FW
After a long struggle, India has succeeded in getting the subsidies on cotton in developed countries eliminated. This will provide a level-playing field for Indian cotton producers. Developed countries have committed themselves to the elimination of subsidies. Apart from this, there will be no more dumping of subsidised cotton into India.
This has been a long-pending demand of Indian farmers and their persistent pressure has finally paid off. Cotton is a very important crop and the very high level of subsidies in developed countries has been a cause of worry for developing countries. Subsidies provided in these countries adversely affect cotton growers in the poorest of the countries. Export subsidies can still be used by WTO members, but only where they used them during the base period (1986-1988).
As India did not have any export subsidies during the base period, it is not entitled to any export subsidies except subsidies aimed at reducing the cost of marketing including internal and external transport as well as handling and processing costs provided that these are not applied in a manner that would circumvent export subsidy reduction commitments. India is not a major user of export subsidies and gave no export subsidy for cotton between 2006-07 and 2009-10.
"Sri Lanka’s garment exporters have found a niche thanks to their design-to-deliver supply chain. But the industry could be embroiled in myriad challenges from the fast-changing global trade environment. With the US-led Trans-Pacific Partnership (TPP) trade pact - of which Sri Lanka is not a signatory - on the horizon, competition from TPP signatories such as Vietnam could deal a blow to the South Asian nation’s apparel exports. The industry currently employs half a million Sri Lankans and provides 44 per cent of all manufactured goods exported by the country."
Since 2010, when the European Commission revoked Sri Lanka’s GSP+ status as a penalty for alleged human rights abuses committed at the end of the country’s civil war, the industry has suffered. Even now, heavy investment in a value-added supply chain that enables prompt turnaround has kept the industry going in the face of unfriendly trade treatment.
TPP a challenge for Sri Lanka Sri Lanka’s garment exporters have found a niche thanks to their design-to-deliver supply chain. But the industry could be embroiled in myriad challenges from the fast-changing global trade environment. With the US-led Trans-Pacific Partnership (TPP) trade pact - of which Sri Lanka is not a signatory - on the horizon, competition from TPP signatories such as Vietnam could deal a blow to the South Asian nation’s apparel exports. The industry currently employs half a million Sri Lankans and provides 44 per cent of all manufactured goods exported by the country.
Interestingly, it wouldn’t be the first time the country is up against trade practices that are not in its favor. Since 2010, when the European Commission revoked Sri Lanka ‘s Generalized System of Preferences Plus (GSP+) status, the industry suffered from the loss of preferential tax treatment. Still, heavy investment in a value-added supply chain that enables prompt turnaround has kept the industry going in the face of unfriendly trade treatment.
Design-to-delivery
In Sri Lanka, design-to-delivery time used to be many months till some time back. Now, a chase order for something that’s selling in the US, the country could produce it and ship it across to the stores in 14 days. This is possible as the supply chain is closer to needle point, points out Sharad Amalean, Deputy Chairman, Joint Apparel Association Forum. A design-to-delivery solution means that the design, manufacture and logistics such as delivery are all carried out in Sri Lanka. The country exports about $5 billion worth of apparel a year. Despite this innovation, growth in exports to the European Union -- Sri Lanka’s biggest garment export market -- fell from 13-14 per cent from 2005-2010 to about 7 per cent a year after the GSP+ status was revoked, according to a report by consultancy Oxford Business Group. But Ashroff Omar, Group Chief Executive of Brandix, Sri Lanka’s largest apparel exporter, is hopeful of another about-turn. The exporter shipped $750 million worth of goods to its clients last year.
Omar believes Sri Lanka will regain duty free status by the end of this year, so he is bullish about the European market. Even so, the TPP will deal a blow. Competition with Vietnam, Sri Lanka’s closest garment-making rival, will be particularly stiff. But Sri Lanka may be able to buy some time while hiccups in the TPP’s implementation are ironed out. Sri Lankans believe if it comes, the earliest would be 2018. And there’s a 10-year phase-out period to remove duties on most apparel products.
Banking on the future
Moreover, during this decade-long run-up, costs in Vietnam will likely go up. Omar feels Vietnam does not have unlimited population. However, the trade deal may still impact Sri Lanka’s share of the apparel export pie after all, China grabbed most of Mexico’s share of the global trade when the Multi-Fiber Arrangement, a deal that set quotas on the amount of textiles and clothing developing countries could export to developed countries, expired in 2004. Today, the world’s second-largest economy controls almost 40 per cent of the global $400 billion market.
So, along with expectations Vietnam’s cost base will rise while the TPP is phased in, Sri Lanka’s strategy is to specialize, by focusing on vertically-integrated design-to-delivery solutions not just in the country but also with partners in China and Hong Kong. Exporters like Brandix are also teaming up with industry players in China and Hong Kong to improve overall supply chain management.
Sri Lanka invested in printing, in laundry, in processing - everything the customer needs. Sri Lanka could also reposition itself as a hub for supplier countries in the region, Omar said, noting that neighbors India, Bangladesh and Pakistan were large producers of cotton, yarns and textiles. Sri Lanka’s reputation as a no-sweatshop, ethical garment center was another advantage, Amalean, CEO of MAS Holdings, a garment maker.
High-end brands including Victoria Secrets, Nike, Gap, Marks & Spencer and Ralph Lauren are few who manufacture in Sri Lanka in part due to this reason. While productivity and speed are Sri Lanka’s hallmarks in the current fast fashion landscape, its garment makers are acutely aware that changes are afoot.
A World Bank and OEVD research says GVC-driven policies have been shown to drive productivity growth, create jobs and improve living standards. Under its new 10-year ASEAN Economic Community (AEC) roadmap, ASEAN is on the lookout for ways to accelerate trade facilitation and eliminate trade barriers by 2025. Extensive research has demonstrated the vital role of global value chains (GVCs) in enhancing economic integration and liberalising trade.
GVCs are essentially the practice of vertical integration in which the various stages of a production process are located across multiple countries to minimise marginal costs. This process is dependent on efficient and inexpensive transportation of raw materials and intermediate inputs. From a GVC perspective, this also means that imports are just as important as exports and that a product may undertake multiple ‘value-adding’ journeys across borders before reaching the market. This reality naturally rewards countries with open borders. As firms generally want to maximise their cost advantages, GVCs do not work well with discriminatory trade policies and non-tariff barriers.
ASEAN’s trade policymakers need to shift away from conventional product or sector-specific approaches and move towards GVC-oriented policies, which measure success in terms of increased trade efficiency and reduced transaction costs. While ASEAN deserves credit for discarding sector-specific approaches from the AEC Blueprint 2015, it can take even greater steps towards embracing GVCs as its core policy focus. Complementary policies’ right package can help ASEAN maximise their participation in GVCs, but implementing them in a concerted manner requires extensive cooperation among governments.
ASEAN also needs to operationalise the ASEAN Single Window, which would allow firms to submit all required import, export and transit documentation via a single electronic gateway. At the same time, ASEAN should finalise and rollout the regional self-certification scheme that would enable exporters to self-certify the compliance of their exports with ATIGA’s rules of origin. Implementation of both these items would mark a major step towards reducing customs delays and would facilitate the movement of goods within ASEAN.
Elimination of unnecessary restrictions on product standards and certification requirements is another key step forward. While human health and safety standards should not be overlooked, overly burdensome procedural requirements and domestic standards are unnecessary obstacles to participation in GVCs. ASEAN needs to expedite its efforts towards harmonising ASEAN standards with international standards and developing more mutual recognition agreements, which currently only cover 11 priority integration sectors.
Such measures often reflect a knee-jerk reaction to short-term adjustment costs of ASEAN economic integration. And while policymakers can defend these measures as securing certain segments of the economy, they put the overall competitiveness of their country and the region at risk. Policymakers should also avoid becoming overly fixated on the progress of one element of enabling participation in GVCs. Instead they should consider how pursuing each element of the AEC agenda is supporting the big GVC picture. In this regard, the focus on GVCs under the AEC Blueprint 2025 warrants more attention because it could fundamentally change ASEAN’s thinking around trade policy.
All ASEAN member states must jointly eliminate distortions to trade to enable the ASEAN region to shine as a participant in GVCs. ASEAN can also leverage off existing regional value chains as a way to enhance GVC participation. GVCs provide ASEAN with the opportunity to take on a more ambitious policy agenda and become a more integral part of global trade. By committing to GVCs, ASEAN would send a strong signal to the international community that it is open for business.
A World Bank report suggested that apparel export industry could be an ideal sector where India's female workforce can find more jobs. This was close on the heels of a United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) survey which highlighted the linkage between higher percentage of women workforce and high economic growth.
According to the World Bank report ‘The Stitches to Riches? Apparel Employment, Trade and Economic Development’, export-oriented apparel production in India and other South Asian countries has the potential to create more and better jobs, especially for female workforce.
Women are expected to benefit the most as their share in the total apparel employment is much higher than their share in other industries. A one per cent increase in expected wages in the textiles and apparel industry could raise the probability of women entering the labor force by 18.9 per cent, says the report. South Asia’s top four apparel producers - Bangladesh, India, Pakistan, and Sri Lanka - have made big investments in world apparel trade and account for 12 per cent of global apparel exports. India also has a more diversified export structure and has a well-developed fiber (cotton), textile and apparel manufacturing base.
Given the strong enthusiasm within Chinese market seen at the Spring Edition of Intertextile Shanghai Apparel Fabrics, Messe Frankfurt’s next Intertextile fair – Intertextile Pavilion at the Shenzhen International Trade Fair for Apparel Fabrics and Accessories 2016 – will provide international apparel fabrics and accessories industry with further opportunities to benefit from this time in South China.
Wendy Wen, Senior General Manager of Messe Frankfurt (HK) explained that Guangdong province’s garment production output has been growing rapidly over the last year. In 2015, a total of 6.5 billion units of clothing were produced there, representing a 2.5 per cent growth compared to 2014. Because of this, the demand for apparel fabrics and accessories in the South China market has been steadily increasing.
Exhibitor profile shows that Intertextile Pavilion Shenzhen is particularly popular with Asian suppliers. As of this month, not only have the Taiwan Pavilion, organised by the Taiwan Textile Federation (TTF), and the Korea Pavilion, organised by the Korea Fashion Textile Association (KFTA) and Daegu Gyeongbuk Textile Industries Association (DGIA), confirmed their return but also a debut Japan Zone is also set to be formed by a number of leading Japanese suppliers. A range of high-quality cotton and man-made fabrics for ladieswear as well as causal wear with quick delivery service will be featured in the zone.
Held from July 7-9, 2016 at the Shenzhen Convention & Exhibition Center across 30,000 sq. mt., nearly 700 exhibitors will showcase an array of high-quality fabrics.
Robert Fraley, Chief Technology Officer at biotechnology giant Monsanto, believes communicating science and training next-generation STEM graduates are just as important as doing science. Texas Tech University, hosted a team of six Monsanto executives lead by Robert Fraley recently. Fraley, a much accomplished scientist with World Food Prize and US National Medal of Technology engaged the whole afternoon with researchers and students to talk about the importance of science, communicating science and training next generation workforce with science and technology education.
He emphasized the need for not only geneticists but also people who are trained in social sciences, statistics and data analytics, emphasizing the need for multidisciplinary knowledge in the future R & D industry. Fraley’s group was the first team in the world to put a gene into a plant that resulted in technologies such as Bollgard and Roundup Ready, which basically enhanced the yield of cotton in countries like India, which became the world number in cotton production last year. Nearly 25 per cent of Monsanto’s R&D budget is set aside for collaborations involving start-ups, academia and small businesses.
This March, Monsanto broke ground for a $140 million cottonseed production facility in Lubbock to be operational in summer 2017, will cater to the cotton seed requirement of the whole United States.
By expanding its selection of high-tech fabrics and bringing together, in a single venue, the Interfilière Lyon is consolidating its position. The show that is set to take place from July 9 to 11 at the Eurexpo Lyon, will offer three spaces, designed to offer visitors an opportunity to explore the variety of fabrics on display. These Include the Intimates General Forum, Momenti di Passione and the Innovation Forum.
This session at Interfilière will explore functionality, versatility and technical features for an ultra-modern look with a foothold in the future. Intimates and loungewear will be at the heart of the Forum for the Autumn-Winter 2017-’18 season. New York-based designer, Tina Wilson, has designed a Pop-Up store for Interfilière featuring loungewear and sleepwear inspired by Art Nouveau.
With the EURO 2016 being held in Paris, Interfilière and Mode City are revisiting their birthplace in Lyon for the duration of a summer, transforming Halls 5 and 6 with a sport-inspired show design. The graphic lines of race tracks, light wood panelling and vertical display offer visitors a clear and effective overview of products and trends.
Brugnoli, the leading Italy based producer of stretch knit jersey for swimwear, lingerie, fashion, sports and athleisure, is the Interfilière’s 2016 Designer of the Year in the Beachwear category. Meanwhile, the Momenti di Passione section of the event will be focus on the preview of Summer 2018 trends. This dedicated swimwear, sportswear and activewear space is designed to highlight new products and provide a forward-looking overview of these markets.
In 2005, Pakistan imposed an anti-dumping duty of up to 18 per cent on imported filament yarn from Thailand, Malaysia, Korea and Indonesia. At that time, 17 local yarn manufacturers were operating in the country. Since then the number of local manufacturers has come down to just four units.
In 2005, stakeholders agreed that in order to bring fabric trade under a legal umbrella, the maximum duty on fabric should not exceed 15 per cent. Hence the duty on yarn was fixed at seven per cent. But over the years the duty on yarn has escalated to 11 per cent without any reason, causing distortions and making raw material for the downstream industry more expensive. Yarn merchants say the yarn duty should be brought down to nine per cent to give benefits to the weaving and knitting industry.
Makers of polyester filament yarn in Pakistan can only meet 25 per cent of the downstream industry’s demand, while the remaining 75 per cent requirement is met through imported yarn. Yarn merchants say, the long term solution for dealing with this issue is to modernise and upgrade plants of local manufacturers besides enhancing their capacity to achieve economies of scale. They emphasise the regulatory duty is not the right solution.
A team from the University of Georgia College of Family and Consumer Sciences has won the first prize at maiden ‘Green and Sustainable Chemistry Challenge’ for their environmentally friendly textile dyeing technology using nanocellulosic fibers. The idea involves the production of nano-structured cellulose and the use of nano cellulose in a sustainable dyeing process that significantly reduces the amount of wastewater and toxic chemicals.
Conventional dyeing processes require large amounts of water and create toxic effluent, or waste, that can be costly to treat. The wastewater from dye facilities often contains synthetic dyes and toxic chemicals, which leave substantial ecological footprints.
The process involves using cellulose to dye materials. During a homogenisation process, cellulose, a readily available natural polymer found in the primary cell wall of green plants, is converted into a hydro gel material consisting of nano cellulose fibers.
Compared to cotton fibers, nano cellulose fibers have 70 times more surface area with high reactivity, allowing for the efficient uptake and attachment of dye molecules. Dyed nano cellulose hydro gels are then transferred to a textile by a conventional printing method.
By this method the amount of water and dye auxiliaries such as inorganic salt and alkali can be significantly reduced. Most textile dyeing industries are located in developing countries in which the regulations and societal concerns for environmental issues are loose compared to those in developed countries.
Although synthetic fibers are on the rise, quality cotton is still ahead, providing endurance that it offers. Cotton has long been one of the world’s most valuable commodities. It’s one of the 10 largest agricultural products worldwide, and the farming of cotton is a $23 billion global business. This year alone, 105.5 million bales of cotton is expected to be harvested across the world. Cotton production around the world has only increased being a staple fiber for the apparel industry and among the many countries that produce the fiber, here are the top eight producers from across the world. The ranking is based on statistics from Food and Agriculture Organization of the United Nations.
China
As the largest producer, China leads the pack with a total production of 6,298,989 tons. Not only is it the largest producer of cotton, as one of the largest apparel producer, China also consumes a lot of what it produces within the domestic market. Since there has been a decrease in production, from 2007 and 2008 when the country produced more than 7,000,000 tons of cotton, China needed to import large amounts of cotton to satisfy the domestic market’s needs. However, now the country has come up with a new Cotton Policy. China consumes about one-third of cotton’s annual global production, making it the most important market in the world, while sitting on 60 per cent of the world’s cotton stock. Some of the stockpiled Chinese cotton sold at auction last year at prices 26 percent less than what the government paid for it. A rumored sale of more stocks this summer will likely result in greater losses.
India
With a total production of 6,052,000 tons of cotton, India is one of the rare countries on the list that managed to keep a steady growth in cotton production through the years. Since the beginning of 2000s, cotton production in India has been increasing 5 to 10 per cent almost every year. It is estimated that with this pace India could easily emerge as world’s number one cotton producer. As per estimates, in 2015-16 global cotton production is projected at 99.8 million bales, 16 per cent below last season. India and China account for over half of the global crop, with India contributing 27 per cent and China supplying 24 per cent of the 2015-16 production, the US Department of Agriculture (USDA) has estimated.
United States
US is among the top cotton producer with total production of 2,842,000 tons. Cotton had a major influence on the history of the United States, with some history experts claiming that increased cotton demand led to the increase of slavery in the United States, causing American Civil War. It’s up to you to decide if there is a major connection. Regarding cotton production, the United States had their ups and downs over the past couple years, but they are still the world’s number one cotton exporter.
Pakistan
Producing 2,171,300 tons, Pakistan’s economy largely depends on the cotton industry and its related textile industry. The country had its biggest production jump of 40 per cent from 2003 to 2004. In the recent years, the production is rather steady and goes around 2,000,000 tonnes.
Brazil
Brazil was one of the largest suppliers of cotton in the world until the 1990s when government’s reforms decreased the production. Now, with a production of 1,127,675 tons, Brazil is trying to climb up the list of eight countries that produce the most cotton in the world by increasing its cotton production thanks to government support.
Uzbekistan Cotton is a major contributor to Uzbekistan’s economy due to the fact that production is mainly aimed towards exports. Uzbekistan produces 1,094,000 tons and is the world’s second largest exporter of cotton, supplying markets of China, Bangladesh, Korea, and Russia.
Australia
With a total production of 898,000 tons Australia has emerged as one of the largest cotton producing countries in the last few years. The country has rapidly increased its production in 2011 when they produced around 60 per cent more cotton than in 2010 and kept the production on a similar level in 2012 and 2013.
Turkey
Turkey productes 832,500 tons of cotton. Turkey has been increasing and decreasing its cotton production through the years. For example, they were producing close to 1,000,000 tons at the beginning of the 2000s but cut the production by almost 50 per cent in 2009. The main reasons for these ups and downs were increasing production costs and lower demand.
