FW
Bangladesh is pulling up its socks on quality check for RMG exports. Ispahani Summit Alliance Terminals a new company has set up a quality control center to ensure export of quality apparel products. The company will offer pick and pack services and work as an agent of foreign buyers. Buyers will pay the charges and fees against the services provided by the quality control company.
There are some 20 such companies in Bangladesh. The first quality control company, Koheni Negali, came up in 1998. Apparel exporters, however, fear there would be hidden costs that buyers would pass on to exporters. They also claim that the lead time of exports will be reduced and cost of export products would go up following the latest decision. They fear disputes may arise with foreign buyers over the issue of a private quality control center and affect the export trade.
The entire issue of a private quality control mechanism for export of apparels may be reviewed soon to make it more exporter-friendly. Buyers sometimes are wary of sending foreign quality control experts due to the political turmoil and security reasons. Currently quality control representatives of foreign buyers check quality of products inside factories and hand those over for shipments after packing.
After the Indian government announced export incentives package under the latest foreign trade policy (FTP), the US, a major importer has accused India of providing incentives against the global trade rules. India, on its part has defended itself saying that it has three more years to remove all subsidies, while a number of schemes in the textile sector have already been removed.
Criticising the new sops for the textiles sector at a recent meeting of the WTO’s committee on safeguards and countervailing measures in Geneva, the US representative said providing new incentives to the sector is a step backwards as India is supposed to remove all textile export subsidies this year. However, both the countries feel that their differences could be amicably sorted out through bilateral meetings.
The five-year FTP announced last month came up with a new incentive scheme for goods exports — the Merchandise Export Incentive Scheme — under which most textiles and garments sectors have been entitled to sops worth 2 per cent of their exports, which is lower than the 3 per cent or higher sops that the sector received under the older schemes.
According to WTO rules, India has become export competitive in the textile sector as it has already accounted for more than 3.25 per cent of share in world trade for two consecutive years and needs to phase out export subsidies to the sector in eight years. Whereas, the US says that India became competitive in 2007 and should thus remove all subsidies in 2015.
www.wto.org
Denim is breaking away from its casual image. Popularity has been bolstered in part by the advanced technologies of Japanese textile manufacturers, who have turned out such products as soft, flexible denim. Many denim textiles used by luxurious brands are products of Japanese textile manufacturers.
Designers are turning out sophisticated denim fashions that overturn the fabric’s casual image. Underlying this trend is the development of new technologies and materials. Gucci used bleached denim for a military-style jacket accentuated with gold buttons and wide-leg pants with turned-up bottoms, while Fendi presented a three-piece suit using denim. Michael Kors combined a short jacket with creased pants, both using navy denim in a fetching combination.
The denim used for luxury brand clothing is a result of advanced technologies, which have led to soft, flexible denim textiles. They are comfortable to wear and create a flattering silhouette. These technologies have also added subtle hues and delicate textures to denim, making it possible to meet the increasingly diverse requests of designers.
A new long dress by Bottega Veneta used a soft denim manufactured in Japan and had elegant drapes. A jacket by Etro used a thin denim that was decorated with geometric motifs. Denim is being used for shoes and bags, too. Some denim textiles are valuable for their rarity, as they can only be manufactured on old-fashioned weaving machinery.
After falling by almost 2 percent in March, cotton prices reversed direction and rose by more than 4 percent in April, according to the latest data from the Agriculture Department. The seven-market US average cotton spot price increase by 2.65 cents per pound, to $0.644.
However, it is unclear why prices rose, since estimates for supply and demand were nearly unchanged in the month, which means the increase might be short-lived. World cotton stocks are projected to increase 8.2 per cent to 110.1 million bales in the current season. Global cotton mill use for 2014-2015, on the other hand, is forecast to rise by less than 2 per cent above last year, to 111 million bales. Although China has started to release large portions of the cotton reserves it stockpiled during the buying program in place for several years to support prices, the expected increase in demand for cotton by Chinese mills has not yet materialized. The country is expected to import 7.3 million bales of cotton in the current crop year, a little over half last-year’s level.
India, the world’s second largest exporter after the US, is expected be on par with China in cotton production this season. India’s acreage plans for 2015/2016 will have significant impact on global production and prices given its limited warehousing capabilities. The USDA estimates that, in response to continuing low prices, global consumption will exceed production in the 2015/2016 season, leading to a reduction in global stocks for the first time in six years, though stocks will still remain near historic highs and most of the stock drawdown will occur in China.
www.usda.gov
Globe Textiles (India) (GTIPL) has inaugurated its new facility in the Ahmedabad Apparel SEZ. A media release says, “GTIPL’s production facility has specific areas allotted for stores, cutting, stitching, trims and packing besides administrative spaces.”
The plant has been so designed to use natural light and ventilation, thereby saving precious energy and conserving natural resources while catering exclusively to global clients. According to Bhavik Parikh, CEO of GTIPL, “This new facility will be a harbinger for growth, in our core business areas of denim jeans and home textiles. Our existing capacity of over 4,000 jeans will get augmented with this new SEZ facility which has been setup keeping in mind best manufacturing practices and adopting environmentally friendly processes.”
The plant will introduce a range of denim jeans in various fits, finishes and styles. “Recent market trends indicate that Indian exports of denim and readymade garments to the US have been promising, while those to the EU and other South East Asian markets too are picking up,” GTIPL added.
GTIPL is a leading textiles player from Ahmedabad, Gujarat, India and offers all types of yarns, fabrics in 100 per cent cotton and fabrics made from blends of cotton and manmade fibres.
www.globetextiles.net
The US apparel and footwear industry's outlook remains positive, as manufacturers will continue to benefit from lower input costs and the expansion of their direct-to-consumer businesses. The industry’s operating income is expected to grow 7 to 9 per cent on a constant currency basis for 2015.
But if foreign exchange rates remain near current levels earnings will be significantly pressured in 2016. As a result, growth may drop to 4 to 6 per cent next year. In contrast, if the US dollar weakens, the outlook will likely remain positive for some time.
The positive outlook for the US apparel and footwear industry is based on the belief that companies have hedged a meaningful portion of their 2015 inventory purchases against foreign currency translation risk, alleviating margin pressure in the near term. Pressures are likely to emerge next year, however, as the currency hedges companies took out at more favourable foreign exchange rates expire.
Mergers and acquisitions are set to remain part of the industry landscape over the next 12 to 18 months as large, global clothing makers continue their push into lifestyle brands. This year Germany sportswear group Adidas Group announced the sale of its Rockport brand while Coach has agreed to acquire luxury footwear retailer Stuart Weitzman.
Bangladesh's knit clothing exports to Japan are set to rise as Asia's economic powerhouse has relaxed origination rules. Japan has relaxed the preferential rules of origin under the Generalised System of Preferences (GSP) for apparel and clothing accessories, knitted or crocheted.
As per the new rule, knitwear exports from Bangladesh will enjoy GSP (zero tariffs) even if the knitwear product is made of imported fabrics. For further relaxation of GSP rules, local exporters will get more preference in the Japanese market. It will also help knitwear items to grab more market shares in that country.
In April 2011, Japan relaxed its GSP rules of origin from 2-stage to 1-stage for woven apparel and 3-stage to 2-stage for knitwear. Now Bangladesh can export any readymade garment item (woven or knit) free of duty to Japan, even though the fabric is local or imported.
Japan is one of the most important non-traditional markets for Bangladeshi apparel products. Some non-cotton knitted items have a good demand in the Japanese market which Bangladesh earlier could not export under the GSP scheme as such fabric is not locally produced.
The new relaxation will not have any negative impact on local textile millers. Rather exporters will be able to import the fabrics that are not locally produced and add more value.
The Better Cotton Initiative has become a member of the International Cotton Association (ICA). It now joins Supima, the Bangladesh Cotton Association, the Brazilian Association of Cotton Producers, the Spinners & Weavers Association of Korea, the Australian Cotton Shippers Association and Turkey’s IPUD, who have all signed up to ICA membership and safe trading.
As a part of ICA’s strategy to promote safe trading, it now has an affiliated association membership category, specifically aimed at like-minded cotton associations to help reinforce and support contract sanctity across all areas of the cotton supply chain.
BCI believes companies that respect contract sanctity are also more likely to respect their environmental and social commitments. Part of BCI’s mission is to assist in improving the well-being of the entire cotton industry and membership of the ICA is entirely consistent with this important objective.
Founded in 2009, BCI exists to make global cotton production better for the people who produce it, better for the environment it grows in and better for the sector’s future. BCI aims to transform cotton production worldwide by developing Better Cotton as a sustainable mainstream commodity.
One of ICA’s primary goals is to expand what is known as the safe trading environment.
bettercotton.org/
Several textile mills in Coimbatore region have agreed to train workers through the Textile Sector Skill Council, which is supported by the Centre. The move will standardise training in the textile units. CEO of the council, J V Rao, has reportedly said that though there are several State and Union government schemes that support skills development in manufacturing sector and the units have in-house training programs, the skill council has standardised the training syllabus for 56 jobs in spinning, weaving, knitting and processing.
The textile industry is transforming with units investing huge amounts in automation. The focus now is on skills, knowledge and performance of the workers. The Centre provides Rs 2 crore annually for the first two years and Rs 1 crore to the council for the third year. The industry contributes Rs 20 lakh a year for two years and Rs 10 lakh in the third year to create the training eco system, Rao informed.
The proposal is to have approved agencies to train the trainers and they will in turn train the employees. The council’s immediate focus is on textile units in Tamil Nadu and Madhya Pradesh as the number of spinning units is high in these States. The units can have in-house trainers or employ trainers from outside, he said.
Each unit that is willing to take part in this project will have to be affiliated with the council. The trained workers will get a certificate and the units can avail of assistance under different schemes of the Union fovernment.
The early cotton sowing in current season in Pakistan registered a substantial decline of over 47 per cent as compared to the same period of the preceding year. Due to low cotton prices and unprecedented rains in the current season, wheat harvest was prolonged and a significant decline in cotton sowing was registered.
Due to the delay in cotton sowing, production would also be affected. Due to lower cotton prices, growers are being hit hard and cannot get returns for expenses. This puts off farmers from growing cotton. The initial target for cotton was set at 15.1 million bales for 2014-15. However, later the target was revised downwards three times and finally it was set at 13.48 million bales due to multiple issues including water scarcity, rains, floods, and shortage of certified seeds.
Cotton was sown on 2,05,000 acres of land in the current season across the country against 3,83,000 acres during the same period last year. Surplus cotton production was recorded last year in the international market, including Pakistan, and the same is expected for the current year. Due to surplus cotton production, there is no chance of an increase in commodity prices next year as well.
