As the garment industry continues to face lots of challenges, apparel exporters have urged the Government to come forward and support.
The second lockdown, which promulgated in major countries like Germany,France and the UK since last November, has led to a liquidity crisis in Tirupur’s exporting units, mainly MSMEs which urgently require the following financial measures from the Government to overcome the ongoing crisis and sustain in the business.
Apart from disruption in the major global markets, the continuous increase in yarn prices due to change in business dynamics has also impacted the garment sector largely – thereby eroding the competitiveness of the industry.
Raja M. Shanmugham, President, Tirupur Exporters Association (TEA) has requested the Union Finance Minister to announce the above measures expediently and protect the apparel sector and employment.He wrote a letter to the Minister in this regard.
Considering the higher interest rate, he urged to extend the Extension of Interest Equalisation Scheme for at least another two years, which would help to workout the costing effectively and also enhance the competitiveness in the global market.
The scheme was recently extended for a brief period of 3 months, from 1 April 2021 to 30 June 2021.
There’s also been request to announce the rates for the items of RODTEP scheme.
The industry is not receiving the reimbursement of the embedded taxes including electricity tax,Mandi tax, GST on petro products paid by the exporters. The non-disbursement of RODTEP is also causing liquidity crisis.
Similarly it was also requested to extend the ECLGS to apparel sector by providing additional 20 per cent credit outstanding, as given to other sectors, and help ease their liquidity crisis.
APPAREL EXPORT
Source: Apparel Online
The COVID-19 pandemic adversely affected numerous industries, and garment manufacturers were among the hardest hit. Here are some of the reasons why the global health threat impacted the apparel sector so severely.
The pandemic reduced exports
Asia accounts for a significant portion of the global apparel industry, and garment factories located there heavily depend on exports to Western nations. However, the COVID-19 pandemic drastically cut export activity.
A report from the International Labour Organization showed that 10 major textile-producing Asian countries account for three-quarters of all textile workers worldwide. However, as the pandemic emerged and worsened, some of those nations experienced decreased exports of up to 80%.
As a result, many garment workers had their wages cut or received paychecks late. In some cases, those changes meant they lacked enough money to buy food.
Pandemic restrictions caused factory and store closures
As government leaders imposed COVID-19 restrictions worldwide, the new rules typically had tremendous effects on factory productivity levels.
For example, even when regulations classified garment manufacturers as essential businesses, they usually limited the number of people who could work at any given time and stipulated other social-distancing measures.
These changes meant many workers lost their jobs or got told to come to work less often. Even with significant progress made in fighting the pandemic, some clothing stores remain closed. That reality hurts garment manufacturers’ profits.
For example, Irish fast-fashion brand Primark — which operates Penneys retail outlets in Ireland — has remained closed for months even though restrictions in the country still permit in-person retail sales. Although many companies pivoted to sell online, Penneys is an outlier that has never had an e-commerce arm, and executives don’t plan to change that.
Supply chain issues posed additional challenges
The impact of COVID-19 caused substantial supply chain issues for numerous sectors. You may have noticed some of them firsthand when you tried to buy something you previously bought without difficulty and discovered the item was unavailable.
By early March 2020, a garment factory in Myanmar had to temporarily close for an undefined period after it ran out of raw supplies and could not import them from China. Statistics show that companies lose 4.1% of their profits due to inventory shortages. That’s one reason why many of them use artificial intelligence and other advanced technologies to avoid the issue. However, COVID-19 was arguably an event few people expected.
Another complicating factor for the global apparel industry was that the pandemic caused consumer buying shifts.
For example, with many people staying home as much as possible and large events canceled, it became unnecessary to buy clothes for parties, weddings, or other special occasions. Jeans brand Levi’s had a second-quarter revenue drop of 62% in 2020, although brands specializing in athleisure wear often saw increased sales.
These changes meant sudden declines for former apparel staples while other garments became more popular. Things will likely shift again as more people get vaccinated and spend time in public, but it could take a while to see the effects.
Garment workers experienced covid-19 outbreaks
Like most other factories, garment manufacturers’ facilities are typically large spaces where people work closely together. Although such setups work well for boosting productivity, they’re not ideal for controlling the spread of a deadly virus.
One particularly unfortunate impact of COVID-19 is that people working in these places often had an elevated risk of contracting the virus. In August 2020, news outlets covered an outbreak in a Guatemalan factory where more than 200 employees tested positive. An initial sample showed that 26 out of 32 workers had the infection.
That result caused authorities to declare a state of emergency and close the factory indefinitely. One worker at the plant died from COVID-19. Major American brands, including Gap and American Eagle Outfitters, rely on the factory for products.
A representative from the company asserted that it was among the first to adopt COVID-19 safety measures. However, this example is a somber reminder of how rapidly the virus can spread under optimal conditions.
Retailers are still placing smaller orders
Coverage published in February 2021 indicated it might be a while before the global apparel industry recovers from coronavirus shocks. One reason is that the orders fulfilled by garment factories are smaller than before the pandemic.
Some apparel brand decision-makers opted to sell off last year’s clothes rather than place big orders for the spring season. Others decided not only to buy less but also to do business with fewer supply chain partners.
Factory owners said their facilities were already operating at a reduced capacity and are not getting the order volumes they did before the pandemic. Many worried they may close for good if things don’t change.
However, retailers likely want to wait and see how reduced COVID-19 restrictions affect people’s desire to shop for clothes before purchasing more, and such trends won’t be immediately apparent.
The impact of COVID-19 persists
These five obstacles are some of the most pressing for garment manufacturers to overcome, and there are almost certainly more on the horizon. Getting through these challenging times will require creativity and, perhaps, changed business models.
Source: Textile Today
The Cotton Association of India (CAI), in its March estimate, has increased the country's cotton crop production for the season 2020-21 beginning October 1, 2020 to 360 lakh bales of 170 kg each (i.e. 382.5 lakh running bales of 160 kg each). This is an increase of 1.5 lakh bales compared to its previous estimate (last month) of 358.5 lakh bales.
The total cotton supply for the months of October 2020 to March 2021 is estimated by the CAI at 459.26 lakh bales of 170 kg each, which consists of the arrivals of 326.76 lakh bales, imports of 7.50 lakh bales and the opening stock estimated by the CAI at 125 lakh bales at the beginning of the season.
Further, the CAI has estimated cotton consumption for the months of October 2020 to March 2021 at 165.00 lakh bales, while the export shipments upto March 31, 2021 are estimated by the CAI at 43 lakh bales.
Stock at the end of March 2021 is estimated at 251.26 lakh bales, including 95.00 lakh bales with textile mills and the remaining 156.26 lakh bales with the CCI, Maharashtra Federation and others (MNCs, traders, ginners, MCX, etc. including the cotton sold but not delivered).
The CAI Crop Committee has estimated the total cotton supply till end of the cotton season 2020-21 i.e. upto September 30, 2021 at 496.00 lakh bales. It consists of the opening stock of 125 lakh bales at the beginning of the cotton season on October 1, crop for the season estimated at 360 lakh bales and the imports now estimated by the CAI at 11 lakh bales, which is lower by 1 lakh bale from the previous month's estimate. The imports estimate for the previous cotton season 2019-20 was 15.50 lakh bales.
The domestic consumption estimated by the CAI has been retained at the pre-lockdown level of 330 lakh bales. The exports for the season have also been retained at 60 lakh bales. The exports estimate for the previous cotton season 2019-20 was 50 lakh bales.
The carry-over stock at the end of the cotton season 2020-21 on September 30, 2021, is estimated by the CAI at 106 lakh bales as against 107.50 lakh bales estimated for the previous cotton season 2019-20.
Source: Fibre2Fashion News
The commerce and industry ministry has convened a meeting of exporters on April 20 to discuss export situation against the backdrop of surging coronavirus cases and healthy growth in overseas shipments in recent months.
The meeting will be chaired by Commerce and Industry Minister Piyush Goyal.
Confirming the meeting, Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said that the ministry holds these meetings regularly to discuss issues of exporters and ways to further increase outbound shipments.
Chairman of the Gems and Jewellery Export Promotion Council (GJEPC) Colin Shah said that these meetings are helpful as exporters get a platform to raise their issues.
The meeting also assumes significance as certain exporters are of the view that restrictions, imposed by different states to contain the rising coronavirus cases, for long time could have a bearing on industry.
The country’s exports surged by 60.29 per cent to a monthly record high of USD 34.45 billion in March on growth in sectors such as engineering, gems and jewellery and pharmaceuticals, even as the outbound shipments contracted by 7.26 per cent during the full 2020-21 fiscal to USD 290.63 billion.
The exports have increased to USD 13.72 billion during April 1-14 this year, according to the provisional data of the Commerce Ministry.
Source: The Financial Express
Due to COVID-19, the demand for antibacterial finished fabrics has increased rapidly. The fabrics not only protect from viruses but also stops the spreading of diseases from one person to another. That is why the number of applications in antibacterial finishing for medical purposes is growing very fast.
Comparing with natural fibers, synthetic fibers have some advancements in medical and surgical applications. It provides good strength, flexibility, hydrophobicity as well as moisture and air permeability. Nylon fibers have outstanding physical and chemical properties.
Some of the healthcare products such as bedding, wipes, surgical gowns, clothing, bandages, plasters must be hygiene and have the ability of resistance to bacteria, mildew, and insect attacks.
Several researchers have worked on the antibacterial finishes on nylon fabrics. This includes a wide range of chemical and physical methods. Nylons are interacted with the chemicals and provides surface resistance to bacteria.
Chemical treatment
Different types of chemicals have been used for the development of antibacterial activity on the surface of nylon fabrics. The list of chemical treatment is summarized in Table 1. Here, it is revealed that some of the chemical treatments show good stability.
The PA6/Ag- nanocomposite treated nylon fabric has stability up to 1 year. The nanoparticles are fully diffused to the nylon surface. The PA6 was filled with a 2 wt% nano-silver which exhibits an excellent antibacterial efficiency. On the other hand, some of the chemicals have low stability due to their only surface treatment. The treated chemicals were placed on the nylon surface and not bonded with the polymers.
Physical treatment
Nylon fabrics are subjected to some of the physical treatments. The surface modification using gas plasma is another method for effective biomedical applications like sterilization.
The antibacterial activity of nylon fabric was achieved by plasma treatment or grafting with polymer. A few metal and oxides are sprayed over the nylon fabric to make the antibacterial surface.
A modified silicon surfactant is also used as a coating on nylon fabric (Figure 1). The treatment was carried out plasma technology where the surfactant decomposes into insoluble silanol and two water-soluble products. Mainly, it is degraded into plasma powder and makes linkages between the ester and silicon-oxygen bonds. This study also suggests a long-term antibacterial finishing on nylon fabrics.
Besides this physical and chemical treatment, others studies are chemical modification of nylon fabrics. Using a vinyl monomer containing a quaternary ammonium group create grafting co-polymerization of nylon fabrics. Another grafting co-polymerization glycidyl methacrylate onto nylon fabric makes a redox reaction of β-cyclodextrins or monochlorotriazinyl.
An effective process has also developed for grafting acrylic acid onto nylon fabrics. The modified nylon fabrics also show good results against gram-positive and gram-negative bacteria.
It is concluded that the above antibacterial finishing on nylon fabric can provide effective approaches than the traditional treatment.
Source: Textile Today
Fearing a possible exodus of migrant labourers in the wake of the second wave of the Covid-19 pandemic, exporters at some of the key hubs have started exhorting their workers to refrain from leaving the factories this time around, just when order flows are improving.
Large-scale migration following a pan-India lockdown in March last year had not just wrought havoc on the workers themselves but also crippled the production lines of companies, especially in labour-intensive sectors such as textiles and garments, footwear and gems and jewellery.
Raja M Shanmugham, managing director at garment supplier Warshaw International and president of the Tirupur Exporters’ Association, told FE, “We are requesting our workers not to leave abruptly this time. We are telling them that we are there to help and there is no need for them to fear about increasing Covid cases. Their awareness level, too, has risen.”
The Tirupur cluster — with 1,000-odd units, mostly MSMEs — employs around 6,00,000 people. About a half of them are migrant labourers. It’s the country’s biggest garment hub, accounting for about a fourth of the annual apparel exports. The garment orders from the US, India’s largest market, are flowing in again.
Some of the exporters in Surat, the country’s biggest diamond hub with about 20,000 units, have also started counselling their workers. “This time around, we are better prepared to take care of the workers. They, too, are better aware of the safety parametres. Hopefully, even if the cases surge further, they won’t leave,” said a diamond exporter from Surat. Nine out of every 10 rough diamonds in the world are being cut and polished in Surat. The city is also a prominent hub of textiles.
According to an estimate by IIM-Bangalore in May last year, Surat is home to a total of almost 42 lakh migrant labourers (from 21 states and also from 33 districts of Gujarat), who work in diamond cutting, textile manufacturing, dyeing and printing, power loom and embroidery, among other industries. About 60% of the migrants work as contractual labourers and daily wagers, it said.
While exporters say there is no plan yet to incentivise workers for not leaving, they believe it would be a win-win for both, as labourers, too, need money after almost a year of paltry income.
Exporters apprehend that if migrant workers start leaving, it could impair their production again at a time when order flow from key markets has witnessed an uptick. For instance, exports of gems and jewellery surged 79%, year-on-year, in March, while garment exports rose 28% and leather exports by 22%.
While the rise in March was aided by a favourable base, it is still an encouraging sign. This is because exports from labour-intensive sectors had been hit harder by the pandemic than the rest. Overall exports jumped by a record 58% in March and helped narrow a contraction in FY21 to just about 7% to almost $291 billion.
Highlights
Pre-emptive move
Exporters in biggest garment hub of Tirupur are promising migrant labourers, estimated at 3 lakh, all possible help
Some Surat diamond exporters have urged migrants not to leave, just when orders are picking up
Surat is home to about 42 lakh migrant labourers, who work in industries, including diamond and textiles
Exporters say it would be a win-win for both, as cash-starved labourers, too, need money
Source: The Financial Express
Powered by a strong domestic and foreign demand, China's economy grew 18.3 per cent year-on-year in the first quarter (Q1) of 2021. The gross domestic product (GDP) reached 24.93 trillion yuan (about $3.82 trillion) in Q1, up 0.6 per cent from the fourth quarter of last year, according to data from the National Bureau of Statistics (NBS).
Low base in early 2020 (Q1) due to the spread of COVID-19 in China last year was another reason for strong growth registered during the quarter. In Q1 2020, the Chinese economy had registered a 6.8 per cent contraction.
Subsequently, however, the economy rebounded, and it showed positive growth of 3.2 per cent in Q2, 4.9 per cent in Q3 and 6.5 per cent in Q4.
"Full-year economic growth is likely to maintain a stably consolidating and improving trend," said NBS spokesperson Liu Aihua at a press conference, citing the country's growing intrinsic development momentum, supply quality and market vitality as major support for sustained recovery.
As per NBS data, in Q1 2021, China's value-added industrial output, retail sales and fixed-asset investment went up 24.5 per cent, 33.9 per cent and 25.6 per cent, respectively. Total international trade too surged 29.2 per cent year-on-year to 8.47 trillion yuan.
The International Monetary Fund, in its World Economy Outlook released early this month, projected the Chinese economy to grow by 8.4 per cent in 2021.
Source: Fibre2Fashion News
Texon’s ProWeave – a patented, jacquard weaving technology - has opened up new design possibilities, by enabling the production of continuous woven substrates with the zonal features product designers want, exactly where they want them. The technology makes it possible to seamlessly integrate functional and design weaving into a single sheet of material.
Reimagining fabrics for the footwear, apparel, fashion and luxury goods industries, ProWeave transforms the way performance fabrics are made and how they look, feel and function. Creating different elasticity, tenacity and abrasion zones within the same weave, ProWeave can help brands bring new creative concepts to life. The innovative technology effortlessly blends diverse yarn thicknesses, weights and fabric references together – creating intricately designed fabrics with distinctive gradient, rib, waffle, colour, stretch, transparency and 3D effects.
Actively aiding the design process, ProWeave is suitable for the production of all kinds of woven footwear and is the ideal solution for clothing, apparel and accessories manufacturers that want to employ novel performance fabrics. ProWeave is set to prove popular in the fast-paced sports and outdoor sector where the trend for woven footwear has been growing quickly, and where demand for innovative materials for garment manufacturing is continuous.
Texon also sees big opportunities for ProWeave in the production of top luxury and premium branded footwear and clothing. In the luxury market, where the main drivers are style and creativity, having the ability to use custom yarns and an innovative manufacturing process to create something truly unique is a compelling proposition.
Paul Jackson, business acceleration leader for ProWeave at Texon, said: “ProWeave takes the production of performance fabrics to the next level. Combining Texon’s know-how in branded footwear, with our Italian division’s expertise in high performance occupational and safety woven fabrics, this exciting technology can help manufacturers differentiate their designs and unlock significant creative advantage.
Technical and functional, yet innovative and inspirational, the design possibilities enabled by ProWeave are endless. Using ProWeave, we can help manufacturers pinpoint the physical characteristics, functional zones and visual patterns they want to achieve on a performance fabric, and then make their vision a reality. ProWeave is radically different to anything else on the market and we’ve been getting really enthusiastic feedback from customers around the world. There is a real curiosity about a technology that can free designers from conventional fabric restraints and help them unleash their imagination.”
With the ability to mix together different high tenacity, flame retardant, stretch and TPU coated yarns to create hard-wearing materials, Texon also sees significant opportunities for ProWeave in industrial footwear and safety apparel applications.
Texon is aiming to be a zero waste business by 2025. ProWeave is designed to support the industry’s sustainability drive. Using a single efficient process to create woven uppers with localised features means less energy consumption for manufacturers and recycled yarns can also be incorporated to build recyclable structures for circular projects.
Texon can provide ProWeave for mass production projects, with multiple designs for uppers, garments and accessories on one roll. The business can also provide ProWeave in small quantities for series or limited-edition collections. ProWeave is produced at Texon’s plant in Prato, Italy and at the company’s newest manufacturing centre in Vietnam, which opened in mid-2020.
Source: Fibre2Fashion News
According to official statistics, Canada imported US $ 663.94 million worth of apparels in Feb. ’21, noting 1.41 per cent growth over Jan. ’21 and 8.35 per cent growth over Feb. ’20.
One country which has escalated its exports in the Canadian apparel market is Cambodia– the 2nd top apparel shipper to Canada – which shipped US $ 95.86 million worth of apparels and surged 53.29 per cent on monthly note.
On Y-o-Y basis, Cambodia’s apparel shipment got a boost of 89.46 per cent in Feb. ’21. With this impressive performance, the country’s share in total Canadian apparel import reached 14.43 per cent which is higher than what it was in Feb. ’20 (8.25 per cent).
On the other hand, China tumbled in its shipment to Canada by 13.55 per cent in Feb. ’21 as compared to Jan. ’21; however it grew marginally by 1.82 per cent on Y-o-Y basis to US $ 191.75 million.
With this somewhat negative performance, China’s share to Canadian apparel import value declined to 28.88 per cent in Feb. ’21 from 30.73 per cent in Feb. ’20.
The 3rd top shipper to Canada was Vietnam which clocked US $ 83.52 million from its apparel exports and grew 42.97 per cent on Y-o-Y basis. However, its shipment value decreased by 0.08 per cent on monthly note in Feb. ’21.
See the below table to know the performance and share of top shippers to Canadian apparel market –
|
Canada’s Apparel Import Value from Top Shippers (Value in US $ million) |
||||||||
|
Country |
2020 Jan |
2020 Feb |
2021 Jan |
2021 Feb |
% Change |
% Change |
Share in Canadian Apparel Import Value (in %) – Feb. ‘21 |
Share in Canadian Apparel Import Value (in %) – Feb. ‘20 |
|
China |
253.35 |
188.31 |
221.82 |
191.75 |
-13.56 |
1.83 |
28.88 |
30.73 |
|
Cambodia |
83.98 |
50.59 |
62.53 |
95.86 |
53.30 |
89.46 |
14.44 |
8.26 |
|
Vietnam |
90.58 |
58.41 |
83.58 |
83.51 |
-0.08 |
42.98 |
12.58 |
9.53 |
|
Bangladesh |
104.47 |
80.91 |
86.24 |
80.04 |
-7.19 |
-1.08 |
12.06 |
13.21 |
|
Italy |
25.44 |
24.72 |
16.69 |
20.39 |
22.18 |
-17.53 |
3.07 |
4.04 |
|
United States |
22.42 |
23.22 |
18.13 |
18.63 |
2.76 |
-19.76 |
2.81 |
3.79 |
|
India |
25.51 |
22.91 |
16.94 |
18.61 |
9.87 |
-18.75 |
2.80 |
3.74 |
|
Sri Lanka |
15.44 |
12.09 |
11.67 |
18.18 |
55.80 |
50.26 |
2.74 |
1.97 |
|
Indonesia |
24.87 |
19.05 |
15.21 |
16.09 |
5.82 |
-15.53 |
2.42 |
3.11 |
|
World |
789.96 |
612.77 |
654.71 |
663.94 |
1.41 |
8.35 |
– |
– |
Source: Apparel Online
China's textile machine production accelerated while overseas factories were trapped amid the coronavirus pandemic last year, but the trend seems to have turned in recent weeks, Chinese customs data showed.
Industry practitioners and experts attribute the change to a recent boom of clothing industry in other Asian economies, rising labor costs in China and overseas clients' reluctance to stockpile products.
In March, China exported $9.7 billion worth of yarn, textiles and other fabric products, compared to exports of $22 billion in the first two months of the year, showing a slight fall on a monthly basis.
The growth of textiles and related product exports also slowed. In the first three months, the export volume of these products grew 40.3 percent on a yearly basis, compared to a 60.8 percent growth in the first two months of this year, the data showed.
When it comes to exports of clothing, the trend is the same. From January to March, China's exports of clothing and accessories rose 47.7 percent, compared with a 50 percent growth in the first two months of 2021.This shows that while the whole picture for clothing and fabric exports is good, the growth trend is not as steady as many people had thought, experts told the Global Times, while some industry workers said they are "confused" about the trend.
Shifting orders
One reason for the sector slowdown is that some businesses have found that they are losing the orders that swarmed into China in the second half of last year due to the coronavirus-triggered manufacturing standstill. In particular, countries like Vietnam and India are launching their machines again.
According to data released by Vietnam's General Statistics Office, Vietnam raked in nearly $7.2 billion from exporting textiles and garments in the first quarter of this year, up 1.1 percent on a yearly basis. In March alone, the country's textile and garment exports rose 15.3 percent to reach $2.7 billion. Vietnam's export volume of textile products fell 10.2 percent year-on-year in 2020.
Ouyang Hong, general manager of fabrics maker Suzhou Jingzhi Textile Technnology Co and Suzhou Yunzhilan Textile Technology Co, said that his client in South Korea shifted an order of about 2 million yuan ($300,000) from his plant to a factory in Vietnam.
"The garment industry in Southeast Asia is rising again and is snatching business away from us," he told the Global Times, adding that many fabric companies he knows are speeding up the export of fabric machines and raw materials to neighboring countries.
According to Ouyang, this is not a good sign for the industry, as the business advantages Chinese companies had last year because of pandemic control might no longer last.
"Price inquiries and orders were frequent in August and September last year," he said, "but now, when we send e-mails to our overseas clients, they often don't reply."
He noted that countries like Vietnam have some advantages in fabrics and clothing manufacturing, particularly in low-end production. For one thing, the cost of labor is much lower than China's.
"A worker in Vietnam could earn 500 yuan per month, while one in China is expected to earn 10 times more. It's like China 20 years ago," he said.
Challenges remain
Rising competition from neighboring markets is not the only challenge that domestic companies are facing, industry practitioners say, as rising labor and material costs are cutting into profit margins.
Jin Xiaobo, CEO of Zhejiang Kaierhai Textile Garments Co, said that the cost of raw materials has soared in China along with the oil price hike and the US' expansive monetary policies, which have squeezed their profit margin. In the past, they could earn about 20-30 percent profit on their products, and now they can only earn around 10 percent.
"Now we have found that customers are more conservative than they were before the pandemic, meaning that they won't allow us as much leeway to negotiate on prices," he said.
Jin also noted that it is more difficult to hire employees this year, as industries are becoming imbalanced after the COVID-19 crisis, with some industries, like electronics, developing faster and showing greater appeal to workers.
In general, his company's first quarter sales revenues have risen by 20 percent compared with the fourth quarter last year, but dropped slightly compared with the corresponding period last year.
"With the rising cost of materials and the unstable exchange rate, we still have confusions about the future," he said.
Ouyang noted that because of the unstable exchange rate and rising material cost, they are often afraid of receiving orders for fear of incurring losses. His sales revenues dropped by about 30 percent on a yearly basis in the first three months of 2021.
However, experts have said that overseas companies' adjustments in inventory, instead of order shift, has been the underlying reason in China's garment export growth slowdown.
"The pandemic has in general showed a rebounding tendency around the globe since February, which has quenched some overseas clients' import inclination as they hadn't expected the pandemic to resurge," Chen Jing, vice president of the Technology and Strategy Research Institute, told the Global Times.
But he noted that despite the fluctuation, the fundamental situation of China's garment exports has been "stable".
"Last year's growth, with China's garment companies snatching market share from many overseas countries, is not a normal state. The clothing industry is one with fierce global competition, but China's industrial advantage is still large," he said.
Industry workers also said that although Asian countries are rising in producing low-end fabrics and clothing products, when it comes to products with added technology values, China's advantages are not to be replaced easily.
For example, Liu Hongyuan, CEO of compression socks maker Hangzhou Zhongzhi Industry Co, told the Global Times that he felt trade conditions have been "good enough" this year. The company's exports to the US grew by 30 percent in the first quarter, thanks to falling transportation costs, he said.
Rise of domestic markets
The garment companies interviewed by the Global Times said that they are now paying more attention to domestic markets to support their business.
Jin, for example, said that they started to attend domestic trade fairs and got in touch with Chinese clients in the second half of last year, and the results have been satisfactory. Around 30 percent of their orders are now placed by mainland customers, while the proportion was only about 5 percent before.
Ouyang also said that they have started to explore domestic markets to a greater extent, including using novel channels such as the popular short video partform douyin.com for commercial promotions.
"In general, I am optimistic about this year's business, because clients' inventory was limited last year due to the pandemic, and this year they should order more," he said.
Source: The Global Times
Overall exports of textiles and clothing from Mexico are forecast to move up in the first seven months of the current year. Category-wise, textiles constituting fibres, yarns and fabrics are likely to see a drop during January-July 2021, while apparel and home textiles export are expected to grow, according to Fibre2Fashion's market intelligence tool TexPro.
In 2019, Mexico exported textiles and clothing worth $4,201.77 million with monthly average exports of $350.15 million. In 2020, exports decreased by 10.52 per cent year-on-year to $3,759.74 million due to the impact of COVID-19 pandemic. Monthly average exports last year stood at $313.31 million, and this figure is expected to surge to monthly average of $397.04 million in the first seven months of 2021. The exports showed a slight rise to $398.12 million in July 2021 over the $395.95 million in January 2021.
Exports of only apparel were valued at $3,269.41 million in 2019 with monthly average exports of $272.45 million. This value decreased by 19.84 per cent year-on-year to $2,620.89 million in 2020. During January-July 2021, the monthly average apparel exports are expected to surge to $281.01 million from the monthly average of $218.41 million in 2020.
Mexico’s textiles exports stood at $285.10 million in 2019 with monthly average of $23.76 million. The value decreased by 24.06 per cent year-on-year to $216.51 million in 2020. In the first seven months of 2021, the monthly average exports of textiles are expected to drop to $14.61 million from the monthly average of $18.04 million last year.
Home textiles exports fetched $647.27 million for Mexico in 2019 with monthly average exports of $53.94 million. The value soared by 42.50 per cent over the previous year to $922.34 million in 2020, despite the world going through the COVID-19 pandemic. These exports are likely to further rise to monthly average of $101.42 million during January-July 2021 compared to the monthly average of $76.86 million in 2020.
Source: Fibre2Fashion News
Pakistan’s cotton output during the current crop year fell to 5.64 million bales from 10.76m bales last year, the lowest in three decades. Imports of cotton continue to meet the country’s requirement of about 15m bales. The industry’s cotton imports have jumped to $1.03 billion during the nine-month period between July and March from last year’s $556.1m. The massive decline in cotton output has created serious problems for the textile industry.
After enjoying an unprecedented run during the first half of the current fiscal year, the value-added sector is anticipating a significant drop in the overseas shipments from the country in the last quarter to June and a ‘disastrous’ three months from July to September on aggravating yarn shortage.
Exporters of value-added textile products claim that they have been suffering losses because of almost a 40pc rise in the domestic cotton yarn prices, nearly 700pc increase in sea freight and 8pc appreciation in the value of the rupee against the dollar since January. Based on their claims, the Economic Coordination Committee (ECC) has recommended the cancellation of the 5pc customs duty on imported yarn until the end of June. The cabinet is likely to take a final decision on the ECCC recommendation this week.
The Ministry of Commerce has already withdrawn the 5pc regulatory duty on yarn imports in December to ease price pressures in the domestic market and facilitate imports by the value-added industry.
On the other hand, the All Pakistan Textile Mills Association (Aptma), the lobby group representing wealthy yarn producers, is opposing duty-free imports of yarn. The yarn makers are also blamed by the value-added sectors for rejection by the cabinet of an earlier ECC decision to allow yarn imports from India via land route — Wahga-Atari border.
The rising domestic yarn prices have led exporters like Faisalabad-based Pakistan Textile Exporters Association’s Khurram Mukhtar to accuse the yarn producers of having created artificial shortages in the market to rig profits at the cost of value-added exporters. “The country’s yarn consumption had increased by about 25pc owing to the growth in the value-added exports that made hoarders and speculators jump into the market. Yarn is being hoarded or sold off-the-books on cash to push its local prices. The unavailability of raw material for the value-added industry will prove disastrous for exports,” he told Dawn from Faisalabad by telephone.
Such claims have led Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) to demand that the prime minister order a forensic audit of yarn producers to break the ‘cartel’ of yarn makers.
While welcoming the ECC decision to allow duty-free import of yarn (from any source other than India), PRGMEA leader Ijaz Khokhar said Pakistan needs to continue importing duty-free yarn as long as it does not become self-sufficient in cotton crop to break the cartel of yarn producers. If this relief is withdrawn after June amid a shortage of cotton, export growth will be affected severely, which should be avoided at all costs, he told this correspondent by telephone from Sialkot.
“This isn’t an ideal situation given the losses suffered by exporters in the wake of increasing sea freight and a sharp depreciation of the dollar against the rupee, yet it will help ease domestic yarn shortages and provide some cushion to the small- and medium-sized apparel exporters.” He said the value-added textile industry believed that the real solution to their raw material shortage lies in the resumption of the trade from India through the land route. “(Yarn) imports via sea would never substitute extremely low-cost yarn via land route particularly in the wake of exorbitant hike in the rates of shipping lines.”
Naturally, Aptma has rebutted all allegations and its chairman Adil Bashir asked the government last week to keep from ‘distorting the policy of free-market mechanism from cotton to garment in the textile supply chain as it would be disastrous for the textile exports’. He said the free market mechanism ensures international prices to the entire supply chain and is the reason Pakistan has so far sustained the biggest cotton crop failure and is still on the path of export growth. He was hopeful that ‘higher cotton prices will encourage the farmers to grow more cotton and increase their output this year.
In a series of tweets, Aptma argued that a ‘certain lobby is trying to mislead the government with unsubstantial claims regarding the shortage of cotton yarn’. It claimed there was ample availability of yarn in the market, adding (the value-added industry) did not want to pay the international price. The industry has exported 292.2 million tonnes of yarn worth $721.2m in nine months to March this fiscal year, down from 336.2mt worth $819.8m last year.
“Buyers need to pay international, duty-free prices of products to procure locally or from abroad. The value-added sector is reluctant to pay international prices as their export contracts are fixed whereas global prices have increased and the appreciation of the rupee has minimised the possibilities of gaining profit in a low-margin business.”
It contended that the yarn producers had purchased 6m bales of local cotton at international prices and imported the balance from the US, Brazil and West Africa to maintain yarn production of 200,000 tonnes a month, which is twice the requirements of the value-added sector. “Yarn and cotton rates reflect international prices. As a consequence of dollar depreciation and decrease in the cotton prices, spinners also had to adjust pricing and accept the loss.”
According to an executive of a major garments and home textile manufacturer, the reduced cotton output had created difficulties for the entire chain. “This is a fact that yarn and fabric are not available in the market for the value-added industry, the claims of spinners apart. But it is also a fact that the yarn producers have paid a higher price for imported cotton because of the rising global prices, leading to a spike in the yarn rates that has pitted value-added industry against yarn producers,” he explained. He said the other factors like the increase in the sea freight charges and appreciation of the rupee against the dollar have eaten into the margins of exporters of the value-added textiles as their export contracts were fixed months ago when the dollar was rising, cotton yarn was cheaper and freight charges were low.
“The changes in these variables have brought to the fore the diverging interests of the different textile chain segments. Unless these internal conflicts are addressed through a policy that looks at the entire supply chain rather than incentivises one or two segments, the tussle between them is likely to increase going forward. The cotton output and pricing issue is also likely to aggravate when 1m new spindles being added by the spinners to expand their capacity become operational.”
Source: The Dawn News
China will strengthen cooperation in the cotton industry with countries participating in the Belt and Road Initiative during the 14th Five-Year Plan (2021-25) to reduce reliance on imported cotton from the United States and Australia, a senior academic with the Chinese Academy of Agricultural Sciences said recently.
Li Fuguang, head of the academy's Institute of Cotton Research, said Central Asia's great potential in cotton production will help meet import demand of 2 million metric tons based on China's clothing textile needs and cotton production.
"Taking advantage of complementary countries in Central Asia will be conducive to a strong response to the trade conflicts between China and the US, and meanwhile promote implementation of the Belt and Road Initiative," Li said.
Cotton production in Central Asia covers nearly 2 million hectares, and the environment there is similar to the Xinjiang Uygur autonomous region, which accounts for 84.9 percent of cotton production in China.
"If the cotton-making technology in Xinjiang is applied to Central Asian countries, the production in the region will see rapid development," Li said, adding that production is expected to increase by at least 5 percent.
Demonstration technology parks have been established in Uzbekistan since 2018 to promote Chinese cotton-growing technologies. Demand for irrigation water has dropped by two-thirds while yields have doubled, Li said.
In the following five years, China will focus on introducing the cotton cultivation technology to Uzbekistan, and keep advancing it in Tajikistan and Kyrgyzstan, he added.
It will also beef up efforts to realize the modernization of the cotton industry by upgrading systems and innovating key technologies.
The country plans to strengthen the collection and utilization of cotton germplasm resources, explore excellent gene sources, and create excellent resources with high yield, good quality and wide adaptability, the academy said.
China will develop environment-friendly and sustainable cotton planting technology to improve productivity and benefits, increase farmers' incomes and contribute to rural vitalization, Li said.
The China Cotton Industry Alliance, a nonprofit organization led by the institute, will play a major role in improving cotton quality and integrating the entire industry chain.
The alliance issued a statement late last month resolutely opposing any stigmatization of Xinjiang cotton. It is endeavoring to build a high-quality cotton industry chain and increase international recognition of domestic cotton brands.
During the 13th Five-Year Plan (2016-20) period, China stabilized its cotton planting area at about 3.3 million hectares, the academy said.
"The country's cotton production has maintained an annual output of 6 million tons, and it ensures our cotton security," Li said.
Source: The China Daily
The Department of Trade and Industry (DTI) will ask the European Union to allow Philippine garment exports to use imported fabric or textiles under the bloc’s trade preference scheme.
During a webinar organized by the Philippine Exporters Confederation Inc., Trade Assistant Secretary Allan Gepty said the agency is working on a request for derogation with the EU so the country’s garment exports that use imported materials would be included in the Generalized Scheme of Preferences Plus (GSP+).
Under the EU GSP+, 6,274 products from the Philippines can enjoy duty-free entry to the bloc if these products originate from the country.
For Philippine garment exports to qualify for the zero duty, the EU requires the use of locally made fabric or textiles.
Gepty said the country’s garment exporters face difficulty in complying with the requirement given limited sources of raw materials.
“For example, most of the raw materials are being sourced from China and under GSP+ rules in the EU, this will not qualify if your inputs will come from China,” he said.
For the country to be given a lenient rule on the EU GSP+, he said a request to invoke derogation would have to be made.
Asked for a timeline on when the request for derogation would be made with the EU, he said in a text message “maybe second to third quarter.”
Earlier, Foreign Buyers Association of the Philippines (FOBAP) president Robert Young said the FOBAP, along with other groups involved in the garments industry such as Garment Business Association of the Philippines, Confederation of Wearable Exporters of the Philippines, Textile Mills Association of the Philippines, and Textile Producers Association of the Philippines, have made a request to the DTI to ask the EU to invoke derogation under the rules of GSP+.
Should the request for derogation be successful, Young said the country would be able to ship $100 million worth of additional exports to the EU.
Apart from a request for derogation, Gepty said the DTI would also continue its push for a free trade agreement (FTA) with the EU.
“Noting that our GSP+ preference would end in December 2023, in parallel, we are also pushing for a Philippines-EU FTA. With an FTA, it is more stable,” he said.
Two rounds of negotiations have been conducted for the EU-Philippines FTA. The first round was held in May 2016, and the last one in February 2017.
Source: The Philstar Global News
