FW
Wool, cotton, polyester prices are on a downward spiral and Chinese cotton has dropped as much as 40 per cent since January 2014. Also, the dip in price of crude oil and gas has made transportation more economical. Cotton prices started to fall last year due to the abandonment of a disastrous government’s stockpiling policy in China. This year though, prices have been relatively stable supported by the expectations of a lower end of the season stock level. According to forecast, this is expected to dip by 5 per cent year-over-year in the 2015-16 season.
Transportation costs as well as polyester yarn, has been affected because of the recent falls in crude oil and gas prices. Polyester yarn is made out of crude oil derivatives. Prices of polyester reduced considerably due to a sharp drop in the derivative’s cost, in the second half in 2014. Moreover, polyester was under pressure because of the fall in cotton prices as it has to stay cheaper than cotton to remain competitive.
In 2014, Australian wool prices were relatively stable in AUD, but became cheaper in USD terms due to the strong US dollar. Wool prices recovered though, in recent months, because of China’s low stock availability and strong demand.
Thus, since textile prices have fallen through the years, will clothes get cheaper and will these savings get passed along the supply chain? It seems not, for, as per market analysts, the cost of raw material in apparel production consists of only around 10 per cent of the total cost. The cost of production, packaging and shipping into the US does not exceed 30 per cent and the labour cost is merely between 0.5 per cent to 1 per cent.
Italian fabric production declined 4.1 per cent in the first semester of 2015 compared to the same period last year. The country’s textile exports recorded a 2.3 per cent loss in the first five months of the year. At the same time, fabric imports into Italy declined by four per cent, resulting in a trade surplus. Wool fabric exports recorded the strongest growth, followed by linen, while all other fibers saw their sales abroad decrease.
In the first five months of 2015, Germany was as always the first outlet for Italian exports, with a 10.6 per cent share of the total, though it recorded an 8.3 per cent decrease. Romania, the second destination for Italian fabrics, also declined by 4.3 per cent and so did France, Italy’s third textile market, by 1.3 per cent.
Among non-European destinations, exports to Tunisia plunged by 27.9 per cent. At the same time, exports to China grew 12.7 per cent and those to Hong Kong by 9.8 per cent. These two destinations together now represent the second biggest export outlet for Italian textiles. A 15.2 per cent expansion was also recorded by the US, which is the fourth biggest market for fabrics made in Italy.
Bangladesh's apparel makers are finding it tough to carry out factory remediation program. Remediation programs were started last year after completion of initial inspections by western retailers. Garment factory inspections were launched to identify workplace risks and ensure safety compliances after the Rana Plaza building collapse that killed more than 1,100 workers. Some 3,000 garment factories have so far been assessed.
One reason for the slow pace of remediation is the unwillingness of many factory owners to repair flaws. Another is non-availability of safety equipment including fire doors, sprinklers and experts to install them. The recent political instability added to the difficulties. But apparel makers claim that most identified flaws have already been fixed, and that the main stumbling block is shortage of funds.
A factory needs to spend a sizeable amount to fix safety flaws. Some apparel makers are unwilling to spend their own money for improvements. They are looking for financing sources, either from Accord or Alliance, or others. There are some 3,500 garment factories in operation throughout Bangladesh though the real number is supposed to be higher as there are many units that are not affiliated with trade bodies and do sub-contracting.
Vietnam is one of the world’s top apparel exporters. But 70 per cent of its textile makers are working as sub-contractors on medium and small scales and are still weak in fiber manufacturing, weaving and dyeing. Almost all input materials come from China and Korea. The rate of locally-made products in the sector stands at a mere 55 per cent due to the weak weaving and dyeing capability.
Weaving and dyeing projects fail to receive licenses due to their high risk of environmental pollution. What’s needed is zoning off regions and areas exclusively designed for weaving and dyeing and equipped with infrastructure and waste treatment facilities.
Vietnam faces another challenge. Once the Trans-Pacific Partnership (TPP) comes into force, regulations on the origin of goods will follow. Vietnam must follow TPP’s yarn-forward rule of origin which requires that only textile and apparel products using the US and other TPP countries’ yarns and fabrics qualify for the benefit of the agreement.
The strength of Vietnam’s textile and garment industry is that only a small capital investment is called for. The payback period is quick because of a short capital turnover. The industry gets preferential policies. Greater product differentiation and specialisation can boost margins.
CHIC Autumn will take place for the first time from October 13 to 15 where around 600 exhibitors are expected to display their range. In March 2016, the Spring edition will take place at the modern National Exhibition and Convention Centre, Shanghai, opened last year. Along with CHIC Autumn, Intertextile Shanghai will take place at the same fairground.
The CHIC autumn event caters to domestic market opening the way for Chinese consumer market for smaller high-end brands with less volume. Matchmaking, networking and further activities will be organised to connect international brands with Chinese retailers underlining the position of CHIC as mediator in the fashion business.
The autumn edition, is spread across smaller area compared to the spring edition held in March. It gets ready as a platform to focus on the merchandise and not so much on branding through enormous image booths. The new date in October will focus on spring/summer collections in all categories including women’s wear, menswear, kids’ wear, shoes/bags/accessories and swim/bodywear.
Much like the March edition, the concept of ‘Show in Show’ will continue. London PURE organiser will host around 50 exhibitors at its pavilion called PUREShanghai. Six brands from UK such as Henry Todd, Raaah, Dabra, Ness, Virgos, Pearls & Portraits will exhibit their collections along with brands from Poland, Thailand, Greece, Turkey, Trinidad & Tobago, Spain, Croatia, USA and Australia, who will be joining PUREShanghai in October.
Preview in China, the South Korean trade show will also be participating at CHIC in October. The Brazilian show association Abicalcados will have a pavilion. And France with brands like Léo & Ugo, Johntex, Zyga, Urbahia Paris and Italy with brands such as Paola Graglia, Giovanni Fabiani will be participating with their respective national pavilions.
En.chiconline.com.cn
Victoria & Albert Museum (V&A) in UK will host India festival 'The Fabric of India’, from October 3, 2015 to January 10. This is the first major exhibition to explore the dynamic and multifaceted world of handmade textiles from India, spanning from the 3rd century to the present day. Showcasing the best of the V&A’s world-renowned collection together with masterpieces from international partners and leading designers, the exhibition will feature over 200 objects, many on display for the first time.
Visitors can expect a stunning range of historic dress, heirloom fabrics, and cutting-edge fashion. India’s rich natural resources for making and decorating textiles are unrivalled. Its varied geographical regions and climates provide a huge range of plant fibres and natural dyes for the cultivators, weavers, dyers, printers and embroiderers of the subcontinent.
Over centuries, most regions developed specialities based on local conditions, such as the golden silks of Assam, the fine cottons of Bengal, or the red dyes of south-east India. Craftspeople use an astonishing range of skills to process raw materials and produce regionally distinctive dyes, weaves, prints and embroideries. The exhibition will display rare pieces collected over the years depicting rich textile heritage of the country.
As the world's leading museum of art and design, the V&A promotes the practice of design and increases knowledge, understanding and enjoyment of the design world.
The Haryana Skill Development Mission (HSDM) of the government of Haryana has signed a MoU with the Apparel Made-Ups & Home Furnishing Sector Skill Council (AMH SSC). The MoU was signed by Subhash Goel, IAS and Roopak Vasishtha, CEO and Director General, AMH SSC under which all the training providers of HSDM, across Haryana will get aligned to the AMH SSC for the skill-training in the apparel, made-ups and home furnishing sector by aligning their course curricula to the National Occupational Standards (NOSs) of the AMH SSC and shall be assessed and certified by the AMH SSC.
The certifications of the AMH SSC, which has been formed by the NSDC would have national/international recognition and would help the youth of Haryana state not only to get decent employment in India but they would also become eligible for international openings. This step would also immensely contribute to the ‘Skill India’ and ‘Make in India’ missions of the Indian government.
www.sscamh.com
The twin-shows the seventh edition of Yarnex and fourth edition of TexIndia concurrently began from September 10, 2015, at the India Knit Fair Complex in Tirupur. The shows are organised under the banner of Textile Fairs India, by SS Textile Media from Bangalore.
While Yarnex has 51 exhibitors displaying textile products like value-added fibres and yarns, TexIndia is showcasing apparel fabrics, trimmings, embellishments of 41 exhibitors. Suppliers of services related to the textile and apparel industry too are also present at the shows.
Among the renowned companies exhibiting at Yarnex are: Reliance Industries, Indian Rayon from the Aditya Birla Group, Indorama Industries, Grasim Industries, RSWM, Amarjothi Spinning Mills, Brightex Corporation from Japan, Damodar Industries, Pallavaa Group, Vardhman Textiles, Trident, Winsome Group, The Lakshmi Mills Company, among many others.
The value added fibres and yarns on display at Yarnex include: spandex fibres, BCI yarns, organic yarns, colour mélange and dyed yarns, modal yarns, recycled polyester yarns, metallic yarns, iridescent yarns, antique yarns, fancy yarns, grindle yarns, indigo yarn, vortex yarn, compact yarns and many others.
A few of the participants at TexIndia are: Adonis Intex, Niharika Creations, Colorsburg, Linz Textil GMBH from Austria, Jain Narrow Fabrics, Netflex (India), PK Astir & Co, Pranera Digital, Laya, Sanya Fabrics, Sri Kalyan Exports, Matrix Enterprises, Versatile Enterprises and Transknits. Exhibitors are showcasing organic fabrics in various blends, wool fabrics, Tencel fabrics, silk fabrics, solid dyed and yarn dyed knitted fabrics, different types of lace and crochet fabrics, various types of zippers, hangers, elastic tapes and webbings, badges, barcodes, labels and tags.
For the first time, TexIndia has also brought together, job workers and knitwear manufacturers and exporters to interact with each-other under one roof. Knitwear manufacturers and brands can find job workers to outsource their requirements at TexIndia. Major exhibit job worker categories include circular knitting, flat knitting, dyeing, finishing, printing, embroidery and garmenting.
www.fnashow.in
Rupee’s worst devaluation may boost exports
After Chinese currency yuan was first devalued on August 10, rupee recorded its sharpest decline among competing countries including China, Vietnam and Bangladesh. Since August 10, rupee has depreciated by 4.63 per cent to 66.83, while yuan is down 2.51 per cent to 6.37 against the dollar.
Among other competing countries, Vietnamese dong slumped by 2.96 per cent to 22,468 against the dollar on the same day from 21,823 dong on August 10. But Bangladesh's currency appreciated by a negligible 0.06 per cent to 77.73 on Monday against the dollar from 77.78 on August 10. While an ICRA study says the depreciation in rupee would benefit apparel exporters, it also points out that since yuan has also depreciated and given that China enjoys dominant position in export markets, India would see increased pricing competition which will affect profitability of exporters. Also, with drafts of new contracts mentioning renegotiation clause if rupee depreciates beyond 2-3 per cent, buyers will immediately start price negotiations hurting exports. However, given that the rupee has depreciated more than that of other competing countries, and India’s share in overall trade is relatively small, experts expect export volumes may not be impacted severely.
Diversified fabric players may have lower prices
Fabric exports, on the other hand, are geographically well diversified as against other segments in textile exports. Given the fragmented nature of India’s fabric industry, Indian exporters will have to pass on the benefits of depreciated rupee by way of lower dollar price. India’s cotton exporters would see improved competitiveness, being the second largest exporter of the natural fibre after the United States.
Nevertheless, as China is the largest market for both cotton and cotton yarn exports from India, higher devaluation of China’s yuan will require Indian exporters to offer lower dollar prices for these products to maintain competitive prices in yuan terms. Meanwhile, as per a report by the Centre for Monitoring Indian Economy (CMIE), the cloth industry in India witnessed a healthy growth in revenues during the June 2015 quarter. Aggregate net sales of the 54 companies that reported their interim results grew by eight per cent year-on-year during the period. Growth in sales was broad-based with 36 companies registering higher sales.
www.icra.in
Australia will set up a new wool supply chain in Vietnam. The goal is to sell greasy wool to Vietnam’s fledgling wool industry. Australia wants to reduce its heavy reliance on China and create new business opportunities elsewhere in the world. Australia has so far partnered 91 manufacturers, mainly knitters, teaching them to produce quality clothing from Australian wool. Of them, 43 are technically competent, making products from Australian wool and sending most of them into Japan and Korea.
The second stage of the supply chain is working with companies and teaching them how to produce wool yarns from Australian wool for the knitting sector. Small ranges will be launched in different colors, around 20 colors at first, and will be supplied to the local spinning industry.
Vietnam is seen as a good market for Australian merino garments. The country is politically stable, has low labor costs, about one-third that of China. It has skilled textile workers although they use synthetics rather than wool. Vietnam has signed free trade agreements with Japan, Korea, the European Union, and is close to signing the Trans-Pacific Partnership. In addition, Vietnam has emerged as one of the fastest growing exporters of textile products.
