FW
Apparel opportunity is finally coming towards South Asia as exports from East Asian giant China and start-ups Cambodia and Vietnam is on decline at least in the United States. According to the US Department of Commerce’s Office of Textiles and Apparel reports, after textile and apparel exports started declining in the recent months, China, Vietnam and Cambodia took the largest hit with a decline of 43.3 per cent, 22.4 per cent and 22 per cent respectively in the month of March compared with February 2016.
Textile exports decline in March ’16 compared with March ’15 was 42.1 per cent for China, 22.6 per cent for Vietnam and 34.4 per cent for Cambodia. Textile and apparel exports from India increased by 15.3 per cent in March compared with exports of same items in February 2015. Bangladesh recorded an export increase of 7.9 per cent during the same period while Pakistan’s exports in textiles and apparel increased by 8.8 per cent.
However, when compared with March 15 the increase in exports from these countries was much lower. The increase in exports from India was only 1.4 per cent, Bangladesh and Pakistan recorded negative exports of 0.1 per cent and 2.9 per cent respectively.
"India is anticipated to fuel the demand for staple fibers owing to increasing manufacturing activities and improving economic conditions. All natural fibers except silk, that are twisted together to form yarns, staple fibers are. Staple fibers can be manufactured either from wool, raw cotton, flax or hemp. The most common raw material used for manufacturing staple fiber is wool and cotton"
India is anticipated to fuel the demand for staple fibers owing to increasing manufacturing activities and improving economic conditions. All natural fibers except silk, that are twisted together to form yarns, staple fibers are. Staple fibers can be manufactured either from wool, raw cotton, flax or hemp. The most common raw material used for manufacturing staple fiber is wool and cotton. However, it is also manufactured from other raw materials such as alpaca, angora, mohair and flax. Filament fibers are usually cut into shorter lengths either for spinning using a specific type of fiber or in the various combinations of natural fibers that are also considered to be the staple fibers. Staple fibers are either short filaments having length of about 21/2 inches and filaments are known as longer staples when they have length more than that of 21/2 inches. Cotton is a short staple fiber that ranges from roughly 1 inch to almost 2 inch in length on the other hand wool is a long staple fiber which ranges from about 21/2 inches to 6 inches. These fibers must be spun together in order to create a usable strand.
Staple fibers, the basis for clothes and more…
Typically, staple fibers are used in a wide range of applications from clothes to construction, needle crafting, rug-making and weaving industries. The yarns of the long staple fibers are ideal for manufacturing heavy-use objects such as blankets, coats, rugs and wrap threads. Just like the growing demand for other housing related products there is an increase in the demand for carpets. Thus, expanding carpet industry is anticipated to boost demand for staple fibers in the future. In addition, staple fibers are also used in manufacturing blankets. Owing to decreasing temperature there is rise in demand for winter clothing across colder regions which have boosted growth of staple fiber industry. Third major use of short staple fibers is to produce more delicate yarns for manufacturing of light-weighted garments. Owing to the development of wide range of applications of the staple fibers from the carpet to the non-woven has boosted the overall growth in the demand for the staple fibers market.
Global market growing steadily
World staple fibers market is anticipated to grow at a CAGR of 6 per cent to 7 per cent from 2016 to 2025 owing to various macroeconomic and demographic factors. Global staple fibers can be segmented on the basis of product type and region. Global staple fibers market on the basis of product type is segmented into two categories; woven and non-woven. Non-woven segmented dominated the market in 2015 when compared to woven type and anticipated to remain pre-dominant over the forecast period.
Geographically global staple fiber market is segmented into seven key regions: North America, Latin America, Western Europe, Eastern Europe, Asia Pacific (Excluding Japan), Japan and Middle East & Africa. In terms of consumption, Asia-Pacific region dominated in 2014 followed by North America and Europe respectively.
As far as production is concerned, China is the largest producer and consumer and is projected to grow at higher CAGR compared to other countries. Meanwhile, India is anticipated to fuel demand for staple fibers owing to increasing manufacturing activities and improving economic conditions. In North America US is the largest segment when compared to Canada and in Latin America, Brazil and Mexico is anticipated to grow at significant rate.
As it seeks to protect the industry against foreign competition, the Russian government has approved a proposed program of state support for Russia’s textile manufacturing industry, covering the current financial year. Set by the Ministry of Trade, the volume of support is at two billion roubles ($30 million). It has been authorised under an existing government policy, known as the ‘Strategy of Development of Textile and Light Industry in the Russian Federation’ for the period till 2025.
Currently, the share of Russian-made textile products within the domestic market is estimated at 24.6 per cent. However, the Russian government wants to increase this proportion to 50 per cent by 2018-2019. The government hopes that this expansion will generate up to 100,000 new jobs within the industry.
The government has confirmed that the majority of allocated funds will be spent on direct subsidies for textile and clothing manufacturers, especially producers of specialist technical clothing and school uniforms as for the latest spending programme. A portion of these funds will cover interest rates on loans, borrowed by Russian manufacturers from banks. Also, as mooted by earlier Russian government discussions, some of the funds will be spent on establishing a special bank branch within the state-run Russian Agricultural Bank (Rosselkhozbank), which will focus on providing loans to local clothing and textile manufacturers on beneficial terms.
The government relaxed the norms for claiming duty benefits under the Merchandise Exports from India Scheme (MEIS) by exempting merchandise exporters from mandatory submission of landing bills with immediate effect. The move was done with an eye on boosting exports which have declined for the 16th straight month in March, the Directorate General of Foreign Trade has notified that proof of landing, which exporters have long argued against, will not be required along the remaining 2787 tariff lines.
Introduced in April 2015, the MEIS scheme under the Foreign Trade Policy incentivises merchandise exports along a total of 5,012 items currently. Exporters earn duty credits at fixed rates of 2 per cent, 3 per cent and 5 per cent depending upon the product and country. However, the benefit of MEIS is available where the exporter presents proof of landing the goods at the destination country. Such proof is not necessary where MEIS is available for export to all countries but was mandatory for the 2787 tariff lines, incentives for which were available only to limited countries.
Meanwhile, the annual resource allocation under MEIS was enhanced from Rs 18,000 crores to Rs 21,000 crores in October 2015. The government had also raised the duty drawback rates by two per cent for many sectors including engineering, marine and textiles. The drawback rates are reimbursement of certain customs and excise duties, and service tax on imports of input materials, which go into the manufacture of goods that are exported.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) turned down the plea for giving the non-compliant factories more time for introducing workers' biometric database, according to sources. The apparel sector trade body decided that it will resume services to those factories only after their enrolment in the database system. Recently, the organization had put on hold providing the services to some of its members for their failure to register in the workers’ biometric database service.
Apparently, the BGMEA meeting was called following the request of a number of its member factories for further time extension. Incidentally, majority of the member factories are yet to enroll for the service even though the timeline for the purpose was extended three times since December 2015 to April 2016.
The Board of Directors of the United States Fashion Industry Association (USFIA) has a chosen a new chairman. Michael Singer, Vice President of Customs & Social Compliance for Macy’s Merchandising Group has been chosen to the coveted post. MMG is responsible for conceptualising, designing, sourcing, importing and marketing private brand goods sold at Macy’s and Bloomingdale’s. MMG products are sold in over 800 Macy’s Inc. stores as well as through e-commerce and to outside customers. MMG is a founding member of the association.
Said Julia K Hughes, President of USFIA that she is thrilled to announce that Michael will take over as chairman of USFIA, helping to lead the organization on their continued path of growth and trade policy wins for our members. Singer has been a member of the USFIA Board of Directors since 2005, and served as Treasurer of the Board since 2011, as well as the co-chair of the Education & Training Committee, launched in January 2016.
President, Pranab Mukherjee has said that India needs more focused approach in terms of procedures and banking solutions that is suited to the needs of exporters in micro, small and medium enterprises (MSME) sector. The President was speaking at an event organised by the Federation of Indian Export Organisations (FIEO) in New Delhi.
He said, the export sector is dynamic and affected by changes in policy both at the domestic and international level. We, therefore, need to be innovative in our approach to capture markets with customized products in today's highly competitive world. Aggressive marketing, while important in itself, would need to be backed by impeccable quality control standards so as to create a sustainable demand for Indian products abroad.
He observed that India's GDP growth is 7.6 per cent and as it is projected to be 7.7 and 7.9 per cent in the coming years, we need not feel disadvantage because India is enjoying today the highest growth rate in the major economies of the world. Therefore, this growth momentum is definitely strong positive signals, he added.
In an order, the Karnataka High Court has lifted a stay on parts of a central cotton seed price control order which allowed the government to regulate royalty or trait fees being charged by technology providers. On March 21, the HC had said that the Centre could not fix royalty as it is based on mutual agreements signed by companies.
Earlier, industry body for technology providers Association of Biotechnology Led Enterprises Agriculture Group (ABLE-AG) had approached the court against portions of a December 7, 2015 order of the Union Agriculture Ministry which regulated the maximum sale price of Bt cotton seeds. By this order, the government also sought to regulate royalty or trait fees charged by technology providers from seed companies.
In its recent order, the court said that it is prima facie seen that the source of power to fix the maximum sale price including trait value is available and such step is taken to see that the essential commodity is made available at a fair price to farmers.
Meanwhile, the court also rejected the contention that Bt cotton seeds were not an essential commodity.
According to the data from Panamanian law firm Mossack Fonseca, the Jhunjhunwala family who own the Bhilwara group, incorporated an offshore entity Cresthold Investments Limited in the British Virgin Islands (BVI) in 2004. It was the year the Reserve Bank of India (RBI) announced a new Liberalised Remittance Scheme (LRS), allowing a resident Indian to take $25,000 abroad every year.
An eight-month investigation by an Indian newspaper in collaboration with the International Consortium of Investigative Journalists (ICIJ) into the Mossack Fonseca files shows that Laxmi Niwas Jhunjhunwala (who founded the LNJ Bhilwara Group in 1961), son Ravi Jhunjhunwala and grandson Riju Jhunjhunwala, besides several other members of the family, have been/are shareholders of Cresthold Investments Limited.
The family’s Friends Colony residence in New Delhi is listed in all Mossack Fonseca records. For instance, records for 2008 show a list of seven members of the Jhunjhunwala family as shareholders of Cresthold Investments Limited, variously holding between 250 and 1,000 shares each.
Incidentally, email exchanges between company officials and Mossack Fonseca staff state that the objective of the offshore entity is ‘building wealth.’ According to a February 2013 email, the principal object of the company is to hold investments through its banking facility in Switzerland. The investments include participation in US-based funds for which formalities have been completed. The accounts and records of the offshore company have been kept with a ‘coordinator’ in the Isle of Man.
Vietnam's garment and textile industry wants to revise a development plan to 2020 with vision for 2030, after it overtook the export target with five years left to match the industry's progress.
The current plan was approved in April 2014, and it is expected that Vietnam garment exports will reach between $20 billion and $25 billion by 2020. However, in 2015, the garment sector already earned an export turnover of $27.5 billion. All the garment and textile businesses have actively taken advantage of opportunities through trade agreements such as the Vietnam-Korea Free Trade Agreement (VKFTA), and Vietnam-EU Free Trade Agreement (EVFTA). Vietnam is now poised to leverage the Trans-Pacific Partnership (TPP), the Vietnam News has reported.
Despite the handsome export revenues, Vu Giang, Chairman of the Vietnam Textile and Apparel Association (Vitas) said the industry was facing numerous challenges as many of its companies had closed down or halted production. Therefore, the industry wanted the Government to revise the plan as it was inappropriate and regressive. The Government should outline another long-term plan until 2040 to help the industry's progress go in line with the country's economic development.
According to Vitas, with the current growth, the sector has set export turnover at between $40 billion and $50 billion by 2020, instead of targets set in the current plan.
