A delegation from the Istanbul Textile and Apparel Exporter Association (İTKİB) recently visited Cuba to strengthen bilateral trade relations. The purpose of the delegation's visit to both Cuba and the Dominican Republic was to enhance trade ties. İTKİB aims to organize procurement and trade delegations to facilitate trade deals between the countries. In addition, they extended invitations to representatives of the textile industry in Cuba and the Dominican Republic to participate in trade fairs held in Turkey.

Turkish Textile Industry's Export Revenues

With export revenues reaching $12.9 billion last year, the industry seeks to expand its global outreach.

Meanwhile, the Turkish leather apparel industry remains optimistic about foreign demand despite concerns surrounding the Ukraine-Russia conflict. The Antalya Leather and Fur Fashion Show witnessed strong attendance, including a significant number of Russian companies.

Recovery and Challenges for the Leather Sector

While the leather sector is slowly recovering from the pandemic's impact, challenges such as rising raw material and labor costs persist for local companies. However, the industry still experienced growth, with leather and leather product exports increasing by 10% in the first four months of 2023, amounting to $236 million in exports last year.

In the first four months of 2023, Cambodia's export earnings from "articles of apparel and clothing accessories, knitted or crocheted" reached $1.395 billion, reflecting a 28.49% year-on-year decrease and a 40.80% decline compared to the July-October 2022 period. This category accounted for 19.28% of the country's total merchandise exports during this period, down from 25.64% in the same period last year. Despite the decline, the current export levels are still higher than during the Covid-19 lows.

Reasons for the Decline

The drop in exports is attributed to economic hardships caused by the Russo-Ukrainian conflict, which disrupted raw material and energy supply chains globally, leading to increased production costs and inflation. The tightening of expenses by consumers in major markets for Cambodian apparel, such as the US and Europe, also contributed to the decline.

April Exports and Challenges Ahead

In April 2023, Cambodia exported $347.692 million worth of apparel, marking a decline of 31.83% compared to the previous year. Although this figure is down from the record high in July 2022, it remains higher than the lowest point in April 2020 when Covid-19 had a significant impact. However, the challenges persist as Chapter 61 items accounted for 18.87% of the country's total exports in April 2023, down from previous periods.

Industry Challenges and Export Destinations

The Textile, Apparel, Footwear & Travel Goods Association of Cambodia (TAFTAC) highlighted that the industry has been facing year-over-year export declines since August due to global economic uncertainty and the Ukrainian crisis. The top export destinations for Cambodia's garment sector are the US, EU, Japan, Canada, and the UK, with the situation in the EU currently unfavorable. Despite a growth trend in recent years, the industry faces ongoing challenges amid global economic turbulence.

Export Performance

In 2022, Cambodia exported Chapter 61 items worth $6.367 billion, reflecting a 9.41% increase compared to the previous year but a 3.26% decrease from the record high in 2018.

The Istanbul International Yarn Fair, scheduled to start on June 1, provides a significant platform for yarn industry manufacturers to showcase their innovations. With an expanded area of 40,000 square meters and new additional halls, the fair reflects the growing demand and interest in the industry.

Bringing Together Yarn Manufacturers

The 19th TÜYAP Istanbul International Yarn Fair will convene manufacturers engaged in the yarn industry, a vital raw material for the textile sector. From June 1-3, visitors will have the opportunity to explore recyclable yarns and discover sector innovations. Due to high demand, the fair has expanded to occupy an area of 40,000 square meters with new halls.

Prominent Yarn Fair in Eurasia

The 19th TÜYAP Istanbul International Yarn Fair, considered the most important yarn fair in Eurasia, expects 15,000 visitors and over 500 participating companies. Running until June 3, the fair will attract global attendees from Europe, the United Kingdom, the United States, Brazil, Algeria, China, Indonesia, Ghana, South Korea, Iran, Israel, Japan, Canada, Qatar, Kuwait, Malaysia, Egypt, Russia, Vietnam and more. It serves as a meeting point for industry giants and local manufacturers, boosting exports. Participants can benefit from support provided by the Turkish Ministry of Trade and KOSGEB.

Expansion and Growing Interest

To accommodate increasing participation requests, new halls have been added to the fair, doubling its size to occupy 40,000 square meters across 7 halls. Industry professionals have shown keen interest, with online ticket requests rising by 25% compared to the previous year.

Focus on Exporting Countries and Yarn Types

Turkey's textile and raw material exports reached 2.7 million tonnes in 2022, with significant volumes directed to EU countries and African nations. Many of these countries are among the first 15 expressing interest in visiting the Istanbul Yarn Fair. The fair will showcase various yarn types, including synthetic and natural fibers, as they are the most exported in the industry.

Highlighting the Circular Economy

The fair will feature a special exhibition area dedicated to recycled yarns, highlighting the circular economy. Visitors can witness the transformation of yarn from waste to final products. Participating firms will showcase sample products, allowing visitors to explore them in detail.

A Gathering of Innovation and Quality

The Istanbul International Yarn Fair is a platform for eco-friendly, high-performance, and high-quality products, serving as the most important commercial event in the international yarn industry. Previous participants reported an 81% increase in order volume, and 32% of visitors made on-site purchases. The fair aims to attract a diverse range of visitors through intensive promotional activities, building on the success of the previous edition's 10,282 industry professionals in attendance.

A decline in Textile Machinery Orders; The Association of Italian Textile Machinery Manufacturers (ACIMIT) reported a significant decline in the textile machinery orders index for the first quarter of 2023 compared to the same period in 2022. The index stood at 84.8 points, indicating a decrease of 35% from the previous year (basis: 2015=100).

International Market Impact

The decline in the textile machinery orders index was primarily attributed to a decrease in orders received from international markets. While the domestic market experienced a 14% increase, orders from outside Italy contracted by 40%. The absolute value of the index was 78.3 points for international orders and 148.1 points for domestic orders. The booked orders for the first quarter of the year indicated an assured output for the next 4.2 months.

Uncertainty in Global Markets

ACIMIT, noted that the challenging macroeconomic environment, characterized by inflationary pressures and geopolitical concerns, has contributed to ongoing uncertainty in global markets. This uncertainty hampers business investment plans and adds to the prevailing market conditions.

Optimistic Outlook for the Sector

Despite the prevailing uncertainty, the textile machinery sector operators remain optimistic. A comparison with orders from the previous quarter (October-December 2022), which showed a slight increase of 3%, indicates that the uncertainty has not significantly impacted the sector. Manufacturers are currently occupied with fulfilling orders from the previous year, demonstrating a positive outlook. Zucchi stated that the predictions for 2023 remain optimistic.

ITMA Milan Trade Fair to Showcase Robust Manufacturing Sector

The upcoming ITMA Milan trade fair, scheduled to commence on June 8 at the Rho Fiera exhibition spaces, will confirm the strength of the manufacturing sector. The fair will feature over 400 Italian producers, occupying more than 30% of the fair space. This substantial presence is a testament to the market leadership of Italian textile machinery manufacturers.

US Enforces Uyghur Forced Labor Prevention Act; Bangladesh's apparel manufacturers are confident in their position amidst mounting pressure on Vietnam's apparel and footwear industry due to the US's refusal to clear certain consignments originating from Xinjiang, China. The US government passed the Uyghur Forced Labor Prevention Act (UFLPA) on June 21, 2022. Under this act, US border authorities have been granted increased powers to block or seize goods containing any part or whole of Xinjiang-made products, which have been linked to forced labor practices in China.

Vietnam's Apparel Industry Impacted

Recent reports suggest that some Vietnamese enterprises have facilitated Chinese businessmen in evading US taxation or sanctions by utilizing cotton from Xinjiang and exporting it to the US. Consequently, US customs data up to April 3 revealed that $15 million worth of apparel and footwear shipments were held up for UFLPA checks, with over 80 percent originating from Vietnam. Only 13 percent of Vietnam's cargoes were cleared for entry. This situation has raised concerns among US importers whose supply chains heavily rely on Vietnam's apparel manufacturers, which in turn depend on China for about half of their input materials.

Bangladesh's Readymade Garment Exporters Remain Optimistic

Amid the escalating tension between Vietnam's apparel exporters and US brands, Bangladesh's readymade garment exporters also express concerns due to their high reliance on imported cotton, fabrics, and yarn. Notably, a significant portion of these imports originates from China. However, BGMEA, assures that the industry is in a safe zone. BGMEA has taken proactive measures by sending letters to all members, emphasizing the need to clarify the origin of cotton before importing raw materials from any country. The recent seizure of Vietnam's clothing shipments by the US may even benefit Bangladesh, as US buyers' confidence in importing goods from Vietnam is expected to decline.

Bangladesh's Cotton, Fabrics, and Yarn Imports

According to the United States Department of Agriculture (USDA), Bangladesh fulfills over 99 percent of its cotton demands through imports, with China contributing only a small share. However, China remains the primary source for fabrics, holding a 59 percent share in the country's imports. Bangladesh also imports 12 percent of its annual yarn demand from China. While the industry heavily relies on local sources for approximately 85 percent of its cotton and yarn needs, the remainder is sourced from countries such as India, Turkey, Pakistan, and other nations. Although China holds a significant share in fabrics and yarn imports, it mainly pertains to non-cotton items. Importers in Bangladesh claim that they diligently check the origin of the cotton for cotton-yarn imports from Indonesia and Vietnam.

Bangladesh's Compliance with US Regulations

Given that the US is the largest export destination for Bangladesh, manufacturers in the country demonstrate a high level of awareness regarding the regulations and laws enforced by the US. This understanding significantly reduces the likelihood of facing legal consequences under the UFLPA. Fazlee Shamim Ehsan, Vice President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), emphasizes the industry's commitment to trust and transparency, urging the US and other Western buyers to place more orders in Bangladesh, as other countries have failed to uphold their commitments.

Textile Exports: In April 2023, Pakistan's textile exports recorded a significant decrease of 29.11% year-on-year (YoY) and 1.99% month-on-month (MoM), reaching $1.232 billion, according to the Pakistan Bureau of Statistics (PBS). Cumulatively, for the first ten months of FY23, textile exports stood at $13.709 billion, reflecting a 14.22% YoY drop compared to the same period last year.

Changes in Textile Categories: In April 2023, specific textile categories experienced varying levels of change. Raw cotton, ready-made garments, and art, silk, and synthetic textiles witnessed month-on-month declines of 47.22%, 20.88%, 10.49%, and 7.89%, respectively. However, bedwear exports increased by 10.77% MoM, knitwear by 3.31% MoM, and towels by 1.02% MoM. On a yearly basis, ready-made garments and knitwear exports plummeted by 29.45% and 34.02% respectively, while raw cotton exports surged by 100%.

Pakistan's textile exports faced challenges in April 2023, witnessing significant declines in various categories. While some sectors, such as bedwear, saw slight improvements, overall exports experienced negative growth. Efforts are required to address the factors impacting these sectors and explore strategies to boost export performance in the future.

Mixed Trends in Vietnam's Textile Industry: Strong Cotton Imports, Decline in Yarn and Textile Exports

In April 2023, Vietnam's textile industry experienced a mix of positive and negative trends. Cotton imports showed robust growth, with a significant increase of 27.9% YoY and 29.9% MoM, indicating strong demand. However, yarn imports faced a temporary slowdown, declining by 16.4% MoM despite a slight 0.8% YoY increase.

Yarn Exports Decline, Imports of Grey Fabrics Decrease

Yarn exports also witnessed a decline, dropping by 4.7% MoM and 1.4% YoY, with China, South Korea, and the United States as the primary export destinations. The net export of yarns decreased by 4.3% YoY, but a promising increase of 18.8% MoM was observed.

Additionally, imports of grey fabrics and finished textiles decreased by 9.6% MoM and 20.7% YoY. Textile and garment exports faced challenges, declining by 3.3% MoM and 19.4% YoY.

These trends highlight the industry's challenges, including global macro risks and weakening demand in key markets. Vietnam's textile industry must navigate these obstacles and develop sustainable growth strategies to adapt to changing market dynamics.

India's textile and apparel export sector has witnessed a prolonged period of negative year-on-year growth, enduring a consistent decline of approximately 20%.

The downward trend has persisted for ten consecutive months, with April's data revealing a 21% year-on-year drop. The textile sector experienced a decline of 19.2%, while apparel exports declined by 23.2%. Over the January to April period, India's cumulative textile and apparel export value amounted to $11.95 billion, reflecting a 20.1% year-on-year decrease

A shift in Export Destinations: In recent years, India's textile and apparel exports have shifted their primary focus from the EU-27 to the United States, making the latter the largest market. Bangladesh follows as the third significant market. While the UK and the UAE each account for approximately 6% of exports, ASEAN and China represent relatively smaller markets. The export share to the United States decreased from nearly 28% in 2022 to 25.5% in Q1 2023, whereas exports to the EU-27 increased to 21% during the same period.

Year-on-Year Changes in Export Markets: Examining the year-on-year changes in India's textile and apparel export destinations, it becomes evident that, apart from China, most major markets experienced a decline in the first quarter of 2023. The most substantial decline was witnessed in exports to Bangladesh, plummeting by approximately 60%, followed by a decline of around 32% in exports to ASEAN. The United States, as the largest export market, also suffered a year-on-year decline of 25%, while the decline in the EU-27 was slightly smaller.

India's textile and apparel industry primarily caters to the domestic market but heavily relies on export support. However, since the second half of the previous year, the sector has faced mounting pressure due to declining exports, with no significant turnaround observed as of April 2023. The situation is expected to improve in the latter half of the year. Notably, the United States remains the largest market for India's textile and apparel exports, with the EU-27, Bangladesh, and the UAE also occupying significant shares.

Meanwhile, China and ASEAN represent smaller markets. During the first quarter of 2023, nearly 70% of India's export destinations experienced significant year-on-year declines, except for China, which exhibited slight growth.

The leather and textile industries sector in the Jordan Chamber of Industry, believes that aligning sector-related initiatives with the vision of economic modernization will propel Jordan's textile industry to become a prominent global player. Currently, the textile sector ranks 16th globally in terms of exports from the Kingdom, with a notable position as the 12th largest exporter to the US market.

Textile Sector's Global Rankings and Jordan's Leading Position: The Chamber highlighted that Jordan leads among Arab countries, with the textile sector's exports accounting for 2 percent of the total US imports of clothing products. This achievement showcases Jordan's significant contribution to the global textile market. The sector's performance indicators are expected to triple over the next decade, aiming for textile exports worth approximately $7.3 billion compared to $2.1 billion by the end of 2022.

Driving Growth through Initiatives: To achieve these ambitious goals, it was emphasized that the importance of effectively implementing sector-specific initiatives. These include enhancing value chains both vertically and horizontally, establishing integrated industries, fostering skilled labor, attracting more investments, and promoting interconnection between companies. These efforts will enhance productivity, competitiveness, and product diversification within the sector. Furthermore, they will enable market entry into new territories while boosting export momentum in existing traditional markets.

Positive Impact on Employment and Economy: The successful implementation of these objectives will generate approximately 149,000 new employment opportunities for Jordanians within the economy. This will contribute to reducing unemployment rates and lead to improvements in overall economic performance. The growth of the textile sector will have positive effects on various economic and social indicators at the national level.

Jordan's textile industry has the potential to become a global player, and the implementation of sector-specific initiatives aligned with the vision of economic modernization is crucial for achieving this. With its current global rankings and leading position in Arab countries, Jordan's textile exports are expected to triple in the coming years. By focusing on enhancing value chains, attracting investments, and fostering interconnectivity, the sector will witness increased productivity, competitiveness, and product diversification. These advancements will not only contribute to the textile industry's global prominence but also create numerous employment opportunities, resulting in improved economic performance for Jordan as a whole.

In 2022, Vietnam emerged as Canada's second-largest apparel exporter, surpassing Bangladesh, largely due to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Bangladesh's apparel exports to Canada reached $1.73 billion, recording a solid 35.2% growth compared to the previous year.

While China remains the leading apparel exporter to Canada, both Bangladesh and Vietnam have made significant progress. Over the past five years, Bangladesh's market share in Canada increased from 11.61% to 13.9%, while China experienced a decline from 38.53% to 30%.

Vietnam Surges in Canadian Apparel Exports

However, Vietnam's exports experienced an even more remarkable surge, totaling $1.75 billion, with a growth rate of 46.35%. The CPTPP, which facilitated duty-free access between Vietnam and Canada, played a crucial role in Vietnam's achievement.

Although Bangladesh currently enjoys duty-free market access to Canada, this advantage might change after its transition from a least developed country (LDC) to a developing nation in 2026.

Bangladesh Faces Duty Challenge

Consequently, Bangladesh may face a 17% duty on its apparel products, while Vietnam will maintain its duty-free privileges. These developments underscore the importance of diversifying product offerings and exploring trade agreements to sustain competitiveness and secure continued access to the market.