FW
India’s apparel production fell 4.7 per cent in February. This is the tenth straight monthly decline in apparel production. Several unresolved issues like the reduction in duty drawback and RoSL after the imposition of GST, capital blockage due to slow GST refunds and uncertainties on the future of export subsidies have affected industry sentiments. Speaking about the decline in production, HKL Magu, Chairman, Apparel Export Promotion Council (AEPC) says, “Apparel manufacturing is clearly in recession as the latest production figures shows a decline of 4.7 per cent in apparel production.”
Global demand positions are good and the industry is keen to take up more orders but cost disadvantages are affecting India's relative position as a sourcing destination. IIP stats reveal there has been a month to month decline in apparel productivity. From positive growth of 1.3 per cent in April 2017, May saw a fall of five per cent. In June, the decline was 3.2 per cent while in July, it was 5.1 per cent. In August, September, October, November and December the industry recorded a decline of 6.4 per cent, 7.2 per cent, 11 per cent, 13.1 per cent and 13.5 per cent respectively. In January, apparel production recorded a dip of 10.7 per cent.
For April-February 2017-18 the decline has been 9.9 per cent. Business is there but buyers want fast track suppliers. Fast fashion dictates trends. Indian exporters don’t have a great infrastructure and most can’t supply in a short span of time.
Alliance has decided to look for a way to carry forward its inspections, safety monitoring, training and helpline services in Bangladesh. Its five-year-term draws to a close at the end of the year. Now, it’s discussing plans to form a successor safety monitoring organization (SMO). This will be an independent, credible, locally-led organisation that will continue Alliance’s work.
Initially, the plan was to place Alliance’s work in the hands of local stakeholders like the BGMEA (Bangladesh Garment Manufacturers and Exporters Association) and trade unions. But this seems to have changed now.
Alliance is a factory inspection platform of 28 North American retailers. Since its founding in July 2013, Alliance claims to have effected a sea change on safety within Alliance-affiliated factories. According to the organisation, remediation across more than 600 factories is 90 per cent complete and 1.4 million workers in nearly 1,000 factories have access to the 24-hour Alliance helpline.
In addition, 1.5 million workers have been trained in fire safety and democratically elected Worker Safety Committees have been established in nearly 200 factories. Fortifying safety in factories and equipping workers with empowerment tools is Alliance’s focus. Safe garment factories protect millions of workers and they are critical to maintaining Bangladesh’s standing as a world leader in garment production.
"Pakistan has always been a major textile market for India and the Asian region. Even after decades of political unrest, India is the 4th largest source for Pakistan’s total merchandised imports and second largest for textiles and clothing. Among Pakistan’s overall imports from India textile and clothing takes a major share of 23.6 per cent and accounts for 12.5 per cent of total textiles and clothing imported in the country. Textile industry is the largest manufacturing activity in Pakistan making it the 8th largest exporter of textiles in Asia. It contribute 8.5 per cent to Pakistan’s GDP and employs about 45 per cent of the total labour force in the country (and 38 per cent of manufacturing workers)."
Pakistan has always been a major textile market for India and the Asian region. Even after decades of political unrest, India is the 4th largest source for Pakistan’s total merchandised imports and second largest for textiles and clothing. Among Pakistan’s overall imports from India textile and clothing takes a major share of 23.6 per cent and accounts for 12.5 per cent of total textiles and clothing imported in the country. Textile industry is the largest manufacturing activity in Pakistan making it the 8th largest exporter of textiles in Asia. It contribute 8.5 per cent to Pakistan’s GDP and employs about 45 per cent of the total labour force in the country (and 38 per cent of manufacturing workers). Pakistan is the 4th largest producer of cotton in the world and has the third largest spinning capacity in Asia after China and India. In spinning, Pakistan contributes 5 per cent to the global capacity. Besides, there are 1,221 ginning units, 442 spinning units, 124 large spinning units and 425 small units which produce textile.
India-Pak EXIM relations
Pakistan, has to its kitty, more than 6 per cent of India’s export as far as textile fibres and yarns are concerned. It is also the third largest exporter of cotton fibre and yarns, 10th for other spun yarns, 9th for man-made fibres and 34th for filament yarns. Pakistan is among the top 10 markets for basic textiles exported from India. On a monthly basis, fibre (including cotton) export to Pakistan averages $24.5 million, spun yarns $12.3 million and filaments $0.4 million. Pakistan is also sixth largest market of Indian viscose staple fibre. On an average 6.7 lakh kgs of VSF is exported worth US$1.35 million. However, the volume is not stable with maximum shipment recorded in the past two year is 1.7 million kgs (January 2017) and minimum of 60 thousand kgs (February 2018). Only on four occasions the volumes have crossed 1 million kgs in last 24 months.
As for imports, in fibre, Pakistan majorly imports cotton ($23 million a month) and viscose staple fibre ($1.3 million a month). In spun yarn, the single major is cotton yarn at an average of $11.1 million a month, followed by $0.6 million worth of polyester/viscose yarn and $0.3 million of polyester yarn. In the first five month of 2017-18 marketing season, cotton export to Pakistan totalled 7.7 lakh bales worth $238 million as against 6.9 lakh bales in the corresponding months of 2016-17. There was no shipment reported in October.
Pitfalls on the way
Textile accounts for 57 per cent of export revenues, but there has been significant decline in recent years. The Pakistan Textile Exporters Association has urged the government to take measures to ensure textile exports grow and sustain employment. Further, the Pakistan Textile Mills Association has demanded removal of duty on cotton imports and a rebate of five percent on textile exports. This plea has come at a time when about 110 mills were shut down due to various barriers to growth including the energy shortage.
Although cotton is the largest fibre, the industry is persistently facing a shortage of white fibre, which has hurt textile sector’s growth. There have been frequent crop failures which impede investments and expansion of textile industry, despite it is the largest generator of employment in the country. The spinning activity is still limited to coarser or regular count yarns and has miniscule ability to produce finer count yarns. The recent sharp depreciation in the PakRe, has made export cheaper, but it also made raw material imports costlier. However, with home grown cotton, textile industry has seen significant benefits of currency depreciation.
There has been growing awareness about sustainability among UK retailers, reveals a new research from WGSN. They are interested in addressing modern slavery, inequality and climate change, and encouraging sustainable economic growth and responsible consumption and production.
There is an emerging shift towards long-term sustainable retail systems rather than short-term sustainable product lines. In fact, there is 128 per cent increase in the number of sustainable women’s wear products online in the UK.
Fitness and swimwear saw the largest jump in volumes of new sustainable products, rising by 40 per cent, lingerie and sleepwear rose 39 per cent, jeans rose 28 per cent, shirts and tops went up 18 per cent and knitwear went up 16 per cent. Volumes for sustainable dresses dropped by six per cent, trousers 30 per cent and coats and jackets by 33 per cent year-on-year.
Gains in women’s wear were not reflected in men’s fashion, however, which recorded flat volumes of new sustainable products year-on-year. However, new products that were out of stock but still appear on retailers’ websites grew by 4.9 percentage points last year, signaling demand and significant scope for exploration in men’s wear. With discretionary spending continuing to dip, consumers need more than sustainability to encourage a purchase, such as newness and value for money.
India and Peru are aiming to sign a free trade agreement (FTA). A FTA with Peru would boost Indian exports. It would reduce or eliminate duties on most of the goods traded between them besides relaxing norms and rules to promote trade in services and increase bilateral investments.
Amid uncertainties in its traditional markets, including the US and Europe, India has been looking to enhance its engagements with countries in Africa, South America and Central Asia. Peru is the third largest market for Indian goods in the Latin America and Caribbean region. Trade between the two is worth $1.77 billion. India’s top exports to Peru include: motor vehicles, cars, iron and steel products, cotton yarn and fabrics. In imports bulk commodities include minerals and ores, gold, fertilizer and zinc.
Major textile items exported to Peru are: cotton yarn, polyester DTY, poly/cotton yarn and PSF, among primary products, and plain fabric, denim, and suiting among woven fabrics. Textiles exports to Peru are worth $13 million a month accounting for 1.85 per cent of India’s total exports of basic textiles, including $9 million worth of spun yarns, two million dollars worth of filament yarns, 1.2 million dollars of woven fabrics and $0.5 million of manmade fiber.
Oeko-Tex helps companies throughout the global supply chain to test their organic cotton products for GMOs (genetically modified organisms). Organic cotton products seeking Standard 100 by Oeko-Tex certification will be required to undergo GMO testing. Currently, the GMO testing technology is limited to cotton. Samples are analyzed using RT-PCR (reverse transcription- polymerase chain reaction) technology, which can identify known genetically modified materials at a limit of 0.1 per cent. Test results indicate whether these GMOs were detected or not.
Today, about 70 per cent of cotton globally is genetically altered. For example, some forms of cotton have been engineered to be herbicide-resistant. Others have been infused with an insecticide to kill pests like boll weevils. The popularity of organic cotton has grown substantially in recent years. Consumers are increasingly worried about the environment and harmful substances in the products they buy for themselves and families. For them, organic foods and textiles are good choices, and products for which they are willing to pay a premium. But, in return for that extra investment, consumers expect the organic products they buy to be genuine and verifiable.
The new GMO testing gives manufacturers and marketers confidence that their organic cotton products meet regulatory and consumer expectations.
Myanmar is expected to grow 6.8 per cent in 2017-18 compared to 5.9 per cent during the previous fiscal year.
Growth was driven by improvements in the agriculture sector, which expanded by 3.5 per cent during the year on better weather conditions and productivity. Agriculture provides about a third of the country’s GDP. The industry and service sectors also grew during the year, expanding by about eight per cent year over year due to higher demand for manufacturing and tourism-related services.
Due to efforts made by domestic tourism operators, such as promotions by hotels and tour companies, tourist arrivals, particularly from around the region, continued to rise.
However, improving rice and garment exports were not sufficient to narrow the current account deficit, now five per cent of GDP compared to 3.9 per cent last year. Imports, driven by strong domestic consumption of overseas goods and demand for capital goods to supply infrastructure projects, grew 12 per cent during the year.
The fiscal deficit has ballooned to around 3.5 per cent of GDP from 2.5 per cent before on the back of higher spending on infrastructure and social services such as education and healthcare.
Despite more robust growth and spending, inflation slowed to an estimated 5.3 per cent in 2017-18 from 6.8 per cent in the previous year, aided by a drop in food prices and a smaller volume of central bank borrowing to fund the budget.
GM seed maker Monsanto has been barred from claiming patents on its genetically modified (GM) cotton seeds in India. The US seeds company is not eligible to claim patents and charge royalties from Indian seed companies. Monsanto India says the court order is disappointing and it will have wide-ranging, negative implications for biotech-based innovation across many sectors within India and that is inconsistent with other international markets where agricultural innovation has flourished.
Monsanto has been involved in a long-running battle in India over royalties paid by local seed companies for its GM cotton. In 2016, India cut Monsanto’s royalties by more than 70 per cent, triggering a long-running feud that drew in India and the US.
Farmers buy GM cotton seeds from Indian seed makers who pay to use Monsanto's proprietary technology to produce them. In March, India cut royalties paid to Monsanto for its GM cotton for the second time in two years, potentially fuelling another row with the US-based company that threatened to leave India in 2016.
More than 90 per cent of India’s cotton crop is genetically modified. Monsanto has been at loggerheads with seed firms and authorities in India over how much it can charge for its GM cotton seeds, costing it tens of millions of dollars in lost revenue a year. Monsanto says some companies in India owe it millions in royalty payments.
Kingpins Show will be held an edition in Amsterdam from April 18 to 19, 2018. The show will focus on industry novelties of fall/winter 2019-20. Sustainability and transparency will be a major focus at the show. Elleti, an Italian specialized laundry and garment manufacturer, will present a capsule collection of replicas of historical denim pieces produced according to its most innovative sustainable technologies.
Many Kingpins exhibitors have focused on eco-friendly products and they are expected to exhibit them at the upcoming show. Arvind is launching 100 per cent denim, zero per cent cotton, a small new selection of fabrics that employ alternative fibers that can help reducing the market’s dependence on cotton. Berto is presenting a series of fabrics entirely made with scraps from its own production and dyed with low C02 emission technology. Calik Denim offers an updated version of its oxygene finishing. Cone Denim presents its new Trutone Future Black made by recycling 17 pet bottles for black-stay-black denims. Denim Expert is offering a new sustainable collection that employs Green Screen certified substances only. Foison launches a new collection that when dyed reduces sulfur carbon and sodium release by 80 per cent.
Garmon is launching its new Stretch Care family of sustainable chemicals. Indigo Textiles launches fabrics treated to reduce the need for washing. Kilim launches denim made by recycling post-consumer denim fabric products.
HKTDC will host Hong Kong Houseware Fair and Hong Kong International Home Textiles and Furnishings Fair simultaneously from April 20 to 23, 2018 at the Hong Kong Convention and Exhibition Centre (HKCEC). The two fairs are expected to attract more than 2,600 exhibitors from 26 countries and regions, making it an ideal platform for companies to explore business opportunities in house ware, home textile and furnishing sectors. The main theme for this year’s event is L.I.F.E, standing for Lifestyle, Interior, Feast and Enrich, the four major themed zones.
Start-ups, which are essential for the sustained development of an economy, will be in focus at Houseware Fair. The show will feature start-ups from Hong Kong, the Chinese mainland, Taiwan and first-time participating country Bangladesh. Start-ups can discover further business opportunities by presenting their products and business ideas to buyers and investors at the two fairs.
Four trend concepts will be displayed to focus on the fair themes. A trend seminar will also be organised to unveil houseware trends for summer 2019. The two fairs will also feature product demo and launch pad sessions, international kitchenette and latte art performances as well as a series of seminars exploring technology trends in the building industry and testing, certification and inspection services for houseware products.
