AsifInam, Chairman, All Pakistan Textile Mills Association, Southern Zone has requested Prime Minister Imran Khan to save export oriented textile industry of Sindh and Baluchistan from total closure as they have become almost standstill due to denial of gas.

Inam said, export oriented textile industries of Sind and Baluchistan contribute over 52 percent in total textile exports of Pakistan. These are deprived of gas supply despite of government vision of the higher priority of gas supply to export oriented industries as compared to other industries. He further said that industries of Sindh and Baluchistan are denied of their legal right on gas supply although they are self-sufficient in supply of natural gas.

Inam added, due to extremely low gas pressure and frequently unavailability it is very difficult for the export oriented textile industries located in Sindh and Hub Industrial Area to run the mills and fulfill their export commitments well in time. Despite Baluchistan High Court Order industrial units located in Hub Industrial Area since last two months are getting only 25 percent gas pressure which is inadequate to run the mills.

The Government and gas supply companies should provide gas first to export oriented industries including textile to run their mills without any disruption so that they can fulfill their export commitments in time and then to other industries if they have enough gas supply otherwise export oriented textile industry would be compelled to shut down their industries as they are incurring heavy financial losses due to unavailability of gas, Inam added.

K-Way, BasicNet Group brand held its third runway show to showcase its F/W 2022 menswear collection at Milan. The brand aims to expand beyond Italy and France and grow the brand’s presence across the world.

BasicNet was founded in 1995. The group’s brand portfolio includes Kappa, Robe di Kappa, Jesus Jeans, Sabelt, Briko, Superga, Sebago and K-Way which was acquired in 2003. In just a few years, K-Way has turned into a cult name, even in the luxury segment, thanks to collaborations with labels like Fendi and Comme des Garçons.

The most recent development for the brand is the deal between BasicNet and K-Way France, the company that operates the brand in France, through which the Italian group bought a 100% stake in K-Way France. But K-Way is also looking to the East. One of the brand’s main projects for 2022 is its market repositioning in Asia.

The American Apparel & Footwear Association (AAFA) recently appreciated President Joe Biden for focusing on the shipping crisis and taking long-term action to prevent such crisis in future.

In a letter to the president, Steve Lamar, President and CEO, AAFA said, the government should include all stakeholders in its future actions, not just ports and carriers, but also terminal operators, truckers, port workers, chassis providers, and, of course, shippers.

Shipping rates, after a brief decline, are on the rise again, hitting new records. And even when AAFA members do get their cargo on ships, the line to get those ships into port keeps getting longer.

Ports have threatened to import fees on long-standing imports and empty containers on docks. While the ports have not yet imposed the fees, many terminals are imposing or intend to impose ‘temporary storage charges’ on carriers, Lamar added.

The government should provide immediate relief by removing temporary punitive tariff costs, such as the US government’s punitive Section 301 tariffs on China our industry, and every facet of the US economy, must still pay. Congress should also quickly and retroactively renew the Generalized System of Preferences (GSP) program and the Miscellaneous Tariff Bill (MTB), whose expiration over a year ago has imposed countless billions of dollars of additional unnecessary costs on the industry and the US economy, the AFFA letter concluded.

Bangladesh apparel exports grew by 30.36 per cent in the calendar year 2021. According to Export Promotion Bureau (EPB) data, its exports earnings grew by 30.36 per cent during the year to $35.81 billion against $27.47 billion in 2020. Of the total exports earned from the clothing products, earnings from knitwear exports surged by 37.72 per cent to $19.60 billion while earnings from the export of woven products surged by 22.45 per cent to $16.21 billion

Trade analysts attributed the rise in demand and prices of apparel goods mostly in the European Union and the United States of America for the sharp rise in exports. Relocation of work orders from China, Myanmar, and Ethiopia also as push factors for the robust growth. Government policy supports and incentives also gave a cushion against the fallout of the COVID-19 pandemic, as per a Textile Today report.

This will help Bangladesh to reach the $50 billion export mark very soon, adds Professor MostafizurRahman, Distinguished Fellow, Centre for Policy Dialogue (CPD).

Knitwear products contributed significantly to the total apparel exports by earning $19.60 billion. As the country can supply almost 100 per cent raw materials to the sub-sector, it posted better growth. People’s long stay at home due to COVID-19 pandemic also increased the demands of knitwear products, adds FazlulHoque, Managing Director, Plummy Fashions.

The rising prices of finished goods boosted overall exports earnings, adds Faruque Hassan, President, BGMEA. Exports to non-traditional markets as well as robust growth in the US market also played an important role in the sharp rise in exports. Apparel exports to the non-tradition market rose by 25.76 percent to $5.68 billion in 2021.

Less than expected arrival of cotton bales and a 10 per cent tariff on raw cotton caused cotton prices to hit a 10 year’s high of Rs 72,000 per candy recently. As per a CCF Group report, this is a 9.57 per cent hike from Rs 65,800 per candy on December 21. It also spurred prices of Indian cotton yarn. Prices of Indian carded 32S for air-jet jumped from $3.66 per kg to $3.9 per kg and then to $4.2 per kg from December 22 to January 10, 2022. Yarn of similar quality was sold at 28,000yuan/mt in China market.

Impact on Indian, Vietnamese cotton yarn prices

Prices of Vietnamese cotton yarn were also adjusted alongwith US cotton in mid-December. Used for weaving, Vietnamese carded 32S yarn was sold at about $4.1/kg, about 29,700yuan/mt after-tax. However, a similar variety of yarn could not be traded well in China and sold at 28,500yuan/mt. Though prices of foreign cotton yarn continued to surge in the second half of FY22, this price rise was accepted by local textile industry. The recent surge has however, weakened both Indian and Vietnamese cotton yarn, providing an opportunity to Chinese yarn.

China’s yarn imports to remain restricted

The combed 30.4-46.6S variety of Chinese cotton yarn is mainly competitive with yarn from India, Vietnam and Uzbekistan. India imposed a 20 per cent import tariff on Chinese cotton yarn, which enables it to limit its use in local market and boost exports to Bangladesh. Chinese cotton yarn benefits not just from import tariffs but also resisting of big ticket sources by the Bangladesh market. The volume of cotton yarn exports overall remained low at 10-20 kg per month, and the export of Xinjiang cotton remained restricted in international market, limiting the increase in exports and promotion of the overall industry. However, the current rise in international cotton prices may restrict China’s import of cotton yarn and boost local consumption in the country.

In the last 15 years, Bangladesh has emerged as a major hub for manufacturing accessories and packaging materials. The country has a market worth $160 million for buttons and supplies around 90 per cent of locally-made buttons to the industry. Not just buttons, Bangladesh also makes around 30 other garment and packaging accessories such as poly bags, hangers, zippers, buttons, cartons and packaging materials.

However, as per a Daily Star report, the scenario was different in the 1980s when garment manufacturers relied on imports as they were not self-reliant or produced accessories domestically. They had to import used cartons and make them reusable by cutting them manually in order to make them fit to carry export-oriented items.

Imports would cause shipping delays

Fifteen years ago also, local manufacturers used to buy buttons from China and Hong Kong to make the final garments for international clients. This would often lead delay in shipping goods to retailers and brands in Europe and the US. To cover up the delays, manufacturers had to offer big discounts or faced order cancellations.

The situation improved after 1990 as local accessories makers set up factories. In the last 15 years, Bangladesh entrepreneurs have built a Tk 40,000 crore garment accessories and packaging industry for serving the needs of the country's gigantic apparel industry. This has also helped them create local jobs and boost forex reserves.

Shortening lead times for exporters

Another benefit for exporters has been the shortening of lead times as they can now procure accessories and cartons directly from local markets. This reduces their waiting otherwise needed in case of imports. Accessory makers are supplying not only to the garment industry but also to pharmaceuticals, home textile and leather sectors, says Al Shahriar Ahmed, Director, Bangladesh Garments Accessories & Packaging Manufacturers &Exporters Association. The sector is growing in tandem with the growth of garment industry.

Accessory makers can supply nearly 90 per cent of locally made products to the industry although the production process is complex, explains Abdul Kader Khan, Managing Director, Khan Accessories & Packaging Company, a Tongi-based accessories company. However, exporters still need to import the remaining 10 per cent accessories that are of specialized kind, he adds.

Exports on the rise

Most accessory manufacturers in Bangladesh like Montrims also export their products to other garment producing countries such as Pakistan, Vietnam, and Cambodia. The total volume of exports is around $500 million. A local garment accessories maker and a concern of Mondol Group, Montrims has exported accessories to a few European countries as well. Annually it exports around $60 million worth accessories. Experts point out, Bangladesh has a huge potential to grow garment accessories business as China is no longer involved in this space. This is shifting a lot of work orders from China to Bangladesh.

Textile mills in India have reiterated their demand to remove the import duty on cotton as prices of domestic cotton continue to increase.

Ravi Sam, Chairman, Southern India Mills’ Associations, notes, cotton prices have surged by 70 per cent higher than the Minimum Support Prices and Indian cotton prices have surged ahead of international prices.

Cotton prices have surged to Rs 77,000 a candy from Rs74,000 a candy on January 4. Cotton yarn price, for the variety used widely by the hosiery sector, stood at Rs331 a kg in April, 2021 and was currently Rs401 a kg.

Just about 140 lakh bales have come into the market so far this season (October 2021 to September 2022) though the usual arrivals by now will be almost 200 lakh bales. The textile industry is also staring at shortage in availability of quality cotton.

Apart from removing the import duty on cotton, the government should also bring in measures to monitor cotton trade on the MCX and NCDEX to avoid speculation, he added.

Ethiopia’s textile and garment sector has exceeded its target export revenues in the last five months. In particular, the leather business is expected to generate $90 million this year. The industry is expected to help the country’s overall economy by improving its performance.

Around 80 of the 400 textile and garment firms in Ethiopia export textile items. The textile and leather sectors in the country face a number of issues, including the availability of foreign money, input raw materials, and spare parts. Earnings in foreign currencies are given precedence in order to compensate for the existing lack of hard money. The country is exploring prospects to gain potential buyers in the worldwide market and establish effective market connections with reputable purchasers. To address the cotton deficit, a 15-year National Cotton Development Strategy has been developed. Ethiopia will harvest a large amount of cotton for export as well as to meet the needs of the domestic textile sector. Several big international corporations have made investments in Ethiopia’s textile and garment industries.

From January to September 2021, textile trade between Indonesia and South Korea rose by 29 per cent. Indonesia mostly exported textile raw materials such as spun yarn, which is then processed into fabric by the South Korean textile sector. Some finished items processed in South Korea are re-exported to the United States and Europe, while others are returned to Indonesia to suit domestic market demand. Despite the implementation of the Indonesia-Korea Comprehensive Economic Partnership Agreement (IK-CEPA) next year, Indonesia’s textile trade balance with South Korea is likely to remain negative.

South Korea will reduce over 95 per cent of its tariff lines, while Indonesia will eliminate over 92 percent and provide favorable tariffs to promote Korean investment. CEPA will have an influence on technology as well as businesses like autos. CEPA will also promote professional exchanges in fields such as science, technology, software, and robotics, encouraging high-tech industry collaboration. The adoption of the IK-CEPA, on the other hand, will have little impact on Indonesia’s textile industry’s export performance. South Korea’s market structure has prompted Indonesia to export raw commodities.

With the goal of attracting local and foreign investment to modernize and reopen closed textile mills, the Bangladesh government has called for open international tenders for four out of 16 textile mills through public-private partnerships (PPP). The move comes after the Bangladesh Textile Mills Corporation (BTMC) initiated a process of handing over two textile mills through PPP.

The four mills are: RR Textile Mills, Dost Textile Mills, Rajshahi Textile Mills and Magura Textile Mill. The tender process has already entered its second phase.

The BTMC will be the major partner of the PPP. The project will be distributed as per the partnership agreement and the government will only issue the land for building infrastructure.

The private parties will implement the project, maintain the mills and market the textile products produced, the official said.

The expected bidders or bidding consortiums have been asked to submit their proposals by March 7. The tenure of the partnership may be up to 30 years but could be renewed further.