbed to 28.88 per cent. Under total manmade fiber exports, India’s synthetic filament yarn exports accounted for a share of 95 per cent.

Synthetic filament yarn exports from China grew 12.43 per cent over the previous quarter and 33.09 per cent over the corresponding period last year. Turkey’s manmade yarn exports grew 3.91 per cent over the same period last year but from the previous quarter there was a fall of 7.67 per cent.

Mexico is the top export market for USA's synthetic filament yarn. The other top export markets are Canada, El Salvador, United Kingdom and China.