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The CITI analysis of the quick estimates of T&A exports for July 2019 indicates that these exports increased by 1.22 per cent to US$2,893.66 million in July 2019 as against US$2858.66 million in July 2018. However, exports of cotton yarn and fabrics during the year declined by 9.98 per cent and 10.54 per cent to US$824.41 million and US$ 3,7399 million respectively on Year-On-Year and cumulative basis.
This change in the trends of exports of apparel and cotton yarn/ fabrics is mainly due to the Scheme “Rebate of State and Central Taxes and Levies (RoSCTL)” announced by the Government of India in March 2019 for the Apparel and Made-ups. RoSCTL scheme has been introduced to provide reimbursement of Central and State Taxes to make sure that taxes are not exported along with the products.
CITI has now made an earnest appeal to the Government of India to extend the benefits of RoSCTL scheme to the yarn and fabric segments to help the textile Industry to boost up its export competitiveness in the international markets to achieve higher growth trajectory and generate more employment opportunities to the masses, especially youths and women workforce.
Intertextile Shanghai Apparel Fabrics will be held from September 25 to 27, 2019. High-end Chinese designers can get fabrics with high-quality materials and designs. Salon Europe will gather a comprehensive range of over 140 exhibitors from Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Switzerland, Turkey, the UK and more, while focused product zones include Premium Wool Zone and Verve for Design. Premium Wool Zone will feature some of the world’s finest wool suppliers from Europe as well as other countries and regions. The zone will feature over 20 suppliers from France, Italy, Hong Kong, Peru and the UK. As demand for luxury wool continues to grow in China and worldwide, thanks to its long-lasting quality, and fine appearance and feel, future prospects look good for this product zone. Verve for Design will feature original prints from over 25 design studios. The demand for original prints in China is huge because the market is always looking for something different. A lot of design studios exclusively exhibit at Intertextile.
With a huge domestic population, and a rising level of high income households who associate European brands with quality, the Chinese market offers potential for overseas brands to forge lucrative partnerships with Chinese trade buyers.
UK has extended the sustainable clothing action plan (Scap). It is set to end next year but the new version is expected to involve more retailers and take steps towards developing industry-wide systems to recycle and reuse textiles and fibers.
Scap’s retail signatories including Next, M&S, Primark and Asos have committed to reducing their water use, carbon footprint and waste sent to landfill by 15 per cent by 2020. Primark is experimenting with clothing recycling bins at its new store and has pledged to introduce a full scheme this year. It has also launched sustainable cotton jeans and eco-friendly glitter. H&M is aiming at having 100 per cent recycled or sustainably sourced materials by 2030, up from 57 per cent now. It is also testing out a free mending service.
The spotlight is shining on the fashion industry. Most big retailers now agree they have to adapt to survive. The planet doesn’t have the resources available to facilitate the linear production model that the vast majority of the fashion industry operates on and therefore systemic change is the only option. There has been a significant change in people’s attitudes toward sustainability and fashion. Consumers want more action and greater transparency from brands.
Spinexpo will be held in China, September 3 to 5, 2019. The flagship event for spinners and knitwear manufacturers is aimed at knitwear brands, flat-bed and circular knit manufacturers, weavers, sporting goods manufacturers, hand-knitting wool distributors and all yarn and knitwear users. Exhibitors showcase technically innovative collections each season, thanks to a partnership between machine manufacturers, spinners and knitwear and sporting goods manufacturers. This edition will explore the topic of disruption: recycling colors and stitches. The focus will be on a mix of different styles inspired by a modern-day rural nomadism, a hodgepodge of combinations, multicultural details and different forms, a desire for daily protection that allows us to live our day-to-day lives.
Some themes are new optical designs of fragmented and complex checks patterns on knits and wovens, rhythmic contrasts and disorderly and energetic, decorative and extravagant transformations that create a contemporary and experimental mood in color and fiber combinations that are unusual, retro-modern, inspired by rituals from elsewhere. The focus is on color and visual effects using high-quality wools that can be felted and brushed. Brushed mohair and felted wools mixed with low melt nylon and polyester suggest new uses for these traditional fabrics.
Indorama Ventures will buy Italy-based Sinterama. With this acquisition, Indorama can make use of the knowledge Sinterama has accumulated over time. This will provide Indorama comprehensive and innovative solutions for automotive and home applications to better serve customers and meet customers’ needs in future. Sinterama brings along a very experienced team of highly respected professionals who together with Indorama’s management make a formidable combination of managerial excellence. Sinterama’s network of strategically located facilities can enable Indorama to provide the best-in-class offerings for customers and meet the needs and exceed the expectations of customers on a truly global scale. The combination seals twenty years of collaboration and is expected to lead to the establishment of a global leader in high added value polyester yarns and applications. The acquisition comprises five production sites in Italy, Brazil, China and Bulgaria. The transaction is expected to be completed in the third quarter 2019.
Sinterama, based in Italy, is a polyester automotive interiors and high performance colored yarns manufacturer. The company is vertically integrated from chips to yarns and offers a vast range of colored polyester yarns for automotive, furnishing, apparel and technical applications. Sinterama is the industry partner of choice for high-value filament yarns. Indorama Ventures is a global leader in the polyester business.
India’s yarn exports have fallen. One reason is the higher cost of raw materials. Mills are running at below their capacity to match the demand and supply, which in turn is increasing the manufacturing cost.
The textile value chain, particularly the cotton-based manufacturing value chain, has slowed down resulting in a stagnancy or drop in domestic consumption. Prices of cotton in India are higher compared to international markets due to higher level of minimum selling price. Second, high fluctuation in prices along with the tight liquidity situation in the market is resulting in slow buying of yarn and fabrics. If the situation continues, there may be a need for converting short-term loans in the textile manufacturing sector to long-term loans.
To give a boost to the cotton value chain, a switch to direct benefit transfer to farmers in the upcoming season instead of an artificially higher level of MSP will help. Also steps on a war footing to increase cotton yields are necessary. Secondly, apparel makers should take advantage of the ongoing US-China trade war and focus on exporting more to the US market. If the situation does not improve, banks should be directed to reschedule loans given to the textile manufacturing sector.
Following the investments Asos made in logistics, sustainability and marketing, the marketplace has asked its suppliers for price cuts. Among the recent investments the marketplace has made is the development of logistics platforms in the United States and Germany.
The multi-brand store is seeing positive momentum in customer engagement with visits up 16 per cent year-on-year. The company is making good progress in improving customer engagement, but embedding the change from the major overhaul of infrastructure and technology in its US and European warehouses has taken longer than anticipated, impacting its stock availability, sales and cost base in these regions. The move to a multi-site logistics infrastructure will enable it to offer customers across the world its market-leading proposition, facilitate its future growth as well as lead to longer-term efficiency benefits.
Asos is spending on new technologies, like artificial intelligence, new marketing strategies, technology platforms and infrastructure, and focusing on growth in the US. Current areas of focus include reducing prices and refocusing the marketing strategy. Unlike a lot of other fast-fashion companies, Asos has its marketplace, third-party brands, its own products, it has beauty. The brand has diversified its offerings, unlike a lot of other fast fashion brands that have just focused on cheap items and breadth of assortment with private-label goods.
"For the first time, the next round of tariffs by the Trump administration will target apparel imports from China. A 10 per cent tariff will be levied on all clothing and shoes imported from China from September 1. 2019. As per Wall Street Journal’s analysis, these tariffs will have a greater impact on women’s and girl’s clothing and shoes as their imports from China was more than twice that of men and boys. The country imported around $23.5 billion worth of women’s and girl’s clothing and shoes from China in 2018."
For the first time, the next round of tariffs by the Trump administration will target apparel imports from China. A 10 per cent tariff will be levied on all clothing and shoes imported from China from September 1. 2019. As per Wall Street Journal’s analysis, these tariffs will have a greater impact on women’s and girl’s clothing and shoes as their imports from China was more than twice that of men and boys. The country imported around $23.5 billion worth of women’s and girl’s clothing and shoes from China in 2018. On the other hand, it imported $10.9 billion worth of men’s and boy’s clothing and shoes during the year.
Increased capabilities, more purchasing power to drive imports
One reason US imports more female clothes from China is because the Chinese apparel industry has the
capability to churn out latest trends. Also, as noted by Tamara Gureivich, an economist at the US International Trade Commission, women spend more on clothing than men. An average US household spends about $665 annually on women’s and girls’ apparel, compared to $427 spent by men.
The impending tariffs will affect most clothing purchases, as Americans spent nearly $400 billion on clothing and footwear in 2018, according to the Commerce Department. They would however lead some manufacturers to shift production elsewhere.
Tariffs to impact purchase quality and volume
Though a few importers and retailers would opt to swallow some or all of the costs—sparing shoppers, rest of them are likely to pass these tariff costs to their customers eventually. On their part, consumers will either opt to buy fewer garments or substitute items of lesser quality.
Opposing the tariffs, J. C. Penney Co said that the new tariffs would have a significant impact on its customers. Of the 19 items set to have the biggest tariff impact on the company and its customers, 13 are for women and girls, such as cotton-knit sweaters. Though women spend more on apparel and footwear than men do, even the existing tariffs on women’s clothing are higher than that on men’s clothing. Men’s clothing is usually imported from countries with whom the US has free trade agreements such as Mexico. This helps in reducing the tariffs on these items.
On the other hand, the US doesn’t have free-trade agreements with China and Vietnam, whose factories supply much of the clothing purchased by American women. This heavily impacts the imports of women’s clothing from China
Korean fiber company Hyosung has a bigger range of functional and sustainable nylon and polyester fibers specially developed for consumers who want to wear jeans on all occasions and meet the challenges of climate change.
Mipan aqua X nylon and askin polyester are cooling fibers which deliver freshness with great wicking performance and a cool touch effect to denim fabrics. Aerolight fiber is a high count filament polyester fiber which gives a soft touch close to a natural fiber. Aerolight fiber is suitable for all seasons, combining the advantages of both synthetic and natural fibers. With a C-shaped cross section it provides excellent moisture management, with a softer, more natural feel than standard polyester.
Hyosung is the largest elastane producer in the world and first developed its own process for manufacturing spandex in 1992. Hyosung offers a broad range of high quality, competitively-priced fiber technologies throughout the global apparel value chain. The spandex range includes Creora dyeable spandex, Creora black spandex and Creora fresh spandex. Anticipating changing market dynamics, the company continues to develop leading sustainable solutions, such as Creora eco-soft elastane, which not only contributes energy saving for sustainability with low heat setting features, but also enables stable production of four-way stretch, with Creora Fit2 technology and warp stretch denim.
The American Apparel & Footwear Association (AAFA) says, the 10 per cent tariff raise starting from September 1, 2019, will hit 77 per cent of textiles, garment and footwear. Some articles will be postponed from the first list of tariff rises to mid-December. However, the American fashion industry will still be a part of most categories with the rises in garments.
Wolverine Worldwide, one of the footwear giants, owner of Merrell, Saucony, Sperry o Keds, has started to analyse the transfer of part of its production in China due to the impact of the tariff rise. The company is accelerating its diversification plan for sourcing.
