FW
Last week, the equivalent of 41 million bales of cotton traded in a single day on the Zhengzhou Commodity Exchange, the most in more than five years and enough to make almost 9 billion pairs of jeans, or at least one for every person on the planet. Prices that had slumped to the lowest on record in February surged almost 19 per cent in the four days leading up to the trading spike recently.
Meanwhile, traders have piled into Chinese commodity markets, sending volumes of everything from steel to coking coal soaring and prompting exchanges to boost margins and fees or issue warnings to investors. The surge in trading is reminiscent of last year’s equities rally that boosted the stock market before a rout erased $5 trillion. China is the world’s largest consumer of cotton and second-biggest producer.
More than 3.6 million contracts of 5 tonnes apiece traded in Zhengzhou on a single day. With Chinese exchanges double counting volume to account for the long and short side of a trade, that’s still about 9 million tonnes, or 41 million bales. One bale can make 215 pairs of jeans, according to the National Cotton Council of America.
On the same day, about 1.6 billion pounds traded on ICE Futures in New York. That’s about 3.3 million bales, or more than 700 million pairs of jeans, enough to dress up the US, Brazil and Japan in denim.
The Cambodian textile and apparel industry enjoyed a seven per cent rise in exports in 2015 and a similar increase is expected in the current year. This growth rate is among the highest recorded in the Asian continent. The local textile and apparel industry generates more than seven lakh jobs in 1,200 workshops. It accounts for 80 per cent of Cambodia’s total exports and contributes a third of gross domestic product. The industry uses as raw material cloth imported mainly from other Asian countries. It continues to attract foreign direct investment.
The country’s clothing and footwear exports in 2015 reached a value of $6.3 billion, compared to $5.8 billion a year earlier. It was a 7.6 per cent rise, a welcome acceleration after a slow first half of the year, though still below the 9.6 per cent growth recorded between 2013 and 2014. Footwear by itself posted a 21.8 per cent rise, with $538 million worth of goods exported.
Europe remained Cambodia’s main market. The US is the country’s second biggest market. Duty-free access to the European Union continues supporting the clothing industry, whatever the sharp increase of labor costs in the last few years.
Bangladesh is one of the largest cotton importers in the world. The country produces just one per cent of the total requirement of cotton for making yarns and fabrics for clothes. It is also the second largest readymade garment exporter in the world. Last year, Bangladesh imported 6.1 million bales of cotton, which was double the amount it imported in 2006. India and Uzbekistan are the main sources of those imports.
Bangladesh has a policy of not cultivating cotton on land where some other crop is grown. But now, it’s looking for places where it can promote cotton, like coastal areas, where no other crop can be produced due to saline intrusion. One target is hilly areas as only two percent of that region has been utilized so far. Cotton production will also be promoted in areas where tobacco is being cultivated.
The country has taken up a project for research and expansion of cotton production. Producing cotton can help the country save 10 per cent to 15 per cent on import costs. In fact a world cotton summit is being held in Bangladesh ending today. Global cotton buyers and sellers have convened at the summit in an attempt to understand the market better.
The Asian Development Bank (ADB) has signed a loan agreement with Bangladesh's BRAC Bank to finance the construction and upgrade of ready-made garment factories in Bangladesh that have taken steps to meet global standards and improve rights and safety of workers. The $30 million loan will also be used to build the badly-needed effluent treatment facilities in the textile and garment industry.
ADB in a statement said many factories in the country still operate without effluent treatment plants, resulting in widespread water pollution which is particularly damaging rural areas where communities rely on surface water for washing, bathing, irrigation and fishing. Bangladesh is the world's second largest exporter of textiles and garments, accounting for over 80 per cent of country's merchandise exports in fiscal year 2014, and employs 4.2 million workers.
The bank however, said the industry has suffered setbacks after two disasters in recent years - the 2012 Tazreen factory fire and the 2013 Rana Plaza building collapse. In the wake of these events, the Bangladesh government entered into a compact with the European Union, the United States, and the International Labor Organization to commit to improvements in building safety, labor rights, and business conduct.
Global Sources fair is being held in Hong Kong from April 27 to 30. This is a one-stop sourcing platform for apparel, fashion jewellery, underwear and swimwear, bags and luggage, scarves, footwear and fabrics. Global Sources’ fashion show assembles top suppliers from mainland China, India, Korea, Hong Kong, Taiwan, Thailand, the Philippines, Vietnam and across Asia. Dedicated brand walls have been set up to help 330 ODM/OBM suppliers promote their own designs and brands.
The event helps buyers discover items that will be hot in the coming months and matches demand for specific product categories. A broader selection of footwear and functional fabrics has been brought in this spring. The selection for bags and luggage has been increased by 50 per cent from the previous show.
By connecting the traditional and new, the experienced and the young, Global Sources aims to create a fashion ecosystem to help manufacturers move up the value chain. Global Sources is a leading business-to-business media company and a primary facilitator of trade with Greater China. More than a million international buyers, including 95 of the world’s top 100 retailers, use its services to obtain product and company information to help them source more profitably from overseas supply markets. These services also provide suppliers with integrated marketing solutions to build corporate image, generate sales leads and win orders from buyers in more than 240 countries and territories.
"Balenciaga has become the hottest fashion brand beating Gucci. Latest research, indicates Demna Gvasalia-designed brand went up two notch to top the hottest brand ranking in the third quarter of 2017. Even after slipping one rank, Gucci continues to excel as the most consistent performer in the hottest brand ranking to date this year. Between July and September, the label launched Gucci Décor — an eclectic line of home furnishings and treatments — and announced its collaboration with Dapper Dan, driving brand searches across the e-commerce sites Lyst aggregates."
Balenciaga has become the hottest fashion brand beating Gucci. Latest research, indicates Demna Gvasalia-designed brand went up two notch to top the hottest brand ranking in the third quarter of 2017. Even after slipping one rank, Gucci continues to excel as the most consistent performer in the hottest brand ranking to date this year. Between July and September, the label launched Gucci Décor — an eclectic line of home furnishings and treatments — and announced its collaboration with Dapper Dan, driving brand searches across the e-commerce sites Lyst aggregates.
The impressive ascent of Virgil Abloh’s Off-White, jumping 31 places is touted to be the biggest game changer. It has become the third-hottest fashion brand in the world in Q3, knocking Kanye West’s Yeezy, which ranked number two last quarter. Abloh is the brainchild of young fashion designers who have been vouching for streetwear through high-end production. While it has been eyeing its target audience, Millennial and Gen-Z consumers, carefully, by mixing high and low price points as well as disparate aesthetic and cultural influences, critics find fault in the brand’s referential nature. But the financial results have another story to tell.
In July, Off-White partnered with optical disruptor Warby Parker on a line of sunglasses, and in September Abloh paid sartorial homage to Princess Diana during the brand’s Spring/Summer 2018 show. However, the brand’s biggest driver by far was a collaboration with Nike, which saw Abloh reimagine 10 models from its archive including the Air Jordan 1, Air Max 90, Blazer, Hyperdunk and Air Force 1.
Streetwear gets a boost
Bain & Company opines, as Gen-Z consumers’ share of wallet grows, streetwear has helped boost global sales of personal luxury goods by 5 per cent to an estimated total of €263 billion ($309 billion) in 2017. Indeed, digital natives that have grown up in an era of hype-culture and product drops are the perfect conduits to build buzz online. This quarter, four of the five new entrants to the Lyst Index — Off-White, Stone Island, Moncler and Raf Simons — are in the streetwear sweet spot, making an appearance in top 10 for the first time. Casual-wear brand Stone Island jumped 33 places this quarter, thanks to leaked details on its upcoming collaboration with Supreme, and the impact of Canadian rapper Drake’s decision to exclusively wear Stone Island on stage during his ongoing world tour. Similarly, searches for Moncler spiked after British rapper Skepta was photographed wearing the brand's upcoming collaboration with Craig Green.
Looking at the streetwear wave, Raf Simons, who in June won both the best women’s wear and menswear designer CFDA awards for his work at Calvin Klein, launched ‘duct tape belt’ priced at £281 (about $372) in August. The Belgian designer is regarded a streetwear inspiration by a number of influential rap artists, including Travis Scott, Frank Ocean and A$AP Rocky — in July, A$AP Rocky released a single entitled ‘RAF’ in tribute, contributing to a 34 per cent spike in Raf Simons search enquiries this quarter.
Top 10 products
The ranking continues to be dominated by womenswear and is made up of the similar category mix as in Q2. Footwear continues to be the strongest category with five different pairs of shoes featured on the list, including, in fifth place, the Gucci Bloom sliders which topped last quarter’s product ranking (and were the only re-entrant).
Rwanda may waive the 25 per cent customs duty on imported fabric, a move that is meant to boost production of locally-made garments. The number of garment makers and co-operatives is increasing in Rwanda. The policy seeks to, among other things; stimulate local industries by banning the import of secondhand clothes. There is a feeling that on the one hand Rwanda’s fashion and tailoring sectors would experience a boom once the industrialisation policy comes into effect but on the other hand, they could also shrink and potentially disappear due to stiff competition from cheaper imports from Asia.
Many co-operatives in Rwanda prefer to buy cheaper fabric from Asia, mainly China, India, Taiwan and Indonesia, as they are not satisfied with the quality and quantity that is produced domestically. There is a fear that if taxes are waived, every tailor and fashion designer will go to China to import the fabric and this will benefit not Rwandan textiles but those in China, Thailand and Bangladesh.
Rwanda’s textile factories are struggling to stay in business due to competition from imported fabrics. Because the majority of Rwandans prefer secondhand clothes, the mills have been forced to cut production. They are also grappling with high production costs.
Reliance Industries has partnered Bhilwara-based Star Cotspin, a leading manufacturer and exporter of sewing threads in India. Reliance is one of the largest manufacturers of synthetic fiber in the world.
Star Cotspin is one of the largest grey sewing thread producers in India, having shown the fastest growth in recent years. As per the agreement, Reliance’s Recron SHT, the world’s best quality super high tenacity fiber, will be the basic substrate for polyester sewing threads manufactured by Star Cotspin. This yarn will then be sold, cobranded with Recron SHT. Apart from branding the products, RIL will also provide marketing and technical support to Star Cotspin.
Star Cotspin will be the first company in north India to be certified under the Recron SHT branding program.
Reliance and Star Cotspin will jointly conduct research and development work to further enhance Recron SHT sewing thread’s quality, and will also explore new business opportunities. Reliance will also support Star Cotspin in creating awareness about standardised high quality sewing thread products among key stakeholders, especially spoolers and apparel manufacturers.
Star Cotspin is planning to undertake a 12,000 spindle expansion project. Six thousand spindles each are expected to be allocated to optical white and black yarn. The company expects to double the consumption of Recron SHT fiber by the end of 2017.
Orissa will set up 19 common facility centers at different weaving clusters to give a fresh lease of life to the handloom and handicraft sectors. These centers will help weavers and craftsmen incorporate new and innovative designs in their work in tune with market demands. One such center has already come up.
New designs, keeping in mind global demand, would be developed and then provided to the weavers and craftsmen. The move would help craftsmen explore new markets and earn more. The artisans would also be provided short-term and advanced technology training in different crafts to improve their skills. Advanced machinery would be installed at these centers for design prototypes and sample development.
A handicraft museum is being set up and it will have a huge collection of art and crafts from across the state. The museum is being developed on 12 acres of land. Antique equipment associated with weaving and those having historical and cultural significance for the handloom sector are being collected for the museum. Craftsmen and artisans would give live demonstrations at the museum.
The state will also promote Tussar silk weaving. A silk park will be set up.
Recently, the Turkish government released its final decision on anti-dumping investigation of US cotton. Based on assertions that US cotton was dumped into Turkey injuring the domestic fiber market - which the National Cotton Council (NCC) steadfastly challenged - a three per cent CIF (cost, insurance and freight) duty has been imposed on all US cotton fiber imports into Turkey, effective immediately.
The country is the second largest export market for US cotton with shipments ranging between 1.5 and 2.0 million bales. The duties automatically put US cotton at a competitive disadvantage to cotton produced in other countries, thus seriously jeopardizing business with Turkish mills.
According to NCC Chairman Shane Stephens, the investigation, which was initiated in October 2014, was clearly in response to several US trade investigations of Turkish steel imports. In an unusual move, he noted that the Turkish government self-initiated the investigation without any showing of special circumstances as is required under World Trade Organization (WTO) rules.
