Bangladesh’s 171 readymade garment factories which are on the suppliers’ list of ‘Accord on Fire and Building Safety’ have made zero progress on factory remediation suggested by the platform of major European brands and retailers. These factories got three months to one and a half years time, but no one has started remediation process yet after the approval of respective corrective action plans of the units by Accord.
According to Bangladesh Garment Manufacturers and Exporters Association (BGMEA), of the 171 factories, most of them were inspected by Accord more than one and a half years ago. On February 11, Accord provided the BGMEA with a list of 553 factories in which the remediation progress was below 40 per cent. According to the BGMEA, the progress on remediation in 211 factories was 0-10 per cent, in 85 factories 11-20 per cent, in 103 factories 21-30 per cent and 154 factories made 30-40 per cent progress. Of the 553 factories, 522 are the members of the BGMEA.
The BGMEA is planning to start a series of meeting with the factories to know the reasons for the slow progress on remediation work at their factories. The meeting will also find a solution to expediting the remediation work in the factories.
The Pakistan government recently revised downward cotton production as well as area target and fixed it at 14.1 million bales from three million hectares for the next season 2016-17 against 15.49 million bales from 3.11 million hectares estimated for the current season (2015-16). The country has already missed the current season crop production target by around 34 per cent and expected that it will remain at 9 million bales.
The Federal Committee on Cotton (FCC) met with Amir Marwat, Secretary Ministry of Textile Industry to set the targets for cotton area and production for the cotton crop season 2016-17. The committee agreed to fix the overall cotton area and production targets for the year 2016-17 as Punjab will produce 9.5 million bales from 2.31 million hectares, Sindh 4.5 million bales from 0.66 million hectares, Khyber Pakhtunkhawa 0.003 million bales from 0.001 million hectares and Balochistan will produce 0.098 million bales from 0.038 million hectares.
The secretary urged to develop coordinated strategy of stakeholders including the Meteorological Department for organising ‘farmers awareness programs to train farmers and enhance their capacity about cotton crop regarding best management practices.
The Buyers Forum in Pakistan has agreed to collectively work towards improving working conditions in the factories and influence their supply chains through policy and advocacy and enterprise improvement programs to promote sector growth through better compliance initiatives.
Rick Slettenhaar of the Netherlands Embassy, representing the conveners of the Pakistan Buyers Forum, complimented the participants on the progress made and urged the Forum to focus increasing its footprint in 2016 to attain concrete results. Romina Kochius, representative of GIZ (German Development Agency), delivered a presentation on the key outcomes of the project on the Implementation of Social Standards in Textile Sector in Punjab during a briefing session with the government, diplomatic development partners and other international agencies. She shared that the success of the project is in the social dialogue approach through which workers and employers jointly work towards issues of workplace compliance which has ultimately reduced industrial conflicts and increased overall efficiency and productivity.
According to Caroline Bates, representing labour standards in global supply chains, a program for action in Asia and the garment sector, briefed the participants about the Garment Sector Stakeholders Forum (GSSF) jointly facilitated by the ILO and GIZ. The Ministry of Overseas Pakistanis and Human Resource Development, Ministries of Textiles and Commerce signalled their continued commitment to make the textile sector in Pakistan sustainable.
The recently signed Trans-Pacific Partnership (TPP) is one of the largest free trade agreements in the world with its members accounting for about 40 percent of the global economic output, the implementation of the TPP will have major implications for the Asia-Pacific region, many of which are particularly significant for China. While there are challenges, the TPP also gives many countries the opportunity to reform their existing policies. Joining the TPP could give China the opportunity to change many of its domestic rules and move to more market-oriented trade and business systems - similar to the opportunity China had in 2001 while joining the WTO.
On the other hand, the TPP can help usher in the second phase of domestic reforms in China. But the TPP has another dimension that might be a greater challenge for China. It comprises the US and several of its political allies and partners.
The TPP also includes several members with whom China has difficult political relations and territorial disputes in the East China Sea and the South China Sea such as Japan, Vietnam, Brunei and Malaysia. This makes TPP an even greater political challenge for China. One possibility option before China is quick conclusion of the Regional Comprehensive Economic Partnership (RCEP) negotiations that include China, Japan, the Republic of Korea, India, Australia and New Zealand and member states of the Association of Southeast Asian Nations. But the RCEP might not be as ambitious as the TPP. Many RCEP members, who are members of the TPP, might see more economic gains from the TPP, which could make the RCEP insignificant in the long term. Perhaps a better option for China would be to press for convergence of the RCEP with the TPP and push for a Free Trade Area for the Asia-Pacific, which it has already proposed. But the FTAAP must be as ambitious as the TPP to make it a credible alternative. Otherwise, more regional economies will choose the US-led TPP leading to strategic complications for China.
Readymade garments from Nepal will get duty-free entry into the US. The special trade preference now allows duty-free tariff benefits for up to 66 types of garment items including certain carpets, headgears, shawls, scarves and travel goods. Nepal will have this facility for 10 years. So far the US had been imposing an average of 16 to 17 per cent duty on Nepali garments.
Nepal sees this as a tremendous opportunity to expand exports to the US market. At one time exports to the US accounted for over 80 per cent of Nepal’s total garment exports. However, Nepal’s garment industry witnessed a prolonged slump after the US scrapped the quota system in 2005. Garment exports fell and the number of garment industries came down.
However, only 40 per cent of Nepali garments being exported to the US could be eligible for receiving the GSP. Nepal should meet the eligibility requirements of the program. If the requirements are not met, the rest 60 per cent could be excluded from the facility. Nepal’s garment industry has started homework to improve production capacity. In the meantime it’s grappling with problems like shortage of skilled manpower, power outage, transit problems while exporting through India and labor issues.
Some 150 dyeing units in Faridabad have been charged with directly discharging effluents into drains without any treatment. They say if they are provided a dedicated textile park with a common treatment plant they are willing to shift. Around 25 years back the Supreme Court ordered dye industries to shift from Delhi to Faridabad. The industries were allotted a dedicated land and at that time there were no residential areas around. But in time residential areas came up near the industries and that was when the problems started.
Now the units say the textile park should be allotted to them near Faridabad because the entire business of the industries is in Delhi-NCR and that if they are forced to go further afield, their supply lines would weaken and they won’t remain competitive.
A common hazardous waste treatment, storage and disposal facility has already been set up at Pali village in Faridabad district for scientific disposal of hazardous waste generated from various industries of Haryana state.
Haryana already has a policy for shifting of potentially polluting textile or dyeing units from non-conforming areas to an approved industrial estate. A common effluent treatment plant has been set up for treating the industrial effluents generated from these textile or dyeing units.
Trade show Sourcing at Magic was held in the US, February 15 to 18, 2016. More than 40 countries from around the world set up booths. There was a strong African presence. African manufacturers are trying to take advantage of the African Growth and Opportunity Act (AGOA) a free trade agreement with the United States that allows certain garments from some African countries to be imported duty-free into the US.
Silver Apparel from New Delhi was looking for new geographic territories for its clothing. The company concentrates on brightly colored embroidered tops with a resort feel. Only for You Designs from Mumbai displayed digitally printed tunics and tops. The company’s representative felt the show was slower than in the past but it was the only show on the West Coast where buyers and overseas manufacturers could get together under one roof.
Overall, the busiest section of the trade show was the Made in USA corner. Another popular section was the Wearable Technology hub. There was a lot of interest in that. DuPont highlighted its various wearable technology fabrics. The North Carolina State College of Textiles, which has a course on wearable technology, was there too. Blue Dragon also displayed a 3-D printer.
Overall, the largest representation at the show was by Chinese manufacturers.
Falling international prices of cotton along with lower imports by China have made India's cotton exports unviable. With falling global prices, farmers who were holding huge stocks, expecting higher demand due to the lower crop, have now started offloading. Result: Prices in the local market have fallen.
India exported 44 lakh bales of cotton so far and the estimate is that 70 lakh bales could be exported this year. At present exports to Pakistan and Bangladesh are happening due to the freight advantage Indian players have. But the fall in Indian prices may not be steep because at lower levels demand from exporters as well as millers will increase and stop the prices from going sharply lower.
At 23.75 lakh bales consumption for November 2015 was down three per cent month-on-month. The cumulative January-November consumption at 277 lakh bales has slowed down to 2.7 per cent from the earlier cumulative growth. Cotton prices in the international market have crashed to a level seen over six years ago.
Prices are the lowest after August 2009. The fall is because of widespread fears that China, which has been a net big importer, will soon start selling cotton from its reserves in markets the world over.
The textile industry in India wants the excise duty on manmade fiber and filament to be halved and changes in labor laws. Also on its agenda is better access to major markets like the US and EU via trade pacts. In India cotton consumption dominates with 65 per cent and manmade fiber and filament at 35 per cent. The industry feels the main reason for low consumption of manmade fibers in India is the higher cost which could be as a result of the excise duty. So a reduction of the excise duty would be a step forward.
The textile sector is confident of providing jobs to unskilled laborers and women as well, even in rural areas, if support is given in the form of higher market access, changes in labor laws and opportunities to scale up. The textile industry is the country’s second largest employer after agriculture. It contributes nearly 14 per cent to industrial production and four per cent to GDP.
The industry’s export earnings grew by 5.4 per cent in 2014-15. The textile industry has two broad segments. First, the unorganised sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organised sector consisting of spinning, apparel and garment segment which apply modern machinery and techniques such as economies of scale.
Most garment companies in Vietnam have orders until the end of the second quarter. Some companies have enough jobs for the entire year. The target to export $30 billion worth of textiles and garments in 2016 appears to be within reach. Orders from importers have come in abundance. The production index of the textile industry grew by 12 per cent in January compared with the same period last year, while the figure was 11.2 per cent in the clothing industry.
The output of fabric made of natural fiber in January reached 30 million square meters, a 10 per cent increase compared with the same period last year, while the output of fabric made of synthetic and artificial fibers rose by 6.5 per cent, to 63.3 million square meters.
In January alone, textile and garment exports brought two billion dollars, up by 5.8 per cent over January 2015. While the number of foreign invested enterprises accounts for 30 per cent of total enterprises in the industry, they make up 70 per cent of the total turnover. Vietnamese enterprises put out the remaining 30 per cent.
Textile and garment companies also look forward to the Trans Pacific Partnership agreement which they feel will bring great opportunities to the industry.
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