A new report by the Textile Exchange shows, the market share of preferred fibers and materials grew significantly in 2020. As per the report, ‘the Preferred Fiber and Materials Market Report 2021,’ the share of preferred cotton increased from 24 to 30 per cent while that of recycled polyester increased from 13.7 to 14.7 per cent. The share of preferred cashmere increased from 0.8 to 7 per cent while market of responsible Mohair Standard certified fiber expanded from 0 to 27 per cent. FSC and/or PEFC certified MMCFs share increased to approximately 55-60 per cent while the share of recycled MMCFs declined to 0.4 per cent.

Quantitative data on leading organizations

A unique annual publication on global fiber and materials production, availability, and trends, the report includes quantitative data, industry updates, trend analysis of leading companies and organizations. It reflects the increase in brands’ use of preferred fibers and materials in 2020 with 75 per cent increase in number of the certified facilities, out of the total 30.000 facilities.

The standards these facilities certified to included Global Recycled Standard (GRS), Organic Content Standard (OCS), Recycled Claim Standard (RCS), Content Claim Standard (CCS), Responsible Down Standard (RDS), and Responsible Wool Standard (RWS) among others.

Miniscule portion of global market

Despite an increase in certifications, preferred fibers still represent less than one-fifth of the global fiber market. In 2020, companies produced 109 million tonne of fibers in 2020, almost double its production of 58 million tonne in 2000. Their production is expected to rise 34 per cent to 146 million tonne in 2030.

However, to achieve this, the industry needs to rebuild its business to the pre-pandemic levels. It needs to adopt more sustainable practices, and reduce the consumption of conventional fibers and materials, opines La Rhea Pepper, Founder and CEO, Textile Exchange.

Shifting to more energy-efficient model

Textile Exchange’s Climate+ strategy urges the industry to reduce greenhouse gas emissions in the pre-spinning phase by 45 percent by 2030. The industry needs to shift to a renewable energy model and adopt more regenerative practices, says Liesl Truscott, Corporate Benchmarking Director, Textile Exchange.

Textile Exchange urges apparel companies to commit the 2025 Sustainable Cotton Challenges that encourages companies to source all their required cotton from most sustainable sources by 2025. It also endorses the 2025 Recycled Polyester Challenge that urges brands to increase the use of recycled polyester in their collections from 14 to 45 percent respectively, by 2025.

The non-profit organization encourages brands, retailers, manufacturers, and suppliers to track their progress by participating in both the annual Material Change Index (MCI) survey and the 2021 Textile Sustainability Conference in Dublin, from November 15-19 alongwith the concurrent preferred fiber and materials Round Tables Summit.

One of the largest Sub-Saharan African textile exporters to the EU, Madagascar offers a ray of hope to the garment industry reeling under COVID-19 effects. Although COVID-19 supply disruptions, production delays, and demand drop-offs have led to a decline in textile and garment exports, it still remains the largest textile and garment exporter to the EU and the third largest to the US. As per a Textile Today report, last year Madagascar exported clothing, accessories worth $205.9 million, 10.6 per cent of total global exports, and knit or crochet clothing, accessories worth $183.9 million or 9.5 per cent of total exports.

Madagascar is also home to many reputed brands like Zara, Express, JCPenney, CK, One Jeanswear Group, Puma, Dockers, M&S, Petit Bateau, etc. it is also one of the most preferred apparel suppliers to reputed European and African brands including Camaïeu, Woolworths and Zara.

Readily available cheap labor

One advantage for Madagascar is its offers cheap labor. The country has an estimated population of over 28.40 million. Of this, many are employed in the textile and garment industry. Malagasy workers are known to be high-skilled, and can achieve a high level of efficiency with a short training period of 1-3 months. This helps restrict unemployment rate to only 3.6 per cent. About 80 per cent workers in Madagascar are employed in primary sectors such as agriculture. This makes them readily available for the garment industry. Working on a minimum wage of $35 per month, these workers can help Asian garments manufacturers move some of their products to Madagascar to avoid product-source restrictions.

FTAs with most European companies

Other advantage is that Madagascar has Free Trade Agreements with most major international economies and an unlimited duty-free access to the European Union under the EPA and the US under AGOA (African Growth and Opportunities Act). Many foreign investors have set up factories in Madagascar. This helps create employment for around 20,000 people in the country. Madagascar is likely to further create 200,000 additional jobs in the industry by 2022. Of this, 60 percent workers will be women.

One strategy adopted by Madagascar to fuel garment industry growth is ti strengthen its potential sub-sectors. The current sub-sectors can produce high-quality exportable yarns and fabrics. However, they cannot meet domestic demand which makes imports necessary. Around 50 per cent of Madagascar garment and textile factories closed due to the pandemic. Retailers canceled orders and froze contracts as COVID-impacted demand. Brands have cancelled orders for manufactured items and terminated contracts for 2021. Yet, Madagascar is trying to attract foreign customers. It has launched a project to preserve and produce natural silk.

Launched during the 7th edition of the annual event Origin Africa in Antananarivo, the project aims to expand Madagascar’s garment manufacturing capacity. The country would soon be ready to take on global exporters.

Growing awareness about maintaining personal and environmental hygiene has pushed up demand for home textiles in India. As an ICRA report ‘Indian home textile exporters sew a success story on pandemic-induced lifestyle changes; to clock 20-25 per cent growth with healthy margins in FY2022,’ reveals demand momentum is likely to sustain through Q2-Q4 FY2022, continuing with the trend of past three quarters. The Indian Independent Investment and Credit Ratings Agency, ICRA surveyed four large listed companies with 35-40 per cent share in the India’s home textile exports for this study.

Double digit growth in FY2022

The report states, these companies are likely to clock in double-digit growth of around 20-25 per cent in FY2022. In FY2021, their revenue growth remained subdued at 5 per cent on account of a 40 per cent Y-o-Y decline in performance during Q1 FY2021. The companies recorded 25 per cent Y-o-Y revenue growth during the remaining three-quarters of the fiscal. However, their operating income declined 18 per cent Y-o-Y in Q4 FY2020 as the pandemic impacted exports to key destinations.

“After adjusting the base for this decline, the exports of these home textile manufacturers grew 15-20 per cent during the nine-month period ended March 2021. Sales averaged 25-40 per cent higher than the three-year average for the pre-COVID period,” elaborates Pavethra Ponniah, Senior Vice President & Co-Group Head, Corporate Sector Ratings, ICRA. The home textile sector reverted to Y-o-Y growth from Q2 FY2021and grew in double digits for the remaining three quarters. Most demand was driven by the US which accounted for 60 per cent of India’s home textile exports.

Robust distribution model boosts US exports

During these three quarters, India’s exports to the US, increased 14 per cent against a growth of 9 per cent in FY2021. India benefitted from a robust distribution model including large departmental chains that remained open even during the lockdown. India’s exports to other major markets including UK and the EU however, reported a Y-o-Y decline during the year.

The ICRA reports shows, India’s home textile exporters have a robust order book for the year. They are likely to outsource some of these orders to fulfil their commitments in time. Their operating margins improved in FY2021 on account of the lower raw material and production costs. Their growth is likely to sustain in FY2022 with sales turnover and operating costs remaining healthy. The 50 per cent rise in cotton yarn prices will not affect their profitability as operating efficiencies and re-negotiation of product prices are likely to boost growth.

Operating margins jump

Unlike operating margins, the profit margins of these four companies dipped in Q4 FY2021. Lack of clarity on new export incentive scheme prevented them from factoring in the export incentive benefits. They started recognizing these export incentives only from Q1 FY2022 as the government’s continued the Rebate of State and Central Taxes and Levies (RoSCTL) scheme on exports of apparels and made-ups till March 31, 2024. This scheme helped companies boost operating margins by 500-600 bps to 21.9 per cent on a sequential basis in Q1 FY2022. Operating margins remained healthy at 17.6 per cent, though lower than the previous quarter due to the impact of higher raw material prices.

“Continuation of work-from-home trend is likely to sustain demand for home textile products in India. Demand will be further supported by higher occupancy in the hospitality sector, which remained muted in recent quarters,” adds Nidhi Marwaha, Vice President & Sector Head, Corporate Sector Ratings, ICRA.

Known for traditional, handcrafted designs, techniques and fabrics, the Indian footwear market is slowly opening up to international streetwear and sneaker brands. German footwear brand adidas recently launched A+P Luna Rossa 21 range in collaboration with Prada that sold out on its launch day itself. Local designers and retailers risk falling out of demand if they fail to broaden their scopes. As per a Vogue Business report, running shoes and branded shoes were the top searched items on Indian e-commerce portal Flipkart during the lockdown months of 2020.

Sale of higher-margin sports footwear to rise

As per the National Investment Promotion and Facilitation Agency of India, the footwear market is predicted to grow to $15.5 billion by 2024. However, the sale of high-end trainers, like the coveted Nike Air Jordans, will remain restricted to a few boutiques like VegNonVeg and Superkicks. Their sale is likely to be affected by heavy import duties and the presence of resale marketplaces like StockX, and independent resellers. Emerging sneakerhead culture is likely to further boost sales of higher margin sports footwear in India. To tap this growth, brands plan to collaborate with new stores besides cashing on their popularity in the media.

The popularity of trainer shoes in India can also be attributed to an exposure to different cultures through travel abroad and social media platforms, views Shivani Boruah, Marketing Manager, VegNonVeg, which opened in 2016 in New Delhi. Indian online shopping portal Ajio also launched a new section Sneakerhood on its platform featuring both international and Indian footwear brands.

Customers encompass all age and income groups

While sneakers are mostly favored by young, trend-driven customers, Indian customers are not limited to a single category. They vary across different age and income groups, explains Boruah. In India, sneakers were first sported by Bollywood actors Varun Dhawan and Ranbir Kapoor in 2016. They became a fashion trend soon after with international brands like Yeezy launching their collections in the market, says Henry Vinoth, Founder of the blog Sneaker News.

Contemporary Indian labels like Huemn, Jaywalking, Gundi and Nought01 are also embracing the sneaker culture. For instance, designer Anamika Khanna, introduced a pair of trainer shoes in one of her 2016 collection. Online shopping portal Ajio also introduced its new vertical, Sneakerhood, on the official fashion week schedule for October. The portal features both international and Indian footwear brands, including special or limited-edition sneakers such as Nike Air Jordans, Fila Disruptors and Asics Gel-Noosa.

Indian brands are responding to the changing fashion landscape in the country with new initiatives. For instance, brand Jaywalking has announced plans to sell its shoes in high-end stores in New York, Tokyo and Singapore. The brand has gained immense support for its offerings on social media platforms.

Judith McKenna, CEO, Walmart International says, the e-commerce company is prioritizing on the holiday season across major markets, including in India, as online sales grow globally as well as in the United States.

Walmart is also on track to record $75 billion in global ecommerce sales by the end of this year. The e-tailer saw strong sales growth in Flipkart (India) as well as Mexico and China in its international markets

In India, it is prioritizing on the Big Billion Day sales, held during the Diwali festival in early November

Doug McMillon, President and CEO, Walmart Inc, said Flipkart had seen another good quarter. Its total revenues increased by 2.4 per cent during the quarter to $141 billion while ecommerce sales in the United States grew by 6 per cent. Ecommerce sales in India grew by 25 per cent to $38 billion in FY21, and are expected to grow over 30 per cent in the ongoing financial year.

Last month, Flipkart raised $3.6 billion in a new funding round, which is expected to give it significant firepower to expand online shopping in India and take on well capitalized rivals like Amazon, Reliance Industries (RIL) and the Tata Group.

According to a report published by the Water Witness International, popular fast fashion brands could be causing pollution that has dyed some rivers in Africa blue or turned their waters as alkaline as bleach.

The report focuses on the polluted rivers in Lesotho in southern Africa and Tanzania to highlight the risks posed as global brands increasingly source garments from contractors in Africa, attracted by cheap labor and tax incentives.

Global brands could force better practices, but so far their presence in Africa has done little to stem rife pollution, water hoarding by contracting factories or even ensure adequate water and sanitation for factory staff, says Nick Hepworth, Director, WWI and Author

In Lesotho, researchers found a river visibly polluted with blue dye for denim jeans. Meanwhile, samples taken from Tanzania's Msimbazi river in Dar es Salaam tested a pH of 12 – the same as bleach – near a textiles factory, the report adds.

It identifies 50 international brands that source or have sourced their clothes from African nations, including Inditex's Zara, ASOS and H&M, but didn't tie the pollution to any company's supply chain.

Brands can and do make environmentally sustainable clothing, and consumer pressure was key to encouraging more, adds Katrina Charles, Expert-water Security and Quality, University of Oxford.

Published in January 2021, a new study by Global Industry Analysts (GIA), projects 4.4 per cent CAGR growth from 2019-2026 for the global sports and fitness clothing market. The market is predicted to grow to $221.3 billion by 2026, as per a Textile Today report. The GIA report highlights North America as the biggest market for sports and fitness clothing where the US has a share of $63 billion this year. However, the Asia-Pacific is reported to top growing market led by China which is projected to grow at 7.3 per cent CAGR from 2019-2026.

In 2020, the global sports and fitness clothing market was estimated at $172 Billion. The sports clothing segment is projected to grow at a rate of 4.5 per cent to reach $193.9 billion by 2026 end while the fitness clothing segment is projected to grow at a 3.6 per cent CAGR during the period.

As per latest US Department of Agriculture (USDA) report, spot cotton prices in the US reached their highest growth levels since June 14, 2018 to average 88.35 cents per pound for the week ended August 12, 2021. The weekly average increased from 86.31 cents the prior week and from 57.62 cents a year earlier. Most benchmark cotton prices increased last month, with the value for the December NY/ICE futures contract ranging between 88 cents and 90 cents per pound, according to the monthly update from Cotton Incorporated. In early August, futures eached levels over 93 cents per pound, Cotton Inc noted.

The A Index also breached $1.00 per pound for the first time since June 2018. The International Cotton Advisory Committee’s (ICAC) has increased the current price forecast of the season-average A index for 2021-22 ranges from 73 cents to $1.25, with a midpoint at 95.43 cents per pound.

USDA also increased its global trade forecast from 335,000 bales to 46.3 million bales. As per the Cotton Inc report, this would enable the association to record third-highest trade volume, only behind 2012-13 and 2020-21.

The Cotton Inc. report noted that the final set of weekly U.S. export sales and shipment data for the 2020-21 crop year just released by USDA was highlighted by the strength of U.S. export shipments over the past 12 months, even in the face of the global Covid-19 pandemic. Although shipments trailed off near the end of the crop year, total U.S. exports in 2020-21 rank as the second highest on record, only behind the 17.7 million bales shipped in 2005-06.

Exports of textiles and raw materials by Turkey increased to $7 billion from January-July 2021. As per the ‘Export Performance Report, July 2021’ published by the Istanbul Textile and Raw Materials Exporters’ Association (ITHB), the rate of textile exports increased from 5.6 per cent to 5.9 per cent during the period. In July 2021, this rate increased by 46 per cent to reach $924 million. While textile exports declined by 18.7 per cent in July 2021 their share in Turkey’s overall exports also declined to 5.6 per cent during the month. As per a Textilequence report, Turkey’s overall exports increased 10.2 per cent to $16 billion during the January-July 2021 period.

Most of Turkey’s textile and raw materials during January-July 2021 were exported to the 27 EU countries, exports to which increased by 42.7 per cent to $3 billion. During the first half of the year, Italy emerged as the topmost export destination for Turkey textiles and raw materials. In this period, exports to the country amounted to $619 million with an increase of 58.7 per cent. Germany ranked second with exports worth $575 million, a 21.2 per cent increase from the previous year.

The US with an export value of $472 million was the third largest exported destination for Turkey during the period. Other countries with the highest exports included England, Spain, Bulgaria, Netherlands, Egypt, Belarus and Russia, respectively.

Yarns emerged as topmost exported product by Turkey during January-July 2021 with a 88 per cent increase from previous year. Turkey’s yarn exports increased by 56.5 per cent in July compared to the same month of the previous year The second most exported product group was technical textiles whose exports decreased by 8.5 per cent to reach $1.4 billion during January-July 2021.

In third place, woven fabric exports amounted to $1.3 billion with an increase of 26.1 per cent in the January-July period of 2021, and to $173 million with a decrease of 2.6 per cent in July.

A report released by Conab (Brazil’s National Company for Food Supply) estimates 0.11 per cent decline in area under cotton cultivation in Brazil in the 2020-21 season compared to that reported in July. Productivity is estimated to rise 0.04 per cent compared to that reported in July, to 1,714 kilograms/hectare. The Brazilian output is currently estimated at 2.341 million tons, stable compared to that previously reported, but 22 per cent lower than that in the previous season.

Domestic cotton consumption is estimated to reach 715,000 tonne while exports in 2021 are now forecast to decline by 1.2 per cent to 2.1 million tonne. Ending stocks in the current season are estimated to decline by 6.9 per cent than that reported in July to 1.29 million tonne and 26.8 per cent below that last season. In July, Brazil’s cotton exports declined 39 per cent to 61,400 tonne from June and 20.6 per cent from July 2020, according to data from Secex, the secretariat of foreign trade.

The CEPEA/ESALQ Index for cotton in Brazil surged by 4.6 per cent during the first fortnight of August spanning from July 30 and August 13. The index closed at its highest price level since May 18, 2021 at 5.1915 BRL/pound on August 13. During the fortnight, Brazilian cotton farmers focused on the harvesting and processing cotton and completing pending contracts. Taking advantage of the price levels, many sellers closed new deals for further delivery – to both the domestic and the international markets – for the cotton from the 2021-22 and the 2022-23 seasons, says Sao Paulo-based Center for Advanced Studies on Applied Economics (CEPEA) in its latest fortnightly report on the Brazilian cotton market.