Bangladesh readymade garment export to the European Union is likely to remain unaffected even if the second COVID-19 wave takes a more serious turn, reports The Business Standard. Work orders for the next spring/summer season in the country are pouring in with enquiries for next winter season also increasing. Apparel makers have shipped their Christmas and winter orders, to be sold from mid-November, says BGMEA.

Experts demand quick release of raw materials

To continue positive developments, Bangladeshi government and entrepreneurs need to adopt new strategies, says, Sayema Haque Bidisha, Research Director-South Asian Network, Economic Modelling (Sanem). Moreover apparel businesses need to enhance their manufacturing efficiency and curtail lead times to 30-45 days. And the government should ensure a quick release of imported raw materials for RMG manufacturers, she adds. It should also persuade apparel buyers and retailers against cancelling orders or stopping new placements till next January at least.

Partial lockdowns to curb second COVID-19 wave

As new COVID-19 cases continue to surge, governments across Europe are introducing new measures to deal with it. France has introduced a night-time curfew while Spain, the Netherlands and the Republic of Ireland have gone for partial local lockdowns. Germany, Italy, Denmark, Belgium, Portugal and Greece have also introduced measures to control the second wave. The only country that has not introduced any lockdown measures is Sweden. Yet, many of its citizens are voluntarily maintaining social distancing and have started working from home where possible.

Economic constraints are forcing countries to opt for partial lockdowns instead of complete shutdown, opines Ashikur Rahman Tuhin, Former Director, BGMEA. Shutting down of economic activities during the first wave hardly resulted in any positive outcome. Hence, WHO has recommended continuance of economic activities with compliance to its health safety protocols, says Fahmida Khatun, Executive Director, Center for Policy Dialogue.

No impact on new orders

The second COVID-19 wave has not impacted orders from European buyers as their online sales have increased significantly and physical shops remain open. Buyers continue to place new orders with Bangladeshi suppliers as they get more profits from suppliers.

Fazlee Shamim Ehsan, CEO, Fatullah Apparels said, Bangladeshi apparel exporters have been receiving new orders for the next summer season though the quantity of these orders has reduced. However, he calls this more a seasonal issue than the pandemic effect.

A ‘Cotton and Products Update’ report by USDA estimates heavy rains in Central and Southern India will impact the quality of the cotton yield this year. India’s cotton production is expected to reach 29.3 million 480-lb bales in marketing year (MY) 2020/21. The First advance estimates for 2020-21, published by the Ministry of Agriculture and Farmers Welfare’s (MOAFW), estimate national average yields to be around 491 kg per hectare.

On September 21, the Committee on Cotton Production and Consumption (COCPC), published revised estimates for MY 2018/19 and MY 2019/20. And as per revised estimates, cotton production in MY 2019/20 is estimated at 27.9 million 480 lb. bales. As of October 22, new crop arrivals of long staple variety cotton in Punjab, Haryana and Rajasthan reached 1.5 million 170 kg bales. The Cotton Corporation of India is procuring supplies in these states at 5-6 percent higher prices than current market rates. It has commenced procurement under the MSP program from the northern Indian states of Punjab, Haryana, and Rajasthan.

Cotton consumption to reach 22.7 million bales

Under the MSP program, the Indian government aims to procure 12.5 million 170-kg bales of seed cotton in MY 2020-21. Cotton consumption in MY 2020/21 is likely to reach around 22.7 million 480-lb bales, claims USDA. In October, cotton yarn prices increased by 2.3 per cent, while fiber prices rose by eight per cent. Though mill buying and mill consumption has improved due to new export orders, domestic retail demand remains subdued. For August 2020 IIP estimates textile manufacturing to have declined by 16 per cent as compared to August 2019. Cumulatively, textile manufacturing declined by 49 per cent during fiscal year 2020-21 (April/August) as compared to 2019-20.

Raw cotton exports increase 54 per cent

Highest cotton exports since MY 2011-12 were recorded in the months of August and September 2020. As per FAS analysis, exports of raw cotton increased by 54 per cent in September as against the previous month. Top export destinations were Bangladesh, China and Vietnam. Of these, shipments to Bangladesh constituted 40 per cent of the total volume. Cotton fabrics export grew 25 per cent in volume terms in September. Top destinations were: Australia, Korea, Sri Lanka and the United States.

Cotton yarn/fabrics exports increase 15 per cent

Ministry of Commerce estimates, exports of cotton yarn/fabrics/made-ups, handloom products to have increased by 15 per cent in value in September 2020 as compared to the same period last year. However, the cumulative value of these exports between April-September declined 20 per cent, compared to same period last year. Similarly, exports of readymade garments increased 10 per cent in September. The cumulative value of exports from April – August fell by 40 per cent compared to the same period last year.

An opportunity to tap the Australian market

Freight rates for October have risen sharply from $300 to $800, particularly for Middle Eastern, European, North and South American ports. Availability of containers has worsened even at major ports like Mundra and Nhava Sheva (Mumbai), while the situation at inland container depots is worse.

The USDA report says, United States, Egypt, and Mali are top cotton suppliers in 2020. Almost 57 per cent of their cotton has been shipped to Tuticorin port for mills in Southern India. Meanwhile Chinese mills have either lowered or ended their use of Australian cotton, presenting India with an opportunity to increase its share in the Australian cotton market.

The Association of Italian Textile Machinery Manufacturers (ACIMIT), has announced figures for the period ranging from July to September 2020.

Exports of Italian textile machinery declined in Q3 2020, although domestic orders increased by 20 per cent, signaling that Italian textile manufacturers are getting back to business.

The index of orders intake for textile machinery, as compiled by the Association of Italian Textile Machinery Manufacturers (ACIMIT), for the period ranging from July to September 2020, decreased by 26% compared to the same period in 2019. The index value was attested at 72.4 points (2015 basis = 100).

Orders on foreign markets declined by 31 per cent, with an absolute index value of 68.2 points. However, an increase of 20 per cent was recorded domestically compared to the third quarter of 2019, with an absolute index value of 112.6 points.

ACIMIT represents an industrial sector that comprises roughly 300 manufacturers (employing around 12,000 people), which produce machinery for an overall worth of around 2.3 billion euros, of which 82% are exported. Creativity, sustainable technology, reliability and quality are the hallmarks that have made Italian textile machinery worldwide leaders.

The Ghana Investment Promotion Centre (GIPC) plans to raise valuable Foreign Direct Investment for the industry through its upcoming Garments and Textiles Investment Meeting on the theme: “The future of garments and textiles in Ghana’s industrialisation drive”.

The two-day virtual meeting, set for the November 04-05, will create a platform for the GIPC and key stakeholders in the garments and textiles industry, namely; the Association of Ghana Apparel Manufacturers (AGAM) and the Cotton Development Authority to discuss a plethora of issues akin to the industry.

Key issues to be discussed are industry insights and policies, finding practical solutions to challenges peculiar to the Ghanaian textile and garment industry as well as exploring the essence of the African Continental Free Trade Area agreement to the industry.

From an investment perspective, the Center will lead discussions on how to leverage the enormous potential of the local garments and textiles industry to lure in needed investment and financial support.

The E.U.-Vietnam Free Trade Agreement, which took effect on August 1, has laid down strict rules of origin for goods exported to the bloc.

Under its provisions, 77.3 percent of Vietnam's textile exports to it will enjoy zero percent tax within the first five years while the rest follow a seven-year roadmap. The EVFTA is the E.U.’s second trade deal with an ASEAN member country after one with Singapore, and one of the few with a developing country. It will see Vietnam eliminate 99 percent of its import duties over 10 years and the EU doing the same over seven.

Before the deal was signed, Vietnam's garment and footwear exports to Europe were given preferential treatment under the Generalized System of Preferences (GSP) program, with a 9.6 percent tariff on the former.

For the first two years enterprises can choose to continue to be taxed under the GSP program or EVFTA. From the third year, if a company does not meet the rules of origin as stipulated in the deal, the tariff rate will increase to 12 percent.

The Vietnam National Textile and Garment Group (Vinatex) said the tax incentives under EVFTA are not attractive enough for businesses to switch from Chinese to Vietnamese fabrics since the former are 10-40 percent cheaper and delivered faster due to the scale of production.

Home-grown fashion brand Beyoung is logging Rs 3 crore revenue per month from its diverse product range. The brand caters to the latest fashion trends in T-shirts, mobile accessories, and other USPs like couple tees, custom products, and not forgetting the Plus Size apparels which have swept the mass market with an ace at a pocket-friendly price.

Beyoung is a self-funded startup launched with a capital investment of Rs.1 lakh. During the initial days, the brand created its unique presence on the social media platform with a massive brand launch. Further, the quirky t-shirt designs like Peeping Panda and Believe were the bestselling along with the plus size tees that grabbed the eyes of all age-groups. This has led to acquiring approximately 10 Million users till date. As Beyoung claimed, they are observing 2X growth in the customers every month.

Recently, in 2020 like every other brand Beyoung has also faced delivery issues as the shipping partners were not working at full force that led to slow down Beyoung’s shipments. Simultaneously, they noticed a reduction on the average basket size from Rs 750 to Rs 500 and orders from 40,000 to 20,000. However, amidst lockdown, Beyoung planned to come back with a headstart by launching several campaigns and safety essentials. No layoffs were recorded during and post lockdown. Shivam Soni confirms the exponential growth in the basket size and number of orders. Also, expecting the 3X growth in the consecutive 3 months.

UK retailers expect Christmas sales to be a disaster as government has ordered non-essential stores across England to shut for four weeks. As per Business of Fashion, UK retailers were already struggling to recover from the first lockdown last spring and laden with stock for Black Friday promotions and the holiday period. The new restrictions could prove fatal for some businesses, particularly if they’re extended beyond the initial four weeks.

They will have a huge impact, as 80 per cent profits for non-food retailers are typically generated in November and December, said Mark Price, Former Deputy Chairman, John Lewis Partnership Plc. As the new measures will continue to funnel business to digitally focused companies, though, online grocer Ocado Group Plc lifted its profit target, citing strong sales trends during the pandemic.

The New West End Company, a lobbying organization for more than 600 London retail and leisure businesses, warned that £2 billion of sales could be lost as a result of the latest lockdown. That would be a severe blow for the city’s West End entertainment district, where current sales were already down about two-thirds from pre-pandemic levels.

Burberry has joined forces with various charities to support young people across the world. The brand has collaboration with FareShare fund over 200,000 meals distributed across 11,000 charities and community groups across the UK. Burberry has also pledged support to UK youth organizations in Manchester, London and charities with a global reach. In London, it is working with London Youth to give grants to 15 youth centers to enable them continue their welfare programs.

In Manchester, Burberry is supporting Norbrook Youth Club and Woodhouse Park Lifestyle Centre to help charities in the Wythenshawe area. Alongside these youth centres, Burberry is contributing to Wide Rainbow, a non-profit based in New York City to provide art supplies, food deliveries and music education to young people in these communities.

In addition, Burberry is partnering International Youth Foundation to contribute to the Global Youth Resiliency Fund. This will enable young entrepreneurs and community leaders, especially in Asia, to develop solutions to challenges including closing nutrition gaps and unlocking access to livelihoods.

Toyobo Co will set up a joint venture company with Indorama Polyester Industries to produce yarns for automobile airbags. The joint company will build a new plant on the IPI factory site in Rayong Province, Thailand, and start operations in the first quarter of 2022.

Toyobo has long maintained partnership with IVL, which is committed to expanding its mobility-related business. Given that Toyobo and the IVL group are capable of effectively using their resources in Thailand, they agreed to establish the joint venture company to produce PA66 airbag yarns and ramp up efforts to expand their airbag business. The JV will be integral part of the Indorama Mobility Group.

IVL, with its presence in Thailand, is undertaking the manufacturing for the proposed JV, with 100 per cent offtake by Toyobo for its weaving plant. Toyobo will diligently meet global clients’ needs as the sole manufacturer capable of producing and supplying airbag materials ranging from yarn to fabrics at our five operations hubs in Japan, Thailand, China, the United States and Europe.

The Baptist World Aid (BWA) report estimates, 70 per cent fashion brands have taken positive steps to support vulnerable garment workers through the crisis. As per the report, around 50 million garment workers lost wages totaling $5.79 billion in the early part of 2020. BWA analyzed the efforts taken by over 400 well-known fashion brands to address the risks faced by their workers in the global fashion industry supply chain.

Top scorers were the brands that demonstrated action across all six COVID Fashion Commitments including; honoring supplier commitments; identifying and supporting the workers at greatest risk; listening to the voices and experience of workers; ensuring workers’ rights and safety are respected; collaborating with others to protect vulnerable workers; and, building back better for workers and the world.

However, the report also found 56 per cent fashion brands were unable to demonstrate actions in all six areas of the COVID Fashion Commitments. Some of these brands included Showpo, Lowes, P.E Nation and Rebecca Vallance. Despite this, the report indicates that 22 per cent of companies are strengthening worker voice systems while 16 per cent are implementing new systems through the crisis period.