The COVID-19 pandemic highlighted that supply chains should not only be based on cost but also on trust, according to Indian minister for commerce and industry Piyush Goyal, who recently said ensuring transparent, trustworthy and resilient supply chains is at the core of trade revival and India emerged as a source of resilience and a trusted partner. Goyal, who is also in charge of consumer affairs, food and public distribution, and textiles portfolios, was delivering the keynote address at the Bank of America's flagship virtual conference on the topic ‘Shifting supply chains globally: Could Make in India see success?’. The minister said supply and demand disruption induced by the pandemic has forced manufacturers everywhere to reassess supply chains. India demonstrated its capacity and capability to the entire world by not only meeting all international service commitments, but also by becoming self-sufficient in production of critical medical supplies, he was quoted as saying in a government release. Goyal said India is back in action and the decade is shaping up to be a growth decade, with the country’s exports surging and foreign direct investment inflows and investments witnessing a high growth trajectory. Global sentiments are changing from ‘Why India’ to ‘Why not India’ to now ‘Make in India for the world’ and serving the world from India, he added.
Source: Fibre2 Fashion
Exports of cotton and man-made yarn/fabrics/made-ups, readymade garments, jute products including floor covering, and carpets from India showed positive growth in October 2021 over the same month of the previous year, according to the preliminary data on India’s merchandise trade in October 2021 released by the country's ministry of commerce & industry. All textile-apparel commodities/commodity groups recorded a positive growth during October 2021 vis-à-vis October 2020. These include cotton yarn/fabrics/madeups, handloom products, etc (46.2 per cent), man-made yarn/fabrics/made-ups, etc (29.12 per cent), jute manufacturing including floor covering (27.44 per cent), leather & leather products (15.64 per cent), carpet (10.06 per cent), handicrafts excluding handmade Carpet (9.72 per cent), and readymade garments of all textiles (6.42 per cent). India’s exports in October 2021 stood at $35.65 billion, as compared to $24.92 billion in October 2020, exhibiting a positive growth of 43.05 per cent. In rupee terms, exports were ₹2,67,056.26 crore in October 2021, as compared to ₹1,83,060.60 crore in October 2020, registering a positive growth of 45.88 per cent. As compared to October 2019, exports in October 2021 exhibited a positive growth of 35.89 per cent in dollar terms and 43.30 per cent in rupee terms. Cumulative value of exports from India for the period April-October 2021 was $233.54 billion (₹17,30,104.50 crore) as against $150.54 billion (₹11,24,418.69 crore) during the period April-October 2020, registering a positive growth of 55.13 per cent in dollar terms (positive growth of 53.87 per cent in rupee terms). As compared to April-October 2019, exports in April-October 2021 exhibited a positive growth of 25.97 per cent in dollar terms and 33.06 per cent in rupee terms. Commenting on the country’s export performance, Piyush Goyal, India’s minister of commerce & industry and textiles, said in his twitter post that the continuing robust exports growth signals a sustained economic rebound. “Quality goods & services exports from Flag of India are laying the foundation of an Aatmanirbhar Bharat.”
Source: Fibre2 Fashion
The minister stressed that new-age industries and start-ups are going to play a critical role in the economy. Finance minister Nirmala Sitharaman on Wednesday exhorted corporate India to enhance its risk appetite and undertake expansion to supplement the government’s efforts to stimulate growth. The demand side of the Covid-hit economy is now able to “manifest itself”, she said at a CII event, indicating that the companies that ramp up capacity now will be able to cash in on the resurgence in consumption that was visible in the build-up to Diwali. In certain cases, supply bottlenecks weighed down consumption, she said, highlighting how demand and supply sides are closely interlinked in a real economy. For instance, car sales could have been higher had there been no chip shortage, she said. Hence the criticism that the government was rolling out mostly supply-side relief measures and ignoring the demand side in the wake of the pandemic is misplaced, she hinted. In the three weeks preceding Diwali, credit worth as much as Rs 75,000 crore was distributed through the out-reach programmes conducted by banks across four-five categories, Sitharaman said. For her part, the minister pledged to go the extra mile if India Inc commits more investments. From reducing compliance burden of companies to ensuring adequate credit flow to them, the government has remained sensitive to the needs of industry, she stressed. “At a time when India is looking at healthy growth, looking forward to industry to give additional impetus to growth…I want India Inc to be a lot more risk-taking. Industry should not delay creation of additional capacity,” Sitharaman said. Separately, at a conference on Creating Synergies for Seamless Credit Flow and Economic Growth, the finance ministry impressed upon banks to shed inhibitions and spur lending, sources said. The two-day conference, starting Wednesday, was attended by 25 key ministries, industry leaders, banks and financial institutions. The move comes as the government seeks to stir economic growth through sustained credit push, amid fears that bankers were increasingly turning risk-averse. Having remained muted for months together, non-food loan flow witnessed an uptick of late. Growth in non-food bank credit improved to 6.8% in September from 5.1% a year earlier. Loans to industry grew 2.5% from 0.4% but still remained low. That’s despite the fact the weekly average (net) liquidity surplus in the banking system has risen from an average of Rs 4.5 lakh crore by the end of June to over Rs 7.5 lakh crore as of endSeptember, according to CARE Ratings. The minister stressed that new-age industries and start-ups are going to play a critical role in the economy. The banking sector, too, has witnessed a remarkable turnaround. “NPAs are drastically down. Recoveries are going up. More than Rs 10,000 crore has been raised by public sector banks (so far this fiscal),” she said at the CII event. Furthering the case for Atmanirbhar Bharat, the minister stressed the need for reducing excessive reliance on imports, especially in essential goods, given the risks posed by a disruption in supply chains in the aftermath of the pandemic. “Even as we want to be linked with the global value chains, we have to understand and take cognizance of the risks it has posed us,” she said. India had to import protective equipment and even testing kits during the initial phase of the pandemic, she said. Sitharaman said on Monday that the tax devolution to states would be ‘front-loaded’ to enable them to increase the pace of capital spending. “On November 22, an amount of Rs 95,082 crore would be released to states, instead of half that amount which is due as per the Budget,” the minister said, after a meeting with state chief ministers and finance ministers. Of course, what has enabled the Centre to advance the tax transfers is robust growth in tax revenues. In the first seven months of FY22, gross indirect tax collections (net of refunds, but before devolution to states) grew 51% on year to about Rs 7.4 lakh crore, as against a required rate of 3% to achieve the full-year target of Rs 11.09 lakh crore. Similarly, gross (post-refunds) direct tax collections grew an impressive 70% on year in April-October of the current financial year to Rs 6.45 lakh crore.
Source: Financial Express
Bank credit grew by 7.14 per cent to Rs 111.64 lakh crore and deposits increased by 11.42 per cent to Rs 160.49 lakh crore in the fortnight ended November 15, 2021, RBI data showed. Bank credit grew by 7.14 per cent to Rs 111.64 lakh crore and deposits increased by 11.42 per cent to Rs 160.49 lakh crore in the fortnight ended November 15, 2021, RBI data showed. In the fortnight ended November 6, 2020, bank loans stood at Rs 104.19 lakh crore and deposits at Rs 144.03 lakh crore, according to the RBI's Scheduled Banks' Statement of Position in India as on November 5, 2021, data released on Wednesday. In the previous fortnight ended October 22, 2021, bank credit had grown by 6.84 per cent and deposits by 9.94 per cent.
Source: Business Standard
To set up an export cell to study opportunities that are emanating and help exporters tap them Guidance Tamil Nadu, State’s nodal agency for investment promotion and single window facilitation, has been focussing on inward investments and helping overseas investors set up their operations in the State. It is now looking outward investments as the State has set a target of achieving $100 billion in exports by 2030 from the current $26 billion. This is in alignment with the State’s target of becoming a $1 trillion economy by 2030. Its GDP was $300 billion in 2020-21. Guidance is setting up an export cell to study opportunities that are emanating and help exporters tap them, said a senior Government official. It will also help Guidance to identify export-focussed companies which can then be attracted to set up base in Tamil Nadu, he added. Recently, Tamil Nadu Export Promotion Strategy 2021 (EPS 2021) was released that said the State’s strengths in exports and established infrastructure for exports serve a ‘bedrock’ for attracting investors to the State. This, in turn, acts as a catalyst for trade. There is a need for an export promotion strategy to focus on export diversification and export dispersion — identifying districts as export hubs. The State’s export basket is diversified with the top ten products contributing 70 per cent of the export share. Some studies put the State’s untapped export potential of ₹1.6 lakh crore.
Detailed study Guidance’s export cell’s agenda will research on demand for various products; the markets to be tapped and do match making by reaching out to potential buyers to do the tie-ups. A detailed study needs to be done to educate the exporters. A portal will be developed in this regard. To increase exports, it is important to reach out to newer markets. Footwear or textiles need to go up the ladder with higher value-added products.
Sectors such as technical, medical and industrial textiles are major areas for target, said sources. To enable more exports, the support infrastructure like ports will also be improved and major logistics players will be roped in. Recently, Dubai’s DP World signed an MoU with the State government to set up an Integrated Chennai Business Park of DP World at Vallur (₹1,000 crore and 1,100 persons). Many more such investment is required.
Source: The Hindu Business line
“I am confident that we are on a path towards a higher growth trajectory, higher poverty reduction, higher employment, and a prosperous, more developed and better governed India. India's economy is moving towards a higher growth trajectory and is likely to grow at around 10 per cent in 2021-22, Economic Advisory Council to the Prime Minister (EACPM) Chairman Bibek Debroy said on Wednesday. “I am confident that we are on a path towards a higher growth trajectory, higher poverty reduction, higher employment, and a prosperous, more developed and better governed India. “I think it is, more or less, agreed that the real rate of growth this year (FY2022) is going to be around 10 per cent,” Debroy said at an SBI event. At the beginning of FY2021-22, the forecasts for real growth were in the 8.5-12.5 per cent range, he noted. However, all kinds of high-frequency indicators, including GST revenue, e-way bill, power consumption, vehicle registrations, railway freight, corporate profitability, foreign direct investment (FDI) inflows and steel consumption now instil confidence about the fact that the real rate of growth will be at around 10 per cent this financial year, Debroy said. For the 2022-23 fiscal, he expects growth likely to be in the 6-7.5 per cent range. According to him, growth and income growth has four drivers - consumption, investment, government expenditure and exports. Of those, three and a little bit of investment are showing fairly robust and broad-based growth. He said the export story in the country looks good at present. Also, government expenditure has been quite stepped-up. Debroy said with improvement in capacity utilisation, investments are also going to pick up in another six months. He also said that there is a lot of uncertainty around the third wave of COVID-19. However, even if it comes, the impact on economic growth is not going to be very serious due to higher vaccination numbers and a better equipped medical system.
Source: Economic Times
They believe focus on reviving informal sector activity, particularly construction, is key to reviving GDP and jobs Global observers of the Indian economy felt a quick consolidation in India’s fiscal policy may not be the right way to go ahead, and that only a gradual path must be embarked on to ensure growth inches above expectations. While they agreed on buoyant revenue and pace of recovery cranking up growth, they held that reviving lost jobs could be complicated, and will require concerted efforts in areas that need support, particularly the construction sector. They were on a panel that discussed the future of India’s fiscal and monetary policy and its implications on growth, at a conference organised by the Confederation of Indian Industry, an industry lobby group. Sudipto Mundle, distinguished Fellow at the National Council of Applied Economic Research, Taimur Baig, managing director (MD) and chief economist at DBS Bank, Sajjid Z Chinoy, chief India economist at JP Morgan, and Neelkanth Mishra, MD and co-head of Asia-Pacific strategy and India strategist at Credit Suisse, were on the distinguished panel. Both Chinoy and Mishra are on the Prime Minister’s Economic Advisory Council as parttime members. Shankar Acharya, former chief economic advisor and a member of the 12th Finance Commission moderated the dialogue. The economists expect a fiscal deficit close to 6 per cent in 2022-23. All of them mentioned the plight of the informal sector and the need to reverse the losses therein to secularly revive jobs and consumption in the economy. “There has been scarring in the informal sector. As a result, consumption levels have stagnated. The marginal propensity to consume — how many individuals spend for every additional rupee earned — has been affected," said Sudipto Mundle. The supply chain disruptions have a lot to do with the underperforming informal sector, he added. Baig said that expedited formalisation has had a collateral damage on small businesses, not equipped to handle it. This resulted in major scarring. Fiscal policy should cater to these areas in the economy, he said. “In the long run, formalisation will improve the business environment. But done hastily, it erodes the tax base and hurts the fisc, rather than helping it," said Baig. On monetary policy, they asserted that the movement should now be to push real interest rates into positive terrain. “The Reserve Bank of India should look at narrowing the policy corridor at a gradual pace, such that real interest rates cease to be negative,” said Chinoy. Mundle said that much of the heavy lifting has been done by the central bank in the period of deep distress. Now that core inflation is at the upper end of the band, and the US has started tapering its bond purchases, India’s monetary policy should think about raising interest rates. “The heavy lifting, now, remains to be done at the fiscal level. To that effect, the buoyant revenues this year have been a relief,” added Mundle. Mishra remained the most optimistic, and suggested that actual growth numbers in successive years could be in the 9-10 per cent range, against the consensus near-7 per cent mark. But he also said that parts of the economy are still struggling, and they need to be recognised. A lot of job losses yet to be recovered are in the services sector. Even if these jobs return, their household balance sheets are broken, and they will take time to mend. Repairing them at the earliest should be a priority of the fiscal policy, said Mishra. The ray of hope could be the nascent, but meaningfully reviving construction sector. After a brief eight-year period of flat nominal output growth in the sector, indications are such that they have now started to turn, he said. Talking about fiscal consolidation, Chinoy said there is a need to reduce primary deficit and reduce debt pressure. But the process should not be too quick, he cautioned. Such rapid tightening of fiscal policy has in the past choked the growth potential of advanced economies. Mundle mentioned that while sustained expenditure will solve the problem of growth, it may not rescue us from the job problem. For that, growth rates need to be higher than 7 per cent, he added.
Source: Business Standard
The Reserve Bank also forecasts 9.5 per cent GDP growth this fiscal while the average projection ranges from 8.5 to 10 per cent. The government projection is around 10 per cent. Citing faster-than-expected recovery, rising consumer confidence and the resultant spending spike, Swiss brokerage UBS Securities has revised upwards its growth forecast for the current fiscal to 9.5 per cent from 8.9 per cent in September. The brokerage also sees the economy clipping at 7.7 per cent in FY23 but moderating to 6 per cent in FY24, as it expects the benefit of the low-interest rate regime to end by the end of FY23, and it sees the central bank hiking policy rates by 50 bps in the second half of the next fiscal. The Reserve Bank also forecasts 9.5 per cent GDP growth this fiscal while the average projection ranges from 8.5 to 10 per cent. The government projection is around 10 per cent. The GDP grew 20.1 per cent in the June quarter of FY22. In its September review, UBS said on a seasonally adjusted sequential basis, the real GDP declined by 12.4 per cent in the June quarter against the -26 per cent in the same period last year. Therefore, we maintain the base case estimate of GDP growth at 8.9 per cent in FY22 compared to the consensus of 9.2 per cent against the deeper 7.3 per cent contraction in FY21, UBS Securities said. The economy is bouncing back on progressive reopening, and the recovery from the second wave has been more pronounced than what we anticipated, Tanvee Gupta Jain, the chief economist at UBS Securities India said on Wednesday. Therefore pencilled in a higher-than-expected GDP run this fiscal. Without giving an exact number, she said the economy will grow by 9-10 per cent in Q3 and 6-6.5 per cent in Q4 this fiscal, leading to higher overall full-year growth. Gupta-Jain told reporters in a concall that she sees real GDP clipping at 9.5 per cent this fiscal, up from 8.9 per cent forecast earlier, 7.7 per cent in FY23 -- which is more optimistic than the consensus 7.4 per cent for the year, but the growth momentum will moderate to 6 per cent in FY24 as the output gap will remain negative amidst the global growth engine slowing down. Their optimism comes from their internal UBS India Activity Indicator data, which suggest economic activity has improved sequentially by an average of 16.8 per cent in the September quarter after contracting 11 per cent in the June quarter. Even for October, the indicator was up 3.1 per cent month-on-month on the festive demand bounce. The brokerage bases the more-than-consensus growth optimism on the following: though consumption growth may moderate measures to boost public Capex and early signs of a recovery in the residential real estate sector may offset some of the adverse impacts. Similarly, exports could also moderate next year from the very high rates this year due to a shift from goods to service consumption at the global level as the pandemic recedes. They also see a potential credit accelerator effect in the country aiding the recovery. The baseline assumption is that activity continues to normalise, and remaining mobility restrictions are gradually removed. Downside risks to the outlook include the following: a mutant virus that is resistant to vaccines is the biggest downside risk, as it may leave the government no choice but to begin new mobility restrictions, another could be a more than the expected spike in inflation and the resultant hike in repo rates to the tune of 75 bps next fiscal. If both materialise, then FY23 growth will be much lower at 5 per cent, she said. And the upsides would be a successful and timely implementation of the recently announced structural reforms boosting growth beyond our baseline forecast, which will also lead to the economy closing the output gap faster. According to the brokerage, potential growth has slowed to 5.75-6.25 per cent currently compared to over 7 per cent in 2017, due to longer-than-expected disruption caused by the pandemic and balance sheet concerns faced by economic agents. Beyond FY22, Gupta-Jain believes Capex, especially infrastructure spending, manufacturing and exports will be the next key growth drivers. On inflation, she expects CPI to decelerate to 4.8 per cent in FY23 from 5.4 per cent in FY22, assuming the RBI gradually starts unwinding its ultra-easy policy as the economic recovery gains momentum. In a base case scenario, she expects a policy rate hike of 50 bps in H2 FY23. On the fiscal front, she expects the government to remain committed to fiscal consolidation and narrow the deficit to 8.8 per cent in FY23 from 10.1 per cent in FY22.
Source: Business Standard
Tourism Minister V Srinivas Goud on Wednesday urged the Centre to sanction Rs 300 crore for development of Ramappa temple which earned the tag of world heritage site. He also sought funds for development of Bhoodan Pochampally which is set to be named as one of the best tourism villages by the United Nations World Tourism Organisation. The Minister will soon meet Union Tourism Minister G Kishan Reddy seeking funds and support for development of tourism in Telangana State. Speaking to mediapersons at his residence in the Ministers’s Quarters here, Srinivas Goud said there were numerous places like Bhoodan Pochampally in Telangana State which had historical and cultural importance. He urged the Centre to treat all the States equally and release funds without any stepmotherly treatment. “Our efforts have come to fruition which in turn brought recognition to India first, on international platforms, followed by recognition to Telangana State. We are expecting an international recognition for Buddhavanam project shortly,” he said. Elated over Bhoodan Pochampally getting international recognition, Srinivas Goud termed it is a team effort of the State government and thanked Industries Minister KT Rama Rao for laying special focus on textiles sector and promoting Telangana’s textiles at all possible events. He reminded that a Pochampally saree was gifted to numerous dignitaries who visited the State from various parts of the country and abroad. The language/dialect and culture of the Telangana region were irgnored and insulted in erstwhile Andhra Pradesh. But their development and promotion by the Telangana government were bringing international repute to the State, he added.
Source: Telangana Today
More than 300 small and medium enterprises (SMEs) have applied to display their products on Cambodia Trade, an online marketplace initiated by the Ministry of Commerce. The ministry received 325 applications as of November 15. 73 of the applications have passed all checks and are eligible to display products on the marketplace. The rest are still undergoing final checks, according to ministry spokesman Pen Sovicheat. Most of the applicants are in the agro-industry, handicraft, food and beverage processing and textile industries, he said. A ministry working group is addressing minor technical problems, mainly related to transportation issues, Sovicheat said. “Due to technical problems Cambodia Trade has been delayed a bit,” he said, adding that the ministry wanted to ensure all items ordered by customers will be transported accurately and safely. “We will try to accelerate and launch the Cambodia Trade soon,” he said. The ministry planned to launch the e-marketplace in October, after reaching deals with local delivery firms and payment system companies. Commerce Minister Pan Sorasak said the market has been designed as an online platform for SMEs to sell Cambodia-made products to domestic and foreign consumers and business partners. “Regardless of where you are, you can access Cambodian products,” Sorasak said. Products eligible for the online marketplaces have to be made locally and hand-crafted, according to the ministry. Both local and foreign companies with operations in Cambodia are eligible to apply to join the marketplace. The CambodiaTrade e-marketplace was developed with financial support from the Switzerland-based Enhanced Integrated Framework for Trade-Related Assistance for Least-Developed Countries. The government says it hopes Cambodia Trade will make the Kingdom less reliant on foreign financial aid.
Source: Khmer Times
Foreign direct investment (FDI) into the Chinese mainland, in actual use, rose by 17.8 per cent year on year (YoY) to 943.15 billion yuan, or $142.01 billion in the first 10 months of 2021, according to the ministry of commerce, which said during the January-October period, FDI into the service sector increased by 20.3 per cent YoY, while high-tech industries saw FDI inflow jump by 23.7 per cent. Foreign investments from countries along the Belt and Road as well as the Association of Southeast Asian Nations into the Chinese mainland jumped by 30.7 per cent and 29.5 per cent respectively during the period, an official news agency reported.
Source: Fibre2 Fashion
Industry shrugs off cotton boycott as region's garment shipments soar The output of the cotton textile industry in the Xinjiang Uygur autonomous region and exports of its products both achieved significant growth this year despite a boycott of cotton and textile products from the region amid allegations of so-called forced labor, business insiders said. Although the boycott of Xinjiang cotton and textile products initiated by the United States, which was based on groundless claims of forced labor, has cast a shadow over Xinjiang's cotton textile industry, the region has managed to become even stronger as its quality cotton and textile products remain popular in domestic and global markets, said Liu Yaozhong, deputy director-general of the textile industry sub-council of the China Council for the Promotion of International Trade. In January, the US announced a ban on imports of Xinjiang cotton as well as related products over alleged human rights abuses. Two months later, public outrage was expressed in China after some international brands chose not to source cotton from Xinjiang, citing allegations of forced labor based on claims made by the Better Cotton Initiative, an NGO based in Switzerland that is supported by the US government. "Thanks to the support of the massive domestic market and orders from the majority of countries, which can see the Xinjiang cotton issue objectively, the region's cotton textile industry didn't fall during the crisis. On the contrary, it has achieved healthy growth," Liu said on the sidelines of the China Xinjiang Development Forum held in Beijing on Monday. The boycott hasn't affected Xinjiang's cotton production, as the region is expected to produce more than 5 million metric tons of cotton this year, about the same as last year. It will account for about 85 percent of China's total cotton production this year, Liu added. In addition, the industrial added value of large and medium-sized textile companies in Xinjiang from January to August increased 26.4 percent year-on-year, while the industrial added value of large and medium-sized textile companies nationwide during the first nine months of the year was up 6.3 percent year-on-year, he said. "It's clear that Xinjiang's textile industry has been growing fast," Liu added. During a trip to Xinjiang in May, Liu said he noticed that many textile companies were short of workers, so the "forced labor" claim was just a joke among locals. "The claim is just to politicize the trade issue," he said. "I hope international companies and buyers that have doubts can come to Xinjiang and carry out their own inspections so they can resume cooperation with Xinjiang cotton and textile suppliers." After seven decades of development, the cotton textile industry in Xinjiang has become vitally important for people of all ethnic groups in the region and the domestic and global textile and garment industries, said Zhang Xi'an, vice-chairman of the China Chamber of Commerce for Import and Export of Textiles. "Exports of textiles and garments from Xinjiang reached $4.74 billion in the first nine months of this year, an increase of 53.7 percent year-on-year. The growth is significantly higher than it was nationwide," Zhang said. He added that the development of Xinjiang's cotton textile industry is key to local livelihoods as more than 65 percent of the workers in the industry are not members of the Han ethnic group.
Source: China Daily
Following lockdowns in retail and factory closures in source countries, supply chain disruptions continue to hit the fashion industry hard. With shipping costs becoming the biggest cost driver, 71 per cent of apparel and fashion companies are planning to increase their nearshoring share by 2025, according to a latest report by McKinsey & Company. “Harbor shutdowns, port congestion, container shortages, and capacity issues in sea and air freight are putting the fashion industry under massive pressure. For the first time, shipping disruptions are becoming the biggest cost driver,” according to the leader of the Apparel, Fashion & Luxury practice at McKinsey in Germany, Senior Partner KarlHendrik Magnus. 82 per cent of sourcing executives surveyed cite shipping costs as the biggest driver, while labour costs in source countries—previously always one of the top drivers—is mentioned by only 21 per cent. “The era of sourcing continuous cost improvement is being challenged as never before and there’s an increasing focus on other competing goals,” says Patricio Ibáñez, co-author of the study and Partner at McKinsey. “Fifty percent of companies have already embarked on extensive transformations to increase sourcing speed and flexibility,” according to the key findings of the study “Revamping fashion sourcing: speed and flexibility to the fore” by McKinsey & Company. As part of the international study, the management consultancy surveyed 38 CPOs (chief procurement officers) from leading apparel companies and retailers in North America and Europe, who together account for roughly $100 billion of sourcing volume. Discussing the increasing importance of nearshoring, resilience, and sustainability, the report states that to remain competitive, fast response times and supply chain resilience are crucial for today’s fashion companies. More and more businesses have reported a fall in earnings in recent months as new merchandise and replenishments have arrived too late, the assortment fails to resound with consumers, and markdowns on overstocks are increasing. One way to respond more flexibly to supply chain risks and current trends, while also managing production by sales data, is to introduce shorter transport routes, says the report by the global consulting firm. Despite the higher sourcing costs, almost threequarters of respondents are planning to grow their nearshoring share—that is, to source apparel from nearby countries. For the first time, Turkey is now one of the top-3 most promising source countries for the years ahead. Turkey is particularly appealing for the European market: Transportation from Turkey to Germany, for example, takes three to six days compared to the up to 30 days needed to move an item of clothing from southeast Asia by ship. For the US market, Central America has become more of an important focus. Relocating production back to the domestic market is also gaining interest: 24 per cent of sourcing executives mentioned increasing their reshoring share as an option. “Another advantage of nearshoring is that the shorter transport routes increase sustainability while lowering greenhouse emissions. Nearshoring also allows more flexible in-season production, which helps to reduce overproduction,” says the report’s co-author Saskia Hedrich. This will also support a trend where 53 per cent of firms are planning to reduce the number of options in their assortment in the next few years by focusing more on analytics to deliver more intelligent and customer-centric design. It’s a trend that benefits everyone: Customers with products that are better tailored to their needs, businesses with better full-price sales, and the environment with less product surplus and waste.
Source: Fibre2 Fashion
Subdued domestic demand due to high rate of inflation, high cost of imports owing to a weaker lira, high energy costs, and lower investments will impact manufacturing and exports of Turkish textile-apparel sector. For the month of October 2021, inflation rate rose to a 2.5-year-high of 19.89 per cent year-on-year, according to Turkish Statistical Institute. “The nearly 20 per cent annual inflation rate is driven by food, services, housing and transportation prices, leaving consumers with little money for their clothing needs. So, people are postponing are purchasing only the minimum necessary textiles for their daily needs,” according to Suat Idil, who represents Fibre2Fashion in Turkey. “The decrease in domestic demand is definitely going to impact manufacturing as textile-apparel companies will cut down on their production.” Accompanying high inflation is the weakening currency. Turkey’s currency lira has lost around 25 per cent of its value since the beginning of 2021, and it today stands at 10.37 against the US dollar. “This is helping textile exporters earn more money right now. Actually, higher inflation and lower interest rate, and thereby weakening the currency, is the government’s strategy for promoting exports. But it is putting big pressure on people as market prices have gone up like crazy. In short term, textile exporters might enjoy this, but then when it comes to importing raw materials from abroad it would also affect them in a bad way,” explains Idil. During January-September 2021, Turkey’s apparel exports increased by 25.72 per cent to $13.364 billion, compared to exports of $10.630 billion during the corresponding period of 2020. However, its imports of cotton, cotton yarn and cotton textiles (HS chapter 52) increased substantially by 34.2 per cent year-on-year to $2.553 billion during the same period, according to the data from the Turkish Statistical Institute and the country's ministry of trade. Meanwhile, in addition to the high cost of fuel and other imports, the government this month raised the price of natural gas supplied to the industry by 48 per cent, as a global price spike drove up import bills. One of the largest gas importers in Europe, Turkey depends on pipeline gas from Russia, Azerbaijan and Iran as well as liquefied natural gas (LNG) imports from Nigeria, Algeria and spot markets. “As a result of the current scenario, new investment in the country’s manufacturing sector, especially from domestic players, will fall drastically. Already, people have started shifting their savings to gold and foreign currencies,” says Idil. “It is ironical that this comes at a time when the West is actively pursuing ‘near-shoring’ and ‘China + 1’ strategy,” a person sourcing goods for a European retailer told Fibre2Fashion on the condition of anonymity. According to economists in Turkey, one of the major reasons for the present high rate of inflation and the weakening of the currency is the government’s insistence on low interest rates. They argue that this may have more side effects next year, which may even spill into 2023.
Source: Fibre2 Fashion
Around 900 exhibitors from 45 countries, including the organisers of numerous joint stands, have already registered for Techtextil, the leading international trade fair for textiles and nonwovens, and Texprocess, the leading international trade fair for processing textile and flexible materials, beginning from June 21, 2022 in Frankfurt am Main. The registration status is over 85 per cent for Techtextil and over 70 per cent for Texprocess based on the last events in 2019, fair organiser Messe Frankfurt said in a press release. With the delay of the fairs until 2022, both will change their cycle of events and shift permanently to even years. The new dates for the subsequent edition have also been set to April 23 to 26, 2024. “The sector is in motion again and people have a great need to find out about the latest developments and see innovations live. Over the last one and a half years or more since the outbreak of the pandemic, companies have faced a variety of new challenges. Many of the companies have undergone a complete restructuring and, simultaneously, launched a host of innovations. Now, they want to discuss them with an international audience of trade visitors,“ said Olaf Schmidt, vice president textiles and textile technologies at Messe Frankfurt. "Techtextil and Texprocess will provide a look ahead in June 2022. The distortions of the industry due to the pandemic and the commitment to sustainability are directing the focus even more toward flexible, digitally automated and sustainable production structures. Among other things, these will also be more regional than before," said Elgar Straub, managing director, VDMA Textile Care, Fabric and Leather Technologies. "Adapted technological solutions exist and are increasingly in demand. The high registration numbers show the need for exchange." Both trade fairs will be held as hybrid events with many supplementary digital services for exhibitors and visitors in addition to the live exhibition and programme of events. With Sustainability@Techtextil and Sustainability@Texprocess, the two leading fairs will put the spotlight in June 2022 on the sustainability concepts of the companies and organisations taking part. Expert discussions will supplement the subject. Moreover, a special category of the Techtextil and Texprocess Innovation Awards will honour outstanding achievements relating to sustainability in the sector, the release added. For the first time, Techtextil and Texprocess will introduce international start-ups for technical textiles and textile processing on a special area supplementing the popular ‘Young Innovative Companies from Germany’ area supported by Germany’s federal ministry of economic affairs, which spotlights companies based in Germany that have been on the market for a maximum of 10 years. Additionally, young people in the textile sector can benefit from the Texprocess Campus with its presentations by universities and other institutes of higher education. In 2022, Techtextil and Texprocess will be held for the first time in the western section of Frankfurt fair and exhibition centre with halls 8, 9, 11 and 12. With regard to the applicable hygiene regulations, Messe Frankfurt will maintain close contact with the relevant authorities in order to ensure the best possible protection of exhibitors and visitors at all times. With the Techtextil and Texprocess Forums, visitors to both fairs can look forward to highly topical and multi-faceted insights into a wide variety of subjects throughout the two events. The Techtextil and Texprocess Innovation Awards will also be given for outstanding new developments in the fields of technical textiles, nonwovens and functional apparel textiles, as well as technologies and methods for processing textiles and flexible materials.
Source: Fibre2 Fashion
