Issue 493| November 9, 2018
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Welcome to The WRAP Weekly newsletter.  Feel free to look around and thank you for being a loyal reader.

This week, we certified 
133 factories in 22  countries:

Bangladesh, Cambodia, China, Egypt, El Salvador, Ethiopia, Guatemala, Honduras, India, Indonesia, Jordan, Madagascar, Mauritius, Mexico, Myanmar, Pakistan, Peru, Philippines, Sri Lanka, Thailand, United States, and Vietnam

In his op-ed for Sourcing Journal, WRAP President and CEO Avedis Seferian addresses the need for a clear, concise, and harmonized framework for social  compliance within the apparel sector. 
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Gerwin Leppink

This Week's Headlines

Bang1 The review board formed to examine the wages for Bangladeshi readymade garment (RMG) workers, has finalized its proposal to set the national minimum wage at Tk 8,000 (U.S. $95.43). The board's ruling ignored various objections from the nation's trade unions and factory owners. The new wage standard is now due to come into effect sometime in December. ( Fibre2Fashion)

Bang2Bangladeshi exports in October surged 31 percent when compared to a year ago according to government data released on Tuesday. The increase in exports was driven by a rise in overseas sales of readymade garments. Total exports from the period ranging from July to October, the first four months of the country's 2018/19 financial year, rose 19 percent from a year earlier to U.S. $13.65 billion, according to the Bangladeshi Export Promotion Bureau. Sales of crucial readymade garments, including knitwear and woven items, totaled U.S.$11.33 billion in July-October, up 20 percent from a year earlier. ( Reuters)

Bangladesh is battling to keep its position as the world's second-largest exporter of clothing after China, facing intensifying competition from nations such as Cambodia, Myanmar, and Vietnam as global brands search for affordable labor. Ongoing competitive pressure has sparked consolidation of Bangladesh's apparel production industry, as the number of factories fell 22 percent over the last five years. Those facilities which remain have seen large-scale growth in market share and expanding international markets for their goods. ( Nikkei Asian Review )
According to the Center for Advanced Studies on Applied Economics (CEPEA) Cotton Index, cotton prices dropped in Brazil in October, declining 7.67 percent, to close at BRL2.9510 (U.S. $0.78) per pound on October 31. The average price throughout October of BRL3.0750 (U.S. $0.82) per pound was 3.5 percent lower than in September 2018. Anticipated oversupply was cited as the reason for the overall decline in prices. ( Fibre2Fashion)

Cambodia is one of the key Asian markets benefiting from companies moving away from China as an apparel supplier in order to mitigate any potential harm resulting from the China/U.S. trade war. The potential for 25 percent tariffs on Chinese apparel and textiles come January, as threatened by the Trump Administration, has boosted the prospects for smaller nations such as Cambodia.  U.S. apparel imports from Cambodia increased 13.09 percent year-to-date through September to reach a value of U.S. $1.83 billion, according to the U.S. Department of Commerce's Office of Textiles and Apparel (OTEXA). Cambodia now represents 2.88 percent of the U.S. apparel import market, rising 11.58 percent for the 12 months through September. ( Sourcing Journal)
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A new online platform offered by a firm in Canada provides textile buyers the ability to source smaller quantities of material, while also giving fabric manufacturers the ability to move their excess stock. The new Tengiva platform will enable buyers and manufacturers to easily purchase excess textiles, and provide buyers with a full catalog of specific offerings from textile manufacturers, streamlining the purchase process. ( Just Style)
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The Egyptian government announced the construction of a brand new specialized free zone for the textile industry in the nation's Minya Governorate. As the textile industry's focus shifts from Asian countries to other parts of the world, Egypt is looking to take advantage of the new climate and attract textile investments. Officials from the government cited geographical location, consumer market,  and free trade agreements with the Common Market for Eastern and Southern Africa (COMESA) as potential competitive advantages. (Fibre2Fashion)

The School of Livelihood and Rural Development (SLRD) will soon run the largest apparel manufacturing unit in the Indian state of Meghalaya. The SLRD acquired the state's largest clothing and garment manufacturing unit which covers an area of 45,000 square feet.  It is hoped that the center will spur economic development within the region by creating jobs for at least 1500 people. The sprawling center has three units, two housing 105 sewing machines each, and the third one possessing 70 such pieces of equipment. ( The Shillong Times )

Jordan saw a 10 percent gain in garment, textile and leather exports during the course of the last fiscal year, but many are cautioning that without further government investment in the sector, these gains could prove to be fleeting. Overall garment and textile exports grew to JD1.29 billion (U.S. $1.82 billion) in 2018, up from JD1.17 billion (U.S. $1.65 billion) in 2017. In reviewing the results, Jordan's Syndicate of Garment and Factory Owners stressed the need to address ongoing challenges in the sector, including,  high energy costs, lack of skilled labor, and tepid support from the country's legislative branch. ( Just Style)
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Foreign direct investments (FDI) into Malaysia's garment and textile sector are set to rise further this year on the back of a strong performance in 2017, according to the Malaysian Investment Development Authority (MIDA). During the first six months of 2018, total investments in the apparel and textile sector totaled MYR244.8 million (U.S. $58.7 million), spurred on by MYR112 million (U.S. $26.8 million) worth of foreign investment. Garment and textiles represent Malaysia's 11th most valuable export commodity, generating MYR15.3 billion (U.S. 3.6 billion) in revenue. ( Just Style)
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The Philippines, once considered a rising trade power in Asia, was in a continued decline since the 1990s as it regularly posted double-digit losses in trade volume. However, 2018 appears to a rebound year for the country, especially for garment exports. August 2018 saw the garment industry book a 7.1 percent (compared to August 2017) increase in export volume. This represented the third consecutive month of sales growth and gave many within the industry cause for enthusiasm.  ( Just Style )
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An executive order signed by President Rodrigo Duterte directed officials to revive the "barter trade" in the country's southwestern region, particularly in the island provinces of Sulu and Tawi-Tawi. For centuries, non-monetary trading of goods had been occurring frequently between Sulu, Tawi-Tawi, Zamboanga, and Malaysia, at a time when borders separating these territories were yet to be defined by the present countries. In the past, merchants from these areas traded items such as clothing for various commodities that were otherwise inaccessible. (Gulf News)

Attendees at the Bloomberg New Economy Forum in Singapore heard that the relocation of production out of China to lower-cost countries in the Association of Southeast Asian Nations (ASEAN) had been taking place for a number of years, and this trend is only likely to intensify as the trade war between China and the United States continues to escalate. However, 75 percent of ASEAN based firms admitted that several Asian governments are indeed becoming more protectionist in their key export markets, a score that is also the highest among all trade blocs in the world, exceeding the global average of 63 percent. ( South China Morning Post)

United Kingdom
Apparel and footwear spending through online-only retailers is set to soar by 67.4 percent over the next five years in the UK, reaching GBP7.5 billion (US$9.8 billion) in 2023 and accounting for over one-third of online clothing and footwear sales, according to a new report from data and analytics firm GlobalData. The report stresses the need for retailers which possess both an online and brick-and-mortar presence to keep refreshing their overall shopping experiences to successfully combat the convenience factor touted by online-only retailers. (Just Style)
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Ethical and sustainable fashion in Europe has a new champion, the Duchess of Sussex, Meghan Markle. Since joining the royal family, the Duchess has used her position to advocate for ethical apparel sourcing practices. She has made conscious choices when it comes to what she wears during official functions, selecting brands who responsibly source and produce their goods. The Duchess' choices have had a secondary effect, with those brands and products she picks witnessing a significant spike in sales. ( Time)

United States
US1 The volume of U.S. apparel imports saw a downturn month-to-month in September as the lucrative back-to-school season came to an end. However, imports from Bangladesh booked the highest gain during this period while imports from China, despite ongoing trade tensions, began to recover modestly. Figures from the U.S. Department of Commerce's Office of Textiles and Apparel (OTEXA) showed that apparel declined 0.73 percent compared to August, but also managed to rise 5.1 percent when compared to September 2017. ( Just Style)
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In September alone, U.S. businesses paid U.S. $4.4 billion in tariffs just on imported goods-and that's up 54 percent over September 2017, according to the "Tariff Tracker" produced by industry coalition Tariffs Hurt the Heartland. Moreover, exports are dwindling as companies look to stave off the cost increases. Exports of products subject to retaliatory tariffs fell by U.S. $2.5 billion, or 26 percent year over year. ( Supply Chain Dive )

Tuesday's U.S. midterm elections are poised to create significant changes in how President Donald Trump can accomplish his domestic goals, but the results may not mean much for the country's trade policies. Both Democrats and Republicans are believed to support a tougher stance on Chinese trade and intellectual property practices. As a result, the president may enjoy bipartisan support as he pushes for Beijing to reduce the bilateral deficit. ( CNBC )

Where in the past, brands and retailers may have had difficulty authenticating the source of their denim fibers, DNA could now provide a viable solution to this particular challenge. A new study conducted by Applied DNA Sciences Inc. and the Fashion Institute of Technology (FIT) concludes that DNA molecular tagging is useful in validating denim, as DNA tags can maintain their integrity even after being exposed to things like bleaching and abrasion. ( Sourcing Journal)
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Following the success of its inaugural show this past spring, Apparel Textile Sourcing Miami (ATSM), the largest apparel and textile sourcing show in the Southern United States, will have its second edition in Miami from May 20-22, 2019. The show will host more than 300 international and domestic manufacturing companies. WRAP, along with other purchasing and sourcing stakeholders, will serve as a partner for the event. ( Fibre2Fashion)
About WRAP
Headquartered in Arlington, Virginia, USA, with regional offices in Hong Kong, SAR, and Dhaka, Bangladesh, full-time staff in Europe, India and Southeast Asia (Thailand, Vietnam, and Indonesia), and for Latin America, WRAP is an independent, objective, non-profit team of global social compliance experts dedicated to promoting safe, lawful, humane, and ethical manufacturing around the world through certification and education. To learn more about WRAP, please visit .

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