Kelheim Fibres receives EMAS certification

• January 15, 2021

Kelheim Fibres’ viscose speciality fibres.

© Kelheim Fibres.

12th January 2021

Innovation in Textiles
Kelheim, Germany

Sustainable

Bavaria, Germany based Kelheim Fibres GmbH reports it has become the first viscose fibre manufacturer worldwide to receive EMAS certification (Eco Management and Audit Scheme), a standardised eco management certification system developed by the European Union.

“Our aspiration is that our fibres offer an eco-friendly and high-performance alternative to synthetic materials”, says Craig Barker, CEO at Kelheim Fibres. “So, it’s not enough that our fibres are made from renewable resources and that they are fully biodegradable – our environmental awareness must include the whole production process and all that goes with it if we want to safeguard our credibility. The EMAS certification proves that we take this responsibility seriously.”

An efficient environmental management system ensures that economy and ecology go hand in hand – that gives us a decisive competitive edge

EMAS includes the globally applicable ISO 14001 standard and goes beyond its requirements by demanding more transparency and continuous improvement - Certified companies report in their annual EMAS Environmental Statement on their environmental goals and their progress in meeting them.

During the audit preceding the certification, the independent environmental auditor thoroughly investigated all departments of the company, from the production itself to the company canteen. He found no non-conformances and was impressed by the competence and the high sense of responsibility among Kelheim’s employees.

In contrast to the EU Ecolabel and similar certifications, EMAS does not apply to individual products or services, but certifies the complete environmental performance of the company. This benefits not only the protection of the environment and climate, but also the improvement of a company’s eco- efficiency.

“An efficient environmental management system ensures that economy and ecology go hand in hand – that gives us a decisive competitive edge,” concludes Craig Barker.

Cotton prices hit 10-year high of Rs11,000/maund

10 Jan 2021

KARACHI: Cotton prices in the local market hit a 10-year high of Rs11,000 per maund (40kg) in the week, mostly because of decreasing production and rising demand, while import orders for 4.2 million bales have also been finalised, traders said on Saturday.

Dealers said due to a decline in production, millers kept buying in the market, whereas ginners remained interested in selling because of favourable prices. Cotton rates increased Rs400 to Rs500/maund. In addition, prices of cotton yarn ad polyester also increased in the market.

High quality cotton rates increased to Rs11,000 per maund, which is the highest level in the last 10 years. Earlier, prices had crossed this level in 2010-11 when there was huge demand from China and rates reached Rs14,000 per maund. The prices around the world had also increased to abnormal levels in that year.

Some analysts predict that prices may further increase 20 to 50 percent in coming days. However, they would follow the trend in New York Cotton futures market that set trend around the world, they added.

Traders said textile sector was in a winning position and it was getting huge export orders despite Covid-19 pandemic led slowdown in economic activities.

“Cotton production has declined critically in the country but growers could not benefit from the higher prices, as ginners remained the beneficiaries and prices increased when seed-cotton was sold by the growers,” traders added.

“In order to fulfill demand of the local industry, there is need to import around 7.0 million bales. However, import orders for 4.2 million bales have been finalised.”

In the local market, Sindh’s cotton was sold at Rs9,500 to Rs10,700/maund, Punjab’s at Rs10,000 to Rs11,100 per maund, while Balochistan’s lint was sold for Rs10,200 to Rs11,000 per maund.

Karachi Cotton Association’s spot rate committee increased the spot rate by Rs300 per maund to the season’s highest level of Rs10,500 per maund.

Chairman Karachi Cotton Brokers Forum, Naseem Usman, said cotton prices in the international market had also increased.

New York Cotton Futures rose to 82 cents per pound during the week but due to decline in exports by 47 percent, they decreased to 79.50 cents per pound, according to USDA weekly report.

Prices also increased in Brazil, Argentina and Central Asia. Rates also moved up in India because Indian government is providing incentives to the growers and industry.

However, growers in Pakistan are moving to other crops due to substandard cotton seeds and zero incentivisation by the government. Even, a support price for cotton does not exist in Pakistan.

Local industry is suffering amid higher prices of cotton yarn and it has demanded removal of five percent custom duty on yarn imports.

Karachi Cotton Brokers Forum and Karachi Cotton Association’s Brokers Advisory Committee have jointly started advertising a campaign to increase cotton production.

They have appealed to the government to take measures on emergency basis to increase cotton production in the country.

New Year is providing an optimistic picture for cotton and textiles sectors

January 9, 2021

Seshadri Ramkumar, Professor, Texas Tech University, USA 

“Yarn prices have hiked about 30-40% in 3-months,” stated Velmurugan Shanmugam, general manager of Aruppukottai, India-based Jayalakshmi Textiles. Yarn demand is high due to lack of fabric stocks and hence processors are in urgent need of yarns, added Velmurugan Shanmugam.

While cotton and textiles sectors are witnessing growing demand, it is also important to focus on new developments. “In the mid to long term basis, development of value-added products is important,” stated Velmurugan Shanmugam.

Cotton and textile sectors have an opportunity to create start-ups to enhance demand and create jobs. The importance of entrepreneurship and the need to infuse start-up culture was stressed by India’s Prime Minister, Honorable Narendra Modi in his December 2020 “Maa Ki Baat, [Speech from the Heart]” address to the nation. Jayalakshmi Textiles, with 70,000 ring spindles produces cotton yarns ranging from 60s Ne to 140s Ne, with an average count of 67s Ne. Recently, I had the opportunity to collaborate with Jayalakshmi Textiles to develop cotton based nonwoven filters and oil absorbent wipes. The collaboration has led to the translation of my idea to useful cotton-based value-added products.

An international collaboration involving this scribe has resulted in the creation of a start-up, WellGro United in Chennai, India to market cotton industrial products. Cotton processing expertise of Jayalakshmi Textiles has played a crucial role in transferring idea to marketplace.

WellGro United has been marketing products that enhance human lives and protect the environment. Recently, India’s oil exploration company, Oil and Natural Gas Corporation, Ltd., has been using cotton-based oil absorbent to counter oil spills in its Rajahmundry site on the banks of India’s second largest river, Godavari.

Jayalakshmi Textiles, which is a major cotton yarn spinner is taking little steps to develop novel cotton products which have found inroads in the oil sector. Cotton-based mats are being exported to Nigeria and Poland for evaluation by industrial sectors. With the increasing trend in demand and prices for cotton and textile products, there is optimism among cotton textile sectors to look for opportunities beyond commodity products. Demand enhancement by developing functional and industrial products will be the next phase of the cotton textiles sector.

BBC News Report on Xinjiang: BCI Statement

Announcements Friday, December 18th, 2020

On 14 December 2020, the BBC published a story across its media channels that focuses on the Xinjiang Uyghur Autonomous Region (XUAR) and allegations of forced labour in the cotton sector, including at farm-level. A BCI spokesperson participated in an interview on 9 December, on-record and recorded, and parts of the interview feature in the BBC’s reporting.

Report supports our findings and current approach in the province

Forced labour, in any form, is unacceptable, and if it is discovered where Better Cotton is produced, it is considered an incidence of non-compliance with BCI’s Standard and is dealt with immediately through license cancelation or denial.

The BBC report focuses on the work of Adrian Zenz, published by the Center for Global Policy, which analyses a large volume of policy papers and state news reports that suggests that transfer of farm labourers for cotton picking is taking place in an increasingly coercive environment.

Zenz’s findings indicate that hundreds of thousands of cotton pickers from ethnic minority villages across the province are mobilised by the state to support the cotton harvest. One of the most notable findings is poor, rural communities being transferred into employment through what the Chinese government promotes as a poverty alleviation programme. Some of the researcher’s findings help corroborate what BCI had determined through the research we conducted and commissioned over the past year. Namely, there are increasing risks of forced labour at the farm level in the region.

These increasing risks, combined with the worsening state of the operating environment, led us to suspend licensing in the region in March, and most recently in October, to cease field-level activities in the XUAR altogether.

Forced labour is a complex issue, which comes in many different forms, and is often related to structural and systemic challenges that extend beyond the boundaries of the farm. BCI drew upon the concept of ‘responsible disengagement’, from the OECD Guidelines and the UN Guiding Principles on Business and Human Rights, to only leave as last resort when there were no clear opportunities for us to impact change within the specific context.

Cotton Market Fundamentals & Price Outlook- December 2020

The latest USDA report featured a 2.2 million bale reduction to the global production forecast (to 113.9 million) and a 1.6 million bale increase to the global consumption forecast (to 115.6 million). The combination of a smaller crop and higher offtake caused the projection for 2020/21 ending stocks to drop 3.9 million bales to 97.5 million.

While this is a significant reduction relative to figures suggested in previous months, the current estimate for stocks remains very high by historical standards. Only last crop year (99.4 million bales), when stocks climbed due to the collapse in mill-use with COVID, and in the years surrounding the peak levels of Chinese reserves (in 2013/14 and 2014/15 global ending stocks were 99.9 and 106.8 million) were warehoused supplies higher than they are expected to be at the end of 2020/21.

Most international benchmark prices increased over the past month.

• The NY March futures contract climbed from 70 cents/lb to 74 cents/lb. Cotlook’s A Index rose from 76 to 80 cents/lb.
• In international terms, the China Cotton Index (CC Index 3128B) increased from 100 to 102 cents/lb. In domestic terms, values climbed from 14,500 to 14,700 RMB/ton. The RMB strengthened against the USD, from 6.60 to 6.53 RMB/USD.
• Indian cotton prices (Shankar-6 quality) increased from 69 to 71 cents/lb. In domestic terms, values increased from 40,200 to 40,700 INR/candy. The Indian rupee was steady against the USD near 74 INR/USD.
• In international terms, Pakistani prices decreased from 74 to 72 cents/lb. In domestic terms, prices eased from 9,700 to 9,500 PKR/maund. The Pakistani rupee was steady against the USD near 159 PKR/USD.

Meanwhile, COVID remains a threat to the global economy and global cotton demand. World mill-use is predicted to recover in 2020/21 (was 102.2 million bales in 2019/20), but the projection of 115.6 million bales is still safely below the volumes over 120 million from 2017/18 and 2018/19.

Due to the drought in West Texas and the series of hurricanes during the growing season, a decrease in the production estimate for the U.S. had been anticipated for several months. This month, the forecast for the U.S. crop was lowered 1.1 million bales to 15.9 million. Several other countries also saw harvest expectations decrease, and other notable reductions were made for India (-500,000 bales to 29.5 million), Pakistan (-500,000 bales to 4.5 million), and Australia (-100,000 bales to 2.4 million). The current forecast for Pakistan calls for the lowest level of production since 1983/84.

Most significant changes to country-level consumption figures were positive. These included the 1.0 million bale increase for India (to 24.0 million), a 500,000 bale increase for China (to 38.0 million), and a 200,000 bale increase for Pakistan (to 10.0 million). Thailand was the only country with a notable reduction for 2020/21 mill-use (-125,000 bales to 700,000).

The global trade estimate increased slightly, rising 330,000 bales to 43.2 million. In terms of imports, the largest updates were for China (+500,000 bales to 10.0 million), Pakistan (+400,00 bales to 4.7 million), Bangladesh (-400,000 bales to 6.9 million), Thailand (-120,000 bales to 700,000), and Indonesia (-100,000 bales to 2.8 million). For exports, the largest changes were for the U.S. (+400,000 bales to 15.0 million), Argentina (+125,000 bales to 550,000), and Australia (-100,000 bales to 1.4 million).

The latest USDA revisions underline divergent supply and demand related influences on cotton prices. From one side, there is the global production deficit in 2020/21. From the other side, there is the massive accumulation of global stocks that occurred in 2019/20.

Macro influences are also mixed. Global daily COVID diagnoses continue to set new records. This has been a result of surges in many locations, including the U.S., Europe, and Latin America. Nearly simultaneously, multiple vaccines were proven effective. The vaccination process is already underway in a few locations and is slated to accelerate quickly.

The rise in COVID cases triggered new restrictions on consumer activity. This will affect overall economic growth, which is correlated with cotton demand. It can also have more focused effects by shuttering brick-and-mortar retail outlets. However, consumers and retailers have had nearly a year to adapt to COVID-driven market conditions, and many sales have migrated online. U.S. spending on apparel (online and brickand-mortar) was higher year-over-year for the second consecutive month in October (latest month with data available). Apparel spending in the U.S. and elsewhere could shift higher if vaccines succeed in lifting the weight of COVID.

Into this swirl of influences, the U.S. announced a ban on products made with fiber grown or processed by the Xinjiang Production and Construction Corps (XPCC) or its subsidiaries. For context, the XPCC produces about a third of all cotton grown in China. The traceability requirements to prove or disprove XPCC content are unknown. Trade lawyers have indicated that the ban extends to third party countries that import intermediate textiles from China and convert them into goods that are eventually sent to the U.S. In the 2019 calendar year (pre-COVID), China directly exported the raw fiber equivalence of five million bales of apparel, home furnishings, and intermediate textiles to the U.S. During the same period, China imported more than eight million bales of cotton fiber and more than eight million bales of cotton yarn. The implication is that China could meet its direct U.S. import demand three times over using the foreign fiber and yarn it has already been getting from the rest of the world.

However, China also exports a lot of fabric. With the ban extending to third party countries, it could be argued that the ban could encourage China and other countries to import more from non-Chinese sources. But, China could also choose to retaliate, and China has proven a willingness to respond. Examples include the series of supplemental tariffs China placed on U.S. goods since 2018 and the unofficial ban enforced on Australian cotton in reaction to criticism over human rights abuses in Xinjiang. If China does react, it could be expected to be harmful to global demand and prices.