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US exports of denim fabrics are falling for the second consecutive year. On the longer term exports are clearly resisting, thanks to relocation of US jean sourcing to Mexico and Central America. Direct investment in low-cost countries in the region could now limit exports from the United States while preserving relations with customers at the same time.
The World Trade Organisation (WTO) decided to form a panel of experts to investigate whether the US had indeed removed illegal cotton subsidies after a 2004 WTO ruling. The request for the panel was made by Brazil, which insisted that the US has not complied fully with the WTO ruling.
The Denim prices in India are steady which is a clear sign that recession in now over. Production is also recovering at the same time amid sharp differences between suppliers of basics and specialists of higher-valued fabrics.
The US market for imports of made-ups and home textiles has continued to grow in the first half of 2006. In made-ups, China remains dominant and there was good growth from Pakistan. While Pakistan accounts for large shares of cotton home textile categories, both China and India made gains.
Exports of China’s woven cotton shirts continued sharply rising in the first half, mainly due to an absence of quotas on the largest part of shipments to the United States and Europe. Prices significantly rose, reflecting a shift of Chinese exporters to higher-valued products.
European Union quotas have resulted in predictably lower volumes imported from China in the first half of 2006. Turkey, seeking to capitalise on the restrictions, has seen some gains made in certain important HS categories but on the whole is still struggling. With China’s higher unit prices suggesting a move away from low-cost production, this could prove another problem for Turkish producers.
China currently is the leading market for Italian textile machinery industry, with a share of 17% on the total Italian export. In 2005, the Italian exports to the Chinese market reached a value of Euro 316 million, while in the first three months of 2006 the Italian sales in China increased by 19% on the same period of 2005.
The US Congress has been urged by a coalition of trade associations, businesses and pressure groups to extend the so-called “third country fabric provision” that benefits African countries. The group is concerned that the present arrangement, due to be scrapped in 2007, will further reduce US apparel imports from sub-Saharan African countries.
The Bangladesh Shilpa Bank will provide loan facilities to the project of Rowshan Ara Cotton Mills Ltd in Comilla, to produce 58 lakh kilograms of cotton yarn per year. A 5-member bank syndicate led by the Bangladesh Shilpa Bank signed a loan agreement with the Rowshan Ara Cotton Mills Ltd.
The Tamil Nadu Government, with an investment of Rs 300 crore is planning to set up textile parks in Madurai, Erode, Kumarapalayam and an exclusive processing park at Cuddalore. The State Government also feels that handloom products sale can be further improved by introducing handloom mark and creating new designs.
In the first half of 2006, textile exports to Japan earned Yen 1194.6 billion, recording a rise of 14.6%. Nearly 90% of Japan’s clothing import is from China, as labour and transportation costs are low while the delivery is quicker. As the labour cost in China is rising many Japanese clothing units are shifting to other cheaper Asian countries like Vietnam and Indonesia.
China Commerce Bureau has issued the results of textile export quota bidding to the US and EU during 2006. Total 4,183 textile units have received export quota at prices lower than last two times. Exporters from provinces like Guangdong, Zhejiang, Jiangsu, Shandong and Shanghai dominated this list and they will have to pay full bidding guarantee.
Nigeria planned to raise 50 billion naira to offer as soft loans to textile manufacturers who had been hit by cheap imports from China, said Finance Ministry. The loans would help manufacturers modernise their factories. Nigeria banned imports of some categories of textiles in 2002, but weak controls enabled goods from China to be smuggled into the country.
President’s Special Initiatives (PSI) Ghana declared that committee has been formed to oversee influx of foreign textile goods into country. Illegal imports of textile and garment would be completely abolished to save domestic textile sector. Government is working hard to revitalize textile industry which at one time was the largest employer, but now employs only 4,000 people.
EU pullover imports from China have continued to get stronger over the past few months and annual quota use, together with women’s shirts, has gone past 50%. Although not yet heading for early exhaustion, quota use at around 12% was again strong in the past four weeks while indications from China show stronger growth for export licenses. Also, Flax yarns could be a contender for early quota exhaustion.
Cotton prices are now declining in China, as farmers began harvesting the new crop. Production could rise more than 11% in addition this season, putting more pressure on prices. Cotton yarn prices are staying unchanged, while PSF yarn prices are declining and viscose yarn prices are rising.
