The new cotton crop season 2023-24 is about to commence, and different kinds of supply forecasts are on. The resilience and potential of the global textile and apparel sector have started showing positive signs and are awaiting retail demand renewal for the upcoming Christmas 2023 season. However, both consumers and retailers have become more savvy and selective in their consumption patterns and retail store fill-up strategies. While retailers are going for 'near to shore' or home sourcing, the consumers are driving the sustainability choice with origin. This autumn edition covers it all; the changing landscape of the global geopolitics dominated by the recent aggressive thrust by Ukraine forces, and the imminent G20 conclave being hosted by India. This edition also covers the current state of India’s textile industry, the emergence of new technologies like Advanced ChatGPT, and the offering of a new project investment. Proposals for a sustainable cotton recycled project from Laroche-based recycling lines to OESpg of yarns.
The global economy has been subject to uncertainty over the last 1.5 years due to geopolitical tensions and conflicts. There are now positive signs of recovery from Q3/2023 onwards with inflation levels in control and retail demand opening for Christmas 2023. Europe has been able to manage its gas supplies from Russia, and other supply chains are also under restoration. These positive events are expected to positively impact the global textile and clothing industry. Global geopolitics are also being dominated by the expansion of the BRICS block to another 7 making it a total of 11 countries that control 60% of the world GDP and would include Iran, SA, and Africa. G-20 summit held by India is another milestone geopolitical event. With Mr. Trump in the fray for the coming US elections, geopolitics is on a roll again, including India’s national election in 2024.
Despite the industry's ongoing challenges, ITMA Milan June 2023 brought forth a new and impactful focus on increasing digitalization and sustainability in textile processes with a focus on innovation, automation, value addition, and product development. With clear directives to the textile industry to enhance reuse/recycling and renewal, and now clearly demanded by both consumers and big retailers. The signal is clear that fake certificates are not acceptable. With the emergence of advanced versions of ChatGPT, the AI generator, there is an ongoing race between the AI creator Open AI, Google, and Microsoft to upgrade their AI chat platforms. New SGE by Google is a new advanced version of such text/image generator ChatGPT in competition with Open AI’s GPT-4, a large language model. Microsoft is also working to upgrade its MS BingChat to handle the competition. Once these developments enter the markets, the global online and new internet users' community will grow substantially, impacting some text/visuals and creating jobs too.
Global economic headwinds and reduced retail demand have adversely affected India's textile exports and industry, especially in South India. The textile and apparel sectors have recorded a 30-35% decline in exports, leading to reduced production and capacity utilization. Yet, cotton prices are showing strange anomalies with an upward trend. On one side, there is the worst situation in yarn, fabric, garments order, and market offtake, yet the cotton price is going upward on the other. Yesterday ICE future Dec 23 moved to 89.98 USC (+216 points), and MCX cotton November contract closed upwards at 61900 Rs. Per candy (while it was Rs 59000/candy just 1 week before). Despite big plans for PLI 2.0 and mega textile parks, the lack of meaningful support or incentives for the textile sector has further exacerbated the situation. India needs to align its textile sector with global market demands, focus on sustainability, and export more technical textiles to regain its position in the global textile trade with enhanced MMF, and polyester use. India’s textile and apparel performance has been declining. Cotton yarn exports are recording the lowest in 10 years at 660 Mln TPA for FY 23. India had a proud 20% share in global yarn export until 2018. For 23-24. However, home textile is a better-performing sector than exports. Overall Hometex business is expected to rise by 7-9% this fiscal year. The domestic cotton price adjustment is one of several crucial aspects essential to reviving the home textile sector. Over 2021-22, Cotton RM costs had skyrocketed to previously unheard-of levels, hitting Rs 1 Lac/Candy on May 22. The new cotton crop is estimated at 31 million bales, indicating a shortfall in output. However, the correction in cotton prices to average 58000-60000 Rs/Candy bodes well for the new crop. No wonder, cheaper PSF fiber from SE Asia is coming in at Rs 5-7/Kg lower, and will continue until at least QCO is in place by Oct 23. Overall, the domestic and export demand remains weak and cold. Our competitor Bangladesh still maintains its no.1 position in the EU but continues to battle with rising labor and gas costs and shrinking export orders vis emerging competition from Africa.
The Nuovatex 'Knowledge Centre' offers new project development on the recycled fiber/yarn of type OE, with an offer of a 10TPD project for a sustainable integrated reprocessed cotton to reprocessed cotton OE yarn Spg/manufacturing project. The resume here provides a window into a new textile yarn spinning project in line with the sustainability theme in the markets. A 10-12 Ton/Day Open-end spinning unit, for knitting and weaving yarns is proposed using the RM of recycled cotton waste from existing mills and regenerating the fiber from post-consumer waste. The proposal suggests establishing a composite Laroche-based cotton waste recycling plant of 10-12 Ton/Day with its baled output to create grey and colored fiber mixings to produce OE spun reprocessed yarns, both grey and mélange types, for knitting, weaving, denim uses, as well as for a towel. Rotor or OE Spg is the ideal spg. technology for recycling cotton waste and creating yarn of 6s to 34s. The project with a capex of $10-12 million is recommended for an industry site adjacent to cotton areas and proximity to mills. The soft waste line is advised to be sourced from Indian machinery manufacturers like M/s Perfect.
ITMA Milan 2023 demonstrated the global textile industry's resilience and a new commitment to sustainability and technology innovations. Despite the challenges of slow markets, the industry remains adaptable and poised for transformation. As a key player, India needs to realign its textile sector to meet changing market demands and embrace sustainable practices. The new PLI 2.0 scheme targeting project capex of INR 1000 Million Plus has not yet taken off, and the deadline is extended until 31 Oct.23. The emergence of new technologies, such as the newer 'Chat GPT-4,' offers exciting prospects for early digitalization. The global textile sector, supported by the MNC Retailers and with a new focus on sustainability and fiber trace, holds great potential to thrive in a more environmentally conscious and innovative future. India’s digital revolution has taken the ONCD open e-commerce platform to the buyers and sellers in the MSME domain, as the UPI-based digital payment has touched a merchandising value of INR 10,000 Million on July,23. However, competition from fast-emerging cotton Textile countries like Egypt, Turkey, Uzbek [and even Pakistan growing its textile exports to the level of $25 Billion is a real threat to India’s positioning. As repeated earlier, the need of the hour is to forge a serious meaningful FTA for the export of textiles to major markets like the USA/EU/UK and also increasing penetration into new markets like America, Africa, and Australia. Unless this is done. All new grand schemes like that of mega Textile parks, or PLI 2.0 or NTTM for technical textiles would be just failures.
Author: The Yarn Bazaar
Published By: The Yarn Bazaar