FW
Apparel imports from Vietnam to the US increased fastest compared to its counterparts in 2014, reveals data released by the Commerce Department’s Office of Textiles and Apparel (OTEXA). For the entire year, the country gained the greatest share of US apparel imports, owing to currency fluctuations in China, which saw its dollar share of US apparel imports fall from over 37 percent in 2013 to 36 percent in 2014.
The value of total apparel imports increased 2.5 per cent in 2014 to $81.8 billion. Total unit volume, measured on a sq. mt. equivalent (SME) basis, increased by 3.3 percent, driving down the average cost per SME by 0.7 percent. Rise in apparel exports from Vietnam was clearly led by China’s loss last year due to rapidly rising labour costs that made many US apparel brands move sourcing requirements to lower cost countries.
China suffered the biggest share loss so far in 2014, dropping from 37.3 percent to 36.4 percent of total US apparel imports. Total apparel imports from China were $29.8 billion in 2014. Imports from China fell marginally in December to $2 billion from $2.1 billion in December 2013. November units from China (on an SME basis) were up slightly, to 773 SME, and rose 4 percent in the full-year period, to 10.8 billion.
Vietnam’s share of total US apparel imports grew from 10.1 percent of the total in 2013 to 11.3 percent in 2014, a 1.2 percentage point gain. Between 2012 and 2013, the country gained only .9 percentage points of share, and the year before that, .7 percentage points. In 2014, U.S. apparel imports from Vietnam totaled a record $9.2 billion, up 14 percent from 2013 and SMEs from Vietnam rose by 13.2 percent.
Otexa.ita.doc.gov
Global synthetic fiber prices decreased by 19 percent in January, marking the 16th year-over-year decline and sixth month of increasing drop in rate, says recent data from consulting firm PCI Fibres. Key reasons for the decline were: crude oil prices, which fell another 8 per cent in January, higher-than-normal fiber and fabric inventories, and slowing demand for fibers in China ahead of the New Year holiday.
In Asia, the world’s largest fiber-producing region, synthetic fiber prices fell by 21.7 per cent in the month, their biggest decline in more than two-and-a-half years. In China, polyester prices continued to fall in the first two weeks of the month, extending December’s trend, due to the sharp drop in crude oil prices and continued weak demand for fiber, but reportedly bottomed out mid-month and remained stable through the end of January as mills began to prepare for the lunar New Year break.
Staple prices fell to five-year low, ending January at prices more than 10 per cent lower than the prior month-end, and nearly 22 per cent lower for the year and filament prices dropped by 13 percent in January. Nylon (type 6) prices in China fell by more than 10 per cent in the month, following a sharp decline in raw materials prices. Caprolactam prices are reportedly more than 30 percent lower than this time next year.
Asian synthetic fiber prices are more than 23 percent below the world average. The European synthetic fiber price index fell by more than 21 percent, its biggest drop in nearly two and a half years, though European synthetic prices remained almost 20 percent above the world average. The US index fell by 13 percent, putting the US synthetic fiber prices index almost 60 percent above the global average.
www.thepcigroup.com
Ahead of the much-talked about Japan India Industry Promotion Association’s (JIIPA) three-day day long ‘India Trends Fair - 2015’ in Tokyo to be held from July 15 to 17, Vijay Mathur, Additional Secretary General of Apparel Export Promotion Council (AEPC), says “I think Japan is serious about India. They feel India has become an important partner but the results can be seen only after a decade or so. By that time, India may be a significant supplier to Japan. Right now, our share in Japanese garment imports is 0.9 per cent.”
He further added that it will take time to make Japanese turn away from China. Japan and China have strong apparel relations. Japan has invested in China over the last 40 years and it’s only now that Japan has started coming to India. Popular Japanese brand like Uniqlo is interested in opening stores in India and many more are willing to follow. “I feel we should grow since we have a FTA in place but it will take time as Japanese take time to decide on business,” he points out.
Apparel market in Asia
Giving an insight on the Asian apparel market, Mathur says, “Manufacturers in Cambodia and Bangladesh can give brands a better price compared to India. Our inflation rate is at six percent, so our cost of production goes up by that much. But the buyer is not ready to increase prices. So each year we become uncompetitive. We can overcome this by increasing productivity and adding services to sales. We can get a better price through our designs, by satisfying buyers, quick delivery. For buyers the bottomline is the price,”
Stressing on the need to increase production capacity, Mathru says while the entire textile value chain in India works in three shifts. But garment manufacturing has just one and a half shift. “We work for 10 hours but there is no night shift. Adding another shift will mean 40 per cent more production. We don’t have to add capacity. It will take away the problem of overtime since everyone will work for eight hours only,” Mathur suggested.
“Make in India is already a part of the garment industry. We are manufacturing in India. We are the largest employment provider after agriculture. We enhance skills through ATDCs and AIMs. We have 200 ATDCs. It won’t be tough for us to acquire a significant share of the Japanese market,” Mathur sums up.
The apparel industry that accounts for 80 per cent of Bangladesh’s total exports is going through a critical phase as the political crisis deepening in the country. Losses are piling up every day due to a decline in orders from international retailers, order cancellation, soaring air freight charges, a production shortfall and higher transportation costs. In this backdrop, the apparel exporters’ platform, Bangladesh Garment Manufacturers and Exporters Association, called an extraordinary general meeting on Wednesday to discuss a way out.
The apparel and textile sector leaders have already held rallies and submitted a memoranda to Prime Minister Sheikh Hasina and BNP Chairperson Khaleda Zia demanding to end the crisis. Atiqul Islam, BGMEA President, is reported to have said that they were not worried about current losses but about the future of the entire garment industry. If the situation does not improve soon, the whole economy will suffer as almost all sectors, like banking, insurance, transportation and port operations, are largely associated with the apparel sector, he said, adding work orders may shift to India, Vietnam or Pakistan due to prolonged political conflict.
The BGMEA has also invited leaders of Bangladesh Textile Mills Association, Bangladesh Knitwear Manufacturers and Exporters Association and some transport sectors to attend Wednesday’s meeting. Representatives of 65 international retailers and brands like Walmart, Gap, JC Penney, C&A, Tesco, G-Star, H&M, Target, Inditex and Carrefour have demanded an immediate solution to the crisis at the regular buyers' forum meeting on February 2 in Dhaka. They said the ongoing blockade is interrupting their supply chain.
Rieter has shown double-digit sales growth for the year 2014. Rieter, a Switzerland-based textile machinery manufacturer saw sales increased by a 11 per cent. This means a high level of capacity utilization until well into the 2015 financial year.
The company took advantage of a positive trend in flourishing countries and significantly increased sales compared to 2013, thereby benefiting from the significant strategic investments in China and India in previous years. Today, Rieter is able to offer products at the highest quality level from all its locations. A large number of orders came from Asian countries, where spinning mill capacities were built up to supply the Chinese textile markets and from Turkey and the US. The Indian market is asking for all kind of products, particularly for ring and compact yarns. The decline in the second half of the year was mainly attributed to lower orders from Turkey and China, which affected Rieter’s machinery business more than its components business.
In contrast, sales in China and Africa decreased compared to the previous year. Rieter achieved an EBIT margin of seven per cent and net profit of about 4.5 per cent of sales in the 2014 financial year. It expects increasing pricing pressure on sales invoiced in Swiss francs in the 2015 financial year.
www.rieter.com/
Imports of denim fabrics into the US have been constantly falling over the last two decades. There was a boost in imports when premium denim boom happened in the mid 2000s . But that peaked out in the 2005-07 period. Now there is hardly any strong reason for imports to pick up for the US unless production of local denim fabrics falls further.
Imported quantities have decreased by about 20 per cent. However, there has also been an increase in average price of the imported fabrics at about 8 per cent despite decreased quantities. This is also indicative that imports of premium denim fabrics seem to be sustaining better over lower priced denims.
Denim fabric imports fell by about 18 per cent in the first four months of 2014 compared to a similar period in 2013. Quantities of denim fabrics imported from around the world reduced from almost all major exporting countries including China, Mexico, Japan, Taiwan. China remains the highest exporter to the US for its fabrics. Mexico, Japan, Taiwan and Italy come next in the rankings and export some quantities to the US. These fabrics are mainly used for premium denim products made in the US. But as has been seen imports have been falling continuously for a few years.
Spinners worldwide are concerned over cotton's quality as the market is likely to be flooded with some cotton which has been stored in warehouses for a long period. They might be eagerly anticipating a period of lower prices for their raw material. This was discussed at the recent ITMF Conference in Beijing and the ICAC Plenary Meeting in Thessaloniki, with experts warning that stockpiled cotton can degrade over time. Quality problems are inevitable; color loss (‘yellowing’) and deterioration of spinning quality are the biggest concerns. Accurate testing with USTER® HVI 1000 is the only sure way to check that cotton supplies are fit for purpose. Against a background of inventory levels which have risen over recent years, prices on world cotton markets look set to fall. It is estimated that more than 100 million bales are in warehouses around the world – a stockpile which would supply the entire textile industry for a whole year. China, the largest single cotton-consuming country, alone has more than half of this total inventory (62 million bales), which would be enough for two years of domestic textile needs.
Long storage affects quality
It is a known fact that raw cotton quality declines over time, even when stored in good conditions. The big issue is loss of color, often referred to as ‘yellowing’. Cotton may come into the warehouse with excellent quality ratings but over time color degradation will take its toll on quality levels stored for long periods. Hence, special attention is required to be paid to cotton sourced from areas with enormous production but poor storage options.
In case Chinese spinners are aware that this cotton may have been in the warehouse for as long as three years, they might baulk at the potential quality risks it carries. In those circumstances, some of these supplies might be unloaded to world markets – spreading the risks to spinners everywhere.
In cotton buying and selling negotiations, color grade is a key driver. That is because a number of serious fabric faults can be traced back to color grading issues. It is essential that spinners know exactly the correct color data for every cotton purchase, so they can ensure that mixing of the bales at the start of the spinning process is appropriate for the yarn quality being produced.
Extensive testing of color degradation of cotton under various environmental conditions has resulted in clear evidence of the seriousness of the problem. If cotton is stored in a cool and dry warehouse, an ideal storage environment, for more than a year it will start to degrade. If conditions are unsuitable – a hot and humid warehouse, for example – the ‘yellowing’ will occur after only six weeks.
Awareness among spinners
Most spinners are aware of the risk of color grade loss with cotton that has been in long-term storage. It may be impossible for them to check on the detailed warehousing environment of cotton purchase. The defect known as barré is an unwanted striping effect in woven or knitted fabric, which becomes visible only during fabric manufacture or even at dyeing – the worst possible times to detect off-quality. The barré effect can be caused directly by inaccurate color grade data, often taken from outdated bale tags.
Re-testing raw cotton samples before making a purchase decision is the solution for spinners is effective cotton classing. For this, the USTER® HVI 1000 is the globally-accepted instrument, used to set cotton calibration standards by the world’s leading cotton authorities, including USDA in the USA, CFIB in China and many other national bodies. The HVI provides fast and accurate data on color grade levels, so that spinners can compare quality data from bale tags with their own test results. Not only does it give them security that their cotton purchase is good value, it also helps to determine the optimum mix of qualities for the start of the spinning process.
hailand should quickly negotiate and conclude a Free Trade Area (FTA) agreement with Europe in the absence of a Generalized System of Preferences offered by the European Union, says Suttinee Poopaka, Executive Director, Thailand Textile Institute. Suttinee feels Thailand should not only to conclude an FTA agreement with Europe as soon as possible but boost its production competitiveness too in its textiles and garments.
Due to competitiveness, many Thai manufacturers have now relocated their production units to neighboring countries like Cambodia, which still enjoys GSP privileges. It is pertinent to note that the European Union has cut GSP privileges to several countries, including Thailand, since January 1 after the World Bank redefined them as upper-middle income countries from 2011 to 2013. Due to which Thailand has to pay high duty as much as 12 per cent for products exported to the EU, impacting the country’s competitiveness with countries such as Indonesia, Vietnam, Cambodia, Laos and Myanmar which still enjoy GSP privileges.
Announcing the Textile Policy for 2014-19, the Pakistan government has put forward its vision to double textiles exports from the current $13 billion to $26 billion besides creation of three million new jobs. The implementation of Textile Policy requires a financial package of around Rs 65 billion in five years. The finance division will provide Rs 40.6 billion while the rest of over Rs 23 billion will be arranged through Planning Commission and Export Development Fund.
The mark-up rate for Export Refinance Scheme of State Bank of Pakistan was reduced from 9.4 to 7.5 per cent with effect from July 1, 2014 while discount on bank interest would be given at 2 per cent as compared to the existing rate. Textile industry in the value added sector would be provided Long Term Financing Facility (LTFF) for up-gradation of technology by SBP at 9 per cent interest for 3 to 10 years.
Textile sector enjoyed duty free import of machinery under textiles Policy 2009-14. This facility (SRO 809) has been extended for another two years. Technology Up-gradation Fund for SMEs, will be extended for the policy period as well. A committee has been constituted regarding EDF which would resolve the issue in one month where textile ministry is likely to get its due share.
The Textiles Policy (2014-19) is based on actionable plans to make textile sector more competitive, robust, goal-oriented and sustainable. It envisages vital measure like budgetary support to the textile sector, enabling policy environment, sectoral strategic plan, marketing initiatives, revitalising projects and capacity building of the ministry and stakeholders, with a view to improving productivity and competitiveness of the entire textile value chain and to achieving the following goals during the next five years.
Under the policy value addition would be doubled from $1billion per million bales to $2 billion; facilitating an additional investment of $5 billion in machinery and technology for the machinery import. According to the policy, clusters would be systematically developed and existing clusters will be strengthened, vocational training of workers, 0.12 million internships and different programs for enhancement of skills and higher per capita productivity would be introduced.
UBM Asia has forayed into the digital textile printing market with the acquisition of ‘China (Shanghai) International Printing Industry Expo (CSTPF)’ from SUNEXPO. CSTPF launched in 2009, has over the last six years evolved into an important gathering for the digital textile printing sector and related industry professionals.
The demand for revolutionary printing technology from leather, glass, ceramic, carpet and other downstream sectors and the continuous innovation in digital printing technology have led to imports of advanced equipment and technology from abroad and the expansion of the overseas market for printed products the next development targets for the digital textile printing industry in China. Having stronghold in China, India and Malaysia as the biggest tradeshow organizer, the acquisition of CSTPF has led UBM Asia into a new sector of immense potential. The UBM Asia and CSTPF teams will work in close collaboration to build the most influential and authoritative international exhibition in the field of digital textile printing.
Gong Changming, General Manager of CSTPF will continue to lead the CSTPF staff and the team will move into the UBM China Shanghai office. The next CSTPF will be held at the Shanghai New International Expo Center, China from April 14-16, 2015.
