Vietnam hopes for higher exports to the EU post FTA
The free trade agreement with Europe is expected to help Vietnam increase its apparel exports. By signing a FTA deal with the European Union, Vietnam has become the first developing country in Asia to receive tariff reductions on 99 per cent goods from the 28-member bloc. Almost 11 per cent of Vietnamese apparel exports to the EU will get complete duty waiver at the time of enforcement of this agreement. The European Union is Vietnam’s second largest export market after the United States, with the main exports being garment and footwear products. Vietnam is the sixth largest readymade garment exporting nation to EU, having four per cent of the total market. After the ratification of the agreement, Vietnam won’t have to pay the 12 per cent duty anymore on garment exports to the EU.
However, Vietnam’s exporters have to comply with regulations if they have to increase their market share in the EU – and that includes meeting rules of origin as well as focusing on environmental safety and information transparency related to labor and the production environment. For the first six months of 2019, Vietnam’s textile and apparel industry grew by 8.6 per cent.
US tariffs on Chinese imports come into force
More than 90 per cent of Chinese apparel imports into the US will be hit with 15 per cent tariffs beginning September. This is also true of 68.4 per cent of Chinese home textile imports into the US and 52.5 per cent of footwear imports.
A sudden 15 per cent tariff on apparel from China will also trigger cost increases from other major suppliers, either by forcing costs up as companies shift to other countries and run into capacity constraints or by giving suppliers in those other countries a pricing advantage.
Companies are trying to lessen the number of products that will be affected by the September tariffs. For example, T-shirts that are less than 70 per cent silk will be hit with tariffs. Knowing this, companies can ask factories to start making their T-shirts completely out of silk. Companies also timed shipments to arrive earlier to evade the deadline. People ordered early and some products landed in August. Another strategy is for retailers to move factories, suppliers or vendors out of China. But even this will be difficult due to capacity limitations in other countries and the need to build new relationships to ensure compliance with various product safety and labor regulations.
Tees are top exports for Bangladesh
Despite the fact that China remains a key global centre for the T-shirt production, it is gradually shifting to other countries in Asia. Bangladesh’s earnings from T-shirt exports continued to rise due to a shift in orders to following rising production costs in China. Most knitters produce cotton T-shirts but many have opted for artificial fibers following the demand for non-cotton products. Value addition is putting a positive impact on the overall export performance. The China-plus move of buyers is helping makers bag better work orders. Earnings are increasing with value addition.
T-shirts, trousers, jackets, sweaters and shirts account for around 73 per cent of Bangladesh’s earnings from exports of readymade garments. In 2016, the volume of global T-shirt exports grew four per cent from previous year. While the economically mature markets of the US, Canada, and Western Europe are close to their saturation point in terms of T-shirt consumption, emerging economies, such as China, India, Russia, and Brazil, are far from saturated. They share a few similar characteristics, including a rising population, an improved economic situation, rising disposable incomes, and urbanization. T-shirt consumption is set to maintain an upward growth trend in the immediate term.
Three day Spinexpo opens door in Shanghai
Spinexpo China opened doors today and will be on till September 5, 2019. This is a global flagship event for spinners and knitwear manufacturers. The event is aimed at knitwear brands, flat-bed and circular knit manufacturers, weavers, sporting goods manufacturers, hand-knitting wool distributors and all yarn and knitwear users. Exhibitors showcase technically innovative collections each season, thanks to a partnership between machine manufacturers, spinners and knitwear and sporting goods manufacturers. This edition is exploring the topic of disruption: recycling colors and stitches. The focus is on a mix of different styles inspired by a modern-day rural nomadism, a hodgepodge of combinations, multicultural details and different forms, a desire for daily protection that allows us to live our day-to-day lives. Paper yarns, linen yarns, heather yarns, natural fibers are combined with synthetic fibers. The combinations merge to create a range of surface finishes, a selection of resolutely trans-seasonal products. Polyesters and nylons become the foundation for new blends with other fibers.
Among other trends, soft wools and cashmeres together with thermoplastic settings and 3D finishing create textures, which blend comfort and durability. Padding and blistered patterns are knitted with finishes that have been developed to be used as outerwear, alluding to the idea of fabrics for survival and protection. Colors are bold, with intense depth and intrigue.
Paris to host Premiere Vision to present new materials
Première Vision Paris will be held in Paris from September 17 to 19, 2019. The event will present new materials and creative stimuli for the autumn/winter 2020-21 season. This major event for all fashion industry players brings together, twice a year, the six principal activities in the upstream sector: yarns, fabrics, leathers, designs, accessories and clothing. The September 2019 edition is particularly interested in how clothes are used to protect against the elements.
The show will present the best of Class, its projects and initiatives, as well as its partners’ collections which have cutting edge sustainable yarns, fabrics, materials and processes. Class is a global resource for smart material innovation, education, marketing and communication. This is the platform for those looking for authentic and real examples of the most interesting materials and processes that can boost sustainability in a brand with no compromise in design and performance.
Premiere Vision will also present Co.Lab, a collaborative business model, smart platform and research lab with a sustainable mission to create a new generation of wardrobe. Co.Lab is the brand new supply chain system that goes from fiber up to garments delivering transparent and 100 per cent traceable production standards together with the new generation of responsible values.
Pak yarn merchants oppose increase in withholding tax
As clarified by the Federal Board of Revenue (FBR), Pakistan Yarn Merchants Association (Sind & Baluchistan Zone) has opposed increasing of the withholding tax from 1 per cent to 4 per cent saying that the decision is ‘not acceptable at any cost’, and the move would prove highly disastrous.
Collection of advance income tax on the total amount of every receipt would raise the cost manifold, as local manufacturers, spinning units and commercial importers of yarn worked at low margins due to large volume. Deduction of advance tax on value of receipt would worsen the liquidity crunch for the industry because refunds are issued after long delays.
UK fashion industry to lose upto £1 billion with no-deal Brexit
The British Fashion Council says, the country’s fashion industry is likely to lose up to £900 million in one year in a no-deal Brexit scenario. This estimates are based on export figures from 2018, which show that abiding by World Trade Organization rules would drastically increase annual tariff costs for retailers and fashion designers.
As per latest figures from the UK Fashion & Textile Association, the industry could lose between £850 to 900 million. According to the BFC, the UK fashion industry is worth £32 billion and employs more than 890,000 people, almost as many as that of the financial sector. As a result, the organisation has released a statement urging the British government to protect the industry and its workers as the risk of a no-deal Brexit is increasing.
Indian government announces new measures to boost leather exports
As per the Council for Leather Exports, the measures announced by the government to push economic growth will help attract investments and boost exports of India’s leather sector. Exports in the sector declined 4.90 per cent during April-June 2019, primarily due to reduction in exports to the major market Europe which accounted for about 53 per cent of exports. The announcement to amend definition of MSMEs will further increase their concentration in leather and footwear industry and will facilitate more companies to avail government support measures. The decision to clear pending goods and services tax refunds to micro, small and medium enterprises (MSMEs) within 30 days, timely passing on rate-cuts by banks and additional credit expansion through Public Sector Banks, will help in overcoming the liquidity problems.
Considering the opportunities offered by the US-China trade conflict, the domestic leather industry is looking to register an overall export growth of 5 per cent this fiscal.
Migrant workers in Bangladesh face exploitation
In Bangladesh, employment opportunities, climate change, natural disasters, and marriage are key triggers for migration movements from the rural to the urban sector. Dhaka and Chattogram are the destinations of 80 per cent of the country’s internal migrants. However, lack of awareness about labor standards and ethical recruitment practices are among the factors that exacerbate the vulnerabilities of migrant workers. These workers are at risk due to lack of awareness and limited capacity to implement appropriate corporate policies and management systems also contribute to vulnerabilities of workers.
Bangladesh is the world’s third largest exporter of clothing, Asia’s third in commercial services and recently an important player in the export of agricultural goods. Bangladesh has a significant market opportunity for businesses to secure their connection to a global market where the legalization of corporate responsibility, including ethical recruitment, is increasingly becoming mandatory. If Bangladesh ensures sustainable sourcing and ethical recruitment, it will increase the country’s competitiveness. There is a need to follow labor laws and promote a sustainable business model which has a good supply chain. Labor intensive business models inadvertently expose companies and workers to risks due to limited transparency in recruitment, employment and working conditions as well as migration processes.
Morocco to host Maroc in October
Maroc will be held in Morocco from October 17 to 18, 2019. The show will be segmented into five categories: fast fashion, denim, jersey/knit/lingerie, sportswear/leisure wear/technical garments, and leather/shoes. The fair offers a comprehensive overview of the Moroccan textile and garment industry from fast fashion to high-quality production of trend peaks up to offers of sustainably produced collections. The sourcing show will host 200 suppliers and 1500 attendees. The fair program will be supplemented by special B2B meetings and conferences, which deal with current production topics.
Trade uncertainty is provoking brands and retailers to re-examine their supply chains, prompting the show’s organizers to center its conference programming around the benefits to be had with closer-to-home operations. Morocco will be highlighted as one such solution, with its specialties, including knits, denim and technical textiles. The region’s infrastructure has grown thanks to an influx of foreign investments. The country consists of more than 1600 companies and over 1,90,000 garment workers. Morocco is being promoted as an attractive sourcing destination because of its close proximity to Europe and shorter delivery routes, lower ecological impact, stable political and social environments, and duty-free EU agreements. The promise of nearshoring has piqued the interest of apparel and textile companies.
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Hong Kong-based garment maker Lever Style gets pragmatic about tariffs
Amid the protracted and unpredictable trade war between the US and China, a Hong Kong -based garment maker is looking to spread out its supply chain risks rather than simply move its production base out of China.
Lever Style will continue to hedge its bets and is looking at a lot more countries to spread its geopolitical risks and also cost inflation. It is constantly evaluating and seeing what’s the best combination that gives it cost effectiveness as well as agility.
Lever Style used to manufacture all its products in China a decade ago but has since moved much of its production out of the country due to rising costs. Now, the company produces in countries such as Vietnam, Cambodia and Indonesia. Lever Style is also trying to change the way it’s managed as a factory, such as by working with production partners around the region instead of going it alone. The company’s clients include fashion labels such as Coach and Paul Smith. However, garment manufacturing is labor intensive — one factor that could limit the business’ flexibility. The more labor intensive things are, the harder it is to just spread things around too much.
The US and China have imposed new tariffs on each other’s goods, intensifying a long-drawn trade dispute between the world’s two largest economies.
Egypt’s cotton exports increase 218.8 per cent in Q3 2018-19
The Central Agency for Public Mobilisation and Statistics (CAPMAS) says, Egyptian cotton exports increased by 218.8 per cent to 510,200 metric quintals during the third quarter of the agricultural season 2018-2019 from the corresponding period of the previous season.
In the quarterly bulletin of cotton for the third quarter of the agricultural season 2018/19, the consumption of local cotton reached 38,000 metric quintals compared to 39,200 metric quintals during the same period of the preceding year registering a decrease of 3 percent, because some spinning mills ceased production.
The total quantity of cotton ginned equaled 382,600 metric quintals during the above-mentioned period, compared to 47,700 metric quintals during the previous period, an increase of 701.8 percent thanks to the cotton production increase.
Egyptian cotton production is on course to rebound with help from a devalued currency and bigger cultivation area, recovering from a slide in exports of the world-famous crop since 2011 that was caused by a drop in quality.
India to increase MSME export share to 50 per cent
The Minister of MSME, Nitin Gadkari has announced that the share of MSME exports in the country will be raised to 50 per cent and sector’s gross domestic product (GDP) also to 50 per cent in the next five years. The ministry will also create 5 crore jobs in the next five years.
The minister was addressing a business summit titled ‘Globalising the Brand Khadi: The Pride of India’, organised by the Confederation of Indian Industry (CII) in Mumbai.
Calling upon enterprising people in the private sector to come forward to promote khadi, the ministry stated that the khadi sector needs to be strengthened and its turnover needs to be raised further. He also launched Tech Saksham, a CII Tech Project, aimed at accelerating MSME growth through technology enablement. CII Tech-Saksham for MSMEs, a MSME ministry-CII project, brings together technology majors Dell Technologies India, HP India, Intel India, Vodafone Idea, WhatsApp India and Yes Bank to address technological gaps faced by MSMEs in their growth.
India’s cotton textiles exports down 24 per cent
India’s exports of cotton textiles fell 24 per cent during April to July, 2019. This has led to a crisis-like situation in spinning industry. In fact, monthly exports of cotton yarn are at a five-year-low. Exports to major markets such as China have halved, and exports to Bangladesh and Korea have fallen 38 per cent and 45 per cent.
Competing countries are gaining access to various markets such as China, South Korea and Turkey, mainly on account of the preferential access given to them by the importing countries, leading to a further erosion of India’s market share. While Vietnam has increased cotton yarn exports to China by 17 per cent during the last four months, India’s share declined 16 per cent in the same period. In view of the sharp decline, many production units are shutting down and need urgent policy support. The industry wants the three per cent interest equalisation to be extended to cotton yarn since this is expected to help the cotton yarn sector and the spinning industry to minimise their losses and regain their competitiveness.
However, made-ups and garment exports are recording a positive growth mainly on account of the Rebate of State and Central Taxes and Levies scheme.
