Archive for November 28th, 2008
Bloomberg
By William Bi
Nov. 27 (Bloomberg) — China’s textile producers and cotton traders have reneged on purchase contracts for as much as 20,000 metric tons of overseas cotton after prices plummeted in the past three months, two global trading executives said.
As many as eight Chinese companies have failed to follow through on purchase agreements with merchants, and the trend may widen as the industry struggles with worsening demand and credit, said the executives, who declined to be identified as they are not authorized to speak to the media.
Cotton has plunged 33 percent since the end of August as hedge funds sold commodities to cover losses, while global recession concern cut demand for products from clothing to shoes. The cancellations by China, the biggest buyer, amount to about 1 percent of imports in the first 10 months of the year.
“Some Chinese cotton users initially tried to delay the contracts when prices began to fall,” said Zhu Xuesong, general manager of China operations at merchant Ecom Trading (Shanghai) Corp. “When prices really plunged, they were caught with losses” they found difficult to accept.
Zhu Lanfen, vice president at the China Cotton Textile Association, said she had heard complaints from merchants about some producers. Yet her group, which represents 400 of China’s 2,000 textile companies, is not aware of any members canceling.
“It’s conceivable that some of the less-established companies may default given the difficult financial situation that they face,” she said. “But they are not going to come and tell us that.”
Break-Even
China’s textile producers operated near break-even point this year because of the appreciating currency, falling export rebates and tightening bank credit, Ecom’s Zhu Xuesong said in an interview.
“I can understand the difficulty they face,” said Zhu Xuesong. While none of his customers’ has reneged on contracts yet, and the actual defaulted cotton may be small relative to China’s total purchases, “the defaults are contagious: they have prompted some buyers not to carry out their contracts to go with the crowd,” he said.
China’s cotton imports fell 8 percent in the first 10 months of this year to 1.9 million tons, customs data showed.
Cotton users are halting orders from the U.S., the world’s biggest exporter, at the fastest pace in at least a decade as the economic slowdown erodes demand from China.
Order Delays
Delays, cancellations and order reductions of U.S. upland cotton by foreign buyers rose almost sevenfold from a year earlier to 329,600 running bales (74,752 metric tons) in the first 13 weeks of the marketing year that started in August, data from the U.S. Department of Agriculture show. The level is the highest since at least 1998. A bale weighs 500 pounds.
Some merchants have applied to dispute arbitration bodies, such as the World Cotton Exporters Association, or the International Cotton Association, to seek remedies, the trading executives said.
Jiangsu Zhongheng Textile Co. and Jiangsu Sumec Technology Co. were two Chinese companies added to the so-called default list on the American Cotton Shippers Association Web site this month. The group names the parties if no adequate response is received in 15 days, according to the Web site.
Price Jump
Miao Ying, general manager at Nanjing-based Jiangsu Sumec, said the size of the order was about 500 tons and the company will contest the allegation. “The dispute is not caused by the price changes,” she said in a telephone interview yesterday.
Kuai Dawen, general manager at Jiangsu Zhongheng, couldn’t be reached immediately at a number provided on the Web site of the Ministry of Commerce. Shi Jianwei, executive vice president at the China Cotton Association, declined an interview request.
Cotton jumped 6.4 percent to 46.55 cents per pound on ICE Futures U.S. in New York yesterday.
November 28th, 2008
China Post, Taiwan
TAIPEI, Taiwan — The 2008 Textile International Forum and Exhibition (TIFE), the premier event in Taiwan showcasing the latest developments and technologies of the industry, wrapped up yesterday in Taipei City.
Sponsored by the Department of Industrial Technology under the Ministry of Economic Affairs and organized by the Taiwan Textile Research Institute (TTRI), the three-day event featured an array of keynote speeches, forums, seminars and exhibitions displaying cutting-edge developments around the theme of “New Perspective in Eco-textiles.”
The 2008 TIFE’s exhibition area was divided into three sections: “A New Way of Living,” “Sustainable Environment” and “Certification and Labeling.”
Among this year’s unique products was a “biocellulose costatic mask” and “biocellulose medical dressings,” made with bacterial strain selection technology — essentially, bacterial byproducts. Production of the mask’s material requires a pure culture fermentation process which takes about seven days to achieve the desired thickness, explains Guu Jan-an, a representative of TTRI’s Functional Material Section.
Another innovation featured at this year’s TIFE are TTRI’s precise filters developed with nanofiber electrospinning process technology, including a membrane bioreactor (MBR) for wastewater management system, and a high-efficiency particulate air filter (HEPA).
The filters are produced with TTRI’s all-in-one electrospinning unit, a complete, energy-saving device that forms ultra-fine fibers such as those used for wastewater, oil, and air filtration, explains Ryan Huang, a researcher with TTRI’s Technical Textiles Section.
Yet another main attraction of the 2008 TIFE was the REACH exhibition stand. The European Union’s REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) environmental regulation came into force last June and deals mainly with chemicals and their safe use, explained Lu Juhng-shu, chief of TTRI’s Dyeing, Finishing and Environmental Protection Section.
The colorful REACH display aimed to raise awareness of SVHCs (substances of very high concern) that might be emitted during the textile manufacturing process.
“The goal is to reach a healthy compromise for Taiwanese textile vendors in terms of manufacturing cost and environmental protection without having to sacrifice product quality and efficiency,” notes Lu.
Established in 2001 by the Department of Industrial Technology under the Ministry of Economic Affairs, TIFE serves as a platform for exchanges between local and international textile industry members and for resource integration aimed at speeding up enhancements and transformations in the industry.
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November 28th, 2008
Hindu Business Line, India
NEW DELHI: India is likely to miss the $12-billion garment export target this fiscal as the overseas sales are expected to fall below last year’s level, an exporters’ body today said.
Apparel Export Promotion Council (AEPC) said the industry was facing huge losses on account of drying up of orders from the US and European markets in the backdrop of financial crisis.
Exports may drop to $8.78 billion in this fiscal, 24 per cent below the target set for 2008-09. Last fiscal, India had exported garments worth $9.69 billion.
But the global financial meltdown, particularly in the US and European Union, is impacting the Indian garment industry, with lakhs of workers being laid off, AEPC Chairman, Mr Rakesh Vaid said.
Last week, Commerce Secretary, Mr G K Pillai had said there would be about five lakhs job losses in the textile industry in the next five months.
AEPC has asked the government for a hike in duty drawback rates, research and development assistance and income tax exemption for five years.
It has also sought interest-free loans for investment in machinery with zero-duty import of capital goods scheme and lower fringe benefit tax to offset losses.
“Many importers have cancelled orders or postponed their delivery schedules. The market sentiment is very weak,” Mr Vaid said adding overseas buyers are now renegotiating contracts.
Several foreign retailers like Steeve and Barry’s along with Mervyns have filed for bankruptcy and more are expected. Pacific Sunwear has closed 150 stores, while Lane Bryant, Fashion Bug and Catherines are closing 150 outlets. - PTI
November 28th, 2008