FW
India's cotton production could be lower than initial estimates due to reduced cotton yield in Andhra Pradesh and Karnataka. The yield has been affected due to lack of irrigation in view of erratic power supply. Cotton production in Andhra Pradesh is likely to be at least 50 per cent lower.
Productivity in Maharashtra too has been affected due to dry weather during the crop's crucial growth period. There have been lower arrivals of cotton in markets across the country. One reason could be farmers are holding back due to lower prices. But the other reason could be a drop in production.
Cotton arrivals as of December 25, 2014, dropped to 88.10 lakh bales since the beginning of the current season on October 1 as against 117.89 lakh bales during the same period a year ago. Arrivals in Karnataka are down at 2.68 lakh bales compared to 3.62 lakh bales a year ago. Arrivals in Andhra Pradesh are lower at 13.04 lakh bales compared to 18.51 lakh bales a year ago. In Maharashtra, arrivals are down by nearly 50 per cent at 14.17 lakh bales.
Strong indications of increased cotton yarn exports to China are expected to boost sentiments in the Indian cotton yarn and cotton markets. Cotton prices are expected to remain up in the coming months. Cotton yarn is also likely to find support in the domestic market. Imports of cotton yarn by China during January 2015 have increased. The import volume of cotton yarn in January 2015 into China increased 20.41 per cent on an annual basis. China’s imports rose 5.5 per cent compared to December 2014.
India has a 32.28 per cent share of cotton yarn in the Chinese market, the largest. India is followed by Pakistan (27.03 per cent) and Vietnam (18.54 per cent). India expects February and March exports to China to improve further. Cotton prices are ruling higher in China compared to India, so Indian cotton yarn is competitive in the Chinese market. Textile mills in China prefer Indian cotton yarn to keep their cost of production under control.
Traders in India are expecting cotton yarn prices to improve from next month. Anticipation for better exports and summer demand from local mills can boost market sentiments. Local mills are buying yarn to meet their immediate demand. Heavy arrivals of cotton are likely to push prices lower but they would prefer buying for a longer period of consumption.
Vietnam earned $3.4 billion from apparel exports in the first two months of 2015, up nearly 18 per cent against the same period last year. The sector had a goal of achieving an export turnover of $28 billion in 2015, up 16 per cent compared to the previous year.
The US, Japan and the Republic of Korea are the three largest importers of Vietnam’s garments. Apparel exports to the US are expected to reach $11 billion this year, a growth rate of 13 per cent. When the EU-Vietnam free trade agreement is signed, tariff reduction, from 12 per cent to 0 per cent, will facilitate Vietnam’s apparel exports to the European Union.
The first SWITCH Asia roundtable and networking event will take place in Myanmar, March 30 to 31. It will focus on sustainable development of the garment and textile industry in Asia with Asian policymakers as well as garment industry associations, manufacturers and importers. It is being held in association with the International Labor Organization.
Discussions will center around sustainable supply chains; opportunities and challenges for a sustainable garment and textile sector in Asia; best practices with a potential for replication in Asia; the role of consumers; sustainable competitiveness strategies at the regional level; and the relation between the garment sector and sustainability, CSR and social development.
Keynotes include a presentation on regional strategies and changing dynamics to sustainably develop garment production. The sessions will also cover sustainability, productivity and factory issues in garment manufacturing targeting Asian and European markets, supply chain management for sustainability, sustainable consumption and production in the garment and textile industry, and maintaining competitiveness within and across regions.
Since 2008, the SWITCH Asia program has been supporting 16 grant projects in Asia’s textile and garment sectors, ranging from CSR to cleaner production, product labeling and certification. SWITCH Asia was launched in 2007. It promotes sustainable consumption and production among consumers, small and medium sized enterprises and Asian policy makers in 15 Asian countries, from China and India to Bangladesh and the Maldives.
www.switch-asia.eu/
Low wage coupled with lack of financial help from the government has take a toll on handloom weavers in Bangladesh. They are now forced to shift to other professions. As per the Bangladesh Handloom Board (BHB), the handloom industry which is a major source of earning for many rural people is passing through hard times. Weavers from rural areas are withdrawing from traditional handlooms due to a lack of capital. The picture of the handloom industry is the same in every part of the country. About 0.129 million handlooms were closed down (made inactive) over the last three decades due to fund crisis, throwing over 0.10 million weavers out of employment. Over 11 million people are employed in the handloom industry, which meets nearly 50 per cent of the country’s fabric requirement, the data said.
Insiders feel that value addition by the handloom sector stands at Tk 10 billion. It meets over 40 per cent of domestic textile requirement, accounting for 63 per cent of textile production. The handloom industry meets the common people’s requirements for saris, lungis, bed sheets and the like. There are over 0.5 million handlooms in the country according to the handloom census of 2003. Of the amount, some 0.129 million are outmoded till date, sources said.
As per Hafiz Uddin, General Manager of BHB, the BHB is trying its best to revive the country’s handloom industry by providing microcredit to weavers as per government directive. BHB has started over 50,000 inactive handlooms through ongoing microcredit program.
Garment makers feel that India needs to focus on getting duty-free access to European Union and the US, two of our biggest export markets, as the country has been facing very stiff competition from South Asian countries. Atul Ujagar, Nike’s Country Director, feels that other countries have been actively working on free trade agreements which would help their apparel secure ‘duty-free’ into developed countries. The textile and apparel industry in India is very strong and it would emerge one of the fastest growing in case ample support is given. The government should be more aggressive on securing duty-free status to up the EU and US markets.
Indian apparel exports are worth $17 billion which is less than the textile, yarn, and cotton exports which amount to around $20 billion. Together, textile and garment exports are at around $37 billion. The industry employs 45 million people which makes it one of the top three employers. India is not able to realise the full supply chain value, Ujagar observes.
Compared to other South-East Asian countries, India has a competitive labour rates. In fact, one of India’s core strengths is its cost-competitive labour but it lags behind in productivity and efficiencies in manufacturing. There needs to be a dedicated focus to improve India’s productivity, he said.
Anindya Ray, Senior Vice-President of Arvind Lifestyle feels, Chinese government provides a platform for buyers through huge exhibitions throughout the year. Indian textile industry is the second largest employer after agriculture. It is unfortunate that the government is not trying its best to help the industry. This industry will become a dying industry without government support. India exports around $17 billion, whereas Bangladesh exports around $24 billion and China’s exports are around $65 billion. China is becoming expensive and people want to move out despite the industry still growing there. India is not a position to make use of the minimum shift away China as India lacks infrastructure, he believes.
Sutlej Textiles and Industries have received approval to acquire Birla Textile Mills, located at Baddi in Himachal Pradesh, as a going concern from Chambal Fertilisers and Chemicals, on a slump sale basis. Birla Textile Mills is a division of Chambal Fertilisers and Chemicals.
Sutlej Textiles and Industries has 2,60,872 spindles for spinning yarn, six million meters a year for apparel fabrics, 1.6 million trousers a year and three million meters a year for home textile fabrics. It has plants in Jammu and Kashmir, Rajasthan and Gujarat.
Chambal Fertilisers and Chemicals is one of the largest private sector fertiliser producers in India. It has two hi tech nitrogenous fertiliser plants in Rajasthan.
The Federation of Surat Textile Traders Association (FOSTTA) has appealed to all traders in the country's largest man-made fabric markets to pay their advance tax to the Income Tax department at the earliest. The department has exhorted the trader community to pay advance tax to escape being charged one per cent every month.
Advance tax is the income tax payable if the payer’s liability exceeds Rs 10,000 in a financial year. Advance tax should be paid in the year in which the income is received. Hence, it is also known as pay-as-you-earn scheme. Any rebate due fetches the payer an interest of 0.5 per cent every month, or six per cent annually, as in the case of an income tax refund. However, if the payer doesn't pay the advance tax on time, he’ll be charged one per cent every month, or 12 per cent a year.
FOSTTA has urged traders to pay advance tax on time on their annual income. This is expected to save the department time as well as provide relief to traders from paying 12 per cent extra. FOSTTA is an association of textile processing units of the Surat textile market. There are around 60,000 traders and 160 markets associated with it.
www.fostta.com/
Sri Lanka has bright prospects of recovering European Union's GSP Plus trade concessions that were withdrawn in 2010. The loss of the GSP Plus concession has greatly affected the Sri Lankan apparel sector. Various EU committees have already assured their support to help regain the facility and a visiting member of European Parliament has assured help to Sri Lanka to regain tariff concession.
The EU withdrew the GSP Plus facility in August 2010 claiming Sri Lanka's failure to comply with the eligibility criteria that included implementation of international human rights conventions. However, with Sri Lanka’s new government taking measures to restore democracy and human rights, the country is hopeful that the EU will consider reinstating the concession.
Sri Lanka’s clothing industry was the main beneficiary, using tax breaks to sell to high street retailers in Europe. It gained about $150 million annually due to preferential tariffs. It says the withdrawal of European Union trade benefits has increased its costs and eroded its competitiveness.
The GSP Plus gives some 15 developing countries access to EU markets with preferential conditions in return for implementing international conventions on human rights, labour standards, sustainable development and good governance.
Picanol, the leading manufacturer of weaving machines for technical textiles saw a fall in turnover for 2014 by 25 per cent compared to 2013. The weaving machine division made a hesitant start in 2014 based on a weak order book at the end of 2013. The first half of the year was characterised by lower demand for weaving machines worldwide. This resulted in a sharp decline in orders compared to the record year of 2013. The demand for Picanol weaving machines increased in the fourth quarter of 2014.
The gross profit of the Picanol group for 2014 financial year was €86.4 million compared to €137.4 million in 2013. The gross profit percentage decreased from 24.5 per cent to 20.7 per cent. The operating result decreased by 47 per cent. The group closed 2014 with a net profit of €52.4 million compared to a net profit of €73.1 million in 2013.
For the first half of 2015, Picanol expects to realise an increase in turnover. This is anticipated to be between the turnover recorded during the first half of 2013 and the turnover of the first half of 2014. Picanol anticipates the global market for weaving machines in 2015 will remain at approximately at the same level as that of 2014.
