05 February 2022, Mumbai:

In 2022, cotton prices are expected to gain 5% y/y, as last year's ending stocks are rapidly reduced amid strong global demand outpacing available supply. Last year, the average cotton price soared by 41% y/y to $2.23 per kg.

In 2021, the average cotton price surged by 41% y/y to $2.23 per kg. Despite the global cotton production rebounded after a 2020's drop last year, reaching the pre-pandemic level of 26.3M tonnes, growing demand outstrips supply.

In H1 2022, cotton prices are projected to increase, as global production at the beginning of the year is lower than in the previous months due to smaller crops in India and the U.S.

This year, the average annual cotton price is expected to pick up 5% y/y to approx. to $2.34 per kg. Instigated by boosting demand and high domestic cotton prices, China is forecast to ramp up imports sharply, also stimulating the price rally.

Global Cotton Lint Exports by Country

In 2020, the amount of cotton lint exported worldwide was estimated at 9.4M tonnes, picking up by 5% compared with the previous year's figure. In value terms, supplies contracted to $14.6B (IndexBox estimates).

The U.S. (3.8M tonnes) represented the major exporter of cotton lint, mixing up 41% of total exports. Brazil (2.1M tonnes) held the second position in the ranking, distantly followed by India (960K tonnes).

All these countries together held near 33% share of total supplies. Greece (289K tonnes), Benin (280K tonnes), Nigeria (212K tonnes), Australia (170K tonnes) and Burkina Faso (167K tonnes) followed a long way behind the leaders.

In 2020, the most notable rate of growth in terms of shipments amongst the key exporting countries was attained by India (+55.9% per year), while exports for the other global leaders experienced more modest paces of growth.

In value terms, the U.S. ($6B), Brazil ($3.2B) and India ($1.4B) appeared to be the countries with the highest levels of exports in 2020, with a combined 73% share of global supplies.

This report provides an in-depth analysis of the global cotton lint market. Within it, you will discover the latest data on market trends and opportunities by country, consumption, production and price developments, as well as the global trade (imports and exports).

The forecast exhibits the market prospects through 2025.

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01 Febuary 2022, Mumbai:

As Indian textile exporters lose market share to Bangladesh and Vietnam, the Confederation of Indian Industry believes India may gain 1% of China's market share and gain access to $10 billion in textile commerce.

According to a recent research by the CII and management consulting firm Kearney, since China's cost competitiveness in the world textile industry has diminished, there is a potential for Indian enterprises to acquire market share. 

According to the paper, India's textile sector should strive for $65 billion in exports over the next five years and overcome present barriers to growth, such as high import levies on textile machinery and raw materials.

Over the following five years, the government wants to accomplish a goal of $100 billion in textile exports.

From April to December 2021, India's overall textile exports climbed by 41% year on year, owing in part to less pandemic regulations, according to ET Bureau. Despite recent development, the CII claims that the country still has a long way to go before it can enhance its competitiveness.

According to the Economic Times, Kearney partner Neelesh Hundekari noted, "The largest potential or market is in exports." "At least a $16 billion growth potential exists in the garment industry, and China Plus One is the ideal feeling."

Every garment sourcing firm wishes to have an alternative to China. Another area where we expect to see a $4 billion increase is in textiles, where we plan to establish India as a regional fabric center.

CREDITS: Fashion Network

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04 February 2022, Mumbai:

The Council for Leather Exports is optimistic that the 2018 Union Budget's leather-related initiatives would enhance exports and benefit micro, small, and medium-sized businesses.

According to the Press Trust of India, CLE Chairman Sanjay Leekha remarked after the new budget was revealed, "The budget has announced important support measures, which would offer a fillip to the growth of exports from the leather and footwear sector."

The CLE said on February 2 that the budget's exemption of decorations and wet blue chrome tanned leather from import tariff will assist enhance outbound exports of leather goods. 

According to the CLE, the government is assisting to encourage the export of value-added products by lowering the price of importing important components for producing leather goods that are demanded by overseas clients.

This would enhance the industry as a whole. A revised start date for manufacturing activities for newly established domestic manufacturing enterprises is also included in the budget.

For enterprises intending to take advantage of the 15% corporation tax exemption aimed to encourage investment, the deadline has been pushed back from March 31, 2023 to March 31, 2024.

"By extending the Emergency Loans Line Guarantee Scheme, MSMEs would be able to obtain extra credit at lower interest rates," Leekha explained. By the end of the 2026 fiscal year, India's leather and footwear sector hopes to have reached a total export value of $10 billion and a domestic value of $20 billion.

"The measures made in the Union Budget 2022-23 will go a long way toward attaining these goals," Leekha stated.

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*Figures mentioned in the above article have been sourced from Fashion Network article. 

01 February 2022, Mumbai:

In order to stimulate apparel exports, the Apparel Export Promotion Council has asked the government to eliminate import duties on cotton in the 2019 Union budget. In an interview with Asian News International, AEPC chairman Narendra Goenka said, "We need to abolish the import tariff on raw cotton."

"Raw material prices in India are really expensive, thus it's our main requirement." Cotton prices have risen by over 70% to 80% in recent year. The reduction of the 11 percent import charge on cotton might be one answer. In order for mills to be able to import cotton at a lesser cost."

"Cotton and yarn costs have increased by 70-80%, posing a challenge for garment exports," Goenka added. "So it is our budget's key one-point need."

The AEPC has also emphasized the need of expanding India's manufacturing capacity, signing free trade agreements with other nations, and promoting Indian clothing internationally through export promotion campaigns. Because these commodities are normally shipped out of India, the AEPC also advised that the government give duty-free facilities for importing trims and decorations. 

"Until two years ago, trimmings and decorations such as tags, labels, and buttons that are used for branding and are nominated by the customers were permitted duty-free," Goenka explained. "That facility was withdrawn, and we are demanding that it be reinstated since we need to import those trimmings from purchasers' designated sources."

The AEPC was founded in 1978 and is India's official organization for clothing exporters. According to its website, the AEPC has ten offices across India and conducts training programmes for the garment sector.

CREDITS: Fashion Network

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04 February 2022, Mumbai:

In order to boost domestic manufacturing, the government has removed customs tax exemptions for 350 items, including wearable gadgets, in its budget for 2022-2023. In order to rationalize customs duty rates, the Central Board of Indirect Taxes and Customs tweeted that it has conducted a complete examination of customs duty exemptions on capital items and project imports.

The CBIC also stated that it intends to phase away approximately 40 customs exemptions over time. The Union Budget, which was presented to Parliament on February 1, proposed eliminating concessional rates on capital goods and project imports and replacing them with a 7.5 percent tax. 

According to the Press Trust of India, the government elected not to remove exemptions for machinery used in India, such as in garment production, for which components are not already made in the nation.

Wearable gadgets, hearable devices, and electronic smart meters, a rapidly developing product category in the country, are one product category for which the government has opted to standardize customs tax rates. Wearable device inputs, components, and sub-parts will be steadily enhanced.

Mobile phones and other devices are among the other products whose customs tax rates may alter.

The government did choose to lower some customs charges, such as the customs duty on cut and polished diamonds and gemstones, which was reduced from 7.5 percent to 5%.

Furthermore, diamonds that are merely sawn and imported under the Kimberley Process Certification Scheme will not be subject to any customs duties.

Imitation jewelry would be subject to a new baseline customs charge of 20% or Rs 400 per kilogramme, whichever is greater.

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*Figures mentioned in the above article have been sourced from Fashion Network article. 

02 February 2022, Mumbai:

India’s imports of Supima cotton from the United States increased last year to 219,360 lakh bales from 1.74,822 bales in 2020, owing largely to leading US brands shifting their garment sourcing to India from China.

Bruce Atherley, Executive Director, Cotton Council International (CCI) believes, brands are becoming more responsible in their sourcing strategies as sustainability and transparency are no longer optional. Leading brands are mapping their supply chains all the way back to spinning mills and looking for reliable supply chain partners.

Peush Narang, CCI Country Representative-India and Sri Lanka, adds, the Indian textile industry is at a critical juncture thanks to its growing cotton imports.

India's textile exports have been brisk as a result of rising demand and government support. Between April and December 2021, India’s textile and apparel exports increased by 41 per cent to $29.8 billion, up from $21.2 billion in the same period last year.

From April-December, India’s textile sector's exports, including textile, apparel, and handicraft, increased by 15 per cent year on year. Exports of cotton yarn, fabrics, made-ups, and handloom products increased by 43 per cent year on year during the period, while jute product exports increased by 33 per cent.

In December, India’s textile exports increased by a record 37 per cent year on year to $37 billion, the highest-ever monthly exports achieved so far. In the same period last year, exports totaled more than $27 billion.

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01 February 2022, Mumbai:

Production Linked Incentive (PLI) Scheme for achieving Aatmanirbhar Bharat has received an excellent response, with potential to create 60 lakh new jobs and additional production of 30 lakh crore during next Keycap digit five years, said finance minister Nirmala Sitharaman.

Union finance minister Nirmala Sitharaman presented the Union Budget 2022 today. This is her fourth budget presentation.

“Production Linked Incentive (PLI) Scheme for achieving Aatmanirbhar Bharat has received an excellent response, with potential to create 60 lakh new jobs and additional production of 30 lakh crore during next Keycap digit five years," said Nirmala Sitharaman.

CREDITS: news18.com moneycontrol.com

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04 February 2022, Mumbai:

Umesh Gaur has been appointed Managing Director International at Tukatech, the leading provider of CAD, CAM clothing technology solutions. Umesh will be responsible for overseeing Tukatech's worldwide business operations in his new post.

He has more than 20 years of expertise in the industry and previously served as the company's President for the Asian region. Umesh, who is presently located in Gurgaon, India, has come a long way since joining Tukatech over two decades ago as an Installation Engineer before rising through the ranks to handle operations in Asia and Europe.

Tukatech is now better positioned than ever to execute an ambitious expansion plan in Asia, the Middle East, Eastern and Western Europe, Africa, and other emerging regions, all while dealing with an ever-changing and increasingly difficult supply chain environment.

"It's a big pleasure to have this chance at such an exciting moment for the firm," Umesh said of his new position.

He observes a significant growth in the usage of technology by businesses of all kinds and levels. This is especially true in exporting nations who are trying to salvage their industries and become more competitive," he adds, "and it is also true in importing countries that are using technology to bring production back home."

He went on to say that exporters must work hard to minimize their time and costs or risk losing business.

"With strong foundations for this growth and a large base of delighted Tukatech users," Umesh said, "I am optimistic that we can continue to build on this success and drive our strategic goal ahead."

Tukatech's Founder and Chairman, Ram Sareen, is 'overjoyed' to have Umesh join the company as Managing Director International.

"I am pleased to be able to announce this promotion. Umesh has extensive clothing industry expertise and has built and supported teams in Asia and Europe. Ram asserted, "He is well-suited to accomplish the same in Africa and other parts of the world."

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*Figures mentioned in the above article have been sourced from Apparel Resources article. 

01 February 2022, Mumbai:

The Union Minister for Finance & Corporate Affairs, Smt. Nirmala Sitharaman presented the Economic Survey 2021-22 in Parliament today. The highlights of the Economic Survey are as follows:

State of the Economy:

• Indian economy estimated to grow by 9.2 percent in real terms in 2021-22 (as per first advanced estimates) subsequent to a contraction of 7.3 percent in 2020-21. 
• GDP projected to grow by 8- 8.5 percent in real terms in 2022-23.  
• The year ahead poised for a pickup in private sector investment with the financial system in good position to provide support for economy’s revival. 
• Projection comparable with World Bank and Asian Development Bank’s latest forecasts of real GDP growth of 8.7 percent and 7.5 percent respectively for 2022-23.
• As per IMF’s latest World Economic Outlook projections, India’s real GDP projected to grow at 9 percent in 2021-22 and 2022-23 and at 7.1 percent in 2023-2024, which would make India the fastest growing major economy in the world for all 3years.
• Agriculture and allied sectors expected to grow by 3.9 percent; industry by 11.8 percent and services sector by 8.2 percent in 2021-22.
• On demand side, consumption estimated to grow by 7.0 percent, Gross Fixed Capital Formation (GFCF) by 15 percent, exports by 16.5 percent and imports by 29.4 percent in 2021-22.
• Macroeconomic stability indicators suggest that the Indian Economy is well placed to take on the challenges of 2022-23.
• Combination of high foreign exchange reserves, sustained foreign direct investment, and rising export earnings will provide adequate buffer against possible global liquidity tapering in 2022-23.
• Economic impact of “second wave” was much smaller than that during the full lockdown phase in 2020-21, though health impact was more severe.
• Government of India’s unique response comprised of safety-nets to cushion the impact on vulnerable sections of society and the business sector, significant increase in capital expenditure to spur growth and supply side reforms for a sustained long-term expansion.
• Government’s flexible and multi-layered response is partly based on an “Agile” framework that uses feedback-loops, and the use of eighty High Frequency Indicators (HFIs) in an environment of extreme uncertainty.

Fiscal Developments:

• The revenue receipts from the Central Government (April to November, 2021) have gone up by 67.2 percent (YoY) as against an expected growth of 9.6 percent in the 2021-22 Budget Estimates (over 2020-21 Provisional Actuals).
• Gross Tax Revenue registers a growth of over 50 percent during April to November, 2021 in YoY terms.  This performance is strong compared to pre-pandemic levels of 2019-2020 also. 
• During April-November 2021, Capex has grown by 13.5 percent (YoY) with focus on infrastructure-intensive sectors.
• Sustained revenue collection and a targeted expenditure policy has contained the fiscal deficit for April to November, 2021 at 46.2 percent of BE.
• With the enhanced borrowings on account of COVID-19, the Central Government debt has gone up from 49.1 percent of GDP in 2019-20 to 59.3 percent of GDP in 2020-21, but is expected to follow a declining trajectory with the recovery of the economy. 

CREDITS: PIB

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31 January 2022, Mumbai:

The textiles industry has been struggling to stay afloat in the midst of a raging pandemic that caused acute labour shortages and a surge in cotton prices. If these weren't enough, smaller nations such as Vietnam and Bangladesh are now overtaking India in this segment.

Though there has been a 41% increase in textile exports from April-December 2021 against last year, a lot remains to be done to help the sector be more competitive and on a par with global challengers.

A report by the Confederation of Indian Industry (CII) and global management consulting firm Kearney released in October last year had stated that India’s textile industry should aim for $65 billion in exports in the next five years, especially with the “China Plus One” sentiments lending India a favourable position — as global companies look at sourcing and manufacturing destinations outside the “factory of the world”, China.

Affirming such views, KK Lalpuria, Executive Director & CEO, Indo Count Industries, says a clear opportunity exists for India as textile brands and retailers are trying to de-risk their supply chain by looking at alternative hubs.

“China’s cost competitiveness is waning. Their market share is still 30%-36% and even a 1% market share shift will imply a $10-billion market, because the global textiles trade is $1 trillion.

So that is the kind of scale that India is looking at,” he says. India’s domestic textile and apparel production is worth $140 billion, including $40 billion of textiles and apparel export, according to the Press Information Bureau.

The government has set an export target of $100 billion over the next five years, from $34 billion (2019-20), according to the commerce ministry. Experts have pointed out that India, being a leading textile player, has the opportunity to massively scale up its presence in this segment.

CREDITS:ET

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