The threats to the global denim market are, falling demand in the aftermath of the global economic crisis, due to which, retail demand has fallen in many economies, budget cuts and public spending cuts threaten economic and spending growth, threat of a second dip and cuts in Europe threaten jobs and may lead to spending cutbacks and social instability.
Another important factor which could pose a threat, are the rising consumer prices, which could dampen consumer demand, mainly due to doubling of cotton prices, trade union pressure for better working conditions, demand for higher minimum wages, like in Bangladesh, rising labour costs in key garment producing countries, especially China, which all would mean, rising import prices in Western markets.
The Asian denim producing countries are threatened by rising sea levels and floods in cotton producing countries could affect cotton prices, consumer backlash against throwaway society and worker exploitation, pressure to reduce “clothes miles” could favour nearby but more expensive sourcing, rising fossil fuel costs and fossil fuel shortages could favour nearby but more expensive sourcing.
He concluded by saying that, the Indian denim sector should be wary of competition from other countries in Asia, especially Vietnam and from China too, despite rising costs and mainly, due to a proposal which could revolutionize sourcing from remote and very low cost regions in China.
If China finds a solution to faster delivery times from remote and very low cost regions, which is likely in the near future, as it is investing heavily in building infrastructure, mainly high-speed rail links, which would even connect to Europe. If achieved, it could revolutionize apparel sourcing in Europe, to the detriment of Indian denim and other textile and apparel producers.
Fibre2fashion News Desk - India
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