As the price of organic cotton yarn has been more than 30 per cent higher than the routine price and at the same time across the globe, customers’ income have been under severe pressure, the overall demand for apparel has been majorly impacted. On the other hand, people’s focus on health and the environment has increased significantly. All these and allied factors play a key role in ascertaining the demand of organic cotton-based garments. This becomes an important issue for India’s cotton production as well as apparel manufacturing as a recent report of Textile Exchange says that India accounts for 50 per cent of the global organic cotton production and has the most land for conversion to organic cotton. Besides, India has the maximum organic certified facilities as the latest figures of Global Organic Textile Standard (GOTS) certification say that India has 2,994 GOTS certified facilities in the textile industry. Other textile and apparel dominating countries are far behind in this regard.
Organic Trade Association (OTA) states that there has been 31 per cent growth of organic cotton in the industry in the past one year and it is expected to see a rise of 10 per cent by the year 2021.
According to OTA, organic cotton is the largest and fastest-growing organic commodity in the American marketplace that’s not a food, reaching a net of US $ 2 billion in sales in 2019 alone.
A survey conducted in 2019 by Nielsen found that 73 per cent of global consumers said they would be willing to adjust their consumption habits to reduce their environmental footprint with nearly half saying they’d pay more for products containing organic or all-natural ingredients.
This shift has spurred demand for organic textiles, which has seen a 12 per cent annual growth rate in recent years.
Various companies, across India share different views as far as the scale of impact is concerned.
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Vishnuprabhu KS, JMD of leading export house KM Knitwear, Tirupur says, “The demand reduced by around 50 per cent because of unsustainable organic cotton yarn price and customers are moving to other countries like Egypt where they also have their own cotton.” KM Knitwear is a respected name in apparel export and is known for its environment-friendly initiative.
Regarding reduced demand, industry also feels that more than the impact of high cotton price, reduced apparel buying has had a major impact on the demand of apparel garments. However, there are customers who want to buy only organic and will definitely opt for the same. Hike in price and that too of around 15-20 per cent does not matter much for them.
Agreeing with this, Rajan Sirohi, VP, Eastman Export Global Clothing, Tirupur adds,
“Buying which used to be earlier in 3 months, happened in 5 months due to store closures, so production cycle and order realisation time increased. Once the store opened, the backlog was also cleared and so overall demand of organic garments was impacted naturally.”
Eastman Export Global Clothing, is among India’s top apparel exporters, following all requirements to be a truly sustainable company.
The brand’s commitment towards organic cotton is high and this motivates and attracts customers to purchase garments. And companies working with such brands has comparatively less impact as Sameer Bhand, VP, Pratibha Syntex, Indore says, “Our customer have long term commitment to organic cotton, though there was slight impact for the short term but we see a good growth going forward.”
Pratibha Syntex is a leading Indian apparel exporter known for its various sustainability efforts including providing support to the cotton-producing farmers.
It can be mentioned here that kidswear and undergarments are among the hot product categories in organic category and Indian apparel exporters have not seen much reduction in their demand. It is also pertinent to mention here that the industry has seen higher demand of organic undergarments during the recent lockdown.
The overall market is picking up and the income of people has also started improving. Hence, companies are enthusiastic about the demand of this segment in the near future/ next season.
Few of the apparel manufacturers believe that it is difficult to predict the demand unless the organic cotton price reduces drastically. They might have to increase prices of end products and expect customers to push back with the reduced volume.
“Premium for organic cotton-based apparel should increase. The main area of increase is cotton and it should be streamlined and regulated,” says Vishnuprabhu.
Smooth yarn supply and transparency issue
It can be highlighted here that apart from demand at international level and efforts of brands, manufacturers, organic cotton cultivation still needs more focus. The norms regarding organic cotton cultivation are tightened and therefore the industry faces acute shortage of organic cotton.
Not only this, the issue of fake organic cotton is also a concern. Last year, 20,000 metric tonnes of GOTS identified cotton were seized that were wrongly certified as organic.
On the request of anonymity, one of the leading apparel exporters tells that they are accepting only as many orders of organic garments, for whom their yarn supplier confirms yarn supply. “Along with smooth yarn supply, there is an issue of transparency, proper records/documentation… and it is not easy at all to ensure 100 per cent monitoring of the same. Managing orders of organic-cotton-based garments is quite challenging,” he adds.
Efforts are there at ground level but need to increase
SIMA Cotton Development & Research Association (SIMA CD & RA), Coimbatore and few other industry bodies are working in this direction. Leading apparel brand Zara’s parent company Inditex recently announced to support more than 2,000 Indian farmers producing organic cotton. The company has joined forces with an Asia-based bank, DBS Bank, to supply finance to farmers.
But these efforts need to increase as it will help India to increase its market share in such a niche segment. It will be interesting to see how the entire supply chain works to grab this opportunity of organic cotton-based garments in the coming days.