India is looking to sell 2.5 million to 3 million bales to China in the next season beginning October, up from around 800,000 bales of expected exports in the 2017/18 marketing year
India has signed contracts to export 200,000 bales of cotton to China in the past one week, the head of a trade body said, after Beijing last week sought to impose tariffs on cotton supplies from the United States.
India, the world’s second-biggest cotton exporter, is expected to export 7 million bales (each of 170kg) of the fibre in 2017/18 against 5.8 million bales shipped in the 2016/17 season, Atul Ganatra, president of the Cotton Association of India, told Reuters.
India is looking to sell 2.5 million to 3 million bales to China in the next season beginning October, up from around 800,000 bales of expected exports in the 2017/18 marketing year, Ganatra said earlier.

Times of India

While trade policy certainly impacts sourcing strategy, it often seems secondary to actual industry experience and practice–and which country’s production is most reliable for serving a brand’s needs.
Amid the turmoil over U.S.-China trade relations, Matthew Shay, president and CEO of the National Retail Federation, said, “This entire process creates uncertainty and makes it difficult for retail companies that must rely on complicated global supply chains.”
In the lead up to the latest tariff threats, importers seemed to be relying on the tried and true. China’s market share of apparel and textile imports to the U.S. increased to 36.63% in February from 36.44% the previous month. China’s industry shipments to the U.S. increased 4.18% in February to reach $39.27 billion worth of goods.
Vietnam, the No. 2 supplier of apparel and textiles to the U.S., also grew its market share to 11.53% from 11.5% month-to-month, despite some predictions that when the U.S. pulled out of the Trans Pacific Partnership, Vietnam’s exports to the U.S. would fall off. Vietnam’s industry imports to the U.S., primarily apparel, increased 9.01% in February to $12.36 billion.
Looking further at Top 10 suppliers, India’s market share shrunk a bit in the month to 6.92% from 6.96%, as imports increased 3.12% to $7.42 billion. The U.S. is challenging India’s export regime as including subsidies not allowed under World Trade Organization rules. India’s had slashed those “draw back duties” in recent months, possibly to be more in line with WTO rules, and experts estimated that could have increased FOB costs.
Bangladesh’s imports to the U.S. struggled in the month, with its market share declining to 4.93% to from 4.97% and the value of its shipments falling 2.84% to $5.29 billion.
Along other Asian suppliers, Indonesia’s market share fell to 4.44% from 4.47% and its imports to the U.S. dropped 1.72% to $4.76 billion. Pakistan saw its market share dip to 2.59% from 2.61% in the month and its shipments rise 1.67% to $2.78 billion, while Cambodia’s market share ticked up to 2.15% from 2.14% and its shipments rise 6.79% to $2.3 billion.
Among the Top 10 suppliers from the Americas, Mexico’s market share dipped to 4.4% from 4.53% in February as its imports increased 7.93% to $4.83 billion, while Honduras’ market share fell to 2.34% from 2.36% on a 2.21% decline in imports to $2.5 billion, and El Salvador’s market share slipped to 1.83% from 1.84% in the month.
Elsewhere among secondary suppliers, winners included Turkey, which saw its imports to the U.S. climb 16.53% to $1.55 billion worth of goods; Italy, which posted a, 8.78% increase in shipments to $1.8 billion, and Egypt, shipping 7.27% more goods worth $905.99 million.
Those second tier suppliers that were losers in the month were South Korea, with imports falling 3.15% to $866.1 million; Thailand, which imports falling 2.26% to $1 billion, and Guatemala, with shipments declining 2 percent to $1.36 billion.
There is concern among the hundreds of millions of dollars in tariff threats flying across the Pacific between the U.S. and China, that the ongoing efforts to re-establish U.S. manufacturing would be hurt.
Rick Helfenbein, president and CEO of the American Apparel & Textile Association, said, “We are concerned that the list includes tariffs on machinery used in our domestic manufacturing process. This would directly raise costs on domestic manufacturers and impact our ability to grow Made in USA.”
With the call for a more balanced trade between the U.S. and the world seemingly at the heart of tariff threats, U.S. exports of apparel and textiles rose 3.47% in February to $22.83 million. The bulk of these exports went to countries in the Americas that are either part of the North American Free Trade Agreement (NAFTA) or the Central American Free Trade Agreement (CAFTA).
Mexico is the top destination of these shipments, with an increase of 3.2% to $6.07 million worth of goods, and Canada is second, with a gain of 3.89% to $5.39 million in shipments. The U.S., Canada and Mexico are currently renegotiating NAFTA.
The CAFTA countries among the top suppliers all increased their exports coming in from the U.S. in the month. Honduras brought in 3.78%, or $1.5 million more goods, the Dominican Republic 5.44% or $561,213 worth of merchandise or materials, El Salvador 25.42% to $468,607 in goods and Nicaragua 19.67%, or $348,919 in shipments.

Sourcing Journal

After a disastrous year for Egypt’s cotton industry in 2016, the country’s agriculture ministry has initiated measures to boost the cotton sector by improving and raising production of long-staple and medium-length cotton. It also plans to increase the area under cotton cultivation to 224,208 acres to meet export market demand.

Despite the increase in production, Egyptian cotton exporters say production cannot meet the high export demand, according to a report in an Egyptian newspaper.
The government needs to ensure that cotton production in 2019 reaches at least 2 million quintals so that it can meet the global demand, Nabil al-Sanrisi, head of the Egyptian Cotton Exporters Association, reportedly told a local news outlet.
According to Adel Abdul Azim, head of the country’s Cotton Improvement Fund, cotton growing areas would increase to 415,200 acres by 2019.
Statistics show the value of Egyptian cotton exports fell by 4 per cent between 2012 and 2016.

Fibre 2 Fashion

Pakistan’s export growth is being hindered by high cost of business and issues of market access and exchange rate, but the government has been working on a five-year strategic trade policy framework to resolve these problems, commerce secretary Younus Dagha said recently at the launch of the International Apparel Federation (IAF) membership in Lahore.

The local currency has already been devalued by around 10 per cent to maintain the exchange rate so that exports could be enhanced, he said.

The extension offered by the European Union for the generalised system of preferences (GSP) plus benefit has helped increase exports of value-added textile products by up to 90 per cent, leading to a growth of 13 per cent between July last year to February this year, a Pakistani newspaper report quoted him as saying.

Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) senior vice chairperson Sheikh Luqman Amin said though the government had given assurance to clear all pending claims, more and more refund claims are piling up.

Fibre 2 Fashion

Higher price volatility resulted in state-owned Cotton Corporation of India (CCI) recording an eight-fold rise in fibre procurement fiscal 2017-18. It procured 1.2 million bales (of 170 kg each) of cotton fibre under minimum support price (MSP) and commercial operations in the last fiscal compared to 150,000 bales in 2016-17. A third of the total was MSP buying.
The cotton season is coming to an end and CCI plans to buy another 200,000 bales before that, according to a report in a top Indian business daily.
Private procurers had started matching the post-January price offers by CCI, resulting in the level staying high. The state body then auctions the natural fibre for textile mills at the market price. The price began recovering since January, to trade above the MSP.
CCI estimates the output at 36.2 million bales for the coming year, 0.5 million less from its last month’s estimate of 36.7 million. Total output for 2016-17 is estimated at 33.73 million bales.

Fibre

A ban imposed on cotton sowing in the province has been lifted and farmers could start its cultivation without any delay. Punjab Agriculture Department sources told APP that department had imposed a ban on cultivation of cotton till the first week of April to avoid the attackchances of pink bollworm which, in case of early-sown cotton, increases.
And keeping in view the possibility, the department had banned early sowing of the crop, they said. Sources further said that field teams have been mobilised to counter the attack of white fly and pink bollworm.
“The step had been taken after thorough consultations with cotton scientists in order to control pink bollworms,” they added. The department had prepared a plan to offer various free-of-charge services to cotton growers to enhance the crop production, the sources added.
The growers will get friendly pests, facility of pest scouting, PB-ropes, gadgets to arrest enemy pests, training opportunities and consultation services under the plan, they said. The agriculture department had advised growers to use certified varieties of cotton seed, he said, adding that spray of recommended varieties of pesticide should be launched in the first phase of cultivation process of the cotton crop.

Urudu Point

Export-friendly policies and incentives announced by Pakistan Government of late and the renewed focus towards seeking better market access by Ministry of Commerce seem to have finally yielded some positive results for the textile export industry of the country. As per the latest data released by the Pakistan Bureau of Statistics (PBS), the country noted a 7.32 per cent growth during July 2017 to February 2018 to US $ 8.8 billion as against US $ 8.2 billion in the corresponding period of FY 2016-17.
The recorded growth in textile exports has helped Pakistan to report an overall export revenue of US $ 14.8 billion during the eight-month period under review as compared to US $ 13.3 billion in the same period last fiscal. According to the Ministry of Commerce, this rising trend in exports is expected to be sustained in the coming months as well due to the rising international demand and exchange rate correction. Notably, the value-added textile sector was the chief growth driver for the increase in textile export, as stated in reports. In the previous review report that came out in November 2017, textile exports clocked US $ 1.12 billion, up by 7 per cent on the year-on-year basis. Then also, the growth was primarily driven by the value-added segment, which noted a 12 per cent yearly growth during the reporting month.
Further, exports of ready-made garments, knitwear and bed wear increased by 13.08 per cent, 13.3 per cent and 4.51 per cent, respectively, during the reporting period. Excluding towels, made-up articles also reported a 7.32 per cent increase in exports while art, silk and synthetic textile exports marked a surge of whopping 80.08 per cent during the said period. A 1.87 per cent increase in exports of cotton yarn and a slight growth of 0.04 per cent was also reported in exports of cotton cloth.

Apparel Sources

There has been a healthy debate as to whether Bangladesh should open up Foreign Direct Investment (FDI) in the apparel sector where, until now, the majority of investors are local entrepreneurs, with the exception of some foreign companies who have invested in garment businesses inside the Export Processing Zones (EPZs). Before analysing the arguments in this regard, we need to explore why and when FDI is necessary and also consider the advantages and disadvantages of adopting this practice.
Many will find it surprising that the fledgling apparel industry of Bangladesh flourished in the hands of the first-generation businessmen who got the opportunity to start their business ventures only after the independence of Bangladesh in 1971. They didn’t have much knowledge of the business per se. Even Noorul Quader, the man largely credited with the revolution of the apparel business in Bangladesh, was a bureaucrat with sound knowledge on how to keep government services functioning smoothly; he was by no means an expert in the apparel field. The spirit of innovative entrepreneurship combined with a diligent workforce are the dominant forces behind the development of the country’s apparel industry. Local entrepreneurs have put their efforts and made huge investment to expand the sector both vertically and horizontally, making Bangladesh the second largest readymade garment exporter in the world.
However, Bangladesh’s share in the global apparel market is still relatively insignificant—only 6.36 percent—whereas China’s share is 36.37 percent. In addition, most of our apparel items are cotton-based while 65 percent of global apparel is non-cotton. The majority of Bangladesh’s apparel export items are concentrated in five basic product categories—trousers, t-shirts, sweaters, shirts, and jackets. We have to consider manufacturing more non-cotton apparel items where Bangladesh has huge potential. So investment in non-cotton textile is a highly feasible proposal as we have a captive market and a skilled workforce. It will, however, be necessary to continue to find methods to reduce our production lead time.
If we continue to keep our export products limited to a small number of categories, the growth in our industry runs the risk of stagnating or may even take a negative turn. Moreover, with the increasing socioeconomic development of Bangladesh, the living standards of people are improving also. In line with improvements in living standards, it is inevitable that wages will also gradually increase. To manage the demand for increased wages, the industry needs to start focusing on the production of higher valued apparel items. Upgrading of product in order to achieve a higher purchase price is an approach that needs to be adopted in order for our apparel industry to sustain its growth.
For value-added products, we need factories equipped with the most advanced machinery and staff with sound technical knowledge, for which we need huge investment. Value-added items like blazers, jackets, swimwear, lingerie, sportswear, uniforms, raincoats, and fishing wear require manmade fibres (MMF) including viscose, rayon, spandex, polyester and so on. But the MMF production capacity of our existing textile mills is still insignificant. MMF production is complex and constantly requires sophisticated machinery and regular research and development (R&D). Presently, we lack expertise in this area. However, knowledge and guidance can be gained by allowing foreign companies to set up the necessary textile mills in Bangladesh. The benefits of this approach are two-fold: our readymade garment factories will be able to procure the necessary materials from these mills, and lead times will be greatly reduced as our dependency on importing materials from China and India will be significantly reduced. In addition, it will facilitate knowledge transfer as local people, recruited in these fabric mills, will get the opportunity to work with, and learn from, experts in their field—the same way we had developed our garment industry in the 1980’s with technical assistance from South Korea. So, foreign direct investment in the apparel and textile industry offers the prospect of good returns.
However, we must remember several things while considering FDI in the apparel industry. If we want to attract companies that produce higher valued items, we need to refine our regulatory system in such a way that the majority of investors will find manufacturing high-end products in Bangladesh beneficial, as too many restrictions may discourage the investors. Additionally, if we want to obtain FDI in a particular type of apparel item, we may have to consider setting up an apparel business park with facilities such as fabric and accessories suppliers, testing labs, consultants, etc.—all conducive to manufacturing that particular product type. Here, we need to remember that it is not possible to fully dictate what a manufacturer is going to produce. A winter jacket factory will produce basic items for about 5-6 months a year during the summer delivery period. Likewise, a swimwear manufacturer may produce lightweight basic blouses during winter delivery period.
An investment-friendly policy and environment is required to attract FDI in Bangladesh. The investment regime will need to be credible and predictable while it should be ensured that there are no frequent changes in policies and regulations. Facilities like infrastructure, energy supply, double tax deduction, etc., should be provided by the government to bring in investment. Tax incentives for machinery import are very important for the apparel industry as automated machines will improve productivity and, at the same time, the quality of the products. When a factory increases its investment, it will feel empowered to take orders of higher value products to cope with its higher overheads. A rule can be enforced to allow the import of only new machines or machines less than an agreed age, so that FDI will not attract companies wishing to dump outmoded machinery in Bangladesh. It should be ensured that foreign investors can bring in their own managers and supervisors. However, the government must be strict to ensure that license will be issued only if a company complies with all the FDI rules.
New factories should install all necessary equipment to control pollution and any negative environmental effects. The rising production cost in China and their shifting to higher-value goods and services has created opportunities for other countries to take the shifting orders. But we have to be very cautious, as there are reports that some apparel manufacturers in China, whose standards were not up to the mark and were notorious for polluting the environment, are now trying to scatter their production plants in different parts of the world. So, it will be necessary for the concerned departments of our government to strictly monitor the issue.
Adaptability to the changing trends is a must to sustain growth in our apparel industry in the long run. We must keep pace with the demands of the time. Our industry has now arrived at a juncture where we need to move up the value ladder by shifting from basic to higher-end products to sustain our growth. Foreign investment, therefore, will be key to opening the window to a brighter future for our apparel industry.

The Daily Star

The Indian economy, which saw temporary disruptions caused by demonetisation and the roll-out of the goods and services tax (GST) over the past two years, will see consolidation in the current fiscal.
The Indian economy, which saw temporary disruptions caused by demonetisation and the roll-out of the goods and services tax (GST) over the past two years, will see consolidation in the current fiscal, finance minister Arun Jaitley said on Sunday. In a message to the CII annual session, Jaitley said reforms such as GST, Insolvency and Bankruptcy Code and new income tax regulations are contributing to a better investment climate. “An aspirational India, an impatient India, has accepted the idea of reforms,” the minister said in the message. Jaitley, who was supposed to address the event, couldn’t attend due to health issues. Speaking at the CII event, economic affairs secretary Subhash Chandra Garg said India is aiming to become a $10-trillion economy by 2030, from roughly $2.5 trillion now. He said four kinds of businesses would drive growth – those in manufacturing, start-ups, infrastructure and the small and medium scale sector. He said creating a conducive environment for businesses would rest on four factors: improving the ease of doing business by streamlining procedures and reducing cost of operation; ensuring a stable macroeconomic environment that would entail a stable rupee, benign inflation, adequate resources for the private sector and promoting FDI; access to credit at low costs to spur investments; facilitating skill development and simplifying labour laws.
CII president Shobana Kamineni stressed the need for widening of the tax base through lowering of the corporate tax, better allocation of resources and right pricing, and deregulation of labour laws. “We value the assurance of a red carpet but cannot live under fear that it can be pulled out from us at any moment,” she said. She added the industry needs to take risk and build new capacity and massive investment is required in the R&D space, investments in which currently account for just 0.3% of the GDP.
Devolution of funds to states should be based on performance indicators: NITI Aayog NITI Aayog vice-chairman Rajiv Kumar on Sunday pitched for building ‘performance indicators’ for the devolution of funds to states, reports PTI. Kumar also said while fiscal irresponsibility is bad, “fiscal fetish” is also not desirable and a delicate balance has to be maintained. “I think it is clear that these (devolution of funds) criteria has to include some performance-based criteria. And therefore, those states which have done better in certain performance should not be punished. I think it is better deal now to start process of building some performance indicators for the devolution of funds and then increase it in phased manner,” Kumar said at the same event. Kumar’s observations come in the backdrop of some states expressing disquiet about the terms of reference of the 15th Finance Commission to decide the sharing of tax resources between the Centre and states. The NITI Aayog was in favour of recommending to the 15th Finance Commission to consider sustainable development goals performance for allocating a small percentage of funds to different states, Kumar said.

financialexpress