FW
Chinese cotton imports in February fell 65 per cent compared to the same time last year. Cotton demand from China is slumping, thanks to heavy inventories and sluggish economic activity. In fact, China is expected to be overtaken by Bangladesh as the world’s top cotton importer in 2015-16.
Chinese cotton demand in the year to July 2016 is expected to fall to the lowest in twelve years. China is believed to have accumulated as much as 11million tons of cotton as part of a price support scheme. The country is now planning to release these supplies back on the market, but at what price, and at what speed, remains to be seen.
Pressured by sluggish global demand, cotton futures had a terrible start to the year. By late February, prices in New York were down 15 per cent from the start of the year. Chinese imports remain the key to the price outlook. Since the global inventory reduction in 2016-17 is due solely to China, the upside price potential in New York will probably remain limited for as long as China's imports do not pick up again and worldwide demand essentially stagnates.
Prices are still down about 10 per cent since the start of the year.
Indian government has reestablished the Khadi and Village Industries Commission (KVIC), the nodal agency for promoting khadi fabric in the country through a notification. Nearly 1m018 Khadi and Village Industries institutions are registered as members, while KVIC was granted deemed Export Promotion Council status in December 2006.
Five per cent of the free on board value or Rs 10 lakh, whichever is less, is provided as incentive for KVI units which undertake direct exports. In addition, KVIC encourages Khadi and Village Industries to participate in international trade fairs by subsidising 75 per cent of the airfare and 50 per cent of stall rent to augment export of their products.
In case of women entrepreneurs and institutions like ST, SC and NE States, air fare and stall rent are extended to the extent of 100 per cent subject to maximum limit of Rs 1.25 lakh each. The Ministry of Micro Small & Medium Enterprises too is implementing a number of schemes for the holistic development and promotion of khadi, according to the sources. These include; strengthening of infrastructure of existing weak Khadi Institutions and assistance for marketing infrastructure provides for renovation of Khadi sales outlets.
The reduction of VAT on cotton and other yarn has been welcomed by cotton spinning industry in Punjab. The state has around 100 spinning mills. The industry hopes to get a level-playing field with the VAT reduction and compete with the spinning industry in neighboring states.
Cotton ginners were demanding various types of tax relaxations. VAT reduction will not directly help the cotton ginning factories but it will provide some relief as demand for yarn will increase and spinning mills will increase cotton purchases. Ginning factories in Punjab have reduced to nearly 100 from 422 in 2003.
In the wake of higher VAT in Punjab, the weaving industry preferred to purchase yarn from spinners in Himachal, UP and Uttarakhand. Out of the 100 spinning mills in Punjab, ten mills with an installed capacity of 1.5 lakh spindles had closed recently due to the unfavorable tax regime.
The spinning industry was facing tough times in Punjab due to the higher VAT. Spinners from neighboring states used to sell it at two per cent VAT, but with a reduction in tax rates, the spinning industry will be able to compete.
Reduction in VAT will prove a big relief to the Punjab-based spinning industry.
Coimbatore, Tamil Nadu, has institutes devoted to industrial textiles, home textiles and medical textiles. Coimbatore is one of the major textile centers in the country. With several medium and large scale industries looking at technical textiles for diverse applications, these centers will promote innovative applications for textiles, especially using non-woven materials.
One center promotes research, encourages industry to use the machinery installed, takes up testing, imparts training, and also manufactures products for commercial use. It has set up full production lines to make wet wipes for diverse uses and needle punching coir products and is working on various raw materials to produce non-woven mats that can be used as filter in different industries.
The market size for industrial textiles in the country is Rs. 9,929 crores. For medical textiles it is Rs 4,282 crores and for home textiles it is Rs 9,274 crores. The market is growing at the rate of six per cent to 14 per cent annually, depending on the product.
In 2012-2013, import of industrial textiles was 22 per cent of the total technical textiles imported, import of medical textiles was 15 per cent and import of home textiles was seven per cent. Export of technical textiles was to the tune of Rs 7,117 crores and of this 15.1 per cent was industrial textiles, 9.9 per cent was medical textiles, and 10.9 per cent was home textiles.
Global buyers have cut business relations with 55 readymade garment factories in Bangladesh due to noncompliance. The American group Alliance has suspended business relations with 42 factories. The European retailers’ group Accord has terminated business relations with 13 factories.
These factories have failed to make adequate remediation progress and provide evidence of remediation. Some factories have failed to attend a remediation escalation roundtable and some have failed to provide evidence to comply with the procedures for ensuring a safe working environment.
After the Rana Plaza building collapse, which killed more than 1,100 people, mostly garment workers, in April 2013, North American retailers, including top brands Walmart and Gap, formed the Alliance, and European retailers formed the Accord, undertaking a five-year plan which set timelines and accountability for inspections and training and workers’ empowerment programs.
The Alliance has so far inspected 870 factories while Accord inspected more than 1,600 factories. During inspections both Alliance and Accord found serious structural faults in 106 factories and sent the list of the units to the government-set review committee suggesting immediate evacuation.
Out of 106 factories 35 were closed as per recommendations. Suspended factories wishing to get back into the fold have to undergo a new inspection at their own cost.
India’s trade deficit narrowed in February to its lowest since September 2013 as exports contracted at a slower pace. However, demand remains weak from Europe, the country’s biggest market. India has been struggling with weak global demand although the blow has been softened by a collapse in its oil import bill and curbs on gold imports.
The decision to impose curbs and raise tax on steel imports to protect domestic steel makers has also had the adverse impact of raising costs and sapping the ability of Indian producers of engineering goods to compete.
Cheaper Chinese exports have undercut India’s engineering exports, which constitute around a quarter of total goods exports.
Merchandise exports, equivalent to about 15 per cent of India’s economy, contracted for the 15th straight month in February. They fell 5.66 per cent from a year earlier. The outlook for exporters remains bleak mainly due to the global slowdown, and annual exports could fall to near 260 billion dollars in the current fiscal year, compared with 310 billion dollars in the previous year.
India’s economy is estimated to grow at 7.6 per cent in the current fiscal year ending March. February imports fell 5.03 per cent from a year earlier.
Jason Adams is the new President of Lectra North America. His main objective will be to develop Lectra’s presence in the United States, Canada and Mexico and Central America in the automotive, fashion and furniture markets.
Before joining Lectra, Adams helped position Camstar and Apriso among the leading independent manufacturing execution system solution providers. At Camstar, he promoted the launch of the life sciences practice, which grew to 80 per cent of annual revenues. At Apriso, he developed the business in several existing and new markets, including automotive, industrial equipment, aerospace and defense, and medical device manufacturers.
He has proven himself with more than 20 years in the software and services industry. Lectra operates in integrated technology solutions dedicated to industries using fabrics, leather, technical textiles and composite materials. It is the world leader in the automotive field, with over 65 per cent of the market share in fabric cutting rooms for car seats and interiors as well as in airbag cutting. The company’s goal is to develop its activity in leather seat and interior cutting, where it has recently introduced new technology solutions with unequaled performance. In the fashion industry, Lectra is recognized for its design and patternmaking solutions.
www.lectra.com/
IWTO Congress will be held in Australia, April 4 to 6. The event occurs about once every 10 years in Australia. The three-day event, one of the highlights of the wool industry calendar, will showcase the achievements of the Australian wool industry along with innovations in the global wool textile supply chain both on-farm and in processing.
More than 20 young wool professionals from eight countries will join the event this year, more than double the number of participants from previous years. This is because of a realization that youth, education and knowledge are the key to a successful wool industry for today and the future and that the younger generation is needed to keep the wool industry going through innovation, new technologies, creativity, training so as to ensure a sustainable future for all.
And IWTO Congress is also a great opportunity for the next generation to meet with all sections of the global and Australian wool industry. The idea is to develop the next generation of wool leadership.
Junior staff are invited to attend the Congress at a reduced fee, allowing them to build up their own networks while gaining first hand knowledge of the latest trends in the industry.
www.iwto.org/
Performance Days will take place in Germany, April 20 to 21, 2016. This is a functional fabric fair for innovations, trends, and sourcing of fabrics. It will offer everything from textiles, yarns to finishes and accessories. The theme for the fair is recycled textile materials. It attracts major international manufacturers and most well-known sportswear and active clothing brands as well as the sports fashion collection industry.
More than 120 exhibitors from 23 nations are expected to attend. The show will include the latest trends in fabric development for the functional textile industry and is the only exhibition to link seasonal sourcing schedules, that is, April/May and November.
There will be an overview of the various fluorine-free technologies available for achieving durable water repellency together with insights into how natural materials and unique geometries and structures found in nature are informing some of the emerging technologies for achieving fluorine-free durable water repellency performance.
Closing the loop in textiles will be high on the agenda. There will be a look at certification for recycled materials, and at using recycled fabrics to address poverty. Fashion and design consultants will examine how to change the game of waste and production.
"The development of knitting industry witnessed some changes after two successive years of one hundred billion breakthroughs in export. According to the General Administration of Customs, the total export of knitting industry (including accessories of knitting garments) was $88.78 billion by the end of November 2015, down by 8.9 per cent year on year."
With weak global consumption, competition for China’s knitting industry increased dramatically in 2015. The industry grew steadily despite transfer or overseas relocation and competition from other Asian countries.
Steady growth
According to the National Bureau of Statistics, there are 5,738 enterprises above the designated size in knitting industry (747 enterprises running under deficit), knits turnover was 644.1 billion Yuan and increased by 3.67 per cent compared to the same period last year when it was 621.3 billion Yuan. To be more exact, knitting garment segment grew by 4.94 per cent while knit-fabric sector was up 2.17 per cent. The total profit in the whole industry was 34 billion Yuan, an increase of 5.4 per cent year on year, enjoying a growth of 1.76 billion Yuan over last year.
During January to November 2015, the total actual investment in fixed assets of the enterprises above the designated size was 105.3 billion Yuan, up 18.8 per cent year on year with 1,921 new project. China’s investment in knit-fabrics was up 14.8 per cent compared to 22.7 per cent in knitting garment sector. From January to November 2015, production of knitted garment enterprises above the designated size declined slightly, down by 0.69 per cent year on year with 13.03 billion units in accumulative productions this month. From the top-producers standings, the traditional five provinces (Guangdong, Fujian, Zhejiang, Jiangsu, Shanghai city)were still in the top five positions, but Shanghai declined fast, down by 10.22 per cent. Zhejiang remained firm in the first threes despite its negative growth.
The development of knitting industry witnessed some changes after two successive years of one hundred billion breakthroughs in export. According to the General Administration of Customs, the total export of knitting industry (including accessories of knitting garments) was $88.78 billion by the end of November 2015, down by 8.9 per cent year on year. It was expected that there’s some difficulty in breaking through to hundred billion dollars. Export value of knit-fabrics was $13.37 billion, up 3.34 per cent in contrast to $64 billion of the knitting garment, down by 11.89 per cent year on year.
According to the General Administration of Customs, total import of knitting industry was $3.77 billion by the end of November 2015, up 0.5 per cent year on year. Vietnam surpassed Italy and other countries to be the No.1 in import value. At the same time, North Korea, Cambodia and Indonesia enjoyed rapid growth.
Global knit sector outlook in 2016
The international market is difficult to improve greatly as it is affected by continuous fatigue of global economy in 2016 and the main power in the industrial development will rely on domestic market driven by supply-front reform. China’s knitting industry needs to look at how to respond to competition from developed countries in ASEAN. China is actively looking at FTAs (free trade agreement) and formulating a variety of supporting policies for cross-border e-commerce, this will surely help it boost the industry as a whole.
