The impact Coronavirus seems to be so deep that the effect of the same will be reflected in trade for many years. While for many years manufacturing has been majorly divided between China, India, Bangladesh, Vietnam and Cambodia, the dynamics are set to change now as many countries are not looking at sourcing garments/textiles locally and giving work to their own people rather than being dependent on a country like China and other countries especially when unemployment rate is very high almost everywhere.
The effect of what happened from Wuhan is finally seen in sourcing and manufacturing of garment and textiles. While on one hand the whole world feels China is responsible for spreading a deadly virus and creating a war like situation on the other they feel foolish of themselves to be so much dependent on China for sourcing of garment and accessories. As a result there is a big buzz that many countries might ban Chinese products. However, the question remains if not China then who will take the onus of supplying raw materials like fabrics, accessories and finished goods like garments to all these countries? In such a scenario it is expected that sourcing will move close towards consumers and also to other low cost countries like India. Bangladesh, Vietnam, Cambodia and many others.
The latest news is that Britain’s textile industry gets an unexpected boost from COVID-19. Throughout the 1990s, British textile companies lost a lot of business to China as clothing retailers and brands in the United Kingdom turned to the Far East for cheaper production. But now the disruption in trade with China has made some of those retailers reconsider the wisdom of having long supply chains, and they’ve been turning back to British manufacturers.
“We’ve been getting a lot of inquiries solely due to the fact that retailers and brands need to be spreading their risk and placing orders locally and making sure the shops aren’t empty,” said Bhavik Master, boss of Paul James Knitwear, a knitted apparel manufacturer in the city of Leicester in the English Midlands. He feels that suddenly, security of supply and not cost — is paramount. Although his factory is currently shut and his staff furloughed, Master expects a surge in firm orders as soon as the coronavirus crisis subsides and stepping up production by at least 20 to 30%.
Alkesh Kapadia of Barcode Design, another local fashion manufacturer, said that he’d received a flood of orders from worried customers.They are concerned about getting stuff from China,” he said. Manufacturers like Master and Kapadia have theirown supply chain worries. Many of their raw materials come from abroad and from countries that have been hard hit by the coronavirus. Italy, for example, is a major supplier of yarn. The industry will ask, ‘Do you want all your products made somewhere like China, or should you spread your risk and start making at least a percentage of your products much closer to homer, in the U.K.?
One of the biggest economic casualties of the crisis could be the international supply chain, and that, will help Britain’s textile manufacturers. As per A report by KPMG from a manufacturing perspective, employment would be impacted owing to limited demand in both domestic and international market, and the textile and apparel sector production is expected to decline by 10-12 per cent in the April, June quarter, the report titled ‘Potential impact of Covid-19 on the Indian economy’ said. Cotton fibre prices are expected to take a hit, according to the report. While prices of imported man-made fibre (MMF) used for high value products is expected to rise by 25-30 per cent over the next two quarters (April to September 2020).
Yarn accounts for 29 per cent of India’s textile trade, as per ITC Trademap database. With a decline in demand in both global and domestic market, the yarn production is expected to contract by 12-15 per cent over the next two quarters.
Fabric production is expected to decrease owing to decline in exports and stagnation in apparel/home textiles production. Apparel production is expected to contract by 18-20 per cent, as per industry sources, owing to decline in global demand. Home textiles industry has had limited impact of the Covid-19 induced global downfall, the report stated.