India, the world’s second-biggest exporter of raw cotton (China tops the list) is set to produce a healthy harvest this year after a strong monsoon season. This could benefit garment manufacturers since it might help to lower world prices, reported Women’s Wear Daily.
Indian farmers planted 9.5m hectares of cotton in July, up from 8m last year, and they have been encouraged to plant bigger crops so as to cash in on higher prices amid concerns over global cotton shortages. According to the US Department of Agriculture, demand could outstrip supply this year.
According to Rita Menon, secretary at the textiles ministry, the Indian government is developing a policy to govern cotton exports. As the world continues to recover from the economic downturn, clothing brands in Europe and the US are increasing orders from Indian textile firms.

Indian consumer goods company Dabur India has acquired Hobi Kozmetik Group, a personal care products company, for $69m, reported Times of India.
According to the company, the acquisition is in line with its strategy to strengthen its presence in North Africa and West Africa. “This acquisition offers Dabur an entry into an attractive market like Turkey and adds to our portfolio a host of popular international brands that enjoy pole position in their respective categories. We also believe that the opportunities for capitalising on the strengths of this business across our international operations are significant,” Sunil Duggal Dabur, CEO Dabur India, told the newspaper.
Dabur International, the company’s overseas subsidiary, acquired a 100% stake in three Hobi Group firms – Hobi Kozmetik, Zeki Plastik and Ra Pazarlama – to complete the takeover. Dabur expects to complete the transaction by the third quarter of 2010-2011, according to the company.

China recorded its weakest manufacturing data in over a year as the government tightened controls on property speculation and on pollution-intensive factories, reported Bloomberg.
HSBC Holdings Plc and Markit Economics’ purchasing managers’ index, released today, slipped from 50.4 in June to 49.4 in July.
The Federation of Logistics and Purchasing yesterday released government-approved PMI of 51.2, a decrease from last month’s 52.1.
Fifty is the dividing line between expansion and contraction, Bloomberg explained. The HSBC reading was the first to register in the contraction range in 16 months, while the government figure indicated the weakest rates of expansion in 17 months.
HSBC economist Qu Hongbin told Bloomberg that China is in the midst of a “slowdown not a meltdown,” adding that “there is no need to panic.”
“Government measures are taking overheating risks out of the economy, but any further weakening would be worrisome as China’s export outlook may also deteriorate,” Credit Agricole economist Dariusz Kowalczyk told Bloomberg. “The scope for yuan appreciation is declining further and there will be no interest rate hikes in the second half.”

Protests continued in Bangladesh on Monday for a fourth day as garment workers demanding higher wages clashed with police, despite their leaders agreeing overnight to a new pay structure announced last week, reported Reuters.
At least 70 people including police were injured in violence at Ashulia, Savar and Narayanganj, around the capital Dhaka, witnesses said.
Police used teargas, batons and rubber bullets to disperse the protesters who barricaded roads and attacked vehicles, they said.
Around 300 people were injured and dozens detained in similar unrest over the past three days, police said.
On Thursday, the government nearly doubled the minimum wage for millions of workers in the key export garment industry to 3,000 taka ($43) from 1,662 taka, but it fell far short of labour union demands of 5,000 taka.

GAZIPUR (BANGLADESH):The eight lane highway leading from the Bangladeshi capital, Dhaka, narrows repeatedly as it approaches this town about 30 miles north, eventually depositing ears onto a muddy, potholed lane bordered by mangroves and small shops.

But this is no mere rural backwater. It is the sort of place to which foreign manufacturers may increasingly turn, if the rising wage demands of factory workers in China prompt companies to seek new pools of cheap labour elsewhere.

Already, in factories behind steel gates and tall concrete walls, tens of thousands of workers, most of them women, spend their days stitching T-shirts, pants and sweaters for Wal-Mart, H&M, Zara and other western retailers and brands.

One of the Bangladeshi companies here, the DBL Group, employs 9,000 people making T-shirts and other knitwear. Business has been so good that it is finishing a new 10-storey building.

As costs have risen in china, long the world shop’s floor, it is slowly losing work to countries like Bangladesh, Vietnam and Cambodia –at least for cheaper, labour- intensive goods like casual clothes, toys and simple electronics that do not necessarily require literate workers and can tolerate unreliable transportation systems and electrical grids.

Li & Fung a Hong Kong company that handles sourcing and apparel manufacturing for companies like Wal-Mart and Liz Claiborne, reported that its production in Bangladesh jumped 20 per cent last year, while China, its biggest supplier, slid 5 per cent.

The flow of jobs to poorer countries started even before recent labour unrest in china led to big pay raises for many factory workers there-and before changes in Beijing’s currency policy that could also raise the costs of Chinese exports. Now, though, economists expect the migration of China’s low-paying jobs to accelerate.

The US House of Representatives approved the renewal of a total ban on imports from Burma that was due to expire on July 26, reported Just-Style.
The one-year extension maintains comprehensive import restrictions against the ruling military junta.
Senate must approve the bill, which then goes before President Obama to be signed into law.
The US has levied import sanctions against Burma since 2003

The breakup of the euro area would save the 16- nation region from years of economic stagnation by boosting weaker members’ competitiveness as well as domestic demand in Germany to spark growth, Capital Economics said.

      “The threatened breakup of the euro zone, which many see as potential disaster, would actually open the door to renewed economic growth, not just for weaker’s members of the zone, but for Europe as a whole.” Capital Economics analysts including Roger Bootle in London said in a report released today.

         Greece’s debt crisis has driven down the euro and forced governments from Spain to Italy to embrace austerity measures and cut their deficits, clouding the outlook for recovery from the worst recession in six decades. The International Monetary Fund on july 8 kept its forecast for 1 per cent growth this year in the region, which expanded 0.2 per cent in the first quarter.

         Europe’s weaker economics face “years of economic pain” as they deflate costs and prices to regain competitiveness with Germany, which runs a large trade surplus and restrains domestic demand, Capital Economics said. Italy, Spain, Ireland , Portugal and Greece could quickly narrow the competitiveness gap if they returned to their own currencies, which would depreciate and allow exports to expand, it said.

 “This would offer them an escape route from their difficulties through economic growth, rather than depression,” the economists wrote.

 A full abandonment of the euro would also help Germany as a restored deutsche mark would appreciate and make the government expand domestic demand to maintain jobs and growth, pushing up the German standard of living, according to the report.

At least 15,000 protesting garment factory workers blocked key roads in the Bangladeshi capital Dhaka Wednesday, the latest in a string of protests over low wages and poor conditions, reported the Guardian. Police fired tear gas and used water cannons to disperse the workers, who sew clothes for some of the top names in Western retail, after they blocked a major intersection in the north of the city.
The trouble began at four factories, owned by one of the country’s leading garment manufacturers, and then spread to all of the dozens of factories along a stretch of road in the Kafrul and Mirpur areas.
The unrest is the latest in a series of violent protests over low wages in Bangladesh’s more than 4,500 garment factories — the mainstay of the impoverished country’s economy.
Last week hundreds of factories in a key industrial zone outside the capital were briefly shut down following days of violent protests which owners said created “panic and anarchy.”
The factories were reopened a day later after the government brought in nearly a thousand riot police to guarantee security.

More than 20 textile plants in Pakistan have shuttered operations since last month, due to a shortage of raw cotton, and high energy and raw material costs, according to the Yarns and Fibers Textiles Exchange, which cited Just-Style.
Pakistan’s textile industry annually consumes 2.7m tons of raw cotton, but last year raw cotton production in the country remained at 2.1m tons. The shortage pushed cotton prices in the domestic market by 90% from the start of the crop season in September last year.
Gohar Ejaz, Chairman of the All Pakistan Textile Mills Association (APTMA) told Just-Style that the industry has been losing business to its global competitors, due to a 15% duty on the export of yarns and soaring raw cotton prices in the country, and textile mills are unable to import cotton at international prices.

The unemployment rate in the United States fell to 9.5% in June from 9.7% the previous month, but at the same time the economy lost about 125,000 jobs, fueling concerns about the pace of economic recovery in the country, reported The Wall Street Journal.
According to the US Labor Department, non-farm payrolls fell by 125,000 last month, as 225,000 government workers that were hired for the 2010 census in recent months lost their temporary jobs. What’s more, the private sector added only 83,000 last month. Economists polled by Dow Jones Newswires looked for payrolls to drop by a more modest 110,000 in June.
Within professional and business services, employment continued to increase in temporary help services, which added 21,000 jobs. Manufacturing jobs continued to trend upwards, rising by 9,000, but the increase was slower than in previous months. Construction lost 22,000 jobs in June.
“We need unprecedented rates of growth to get out of this hole in a reasonable amount of time,” said Jesse Rothstein, chief economist at the Department of Labor, ahead of today’s announcement. “It’s hard to overstate how deep the hole is.”
That, however, is unlikely to happen any time soon, as economic figures released on Thursday pointed to a broad economic slowdown in the US, from less manufacturing growth to elevated claims for jobless benefits and declines in home construction and pending sales. Today’s report also showed that 46% of unemployed Americans were out of work for more than six months in June.