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Pakistan’s continued aggression has led to suspension of imports of cotton from India though unannounced. Sources in the textile sector say high officials of the plant protection department that works under federal ministry of food security have issued verbal orders to the staff to stop issuing permits of import of cotton. The issuance of import permits from India has been suspended for three days.
Sources claimed many textile exporting manufacturers import cotton as well as chemical dyes from India in heavy quantities. Import of cotton without proper permit has been banned. Some importers were importing cotton without permit. This facility has been cancelled after recent tensions with India.
Last month, traders from Gujarat decided to stop supplying vegetables especially tomatoes and chilli to Pakistan, it is understood. Ahmedabad General Commission Agent Association general secretary Ahmed Patel claimed that Gujarat used to send 50 trucks with 10 tons of vegetables, mainly tomatoes and chillies to Pakistan from the Wagah border but this has been stopped since the last two days considering the tension between the two countries. This happens to be the first time in almost two decades that Gujarat traders decided to stop supply of essential vegetables to Pakistan, he said.
The Alliance has rejected reports of four global rights groups saying that in several areas, it misrepresented and oversimplified the complexities of the western retailers' platforms including efforts of the Accord to improve worker safety in Bangladesh. Observed Ellen O'Kane Tauscher, Independent Chair of Alliance, in a statement that the Alliance stands by its progress which is validated by an accomplished team of on-the-ground engineers and professional staff and Alliance remains committed to its mission of creating a safer environment for millions of workers that make a living in Bangladeshi factories.
The Accord has never raised any of the issues contained in this report. While some may seek to set up a false sense of competition between the two organizations (Alliance and Accord), Alliance continues to work closely together on the ground to advance factory safety on behalf of millions of garment workers in Bangladesh, she added.
Tauscher’s statement came one day after four global rights groups' allegation that the Alliance for Bangladesh Worker Safety has overplayed progress with rosy status reports while workers' lives remain at risk. The rights groups, namely, International Labour Rights Forum, Worker Rights Consortium, Clean Clothes Campaign and Maquila Solidarity Network prepared the report based on 175 factories which supply apparels to one or more of these five Alliance member-corporations-Walmart, Gap, Target, Hudson Bay and VF Corporation and for which the Accord publishes detailed progress reports.
The Alliance and its member-companies share the same ultimate goal as that of The Accord in creating a safer future for garment workers of Bangladesh, she said. The Alliance remains committed to working collaboratively with the Accord, the National Action Plan and other key stakeholders to achieve this goal over the next 18 months, she reiterated.
With sustainability becoming the buzzword apparel brands looking to make lesser impact on the environment now have access to more material data to help them reach sustainability goals. The Sustainable Apparel Coalition (SAC), an industry-wide group working to reduce the environmental and social impacts of products around the world, released a new and improved version of its Higg Materials Sustainability Index (Higg MSI) where TENCEL® fabric scored better than around 70 per cent of textiles measured.
Originally developed by Nike, the scoring tool was adopted by the SAC in 2012. The body has since updated the methodology, technology and data to create an easy-to-use public tool that measures and communicates the environmental impact of thousands of materials used in creating apparel, footwear and home textile products. The Higg MSI’s purpose is to provide information about materials and their impacts from extraction through manufacturing in a user-friendly way, creating a benchmark and allowing design teams and supply chain partners to pick less harmful options during design and development. It uses a common language around materials for simplified communication.
TENCEL® fabric, made from the Lenzing branded fiber product of the same name (its generic name is Lyocell), scored 34 on the Higg MSI. By comparison with other fiber materials combined with their default fabric production and dyeing and finishing, a hypothetic unbranded (generic) Lyocell fabric receives 44, silk receives 128 and cotton gets 88. Lyocell’s score is based primarily on data Lenzing submitted to show how TENCEL® ranked versus other commonly used fibers. The score, however, does not represent any specific producer.
Oman wants to invest in Bangladesh. Prospective sectors include leather, jute, furniture, handicrafts and others. Oman, an Islamic country, sees many similarities with Bangladesh.
Bangladesh mainly exports agricultural and engineering products, footwear, frozen foods, plastic goods, jute and jute goods to Oman while it imports rubber, mineral products, chemical and textiles.
Cooperation in agriculture and fisheries is another prospective area where both the parties are working together. Another is the energy sector. Bangladesh is seeking investment from Middle Eastern countries in different sectors. Oman has a lot of cash and is looking for good investment destinations. So if Bangladesh provides a favorable regime for Middle Eastern investment, it will ultimately help the country to create more employment opportunities and to grow more.
The United States is currently facing sluggish growth while the Euro zone is reeling under a debt crisis. These two are the biggest destinations of Bangladesh’s export items and also the country gets most of its foreign investment from these regions. Due to the bad conditions in those countries, Bangladesh’s export growth is slowing down while foreign investment is drying up. In this backdrop, the future for Bangladesh is the Middle East.
Following the demonetization, mills want the working capital limit to be enhanced by 50 per cent. Stocks have started piling up across the value chain of the industry and textile units say they are not in a position to collect any receivables. The result is that the cash flow of the textile industry has been seriously affected.
The industry assumes it would take at least six months to reach normalcy but in the meantime cotton prices have increased by around Rs 2,000 per candy as arrivals in the market came to a grinding halt during the first ten days after demonetisation.
The spinning sector was already reeling under a recession due to a sharp fall in yarn exports and now the withdrawal of around 86 per cent of the currency in circulation has led to a severe shortage of funds for regular operations such as purchasing the raw material, that is, cotton, and the sale of finished goods.
Textile retail showrooms and shops across the nation have been hit by the cash-crunch and low sales as customers have been saddled with Rs 2000 notes which they don’t know what to do with.
A two month moratorium has been granted for loans up to a crore, but the textile industry says it needs at least a year’s moratorium for repayment of the dues and interest.
The Annual Conference (2016) of the International Textile Manufacturers Federation (ITMF) was held in Jaipur recently. The Committee of Management of the Federation unanimously elected Kenya-based Jaswinder Bedi as the new President of the Federation. He would hold office for the next two years. Furthermore, the committee elected Kihak Sung (Korea Rep.) and Ruizhe SUN (China P R) as vice presidents and reconfirmed Peter Gnagi (Switzerland) as ITMF treasurer.
The committee also elected members of the non-executive board. The names are: Raffael Cervone (Brazil), John Cheh (Hong Kong, China), Muharrem Kayhan (Turkey), Andrew Macdonald (Brazil), Heinz Michel (Switzerland), B K Patodia (India), K V Srinivasan (India), Bassem Sultan (Egypt) and Loek de Vries (Netherlands). In recognition of his outstanding contribution to the Federation during his six years service as ITMF Vice President (2010-14) and ITMF President (2014-16) Tiankai WANG (China PR) was appointed Honorary Life Member of the Federation.
The European Union may sign the textile protocol with Uzbekistan after all. Five years ago it had decided not to sign because Uzbekistan was known to use child labor and forced adult labor in its textile production units.
But in 2013, Uzbekistan started permitting the ILO to monitor the annual harvest. Owing to boycott from major clothing manufacturers, Uzbekistan drastically cut down on child labor. So the ILO came to the conclusion that the use of children in cotton harvest had become rare and sporadic. In effect, it said, the practice of forced labor and child labor was effectively in the process of being eradicated.
However, human rights groups insist that forced labor has taken the place of child labor and continues to be used on a massive, nationwide scale in Uzbekistan. They say, independent monitors are harassed and not being allowed to examine the situation as closely as they would like to. They point to the fact that no concrete reforms have been implemented and no substantial results are visible. So the groups say the protocol should be signed only after thought and care. The issue will be put to vote in December.
"Ever since Target found that a supplier was selling its bed sheets that falsely had 100 per cent Egyptian cotton, an industry group in Egypt has stiffened its standards and doubled down on DNA-based certification. The retailer dropped a contract with Welspun India after it became clear that the sheets Target was getting were not 100 per cent Egyptian cotton as advertised. And the retailer was just the first: Walmart dropped the sheets soon after which Bed Bath & Beyond followed in the same trajectory. Other firms also have been quick to audit the textile giant."
Ever since Target found that a supplier was selling its bed sheets that falsely had 100 per cent Egyptian cotton, an industry group in Egypt has stiffened its standards and doubled down on DNA-based certification. The retailer dropped a contract with Welspun India after it became clear that the sheets Target was getting were not 100 per cent Egyptian cotton as advertised. And the retailer was just the first: Walmart dropped the sheets soon after which Bed Bath & Beyond followed in the same trajectory. Other firms also have been quick to audit the textile giant.
This move has shaken up the bedding industry and threatened the future of Welspun. It also put attention on Egyptian cotton in general for which demand has grown even as cotton production from the country has shrunk significantly. The Cotton Egypt Association (CEA), the group that certifies fabrics as 100 per cent Egyptian, has long tested producers’ fibers. The process of certification, however, has faced challenges, because of size limitations.
Announced earlier this year, CEA’s latest strategy is to conduct DNA-based testing to test more effectively. The results are telling in ways that Currently, Welspun is heavily depending on CEA as it wants to repair its brand image at the earliest. Among other steps, Welspun is using CEA’s DNA-based certification process to confirm the integrity of its sheets as well as moving its production of such cotton in-house from procuring cotton to the finished product, The company has maintained its Gold Seal certification from CEA.
With a new focus on healthcare textiles, innovative yarn and its applications, the 18th YiwuTex will be held at Yiwu International Expo Centre, Jinhua, China from June 13-15, 2017. The show will feature three thematic zones: Functional Knitting Machinery Zone, Smart Apparel Machinery Zone and Digital Printing Machinery Zone. Visitors to the event can join such a wonderful gathering with top-notch industry players and textile machineries.
China’s textile and garment exports in 2015 saw a 4.9 per cent dip compared to the same period last year, while profits in sportswear increased over 20 per cent mainly due to sales of functional wear. The figure indicates that high-tech and value-add apparel products have become the market heat and the key for traditional textile industry to get out of its dilemma.
Embracing new market development, YiwuTex 2017 will focus on healthy and functional textile products. The introduction of latest technology in the show could revitalise the production chain of the textile industry and strengthen the enterprises by adding values to their products.
Based on rapid growth of industry, YiwuTex 2017 will launch an apparel ERP system and e-commerce platform zone that will showcase the latest automatic machinery and intelligent management technology; promote online to offline production data management; encourage the traditional production line innovation and provide optimized solutions for textile and garment enterprises. One of the show highlights of last year’s show was its Digital Printing Machinery Zone which drew much attention from the buyers.
"With China increasingly looking to serve its domestic market and facing high labour costs, India is at certain advantage in gaining global lead in textile exports. With a huge demographic dividend and lower wage rates compared to exporters in Southeast Asia and China, India has many positives. The Government’s ‘Make in India’ programme also aims to propel India’s growth as the leading exporter of the world."
With China increasingly looking to serve its domestic market and facing high labour costs, India is at certain advantage in gaining global lead in textile exports. With a huge demographic dividend and lower wage rates compared to exporters in Southeast Asia and China, India has many positives. The Government’s ‘Make in India’ programme also aims to propel India’s growth as the leading exporter of the world.
A recently released World Bank report, ‘South Asia’s Turn: Policies to Boost Competitiveness has and Create the New Export Power House’, highlighted the potential of South Asia to become the next factory of the world. The report cites increasing labour costs in China as the key factor which could lead to this transition. Increasing labour costs have been the major determinant of location of exporting industries historically. It was Japan which first challenged manufacturing in the West through low labour costs, only to lose to Asian tigers later, which subsequently lost out to China. However, it needs to be kept in mind that just low labour costs do not guarantee export success. Despite having higher wages, China has a much bigger share in the global apparel industry than south Asian countries.
Among other recommendations, the report also underlines the importance of integration into Global Value Chains (GVCs) for expanding manufacturing in south Asia. While the emphasis on GVCs is not new, the renewed thrust seems to be in the backdrop of trade facilitation agreement (TFA), which was arrived upon in the World Trade Organisation’s ministerial conference in Bali in 2013. TFA is aimed at harmonising trade regulations such as custom clearance procedures, by drastically improving trade infrastructure in third world countries. The report identifies timely access to key imported inputs as an important factor for sectors such as apparel and electronics, something which can greatly improve due to TFA.
Boosting competitiveness
The role of GVCs in boosting a country’s export competitiveness is a widely debated topic in economics. Organisations such as the WTO, OECD (Organisation for Economic Co-operation and Development) and the World Bank have been arguing that GVCs can help a country boost its manufacturing exports, provided right kinds of reforms accompany them. Such policy prescriptions have focussed more on labour market reforms and improvement in ease of business rankings, and remained critical of attempts to force domestic content requirements on players involved in GVCs. On the other hand, many developing countries have lamented the fact that thanks to GVCs, they have become stuck at low value addition activities without much income generation.
Impact of GVC integration
After the opening up of the economy in 1991, Indian manufacturing has become more integrated with the rest of the world. This has been accompanied by an increasing share of manufacturing exports in India’s total export basket as well. However, it is also a fact that manufacturing’s share in India’s GDP has been more or less stagnant in the Indian economy. India has been witnessing a decline in its value added manufacturing in the post-reform period, resulting from a large increase in imports of processed industrial supplies, which suggests increasing outsourcing of content requirements.
Although increasing integration to the global economy has benefitted a section of Indian manufacturing, India has ended up importing more from the rest of the world rather than exporting to it. India is not the only economy, which is facing such problems. In 2014, Indonesia banned imports of raw materials, to increase domestic sourcing of its manufacturing activity. Such policies carry the twin risk of alienating investors as well as promoting inefficiencies within the economy in the name of domestic sourcing.
Working towards the goal
There is a need to improve investment climate in the South Asian regions vis-à-vis other manufacturing centres in the world. Although India fares much better than its South Asian peers, it is much behind countries such as China. A tepid global economy, trade growth environment and rising protectionist politics in the advanced capitalist world is likely to make export led growth more difficult in the days to come. Unless India undertakes holistic reforms, which equip its manufacturing sector to fully exploit the advantages of integration to the global economy, it is unlikely to realise the dreams of the becoming the next global factory.
