The cotton area harvested and the cotton production in India have shown a significant rise in the MY (market year) 2019/20 as compared to the area harvested in MY 2018/19. The cotton area harvested, and the cotton production has increased by 5.56 per cent and 14.34 per cent to 13.30 million hectares and 29.50 million 480-lb bales respectively in MY 2019/20 over MY 2018/19.
It is expected to increase in the upcoming MY 2020/21 with higher demand for cotton yarn and fabric for exports. It also triggered cotton fibre and yarn prices in the beginning of the year 2021. The purchase of cotton by the government of India under the MSP programme has been done in various states which has secured approximately more than 24.00 per cent of total production.
The area harvested and production is expected to move up to 13.40 million hectares and 29.50 million 480-lb bales in the MY 2020/21. The excess rains of northeast monsoon and rising pest infestation lowered the production of cotton in Telangana. But the cotton area harvested in Telangana soared by 15.00 per cent in MY 2020/21.
The domestic consumption of the country got subjugated as a majority of people worked from home. Also, the lockdown had limited the retail footfall with slower recovery. The customers became more cautious and they focused on the savings.
India cotton trade
The cotton exports of India have considerably moved up in the MY 2019/20. The country’s cotton export remained at 3.20 million 480-lb bales in the MY 2019/20 with the growth of 9.37 per cent over the previous MY 2018/19. The cotton exports got the boost with the ongoing Sino-US trade war. But this boost was offset by the impact felt due to the spread of the Covid-19 pandemic.
The impact of Covid-19 has been partly controlled with the help of lockdown and the release of vaccine. The shipments have been rising regularly with time. Also, certain governments have developed alternative ways to increase trade. India’s exports and imports moved up with strong overseas as well as domestic demand. India’s cotton imports increased by 26.67 per cent in the MY 2019/20 to 2.28 million 480-lb bales from 1.80 million 480-lb bales in MY 2018/19.
The cotton exports are expected to move in the MY 2020/21 to 5.00 million 480-lb bales from the 3.50 million 480-lb bales in MY 2019/20. The prices of the Indian cotton remained lower as compared to the overseas cotton prices. From October 2020 to January 2021, the Indian cotton prices surged by 16.00 per cent as compared to 23.00 per cent rise of the Cotlook A-Index. This price gap has given a competitive advantage to the Indian cotton players over the overseas players. The gap between Indian ex-gin and Cotlook A Index prices kept Indian raw cotton as a cost-effective alternative. According to FAS analysis, Bangladesh, China, and Vietnam remained at the top of the list of Indian cotton suppliers in 2020 and contributed for more than 90.00 per cent of total Indian cotton exports.
The Indian cotton exports are expected to increase in MY 2020/21 with a rate of 42.86 per cent to 5.00 million 480-lb bales from the 3.50 million 480-lb bales in MY 2019/20. But the imports are expected to move down by 56.14 per cent to 1.00 million 480-lb bales in MY 2020/21 from the 2.28 million 480-lb bales in MY 2019/20.
The prices of Indian cotton have shown considerable rise in first half of MY 2020/21, from August 2020 to January 2021. The prices are striking again from the beginning of 2021. The price rise has been observed in almost all cotton fibres in the country. Out of the major cotton fibres in India, the prices of DCH-32 from Karnataka and V-797 from Gujarat have shown a considerable price augmentation in the first quarter of 2021. DCH-32 and V-797 have shown a price rise of 20.14 per cent and 22.87 per cent to 71.23 INR/candy and 33.89 INR/candy in March 2021 from 59.29 INR/candy and 27.58 INR/candy in January 2021, respectively. The prices of other cotton varieties such as J-34-RG from Bhatinda, MCU-5 from Andhra Pradesh, MECH from Maharashtra, Mech-I/H-4 from Madhya Pradesh and Shankar-6 from Gujarat have also shown a rise, but the increase was negligible and remained between 4.00 to 7.00 per cent.
The demand of the cotton yarn in abroad countries has been increasing from the beginning of the MY 2020/21 with there is a surge in demand for value added cotton textiles. This also sustained the escalated prices of the Indian cotton textiles. The counties such as China, Bangladesh, and Vietnam have exponentially imported cotton from India in the second half of 2020. Exports of cotton fabrics also followed the same trend as cotton yarn. But the cotton imports remained low due to ample domestic crop in the country with relatively low buying from mills.
The yarn export of the country remained at 930.00 thousand metric tonnes in MY 2019/20 with a monthly average of 77.50 thousand metric tonnes. The monthly average of yarn exports in the first half of MY 2020/21 has prominently surged to 89.64 thousand metric tonnes from the monthly average exports of 77.50 thousand metric tonnes in MY 2019/20 with a growth of 15.67 per cent. It further expected to move up 6.64 per cent from January 2021 to July 2021.
The fabric exports of India were 1,489.15 thousand metric tonnes in MY 2019/20 with a monthly average of 124.10 thousand metric tonnes. The monthly average of fabric exports in the first half of MY 2020/21 has increased to 169.52 thousand metric tonnes from the monthly average exports of 124.10 thousand metric tonnes in the MY 2019/20 with a hike of 36.61 per cent. But it is expected to remain stable to a slightly lower value between January 2021 to July 2021.
Source: Fibre2Fashion News
Goods and service tax (GST) collections could see a dip of 10-20% in May as Maharashtra - the largest state contributor to GST - and Madhya Pradesh enforce lockdown-like curfew rules even as other states have imposed night curfews to control the rising number of Covid cases.
"With closed shops, businesses, supply-chain bottlenecks, restricted movements etc, tax collections are set to fall nationally by 10-20% in May, and for states like Maharashtra which is the highest contributor, the collections are likely to reduce by half,” said Harpreet Singh, indirect tax partner at KPMG India.
Maharashtra clocked Rs 17,038 crore in GST collections in March, which is 18.5% of state GST of Rs 91,869 crore, as per data released earlier this month.
"The immediate impact will be felt by auto, cement and other manufacturing led sectors that have sent inventory to dealers who will now be stuck with no secondary sales. This will put further pressure on working capital," said MS Mani, partner at Deloitte India.
The collections in May, from transactions done in April, may not be as muted as May 2020 when the revenue was washed out owing to the lockdown in April 2020, but the impact could be more severe – from both supply side as well as demand side - if more states impose full day curfews, experts said.
“It’s really a tough call for the government, as the current Covid spike may warrant further lockdowns. We may well see a W shape tax collection pattern instead of V shape pattern,” Singh added.
While Maharashtra and Madhya Pradesh have imposed tough restrictions to curb escalating number of Covid cases, others like Delhi, Haryana, Rajasthan, Chandigarh, Odisha and Gujarat have imposed night curfews in some districts or all across the state or union territory.
Pratik Jain, partner at Price Waterhouse & Co, LLP said that the lockdown last year had a significant impact on consumption and consumer sentiments, but since the curfews being imposed are state specific and not national, the effects may not be deep.
“With prior experience supply chain bottlenecks are expected to reduce, the impact may not be that severe. Similarly, on the compliance front, one should expect a lesser impact than last year,” he said.
Experts noted that the curbs will certainly disrupt business and economic activity in the states and have a trickle-down effect on GST, customs collections, or even GST related compliances which need physical attendance of stakeholders.
“The physical interactions being required by various revenue departments need to be curtailed in the Covid times as this is fuelling further spread of the virus and also leading to undue stress on the taxpayers,” said Bipin Sapra, tax partner at EY.
Source: The Economic Times
There is no denying that the Coronavirus pandemic has taken a toll on many industries, including the Indian ethnic wear industry. During the peak of lockdown, the buying power of the average consumer had reduced considerably. Consumers gave basic necessities like food, medicines, and the likes their priority. Fashion became need-based. The Indian ethnic wear industry relies heavily on ceremonies and special occasions - with marriages, festival gatherings getting canceled - occasion-specific fashion definitely took a hit.
Work-from-home defined new parameters of fashion. Fashion became guided by comfort, sustainability, and affordability. Most of our Indian silhouettes are well suited for home wear or what we call leisurewear. Soft cotton clothes made consciously by brands were preferred over fast fashion clothing like jeans, crop tops, etc. The pandemic has definitely created a shift in people’s mindsets.
Consumers are becoming conscious buyers - they want to invest in clothing that can last longer, that supports the Indian artisans as well. The quality took precedence over quantity ever since Covid-19 hit us. We are more mindful and active in our decisions of what we are purchasing.
Thrifting clothes, wardrobe capsules, and Indian-based affordable fashion picked up. With malls, markets and bazaars shut - the entire shopping experience shifted online. The brands that worked on online platforms like Instagram, Facebook, Shopify boomed whereas the brands that are predominantly offline take a huge hit.
At the grass-root level, however, the Indian artisans struggled enormously. These art forms and processes are passed down as lineage to these artisans and their livelihoods completely rely on their art. A lot of designers and heritage brands employed several Indian artisans. Since most of these designers and brands were present offline - their stock kept piling and so the artisans didn’t receive many new orders. These artisans also heavily relied on offline exhibitions happening in metropolitan cities. They usually save their best pieces to showcase in these exhibitions - since exhibitions stopped another source of their income had come to a standstill. This is when younger Indian brands like us - The Indian Ethnic Co. stepped in and decided to buy their best products, by gradually gaining their trust.
We at The Indian Ethnic co. have grown as a company during the pandemic. When the strict lockdown was enforced, we had no staff, loads of pending orders, and courier services were also affected. All of our processes had slowed down. Our family-run business needed all hands on deck, so we divided the processes amongst ourselves. Irrespective of the long days, we wanted to keep the momentum going and that’s exactly what we did. Lockdown rules were different in all parts of the country - there were some places we could ship to and some we couldn’t, despite these restrictions, we didn’t stop taking orders, we kept all the orders ready and shipped them as and when we could. We are fortunate to have some really loyal and understanding customers that were patient with us. Personally for us, the Pandemic also creatively opened us up to newer ways of marketing. We finally executed our idea of dance and clothing coming together. It is true that adversity enables invention.
The pandemic has certainly left its imprints in big ways. It has created shifts on a collective level. We essentially are living through a huge incident that will go down in history. We truly believe that from here on we will reimagine and reinvent our ideas of consumerism, fashion, and culture.
Source: The Indian Retailer.com
Sri Lanka is all set to ban the import of textile fabrics in a bid to protect domestic industry, the state minister for batik, handloom textiles and local apparel productions, Dayasiri Jayasekara, has announced. The relevant gazette notification has been approved by Parliament, and will be notified soon, the minister said last week.
Jayasekara told a news conference that a number of factors had contributed to the decline in the production of local handloom textiles, and that the local handicrafts industry had collapsed in the wake of imports of large quantities of textile products such as saris, pillows and bedding. The minister also regretted that the local handicrafts industry could not be developed as a result. The government is taking steps to revive the batik industry, he added.
Among the plans to revive the local handicrafts industry is a proposal to provide incentives of SLR 5,000 to individuals. Local manufacturers will also be given the opportunity to supply fabrics for school and security uniforms. “We now have a great opportunity to take handloom textile and batik products manufactured in Sri Lanka to a great height,” the minister said.
Sri Lanka’s batik, handloom and apparel industry has set an export target of $6 billion for 2021. Exports in 2020 had dropped from $5.6 billion in 2019 to $4.4 billion for the year.
Source: Fibre2Fashion News
Prime Minister Mostafa Madbouli held a meeting Tuesday with ministers of trade and public enterprise to follow up on the construction of a textile factory in Mahala that is meant to be the largest in the world.
Minister of Public Enterprise Hisham Tawfik said that the factory - to be inaugurated in March 2022 - spans over 62,000 square meters and that its daily production is estimated at 30 tons.
Five trainers will train 130 others who will train the workers as other state-owned are being developed in Cairo, Beheira's Kafr Al Dawar, and other areas in Delta.
The prime minster also instructed granting farmers incentives to grow high-quality cotton to the extent that fulfills the needs of local factories.
The government is also working on another large textile enterprise. In 2019, the General Authority for Investment and Free Zones (GAFI) concluded the contract for the establishment of the first textile city in the Free Zones System in Minya Governorate.
The city will be built on 306 feddans, and a company will be established to manage the city and all parties will have equal shares in it.
The project aims to provide more than 17,000 direct jobs, in addition to indirect job opportunities, and targets exporting to overseas markets.
Source: Egypt Today
Bangladesh apparel export to the USA surged in terms of volume in February 2021, according to the official data of the USA. The country exported $194.08 million SME of garments in February 2021, which was $89.73 SME of garments in the same period of last year.
The USA saw an 8.70 percent fall in apparel import value in February ’21 on a Y-o-Y basis. The country imported US$ 5.39 billion worth of garments in February this year as against the US $ 5.91 billion in the same month of 2020.
However, the import increased in volume terms by 3.20 percent to 2,069.78 million SME of garments in the 2nd month of 2021. After 17 months (on a Y-o-Y basis) the country has seen such an increase.
The apparel export destinations such as Pakistan, China, Bangladesh, Egypt, etc. noted growth in volume-wise apparel shipment to the USA, while China and Pakistan upped their shipment in value and volume both terms.
India, Vietnam and Indonesia declined in both value-wise and volume-wise apparel export to the USA where Bangladesh saw an increase in volume-wise apparel exports to the USA.
The apparel export destinations such as Pakistan, China, Bangladesh, Egypt, etc. noted growth in volume-wise apparel shipment to the USA, while China and Pakistan upped their shipment on value-terms as well.
India, Vietnam and Indonesia declined in both value-wise and volume-wise apparel export to the USA.
Bangladesh saw a decline in apparel exports to the USA in terms of value-wise shipment. Bangladesh exported $480.98 million in Feb’21 against $528.47 million in the same month of the previous year.
Source: Textile Today
IFC, a member of the World Bank Group, is supporting the garment sector in Haiti to help companies and workers navigate the COVID-19 crisis through job and investment retention, and in the medium term, attract private capital and create more employment. Approximately 55,000 workers, most of them women, are employed in the Haitian garment industry.
Although the pandemic has yielded to the cancelling of orders and closures of factories, IFC, with the backing of the Korea-IFC Partnership Program (KIPP) and the Facility for Investment Climate Advisory Services (FIAS), will bring together key players from the public and private sectors, seeking opportunities to increase production. Leveraging its potential, Haiti can also aspire to attract high-priced and high-quality garment manufacturers.
In the first phase, IFC will focus on a targeted response to help manufacturers quickly convert to produce personal protective equipment (PPE) and expand apparel production to meet a shifting global demand to navigate the COVID-19 crisis retaining jobs and investment.
In the medium term, IFC will support the sector to keep existing producers in the market by improving government services, developing operational guidance and continuity plans, and enhancing the business environment and the sector competitiveness by improving business regulations.
The third phase will focus on attracting investors, facilitating expansions, developing a new value proposition for bringing production closer to the US market, taking advantage of nearshoring, and mobilising investments.
"We are looking to develop a renewed value proposition for Haiti that can push sector growth. IFC will play an integrator role, bringing together institutions, companies, industry associations, as well as local and international investors who are paying attention to Haiti's potential. From our track record in the last decade, I am confident we can help Haiti succeed," said Judith Green, IFC manager for the Caribbean, in a statement.
A public-private Technical Secretariat will work with IFC and Haiti's ministry of finance and economy as the counterpart in this project to strengthen the public and private sector capacities and ensure a collaborative effort. This Secretariat includes the Center for Investment Facilitation, the Industry Association of Haiti (ADIH), the ministry of commerce and industry, the Textile Ombudsperson Office, and Better Work Haiti, the statement said.
"IFC is a long-term partner to Haiti, particularly the textile industry, and we are pleased to be working together once again to help the sector achieve all its potential and keep creating jobs for Haitians," said Haiti's minister of economy and finance.
"ADIH has been working together with IFC in the past months to identify the challenges of the export-oriented garment industry, and this work has facilitated dialogue within the companies in the sector as well as the institutions involved. I am certain that we will be able to leverage this experience to make the sector more competitive," said ADIH president Wilhelm Lemke.
IFC's analysis estimates over $70 million in investment potential in a favourable scenario, with thousands of new jobs for the next few years within the garment industry.
Source: Fibre2Fashion News
