Chinese central bank's move to devalue its currency will hit India's exports, cause more volatility in the rupee and is likely to widen the trade deficit between the two countries, Assocham said. Faced with sluggish economic growth and dwindling exports, China today devalued its currency for the second straight day, sending fresh shockwaves through global markets and fuelling fears of a currency war as jittery Asian neighbours came under pressure to devalue as well. According to an analysis by industry body Assocham, the devaluation of Yuan was likely to lead to "lot more volatility around the rate of rupee". Moreover, it said, Indian exports, which are already under, a huge pressure in major markets of the world would see further erosion in their competitiveness as the Chinese would become much more aggressive. The chamber observed that if the Indian rupee is not able to keep pace with yuan in losing value, China will further dump goods into the Indian market, further widening the trade deficit between the two countries. "Both the RBI and the Finance Ministry should keep a very close watch and take immediate and swift actions to ensure that Indian economy does not suffer the collateral damage of the currency war among the major economies. Chances are that the US may react in a manner which may further queer the pitch," Assocham Secretary General DS Rawat said. "The impact of the Chinese aggression on the export front is certainly not a good news for India. In the last two days, China has got itself the export advantage of 4 per cent.
The world's largest exporter, China's exports account for 13.7 per cent of the global pie. India's overall exports have contracted for seven straight months until June. Besides, on the government's decision to raise basic customs duty on base metals such as iron, steel, copper, nickel and aluminium by 2.5 per cent, Shah said: "The move is ill-advised as it would push up the cost of the manufacturing of the engineering products and make them uncompetitive. So, the engineering exports will take a hit from China as also a high duty on steel, the mother raw material. Finance Minister Arun Jaitley today approached Parliament seeking to increase the basic customs duty by 2.5 per cent on specified goods falling under Chapter 72.
SOURCE: The Economic Times
Even as the rupee declined for the sixth consecutive session and China announced a second cut in yuan on Wednesday, economists are of the view that these currency fluctuations are unlikely to have a significant impact on India’s export. However, they agreed that the devaluation of yuan will have some adverse impact on the exports. With rupee being one of the strongest currencies over the last few months, India has seen a decline in its exports, which fell for the seventh straight month in June, contracting 15.82 per cent year-on-year. An analysis of the performance of major currencies in the last one year shows that Indian rupee depreciated only 5.8 per cent vis-a-vis US dollar during the period while Russian rouble depreciated 44.6 per cent, Brazilian real depreciated 34.3 per cent and Euro depreciated 16.7 per cent against US dollar. Owing to this, economists said, Indian exports lost competitive edge in global market. “Fluctuation in the currency does not impact our exports significantly. But exchange rates have to be viewed vis-a-vis competitors. We have lost competitive edge due to significant depreciation in other currencies over the last one year. It is definitely a challenge. Due to currency fluctuation, cost of hedging has also gone up substantially so exporters need to work out their strategy and cut costs to make up for loss,” Ajay Sahai, director general of Federation of Indian Export Organisations told The Indian Express.
However, he emphasised that historically there is no co-relation between growth of exports and rupee depreciation. Growth in exports, he argued, is almost always a function of global demand. Early during the day, reacting to China’s move, Chief Economic Advisor Arvind Subramanian called on to policymakers across the world, including India, to take notice of the development. “China has done two things — it has devalued its currency as a measure aimed at reducing the spread between the offshore and the onshore rates and is based on an IMF recommendation. This action is both an endeavour to make their yuan a more plausible credible candidate for inclusion in the SDR basket. There is no doubt that China is responding to its own internal development of slowing down of growth and exports in order to give its economy a boost,” he said.
Exporters are worried that the move of China may not be a one-off affair and more steps may be in the offing. With Euorpe, Asia and, to some extent, Africa being highly price-sensitive markets for Indian exports, it is to these markets that the exporters are worried about losing their edge. When asked about the quantum of impact of one per cent rupee depreciation on exports, Sahai said that it comes to an advantage of roughly around 0.3 per cent, though there are no studies to prove it. However, DK Joshi, chief economist, Crisil, said that devaluation of Chinese currency will not have any significant impact given the fact that currency fluctuation is only a small factor in growth of exports. “The exports have lost competitive edge due to non-price factors such as general competitiveness of economy, infrastructure and logistics etc. Also, the export markets of India are not doing well,” he said. From October onwards there may be some improvement in exports “with firming up of agriculture commodities and metals likely to follow the path,” Sahai said.
SOURCE: The Financial Express
The world will have to take note of the yuan devaluation, Chief Economic Adviser (CEA) Arvind Subramanian said, hours after the Chinese central bank pushed its currency lower for the second day in a row. "There is no doubt that China is responding to its own internal development of slowing down of growth and exports in order to give its economy a boost. All of us policymakers around the world, including India, have to take notice of this action," Subramanian told reporters. He refused to speculate on the impact of yuan devaluation on India and its exports, but the government has already proposed a 2.5 per cent rise in import duty on some base metals. China's central bank on Tuesday devalued its currency by close to 2 per cent to boost exports and support its rapidly slowing economy. The yuan fell another 2 per cent on Wednesday. Most regional currencies, including the rupee, have fallen against the dollar after the yuan devaluation and concerns have risen over greater competition from Chinese exports in the international markets and also the possibility of dumping of cheaper Chinese goods. The CEA said the devaluation could have also been targeted at getting the yuan included in the IMF's reserves currency special drawing rights (SDR). "This action is both an endeavour to make their yuan a more plausible and credible candidate for inclusion in the SDR basket," he said. SDR is an international reserve asset created by the IMF in 1969 to supplement member countries' official reserves. Meanwhile, the government has raised basic customs duty on base metals such as iron, steel, copper, nickel and aluminium.
SOURCE: The Economic Times
The International Monetary Fund has extended cautious welcome to the Chinese monetary authorities’ decision to allow greater play for market forces in determining the yuan’s exchange rate. The yuan is overvalued: as per the trade-weighted real effective exchange rate computed by the Bank for International Settlements, it was up 14 per cent in June, as compared to a year earlier, and up 20 per cent, as compared to the level in June 2012. According to Singapore’s DBS, Asian currencies have, in general, strengthened against the currency basket of yen, euro and dollar, even if they have depreciated against the dollar.
There is every reason for such overvaluation to be countered by policy action. The Indian rupee has risen 7.7 per cent against this trio since July 2014, even as it has slipped some 6 per cent against the dollar. The yuan has fallen against the dollar for two successive days. It might fall again, as the People’s Bank lets the market play a greater role in setting the exchange rate — the Chinese economy has slowed and its markets have tanked; so why expect the yuan to maintain its strength? This is no disaster for the world economy or India’s own economy. A better aligned currency might help China boost its growth and revive the country’s ability to bolster economic growth in all countries from which it imports raw materials, components and finished goods.
How should India’s policymakers react? Lower interest rates would allow the rupee to climb down in tandem. A sharply lower rupee eats into dollar-denominated returns from India and could induce capital to flee. The RBI has to calibrate its response to avert that eventuality. Stepping up investment in the economy to boost growth is the surest, strongest response India can come up with. That means tackling the bad debt problem that threatens the well-being of India’s banks as well.
SOURCE: The Economic Times
India Inc’s efforts to persuade Parliamentarians to pass the Goods & Services Tax-related Constitution Amendment Bill went in vain on Wednesday as the Rajya Sabha could not take up the Bill. With just one sitting left in the session, the possibility of the Bill getting passed during the Monsoon Session looks remote. Top industrialists led an online petition to bring normalcy in the Rajya Sabha, so that GST-related legislation could be passed. However, after a couple of adjournments, when the Deputy Chairperson called for a discussion on the Constitution Amendment Bill, Congress MPs shouted slogans and encircled the Well, leading to adjournment of the House for the day. The Bill was moved on Tuesday, but could not be taken up due to disruptions. While industry chamber CII was instrumental in an online campaign, FICCI also lent its support for the passage of the Bill. FICCI President Jyotsna Suri said passage of key legislation is urgently needed to boost business sentiment, encourage greater domestic investments and create over a million jobs each month. “GST is one such reform, which, once implemented, can add over 1.5 percentage points to GDP growth. We look forward to progressive dialogue and political consensus on key socio-economic issues in Parliament to further the national growth agenda,” she said. However, the move by India Inc did not go down well with senior Opposition MPs. JD(U) President Sharad Yadav raised the issue of the online petition in the Rajya Sabha.
‘Working for rich people’
Alleging that corporate houses are intervening in the functioning of Parliament, Yadav said that it was clear that the system was now working in favour of rich people. “There has been an allegation that Parliament, elected by 125 crore people, is controlled by a few moneybags. Now, that charge has been vindicated (through the complaint of India Inc). How dare they take such a step of running the country’s Parliament,” he asked. Finance Minister Arun Jaitley was quick to rebut the charge. “Do you think that the common man in the country has no interest in running the House? Do you think that those who voted for you do not want Parliament to function,” asked Jaitley. Opposition leader Ghulam Nabi Azad and CPI(M) General Secretary Sitaram Yechury condemned the move by corporate houses. “We want the House to function and, if somebody is expressing their interest, especially businessmen — for the first time, I have heard them say such things — it is okay. But they cannot interfere with our work,” Yechury said. The Monsoon Session concludes on Thursday and unless a special session is called, the Bill will be taken up only during the Winter Session.
SOURCE: The Hindu Business Line
FICCI on Wednesday said that passage of key legislations is urgently needed to push business sentiments, greater investments and jobs creation. “Passage of key legislations is urgently needed to push the business sentiments, encourage greater domestic investments and create over a million jobs each month. GST is one such reform, which once implemented can add over 1.5 percentage points to the GDP growth. We look forward to progressive dialogue and political consensus on key socio-economic issues in the Parliament to further the national growth agenda”, said Jyotsna Suri, president, FICCI. Protests by the Congress on Wednesday has again stalled discussion in Rajya Sabha on the constitution amendment bill for GST. ‘Disheartened’ by the continuing disruptions in Parliament, top industrialists including Rahul Bajaj, Adi Godrej and Kiran Mazumdar-Shaw have signed an online petition along with 17,000 persons to end the gridlock. The petition urges all political parties to end the logjam and begin a consultative and collaborative process for passage of key reforms Bills. “Achieving sustained higher growth of 8-10% is imperative for Indian economy so as to meet the objectives of inclusion, poverty alleviation and creation of employment opportunities. The pace of economic recovery has been slow with manufacturing sector yet to see a major turnaround,” said Suri. Uncertainty over the fate of GST Bill weighed on the Indian markets on Wednesday. The BSE Sensex tumbled 353.83 points to close at 27,512.26, while NSE Nifty cracked below 8,400-mark by falling 108.55 pts to 8,353.80 on Wednesday.
SOURCE: The Financial Express
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 49.15 per barrel (bbl) on 12.08.2015. This was lower than the price of US$ 49.80 per bbl on previous publishing day of 11.08.2015.
In rupee terms, the price of Indian Basket decreased to Rs 3186.39 per bbl on 12.08.2015 as compared to Rs 3195.67 per bbl on 11.08.2015. Rupee closed weaker at Rs 64.83 per US$ on 12.08.2015 as against Rs 64.17 per US$ on 11.08.2015. The table below gives details in this regard:
|
Particulars |
Unit |
Price on August 12, 2015(Previous trading day i.e. 11.08.2015) |
Pricing Fortnight for 01.08.2015 (July 14 to July 29, 2015) |
|
Crude Oil (Indian Basket) |
($/bbl) |
49.15 (49.80) |
55.15 |
|
(Rs/bbl |
3186.39 (3195.67) |
3511.95 |
|
|
Exchange Rate |
(Rs/$) |
64.83 (64.17) |
63.68 |
SOURCE: PIB
China weakened its currency, the renminbi, for a second straight day on Wednesday, jolting markets across Asia and raising concerns about the path of the giant economy. The central bank, the People's Bank of China, set the official rate for the renminbi's exchange at 6.33 to a dollar on Wednesday morning, or 1.6 per cent lower than the previous day. It was the currency's second-largest one day drop since 1994, when China's modern foreign exchange system began. The largest drop was on Tuesday, when the renminbi was devalued nearly two per cent. The move sent other Asian currencies lower for a second consecutive day on Wednesday. Stock markets also fell across the region. Hong Kong's main index fell 2.4 per cent while in Japan the Nikkei 225 stock average closed down 1.6 per cent. The sell-off was steeper in Southeast Asia, where the main share index in Singapore fell 2.9 per cent, while Indonesia's Jakarta composite index closed 3.1 per cent lower.
The Euro Stoxx 50 index, a barometer of euro zone blue chips, was down 2.5 percent at midday, while the FTSE 100 index in London was down 1.3 per cent by late morning. The euro rose almost one per cent, to $1.11. The renminbi fell sharply in offshore markets, where it is freely traded. The offshore renminbi weakened to around 6.5 per dollar in late Asian trading, displaying a record level of bearishness on the Chinese currency, as investors bet on further depreciation to come. In onshore trading in mainland China, where the renminbi is subject to a daily rise or fall of a maximum two per cent, the currency at one point pushed up against the weak end of the trading band. But it recovered sharply late in the trading day on heavy buying volumes to close at 6.38 per dollar, weaker by one per cent than Tuesday's market close. The onshore market closing level has taken on new significance since Tuesday, when China's central bank said the closing price would be used as the reference point for setting the renminbi's official exchange rate on the following morning.
Citing unidentified people, Reuters and Bloomberg reported on Wednesday that the central bank intervened in the market, selling dollars and buying renminbi through state banks in order to support the Chinese currency. The reports could not be independently verified. Phone calls to the People's Bank of China's headquarters in Beijing rang unanswered after regular office hours. In a statement on Wednesday morning, China's central bank reiterated its pledge to give the market a bigger role in setting the exchange rate. But it sought to allay any concerns that the value of the renminbi would continue to spiral downward. "Based on international and domestic economic and financial conditions, there is currently no basis for a continued depreciation of the renminbi exchange rate," the statement said. China appears to have two main goals in allowing its closely managed currency to weaken. For one, it could help offset the country's slowing economy. Exports have been particularly hard hit, contracting by 8 percent in July, and a cheaper renminbi makes China-made goods relatively more affordable for consumers in the United States and Europe. At the same time, China is also seeking a greater role for its currency on the global stage. In recent months, policy makers have been lobbying the International Monetary Fund to include the renminbi in its basket of global reserve currencies, which includes the dollar, euro, yen and pound. That means convincing the fund that the renminbi is a freely traded currency. The IMF reacted positively to Tuesday's statement by China's central bank that it would tweak the way it sets the exchange rate, saying in a statement that the move "appears a welcome step as it should allow market forces to have a greater role in determining the exchange rate." It added, however, "The exact impact will depend on how the new mechanism is implemented in practice."
SOURCE: The Business Standard
Ministry of Commerce, Government of China, has announced it would review anti-dumping duties on purified terephthalic acid (PTA) imported from South Korea and Thailand, according to a Xinhua report. Anti-dumping duties ranging between 2 per cent and 20.1 per cent were imposed on PTA imports from these two countries in August 2010, for a period of five years. The ministry's decision to review these duties follows an application made by domestic producers in June this year requesting the ministry to reinvestigate the case and extend the duties which are due to expire. Since August 2010, South Korean PTA exporters like Hyosung Corp is levied duty at 2.6 per cent, Samsung Petrochemicals 2.0 per cent, SK Petrochemicals 11.2 per cent, Samnam Petrochemicals 3.7 per cent, KP Chemical 2.0 per cent, Taekwang Industrial 2.4 per cent, while other Korean PTA exporters pay 11.2 per cent anti-dumping duties. In case of PTA imports from Thailand, Indorama Petrochemicals attracts duty at 16.9 per cent, Siam Mitsui PTA Co 6.0 per cent, TPT Petrochemicals 12.9 per cent, and other Thailand based PTA exporters 20.1 per cent anti-dumping duty when exporting PTA to China. PTA is an organic compound used in polyester coatings and resins.
SOURCE: Fibre2fashion
The International Finance Corporation's (IFC) China Water Programme in 2013 to promote industrial water efficiency and water quality by demonstrating the business case for voluntary saving of water, energy, and chemicals has shown impressive results, it said on its website. The 50 demonstration projects developed as part of the programme saved 9 million tonne water and avoided 110,000 tonne of greenhouse gas annually. It also saved $18 million in operating costs annually due to reduced resource use and facilitated over $50 million in capital investment. Suppliers of global brands such as Ikea and Primark, as well as domestic companies participated in the programme. “Unlike similar textile-focused initiatives, our projects go beyond low hanging fruit,” said Rong Chen, IFC Project Leader. “These projects are more difficult to develop and finance, but have greater impact.” The team referred several projects to the Bank of Beijing, which is the first Chinese bank to include a water-efficiency component under a risk-sharing facility with IFC.
IFC is also scaling up the programme by collaborating with stakeholders beyond the textile supply chain. It recently implemented the Green Textile City Initiative together with the Natural Resources Defense Council (NRDC). This sector-level initiative provided capacity building for 100 textile mills in Shaoxing and Guangzhou. Thirty-three of the trained mills went on to develop and implement more than 200 projects on their own with substantial water and energy savings. “In the future, we plan to work with more brands that see water as a value driver for their business and want to strategically manage this resource beyond immediate factory-level projects,” said Navneet Chadha, IFC Principal Operations Officer. “Collective industry action is necessary to make water management interventions really sustainable and lead to market transformation.” IFC China Water Programme is delivered in partnership with the Netherlands Ministry of Economic Affairs, the Netherlands Enterprise Agency RVO, and the Hungarian Export-Import Bank.
SOURCE: Fibre2fashion
Marking the 70th anniversary of the end of World War II, Japanese Ambassador Hiroshi Inomata said his country is committed to peace at all costs. The ambassador was addressing a public gathering hosted by the Institute of Strategic Studies Islamabad (ISSI) on Tuesday. The talk is part of the newly introduced ‘Ambassador’s Platform’ series at ISSI, said a press release. Inomata said the Japanese nation had learnt many lessons, and would like to see a world without nuclear weapons and contribute more actively toward international peace. He called to memory the visit of then Crown Prince Akihito and Princess Michiko to Pakistan in 1962, as well as other high-level visits and exchanges between the two countries in recent times. The Japanese government is working to materialise an official visit by Prime Minister Shinzo Abe to Pakistan, shared the envoy, adding that the country is among the select few his nation shares a security dialogue with. Inomata said both countries were important trading partners during the 1950s, when Japan exported textile machinery to Pakistan, and Pakistan exported raw cotton to Japan to help develop the nation’s textile industry. He also said a meeting of the Pakistan-Japan business forum will be held in November to explore new investment avenues between the countries, in light of the declining profitability of Japanese investments in the Pakistani textile sector. ISSI Director-General former ambassador Masood Khan said Pakistan has always maintained a strong political understanding with Japan, along with economic and cultural ties. ISSI Chairman Ambassador (retd) Khalid Mahmood said Japan has an important role to play with its observer status at the SAARC platform, and should not discriminate against Pakistan in matters related to civilian nuclear cooperation.
SOURCE: The Tribune
Sri Lankan Prime Minister Ranil Wickremesinghe has assured that the country will regain the GSP plus trade concession from the European Union. His assurance came after a meeting local and foreign garment industry officials at his official residence Temple Trees on August 11. The Generalised Scheme of Preferences (GSP) Plus had helped the garment industry, Sri Lanka's second biggest foreign exchange earner after remittances, to benefit substantially with a 6-7 per cent concession. Industry players have estimated the benefit to be in the range of above $500 million annually. Wickremesinghe's optimism was echoed by another minister. "We are very, very hopeful that, within a matter of months, Sri Lanka will be able to get GSP Plus back," Harsha De Silva, deputy economic development minister, told reporters. He said the concession would benefit those exporting to the EU by at least 12 per cent. "No fresh conditions have been made. We have been working very closely with the EU."
Exporters have also agreed to raise wages of their employees and increase their EPF and ETF contributions needed for the return of GSP plus. Responding to a question about higher salaries in Sri Lanka’s export industry in comparison to countries like Bangladesh and Vietnam possibly dissuading potential investors, De Silva said that this was a myth and that, in fact, salaries in the country needed to be increased. Sri Lanka lost the EU concession in 2010 after then-president Mahinda Rajapaksa rejected demands from the international community to address human rights abuses allegedly committed during a 2009 offensive to crush the Tamil insurgency.
SOURCE: Fibre2fashion
HSBC Bangladesh is set to honor leading exporters for their contribution to the country’s sustainable economic growth at the sixth HSBC Export Excellence Awards in November. Exports are a major driver of economic growth in the country, accounting for 20 percent of the gross domestic product. Bangladesh surpassed $31.2 billion in exports in the last fiscal year. The excellence awards are given out in four categories: garments and textiles, enterprises in export processing zones, traditional and emerging sectors and small and medium enterprises.
According to The Daily Star, garment exporters with an annual export turnover of $50 million or higher are in Group A, while those below $50 million are in Group B. Companies in the export processing zones will be awarded in a separate category. Non-garment or textile companies with an annual export turnover of $5 million or more will be awarded under the traditional and emerging sectors category. The small and medium enterprises category will award non-ready-made garment or textile companies that have an annual export turnover below $5 million. This year, a jury will have the option to choose more than one winner from the categories to accept the Special Achievement Award, in an effort to encourage exporters. The awards were announced at a press conference at the Sonargaon Hotel in the country’s capital, Dhaka, by the Chief Executive of HSBC Bangladesh, Francois de Maricourt, reported the Daily Star. “We are pleased to provide a platform for Bangladeshi exporters to showcase their capabilities. Our efforts in promoting excellence in this field will continue,” Maricourt added.
The Country Head of Commercial Banking at HSBC Bangladesh, Bhuvnesh Khanna, said the excellence of entrepreneurs in Bangladesh is often best displayed by exporters. They make Bangladesh more international, Khanna said, adding that the award ceremony is a way of recognizing contribution and showcasing their excellence. The interested exporters must fill out a form and submit it to the Bangladesh Brand Forum by September 17. Applicants are not required to be a client of HSBC to be eligible for the awards. Past award winners include, DBL Group, Epyllion Textiles, Pacific Jeans Group and Picard Bangladesh. HSBC is the only international bank in Bangladesh with presence in all eight export processing zones, accelerating exports and has helped local exporters ship products to 120 countries in 2013 and 2014.
SOURCE: The Sourcing Journal Online
With the signing of TPP and VN-EU FTA and once the agreement takes effect, Vietnamese garment and textile industry is expected to grow 50 percent in the first year and 20 percent in the following year, according to the Trade Promotion Department under the Ministry of Industry and Trade. To take advantage of opportunities from free trade agreements such as the Trans-Pacific Partnership (TPP) and VN-EU Free Trade Agreement many foreign firms have recently sped up investment in garment and textile industry in Vietnam. Vietnamese garment and textile products exported to the US and European nations will enjoy 0 percent tax rates instead of 10-30 percent as present. Many Japanese firms had made moves to invest in the garment and textile industry in Vietnam. According to Japanese Consul General to HCMC Nakajima Satoshi sixty percent of 500 Japanese businesses under a recent survey affirmed that they were working the plan to invest in Vietnam. Their most chosen areas comprise industrial zones in southern provinces of Long An, Binh Duong, Dong Nai and Tay ninh. The garment and textile field has also attracted businesses from South Korea, China, Hong Kong (China) and Taiwan (China). The representative of Long Hau Industrial Zone (IZ) in Long An said that it had received over 20 oversea companies coming to learn about investment there since early this year.
Rach Bap and An Dien IZs in Binh Duong reported the number of foreign firms seeking investment opportunities top 100 since last year-end, it was only 20-30 from a year back. Of the 100 companies, 25 have promoted investment procedures and 20 have registered to invest in these IZs. The HCMC Enterprise Association said that many delegations of foreign firms had come to learn about Vietnam investment environment. Many wanted to build garment and textile plants about 50 kilometers from the center of the city. The Foreign Investment Agency under the Ministry of Planning and Investment reported FDI attraction drop in the first half this year but rocket in the garment and textile industry, which held US$1 billion out of the total capital of US$5.85 billion. The three largest projects included a US$600 million fibre plant in Dong Nai, a US$247 million project to make support industry items in Binh Duong, and a US$160.8 million fibre plant in Tay Ninh.
According to field surveys by Japanese trade promotion agencies in Vietnam, the reason behind investors choosing HCMC neighboring provinces is that it is easier for them to find land species with area of from 20 hectares or larger each. Moreover, labor cost and rent are still low and do not increase quickly there. Binh Duong province People’s Committee said that they had built large industrial zones to attract big garment and textile projects, for instance, 300 hectare Trang Bang IZ. Another reason for foreign firms to flock into the garment and textile industry is because Vietnamese businesses have vacated their playing field. The country has over 2,000 companies operating in the industry. However most of them have just done outwork and exported. Their material sources mainly come from nations without incentives from free trade agreements. The garment and textile export turnover of Vietnam to the Eurasian Economic Union (EAEU) has reached only US$300 million a year when the Vietnam-EAEU Free Trade Agreement was not signed,
SOURCE: Yarns&Fibers
Petrovietnam (PVN) and Vietnam National Textile and Garment Group (Vinatex) have signed a cooperation agreement on Dinh Vu polyester fibre consumption of PetroVietnam Petrochemical and Textile Fibre JSC (PVTEX), PVN said on its website. The agreement is the outcome of cooperation between Petrovietnam and Vinatex after more than one year of commercial operation of Dinh Vu Polyester Plant. So far, its products have been domestically and internationally credible and the quality has improved to the level of imported goods. It is now a stable background for close and comprehensive relation between the two groups in various fields such as polyester provision, export market extension cooperation, staff training and product evaluation as well as other aspects for the mutual benefit and enhancement of trademark value of both sides, PVN said.
At the signing ceremony, Vice Minister of Industry and Trade (MoIT) Tran Quoc Khanh said, “The signing of Dinh Vu polyester fibre consumption agreement is an important event showing the close cooperation between the two big groups. In the development strategy, the Vietnam Oil and Gas Group has indicated the importance of developing the post-refinery stage, manufacturing the essential goods and enhancing the value of textile industry in accordance with the Government's requirement to Petrovietnam. We believe that the quality of PVTEX products and services will bring the business values and advantages for our customers; specifically a stable material supply and maximum time reduction of transportation, storage as well as exchange rate stability.” The cooperation for polyester consumption and market development is to ensure not only material stabilization, product competitiveness increase and market extension for Vinatex enterprises but also Vietnam garment trademark promotion and increased domestic rate of textile industry to 60 per cent.
Vinatex General Director Le Tien Truong said “The stable qualified product of Dinh Vu Polyester Plant is good news for textile enterprises. We can sign a consumption agreement on equal and straight basis. Vinatex enterprises wish to be given priority in buying PVTEX products with over 50 per cent total demand of each enterprise.” The cooperative agreement between Petrovietnam and Vinatex has affirmed the right policy of Dinh Vu Polyester Construction Project in the light of the impending approval of the Trans-Pacific Strategic Economic Partnership Agreement (TPP) and its implementation. The use of domestic products will bring big advantage for Vietnam garment enterprises in general and Vinatex in particular in terms of price, shipment time (from 2 weeks to 2 days), especially the product's origin (from polyester stage) as stipulated by TPP, PVN said.
SOURCE: Fibre2fashion
