At the recent Texworld 2014 that took place at Javits Center in New York City, American buyers showed no reservations about rising costs in China or about lifting of China’s cotton stock piling policy. Though there have been talks about how manufacturing and production is gradually shifting back to the US due to rising labour, freight and raw material costs going up in supplier countries, buyers’ at response Texworld only ascertained the fact that they are still dependent on imports and have prepared themselves for the increase in costs.
The 16th edition of Texworld USA, the New York-based bi-annual trade show had US at its focus. It also hosted three international pavilions – with delegations from Turkey, Taiwan and Egypt.
No major concern over rising costs
Though players in importing countries are aware that increasing labour costs in China are putting pressure on the textile prices, buyers seemed to have factored in this cost and prepared themselves in advance. According to them, since the price rise is happening step by step, though it is finally passed on to the customers, they are not complaining as long product quality is maintained.
But experts point out that in the last decade, US has got used to importing from China, so that dependency on the country’s strength will not get hampered easily. On the other hand, the emergence of other sourcing destinations like Vietnam and Cambodia and now Japan with its currency going down, are being looked at as options for sourcing high-quality, affordable fabrics. Also a lot of focus is getting shifted to the TPP bloc (the Trans-Pacific Partnership – a proposed trading bloc that has countries like Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam].
Apart from price hikes in China, a number of companies that import from other places are finding their costs rising, particularly in Turkey and Peru because of the higher duties that are now payable.
Better quality to improve demand
Players believe that price rise will not be an issue if one focuses on providing good quality to the end user. So for them innovation is the key to remain profitable during slow economy and rising costs. Many players are shifting their attention from mass market products to a product-a level above. Even cutting down on inventories and people is considered a way out to combat price hikes. Also minimizing requirements as much as possible is another measure being adopted by the companies of late.
