News International
World Cotton Production to Decline Next Season
 Cotton experts have lowered their estimates for cotton production for next season as falling prices lead farmers to focus on alternative crops - but say rising mill use and lower cotton prices could fuel a rebound in world cotton trade.
The forecast from Inter-governmental group the International Cotton Advisory Committee (ICAC) comes after cotton prices jumped to a record high of US$1.64 per pound in 2010/11, but dropped sharply in the current season.
For the first time in three years, it says, the crop is less attractive than the main alternatives. As a result, the Secretariat projects global cotton area to fall by 8% in 2012/13 to 33.3m hectares and production to drop by 6% to 25.1m tons.
Cotton production is expected to decline in most large producing countries, with the exceptions of the US, Uzbekistan, and Australia. However, after two seasons at depressed levels, global cotton mill use is forecast to start growing again in 2012/13 - providing there is a recovery in global economic growth that boosts purchases of textile products and consumption of raw fibres. Largely driven by demand in Asia, global cotton mill use could rise by 3% in 2012/13 to 25.0m tons.
Together, rising mill use and lower cotton prices could fuel a rebound in world cotton trade in 2012/13. Imports and exports are expected to jump by 9% to 8.4m tons. As global production and consumption are expected to roughly balance in 2012/13, global cotton stocks are forecast to increase only slightly, to 11.6m tons.
M&S Denies Suppliers’ Row
 A row had reportedly broken out between Marks & Spencer and its suppliers over plans to make them contribute towards its GBP600m store refurbishment programme. M&S had asked its major suppliers to pay 1.25% of their annual sales with the retailer towards its store revamp programme. However, at least one major supplier is refusing to pay with others expected to follow suit. Speaking at the retailer's interim results earlier this month, Chief Executive Marc Bolland played down M&S' demands saying that "every supermarket does it" and that the retailer's plans were received "well" by suppliers.
M&S Chief Executive Marc Bolland has denied reports that the retailer is in a row with its suppliers over plans to make them contribute to its store revamp scheme. The retailer’s suppliers were asked in September to contribute to the GBP600m UK store upgrade by putting 1.25% of their annual turnover with the retailer towards the scheme. "Don't create something that is not there," said Bolland, adding that M&S has the "best relationship with suppliers in the industry".
He said the response to the plans was "extremely positive" with 80% of suppliers coming up with "very positive ideas" on where they can innovate. He said the moves will also allow the suppliers to invest in product development, which will enable them to grab market share. General Merchandise Executive Director Kate Bostock backed up Bolland saying the retailer took a lot of time to talk through the strategy with some 60 general merchandise suppliers who "recognised the opportunity" in international and e-commerce. "Every single one has come to the party," she said.
The retailer expects to begin seeing the benefits of its store revamp in the second half of the year. Speaking at the interim results, Financial Director Alan Stewart said: "We expect a benefit in the second half, which will be part of the margin guidance and will help the margin, but there is nothing in the first half."
Pak Textile Unions Demand Implementation of Living Wage of PKR 25,000 PM
Trade union leaders in Pakistan are calling for the implementation of a living wage and changes to the country's labour laws - and say they will resort to strikes and protests if the Government refuses to accept their demands. Their concerns follow two days of meetings in Islamabad involving five trade union federations affiliated with International Textile Garments Leather Workers Federation (ITGLWF).
In particular, they want to see an end to the minimum wage system which they say has "failed to fulfill the basic needs of the worker." They want the PKR7000 (US$80) monthly minimum wage replaced with a living wage of PKR25,000 (US$286) for every worker. They also want labour law to be formulated "in accordance with the requirements of the workers and observe them strictly," and are calling for an end to the ban on factory labour inspection.
The unions also want the Punjab Government to end restrictions on union formation in factories with less than 50 workers, which they say is against the articles of constitution and ILO conventions. On a wider level, they are calling for an end to all restrictions on union formation and want it to be compulsory for every establishment to have a union. And they say there should be a mechanism for courts to rule on industrial disputes within three months.
The five unions represented at the meeting were the Pakistan Textile Garments Leather Workers Federation (PTGLWF), Pakistan National Textile Leather Garments and General Workers Federation (PNTLGGWF), Itehad Labour Union Carpet Industry Pakistan (ILUCP), Pakistan Textile Workers Federation (PTWF) and the National Trade Union Federation (NTUF).
Their concerns stem from worries about the country's high rate of inflation, low minimum wages, centuries-old labour laws and poor enforcement of labour laws, as well as the lack of social security and pension facilities for most workers. "We demand that the Government accept the workers' demands for the sake of industrial peace and harmony, otherwise we don't see any other way than except to take the streets to achieve these demands," they said.
Cambodian Garment Workers Secure $5 Minimum Wage Increase
The minimum wage for Cambodia's garment workers is to rise by $5 a month from January 2012, following negotiations between the government and employers, Prime Minister Hun Sen told a public and private sector forum recently. The rise will lift the monthly wage from $61 to $66, and according to the government will help workers to meet basic needs like health care as well as reduce the likelihood of strikes. To offset the rise, the Government has agreed to delay the introduction of a 1% tax on their profits from 2013 to 2015.
Van Sou Ieng, Chairman of the Garment Manufacturers Association of Cambodia (GMAC), said employers would face a loss of income due to the higher monthly wage but conceded that the move would help prevent strikes. The garment industry in Cambodia employs around 400,000 workers and is the backbone of its economy. Exports reached $1.858bn in the first half 2011, up 32% over the same period last year.
Pak Textile Mills Resent Power Cuts
Textile mills owners in Karachi have staged a series of protests calling for an end to power cuts in industrial areas. Addressing a press conference after the protest, Siraj Kasim Teli, former President of the Karachi Chamber of Commerce and Industry (KCCI), said that unless the Karachi Electric Supply Company put an end to the power cuts, local businesses would shutter their plants, stop paying electricity charges, lay off 3m workers and hand over the keys of 17,000 factories to the Government.
The decision was backed by Zahid Husain, former Chairman of Korangi Association of Trade and Industry (KATI), Zubiar Motiwala, Chairman of the Sindh Board of Investment (SBI), and Abrar Ahmed, President of the KCCI. Industrialists say the power cuts are destroying production and make export commitments difficult to meet.
Earlier, Pakistan's Minister for Petroleum guaranteed a four-day a week gas supply to the textile industry in the north, while in southern parts of the country power cuts have increased to around 12 hours a day in Karachi, the largest industrial city.
Bangladesh Withholds Permission to US Survey on Child Labour
The Bangladesh Government is currently withholding permission for a United States-sponsored survey to check if child and forced labour is employed in the country's apparel sector, even though the local garment industry has no objection. "The Government should grant the permission", Shafiul Islam Mohiuddin, President of the Bangladesh Garment Manufacturers and Exporters Association told. "Anyone can visit and check that there is no child labour in our industry".
However, the survey is not likely to involve inspections inside export-oriented garment factories. Ahmed Wali, a senior official at RTM International, the local NGO sub-contracted to conduct the survey, told that the assignment is to check child labour in more informal parts of the industry such as local tailoring shops. Furthermore, he said that, "we would not proceed without an approval from the Bangladesh government", an application for which is pending.
Bangladesh and US have been negotiating a Trade and Economic Cooperation Forum pact for more than a year, where labour rights issues remain unresolved. "We have reached consensus on almost all issues except that of child labour", Bangladesh's Finance Minister Abul Maal Abdul Muhith told journalists in August this year. "We will seek relaxation on this issue". Subsequently, the US Department of Labour appointed ICF International, a Virginia-based consultancy firm to undertake a survey; it, in turn, engaged RTM.
Zero-tax Scheme Restored on Textile Exports by Pakistan
Authorities in Pakistan have restored a zero-tax scheme for five export-oriented sectors including textiles and leather. The Federal Board of Revenue (FBR) has issued a notification to withdraw a 5% across-the- board General Sales Tax (GST) and reintroduce multiple GST rates of 4-6% on the supply of raw materials and other accessories to un-registered segments of the export-based textile and leather sectors.
Under the scheme, no GST will be paid on the cotton ginning or manmade fibre manufacturing stages. While in the leather sector, the facility will cover the whole GST-registered supply chain including both imports and local supplies, except local retail sales. The provision of zero-tax will only be available to importers, traders, manufacturers and exporters of textile and leather products registered with the country's sales tax department. MI Khurram, owner of Comfort Knitwear and a member of the executive committee of the All Pakistan Textile Mills Association (APTMA), said there are still some anomalies in the new scheme that need to be addressed immediately.
Authorities in Pakistan are trying to reach a textile and clothing export target of US$25bn by the year 2015.
Srilankan Apparel Exporters to Benefit with LKR Devaluation
Sri Lanka's apparel exporters say a surprise 3% devaluation of the Sri Lankan rupee, introduced in recent national budget for 2012, will work in the industry's favour. Although the export apparel industry is a large importer of raw material, import costs are not expected to increase as a result of the devaluation because the industry's import-export transactions are in US dollars and not in rupees. But the sector will gain significantly when converting dollars into rupees to meet local operating costs.
"We import 50% or more of our inputs, but most local apparel companies import in dollars and earn in dollars," explains Sarathchandra Illeperuma, Deputy Chairman of the Sri Lanka apparel Exporters Association. "So the devaluation will not impact import costs. But the devaluation is a huge advantage in helping factories meet increasing operating costs in the country." The devaluation is also expected to make 'Made in Sri Lanka' apparel more competitive in export markets.
However, trade unions note that the devaluation will increase the cost of living inside Sri Lanka because the price of all imported goods - including food and fuel - will increase. This, say trade union sources, will increase calls for higher wages. The minimum wage in the garment sector is LKR7,950 (US$69.73), and the industry is estimated to have around 30,000 vacancies despite an ongoing recruitment campaign.
USDA Issues Corrections to Rule Increasing Cotton Import Fee
 The Department of Agriculture’s Agricultural Marketing Service has made several corrections to a 31 August final rule increasing from US$0.01088 per kilogramme to US$0.012665 per kilogramme as of 30 September the assessments paid by importers of cotton and cotton-containing products. That rule also updated the textile trade conversion factors used to estimate cotton equivalents contained in cotton textile products imported into the United States, which serve as the basis for collecting cotton import assessments, and expanded from 706 to 2,371 the number of Harmonised Tariff Schedule statistical reporting numbers on which such assessments are levied.
U.S. Trade Liberalisation Efforts with Asia-Pacific Region Move Forward
The Obama administration has stepped up efforts to conclude a comprehensive trade agreement with a group of eight countries in the Asia-Pacific region as part of a broader strategy that seeks to double total U.S. exports in order to spur domestic economic growth and job creation. President Obama’s goal of doubling exports over five years is rather bold as it would require exports to grow from US$1.58 trillion in 2009 to an all-time high of US$3.15 trillion by 2015. Exports grew by 16.7 percent to US$1.84 trillion in 2010 and 15.8 percent from US$1.35 trillion during January-September 2010 to US$1.57 trillion during January-September 2011. Assuming fourth quarter 2011 exports grow at the same rate as during the first nine months of the year, exports would still have to increase at an annual average of about 14.6 percent during 2012-2015 to achieve the US$3.15 trillion target by 2015. That is quite an ambitious target given the uncertain global economic outlook and the fact that U.S. exports have never in the past grown at a rate of 14 percent per year or higher during four consecutive years, although exports have increased at a healthy pace during the past two years.
The administration has designed a multi-pronged strategy to fulfil this challenge, including pursuing trade liberalisation initiatives in several regions of the world. After much delay, the pending U.S. free trade agreements with Colombia, Panama and South Korea were approved by Congress in October and are expected to enter into force sometime next year. All three FTAs have been approved in the respective U.S. partner countries, with the South Korean legislature taking that step on November 22. The U.S.-South Korea FTA is the most significant U.S. trade agreement since the North American Free Trade Agreement and the U.S. International Trade Commission estimates that it will add around US$1 billion to annual merchandise exports to South Korea. An eventual deal with the Trans-Pacific Partnership group of countries (the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam) would add to this figure and help achieve the goals set forth in President Obama’s National Export Initiative.
US Launches Campaign on Counterfeit Goods
The Obama Administration has launched a campaign aimed at educating the American public about the harm that counterfeit goods have on the US economy and the threats these fake goods pose to public health. Attorney General Eric Holder said that the campaign by the US Department of Justice will work to educate consumers on the impact of intellectual property theft, including the destruction of jobs, suppression of innovation, as well as jeopardising the health and safety of consumers. "In some cases, these activities are used to fund dangerous - and even violent - criminal enterprises and organised crime networks. And they present a significant - and growing - threat to our nation's economic and national security," he said.
Recent technological advances, particularly in manufacturing and distribution, have created opportunities for businesses to grow, "but these quantum leaps have also created new vulnerabilities, which tech-savvy criminals are eager to exploit," Holder said, adding that the department is seeing an "alarming rise" in IP crimes.
The campaign will run across TV, radio and the internet to help raise awareness about the ways the public can help law enforcers combat these crimes, protect potential victims and bring criminals to justice. The moves have been welcomed by the American Apparel and Footwear Association (AAFA), whose President Kevin Burke said: "I firmly believe that, much like the drug trade, if we educate consumers about the economic and public health risks of purchasing fake goods, we can significantly reduce the public desire for counterfeit products."
Rising Contraband Forces Closure of 200 Mexico Apparel Mills
 Mexico's rising trade in contraband and fakes continues to rile the textiles and apparel industry, forcing 200 factories to close this year, according to leading apparel industry association Canaive. An official confirmed 20 textile mills have closed in Puebla and another 200 throughout the country as a flood of "illegal" Chinese imports, rising contraband and used-clothing continue to dent local producers' profits.
Despite Government promises to tackle the illegal trade last year, efforts so far appear to be unfruitful. According to the American Chamber, clothing remains the most copied product by volume and sales value, triggering losses of MXN938m ($100m) annually for the industry. The Canaive official said the industry is working to pressure the Government to "stop sitting on its hands" and step up efforts to combat the contraband trade, which accounts for 60% of textile and apparel sales in the country. The official added the uncontrolled arrival of cheap products is also hurting the industry. He said four out of 10 garments come into Mexico priced below $1.
Providing a glimmer of hope, however, exports to the US, the country's biggest trading partner, have improved this year. In fact, from January to October, the textiles and apparel industry registered a textiles trading surplus of $522m, up 0.5% from the same year-ago period. Claudia Ramos, Canaive's President, said the industry is working hard to produce more "value-added" garments to counter its problems and remain competitive against other international producers clamouring for access to the US market. She said efforts are going well, with the industry recovering the fifth place as a global textiles and apparel supplier to the US, with China remaining number one.
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