INTERNATIONAL
Textile Raw Material Price 2015-08-25
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1071.24 |
USD/Ton |
-0.43% |
8/25/2015 |
|
VSF |
2061.39 |
USD/Ton |
0% |
8/25/2015 |
|
ASF |
2397.42 |
USD/Ton |
0% |
8/25/2015 |
|
Polyester POY |
1032.26 |
USD/Ton |
-1.93% |
8/25/2015 |
|
Nylon FDY |
2580.64 |
USD/Ton |
-0.30% |
8/25/2015 |
|
40D Spandex |
5613.48 |
USD/Ton |
0% |
8/25/2015 |
|
Nylon DTY |
2584.54 |
USD/Ton |
0% |
8/25/2015 |
|
Viscose Long Filament |
1200.66 |
USD/Ton |
0% |
8/25/2015 |
|
Polyester DTY |
2837.93 |
USD/Ton |
0% |
8/25/2015 |
|
Nylon POY |
5761.61 |
USD/Ton |
0% |
8/25/2015 |
|
Acrylic Top 3D |
1309.81 |
USD/Ton |
-0.83% |
8/25/2015 |
|
Polyester FDY |
2401.32 |
USD/Ton |
0% |
8/25/2015 |
|
30S Spun Rayon Yarn |
2682.00 |
USD/Ton |
0% |
8/25/2015 |
|
32S Polyester Yarn |
1730.82 |
USD/Ton |
0% |
8/25/2015 |
|
45S T/C Yarn |
2775.55 |
USD/Ton |
-0.56% |
8/25/2015 |
|
45S Polyester Yarn |
1917.94 |
USD/Ton |
0% |
8/25/2015 |
|
T/C Yarn 65/35 32S |
2338.95 |
USD/Ton |
0% |
8/25/2015 |
|
40S Rayon Yarn |
2853.52 |
USD/Ton |
0% |
8/25/2015 |
|
T/R Yarn 65/35 32S |
2541.66 |
USD/Ton |
0% |
8/25/2015 |
|
10S Denim Fabric |
1.09 |
USD/Meter |
0% |
8/25/2015 |
|
32S Twill Fabric |
0.92 |
USD/Meter |
0% |
8/25/2015 |
|
40S Combed Poplin |
1.01 |
USD/Meter |
0% |
8/25/2015 |
|
30S Rayon Fabric |
0.74 |
USD/Meter |
0% |
8/25/2015 |
|
45S T/C Fabric |
0.75 |
USD/Meter |
0% |
8/25/2015 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.15593 USD dtd. 25/08/2015)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The recent devaluation of the yuan has led to a weakness in the rupee against the dollar. So far in 2015-16, the rupee has depreciated 13.9 per cent and 6.6 per cent against the euro and dollar, respectively. The depreciating rupee has prompted textile and apparel importers abroad to renegotiate the terms of their contracts with Indian exporters. Now, new contract orders are being deferred till the Indian currency stabilises. Typically, depreciation in the rupee results in higher realisation of export-driven products from India. As a result, global importers re-negotiate prices of the products. But most exporters are not celebrating the sharp depreciation in the value of the rupee — which fell to a two-year low on Monday — as they say that the gains from higher export realisation in the short-term get out-weighed by the problems associated with a highly volatile currency.
Overall textile exports rose a marginal 5.4% to $41.4 billion in 2014-15 as compared to $39.3 billion in the previous year. D K Nair, Secretary General, Confederation of Indian Textile Industry (CITI), believes that overseas importers who are confident about the product and quality, have started re-negotiating price and contract terms. Indian exporters with deep pocket who can resist price re-negotiation for higher realisation may continue to resist, said Nair.
SOURCE: Yarns&Fibers
Exporters from labour-intensive sectors such as agriculture, marine, carpets, handicraft and textiles stand to gain the most from the rupee depreciation, even as the hedging cost will rise for most, and China will have an upper hand due to its currency devaluation. However, sectors like gems and jewellery, electronics and high-end engineering which depend on imports for raw material inputs will not get the benefit of the rupee depreciation, exporters told PTI on Tuesday. "The major gainers will be traditional export sectors such as agriculture, marine, carpets, handicraft and textile. However, sectors like gems and jewellery, electronics and high-end chemicals which have high import dependence will have limited impact," exporters' body FIEO Director General Ajay Sahai said. Meanwhile, the rupee today closed 55 paise higher at 66.10 against the US dollar. The domestic currency had tumbled by 82 paise -- its biggest single day fall this year -- to settle at 66.65 on Monday. "The rupee depreciation will be beneficial for textile exporters as export intensity in the sector is high whereas import intensity is low. "However, the problem is, our main competitor is China. India's textile exporters will lose to China as it has a competitive edge," said D K Nair, Secretary General, Confederation of Indian Textile Industry. "Naturally, the handicraft exporters will benefit. However, as imports will be costlier, the raw material cost will go up, even though export demand will rise. The benefit of cost to exporters will therefore be 50 per cent," said Raj Kumar Malhotra, former Chairman of Export Promotion Council for Handicrafts. He added that the hedging cost will also be pushed up for exporters. "The depreciation is not going to have a negative impact as such on the gems and jewellery exporters. Even though the cost of raw material will rise and our inputs are mostly from imports, at the same time, it will be offset by higher export realisation demand," said Vipul Shah, Chairman of Gems and Jewellery Export Promotion Council. "I do not think we will see much positive impact as our exports are not competitive, and Chinese currency has also been devalued," EEPC India Chairman Anupam Shah said. Besides, after its biggest ever fall yesterday, the Sensex, in see-saw trading today, rebounded from one-year lows by jumping over 290 points to regain 26,000 mark and Nifty gained over 71 points on value-based buying in bluechips amid government expressing its intent to re-convene Monsoon Session to pass key legislations. "Both the government and the RBI are keeping a close watch on the situation and we expect that this development would spur us into accelerating the reforms process and making Indian economy even more robust and resilient from within," FICCI Secretary General A Didar Singh said.
SOURCE: The Economic Times
As merchandise shipments continue to fall since last December, a top official in Commerce Ministry today attributed the declines to sharp fall in fuel prices overseas, which led to a dip in petroleum product exports. Claiming that exports to the US are doing well, Commerce & Industry Ministry additional secretary J K Dadoo said trading with the European Union has been impacted due to economic woes of the 27-nation bloc. "Our exports are doing well, while the European Union is still under some pressure because of the ongoing economic pressure there, exports to the US have picked up," Dadoo told a seminar organised by Dun & Bradstreet. "Petroleum prices have been falling and that has affected our exports," he added. It can be noted that in Q1, Reliance, which alone contributes over a quarter of the country's exports reported an over 40 per cent plunge in exports. Similarly, Essar Oil too reported decline in petroleum products exports during the quarter as oil prices across the globe were falling, following demand slump in the world's largest oil consumer China and increased shale gas production in the US, which is the second largest oil market globally.
For the eighth month in a row, exports were down 10.3 per cent in July to USD 23.13 billion, hit by global slowdown and dip in crude oil prices that impacted the value of petroleum products. In July 2014, the merchandise exports had amounted to USD 25.79 billion. The last time exports registered a positive growth was in November last, when shipments expanded 7.27 per cent. Low prices of crude, metal and commodity, dip in manufacturing and slowdown in western markets are some of the factors attributing to the fall. There has been increase in demand for petroleum-based products in the domestic markets because of the deregulation of diesel prices. The oil price deregulation had brought private refiners such as Reliance Industries and Essar Oil on par with the state-owned refiners who were earlier selling diesel at subsidised rates. The move has helped private firms to reopen their retail fuel outlets and ramp up domestic retail sales of petrol and diesel.
SOURCE: The Economic Times
The government will have to accord high priority to Skill India to realise Make in India, because highly dynamic and productive sectors such as telecom and finance face skill shortage, “thereby limiting the benefit of the underlying dynamism,” chief economic advisor Arvind Subramanian has said in a document prepared for the Central Board of Excise and Customs (CBEC). In a chapter titled Indirect Tax Policy and Make in India Campaign, the CEA has argued that dynamic transformational sectors “have tended to be skill-intensive in which India does not necessarily have comparative advantage. An exception is construction which is unskilled-labour intensive and fairly dynamic”. Also, for the manufacturing sector to be transformational, it has to be formal as “unregistered manufacturing can’t be a transformational sector efforts to encourage formalisation will be critical”.
Emphasising on the need to embark on rapid skill upgradation, Subramanian said that skill-intensive sectors are dynamic and for sustaining their dynamism, there is a need for supply of skills to keep pace with the rising demand for them “otherwise even these sectors could become uncompetitive”. Further, he said that the government should make policy interventions at three levels — improving business environment by making regulations and taxation less onerous, reforming labour laws and building infrastructure; promoting manufacturing by providing subsidies, lowering cost of capital and creating SEZs; and shielding domestic manufacturing from foreign competition via tariff and local content requirement.“The effectiveness of protectionist measures is open to debate given past experiences. Moreover, they would run up against India’s external obligations under the WTO and FTAs and also undermine its openness credentials,” he said. He said that an intervention in form of doing away with all exemptions for countervailing duty (CVD) can be implemented to eliminate the negative protectionism facing Indian manufacturers and help the country without violating international obligations.
SOURCE: The Financial Express
A high-powered sub-group of chief ministers on skill development is likely to recommend exploring legislation on 'right of youth to skill development' on the lines of the one framed in Chhattisgarh. Officials said the sub-group headed by Punjab Chief Minister Parkash Singh Badal, which held its last meeting on Tuesday, could also suggest earmarking at least half the funds for corporate social responsibility (CSR), specifically for skill development activities, and the need for a long-term policy of 5-10 years on skilling. Presently, all listed companies have to set aside two per cent of their average net profit of three previous years for CSR activities. A cess could also be levied for creating a non-lapsable pool to boost skill development. Officials said, the report - which is expected to be presented to Prime Minister Narendra Modi soon - could also suggest creation of a three-tier structure for skill development at the state, district and block levels to ensure convergence of all activities. "I think it will take 15 days maximum. The committee has also entrusted me with submitting the report on their behalf. NITI Aayog will prepare the final report," Badal told reporters after the meeting. Assam Chief Minister Tarun Gogoi, who also participated in Tuesday's meeting, highlighted the need for creating infrastructure for skill development and attracting investment, especially in the North-East. Gogoi also pitched for more funds for states in the region against the backdrop of their limited revenues and lesser industrialisation.
NITI Aayog had set up the sub-group of chief ministers on skill development in March, following a decision taken at the first meeting of the Governing Council of the body on February 8 this year. The group was set up to suggest measures to strengthen the state skill development missions to boost capacity and improve standards of skilling at the state level. Apart from Badal and Gogoi, chief ministers of Goa, Gujarat, Meghalaya, Odisha, Puducherry, Tamil Nadu and Tripura are part of the sub-group. The group was also asked to examine the private sector's role in skill development and suggest ways for improved partnership in curriculum development, delivery mechanism, pedagogy, certification, trainer attachment, apprenticeship training and financing. The panel was mandated to propose measures to expand the outreach of skilling programmes, particularly in demographically advantageous states, and recommend measures for dealing with shortage of trainers, instructors and assessors. It also suggested ways to mobilise panchayats, municipalities and civil society organisations, as also the railways and armed forces to participate in these efforts. It was also entrusted with proposing ways of career guidance and post-training placement tracking and suggesting state-level innovative measures for upscaling of pilots, sharing best practices and dissemination and replication by other states/UTs.
SOURCE: The Business Standard
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$ 42.59 per barrel (bbl) on 25.08.2015. This was lower than the price of US$ 42.97 per bbl on previous publishing day of 24.08.2015.
In rupee terms, the price of Indian Basket decreased to Rs 2841.18 per bbl on 25.08.2015 as compared to Rs 2857.93 per bbl on 24.08.2015. Rupee closed weaker at Rs 66.71 per US$ on 25.08.2015 as against Rs 66.51 per US$ on 24.08.2015. The table below gives details in this regard:
|
Particulars |
Unit |
Price on August 25, 2015 (Previous trading day i.e. 24.08.2015) |
Pricing Fortnight for 16.08.2015 (July 30 to Aug 12, 2015) |
|
Crude Oil (Indian Basket) |
($/bbl) |
42.59 (42.97) |
50.68 |
|
(Rs/bbl |
2841.18 (2857.93) |
3243.52 |
|
|
Exchange Rate |
(Rs/$) |
66.71 (66.51) |
64.00 |
SOURCE: PIB
India today hoped that Egypt will offer a transparent and predictable regulatory regime for businesses to attract potential Indian investors. "In trade, we are the second largest destination of global exports from Egypt but this can be increased significantly as can our exports to Egypt," External Affairs Minister Sushma Swaraj said in an address to a group of strategic thinkers and policymakers at the Diplomatic Club here. Indian investments in Egypt is touching $3 billion, in over 50 Indian ventures. And the bilateral trade volume stood at about $5 billion. She hoped Egyptian authorities would be ready to create a favourable business environment to attract potential investors from India and offer a transparent and predictable regulatory environment. "We can work out mutually beneficial solutions to enhance two-way trade significantly by having preferential arrangements as well as better coordination," she said. She said the Joint Business Council, composed of the leading business houses on both sides will discuss the new economic partnership that provides win-win solutions.
Swaraj said Indian business leaders are prepared to step up their involvement in Egypt as they recognise the country is not only a large market but it can also become the hub for manufacturing in the region because of the trade agreements it has with Africa and Europe, Egypt. "We are ready to strengthen cooperation in the fields of textiles, apparel machinery, automotive components, chemicals, consumer goods and any other area that Egypt would prefer," she said. "Further, India has great strength in new technologies such as IT, pharmaceuticals, health and space. Our companies would be ready to share their competencies with Egypt." Swaraj said India's SME sector can contribute to Egypt's SME sector.
Swaraj hoped Egypt will create a favourable business environment to attract Indian investors and offer a transparent and predictable regulatory environment. "In short, given a suitable business environment, the sky is the limit for our economic engagement. I must also mention that sharing our best technologies and building partnerships are central to our engagement with Egypt." On transformation in India, she said, "We have seen steady progress in India over the last few decades. Our successful democracy, independent judiciary, vibrant media, and vigorous civil society rests on the basis of our Constitution, which assures the rights of citizens and the integrity of India. We celebrate our extraordinary diversity of languages, ethnicities and religions. This has nurtured tolerance in an integrated India."
SOURCE: The Economic Times
Plunging crude oil prices aren't just a boon for corporate India and the consumer. They are an invaluable opportunity for the government to push for faster reform of pricing and distribution distortions in the oil and gas sectors. The Indian basket of crude oil is trading below $43 a barrel, a seven-month low and less than half the price of July last year. At the start of the current financial year, the Union government had prepared its oil economy budget after assuming the crude oil price to be at $70 a barrel. So far the average price has been $55 a barrel - and, with global prices slated to slip to $40 a barrel, the savings for the rest of the year would be substantial. Moreover, by all accounts the convergence of global factors that has kept prices benign is likely to continue.
The beneficial effects of recent reforms to fuel pricing are already visible. In June 2010, petrol prices were deregulated. This was followed by an exercise to convert the cooking gas subsidy to a direct benefit transfer scheme that went all-India in January this year. And in October 2014, the diesel prices were deregulated. The impact on the petroleum subsidy has been significant: the budgetary outlay has more than halved in 2014-15. For the state-controlled oil marketing companies, the savings on under-recoveries - the difference between production costs and retail price - have been dramatic too. Under-recoveries dropped from Rs 1,39,869 crore in 2013-14 to Rs 72,314 crore in 2014-15. The government should now focus on the need to eliminate the remaining subsidies on petroleum products. To begin with, the subsidy on kerosene should be discontinued. Retaining subsidy on kerosene distributed through ration shops is dangerously illogical; having deregulated open-market kerosene prices in February this year, the temptation for arbitrage is high. The subsidy on cooking gas, mostly used by the better off, should also end.
Apart from the monetary gains, the elimination of subsidies has corrected the imbalance between diesel and petrol consumption in the transport sector, as is evident in lower sales of gas-guzzling sports utility vehicles; and reduced the incidence of kerosene adulteration of diesel. These advantages strengthen the case for the government to take reforms one step further to gas pricing and distribution. In a country that imports a third of its gas requirements outside the administered pricing system and urgently needs to reduce its excessive dependence on coal, a transparent and fair gas pricing regime is essential. Without it, big-ticket foreign investment will stay out, and a host of power and fertiliser plants will stay stalled. Cleaning up gas pricing might well have a positive domino effect on power and fertiliser subsidies, with which successive governments have struggled to cope. For an economy that urgently needs to address the twin challenges of accelerating investment and climate change, it makes little sense to continue with an administrative regime that is distortionary in its impact, especially when global and local factors converge to present a unique opportunity to reform.
SOURCE: The Business Standard
The Maharashtra government has framed a trade policy to retain the state’s leadership position in the retail sector. Development of retail clusters, relaxation of working-hour rules under the Shops and Establishment Act, inclusion of food and grocery retailing in the Essential Services and Maintenance Act to avoid disruption due to bandh and agitation are among the proposed changes. Retail trade would be relaxed from the provision of stocking limits under the Essential Commodities Act and the players would be exempted from the Agriculture Produce Marketing Committee (APMC) regulations, so that farmers can sell their produce directly to the retailers. Retailers would not have to pay any cess to APMC. The government plans to create retail entertainment zones. According to a draft policy, retail enterprises would be allowed to stay open every day of the year but with a rider that the employees should be granted compulsory weekly offs on a preferential basis. Retail enterprises in all goods and commodities would be allowed to function between 5 am and 11 pm. For logistics and supply purposes, these can operate between 11 pm and 5 am.
The government has sought comments and suggestions from stakeholder. A senior government official told Business Standard: “Retail enterprises will be exempted from maintaining physical records for attendance and salary and they will have an option for self-certification and filing of consolidated annual returns under 13 Acts administered by the state labour department. The retail development will be allowed higher ground coverage, up to 70 per cent, subject to setback and fire safety regulations and floor space index (FSI) norms. The floor-to-floor height will be raised to 5.5 meters and additional parking space will be allowed without FSI implication.” Further, the official said up to 50 per cent additional FSI for development of retail and shopping centre would be admissible over the base FSI, subject to payment of full applicable premium according to the prevailing ready-reckoner rates. This would enhance viability and quality of development of retail centres. The Federation of Retail Traders and welfare Association, which has around 150,000 shopkeepers in Mumbai and 200 area associations, said its was not roped in during the formulation of the draft policy. The federation president, Viren Shah, alleged that the policy provided all benefits to big corporate houses and multi-chain stores and industry houses but has neglected small traders. Shah had in a recent communication appealed to the government to redraft the policy and address the concerns of small traders.
SOURCE: The Business Standard
Turkey was named the sixth largest textile and confection exporter of the world by making around 4 percent of such exports globally in 2014, according to a note released by the Turkish Statistics Institute (TÜİK) on Aug. 25. China topped the list with 41 percent, followed by India with 5.4 percent, Italy with 5.3 percent and Germany with 5 percent. The share of the sector in Turkey’s total exports was 18.7 percent in 2014 in value with around $29.5 billion, according to the note. This rate was around 40 percent in 1995, but decreased to 26 percent in 2005 and 19.3 percent in 2010, said the note. Today, the leading exporting sector of Turkey is the automotive sector.
The 2014 exports of Turkey increased some 4 percent last year, reaching $157.6 billion, a record in the history of the modern republic, according to figures released by the Turkish Exporters’ Assembly (TİM). Car sales have been a major driving force, netting $22.3 billion, along with textiles and chemicals. There has also been a decrease in the share of textiles trade in the world. While the share of the sector was 7 percent in global trade in 1995, this rate dropped to 4.6 percent in 2014. The report also said Turkey was one of the three countries which gave a trade surplus in the sector. China’s textiles sector’s trade surplus was $264.6 billion in 2014, followed by India with around $33.7 billion and Turkey with around $16 billion. These countries were followed by the United States, Japan, Britain and Germany.
SOURCE: The Hurriyet Daily News
The Islamabad Chamber of Commerce and Industry (ICCI) has hailed the restoration of GSP Plus programme by the US for Pakistan, describing it a highly positive development for the economy of Pakistan. In a press release, it said the US decision would help in improving Pakistan's exports and reduce trade deficit. The US has renewed its GSP programme for Pakistan through Dec 31, 2017 effective retrospectively between Aug 1, 2013 and July 28, 2015. Muzzamil Hussain Sabri, President, ICCI, said that the total volume of US procurement was around $1.7 trillion and restoration of GSP Plus has created a good opportunity for Pakistani exporters to get better penetration in the huge US market. He said after the grant of GSP Plus by the European Union, Pakistani exports to EU have increased by 21 per cent and added that the concession of duty-free access to US market have created fresh prospects for further boosting our exports. He said under the GSP, Pakistan could export more than 3,500 items to the US market without paying any duties on them. However, he said most of textiles and leather products have not been included in this facility despite the fact that these are our main exports. He urged upon the government to try to convince US authorities for inclusion of textiles and leather products in GSP Plus facility so that Pakistan could realize maximum benefit from this concession.
Sabri pointed out that bilateral trade between the two countries was just $5.3 billion, which was far less than the actual potential. He said both countries should step up efforts for improving volume of two-way trade that will further strengthen mutually beneficial partnership between the two countries. He said government should fully cooperate with private sector in its efforts aimed at diversification of exports in order to get full benefit of GSP Plus program. He said government should also support exporters in capacity building so that they could compete more effectively in the international markets. He said government should ensure uninterrupted power and gas supply to industries to reap full benefits of GSP Plus concession.
SOURCE: Fibre2fashion
All Pakistan Textile Mills Association (APTMA) and other associations of textile industry wanted to enhance their exports provided government extends support and create conducive environment in this regard. "We are committed to enhancing the country's exports of textile products which had decreased by 1.76 percent in pervious fiscal year (2014-15)",Vice Chairman APTMA-Punjab Region Sheikh Muhammad Akbar told APP. He said that APTMA has reposed full confidence in the policies of the government and specially Minister for Finance, Ishaq Dar for his efforts in resolving the issues of the textile industry aiming at reducing cost of doing business of the industry.
The Vice Chairman said that APTMA believed in resolving issues peacefully with the government and through negotiation. Our genuine demands were being taken seriously by the government to resolve them. Sheikh Akbar said other leading associations of the textile industry including Pakistan Textile Exporters Association (PTEA), All Pakistan Power-looms Association (APA) and the All Pakistan Sizing Industry Association (APSIA) have decided to prefer dialogue to any other option with government and hoped that their genuine demands would be taken care of. He further vowed to enhance the regional trade and compete with other regional countries in textile sector and asked to authorities concerned to resolve the genuine problems of the industry.
Sheikh claimed that as compared to the other regional countries in Pakistan the member mills of APTMA were concerned about the high cost of doing business, including burdening of the industry with surcharges in electricity bills, and taxation on the export-oriented textile industry. He also informed that the government was aware of industry's problems as APTMA has already submitted a 7-point agenda to the Ministry of Commerce in this regard.
Vice Chairman APTMA appreciated, the government efforts to bring foreign investment in the country and said that signing of US$ 46 billion agreement China Pakistan Economic Corridor (CPEC) was a big achievement and that would support to exploring new avenues and help enhance the global and regional tarde. He maintained that smuggling and other ways of illegal trade was hurting the local industry and urged the government for resolving the issue and the problem of cost of doing business to protect the local market.
SOURCE: The Business Recorder
The prospect of a sweeping Pacific trade agreement led by the United States, and excluding China, is driving Chinese yarn companies to gain a foothold in the lucrative U.S. market. China, once the epitome of cheap mass manufacturing, textile producers from formerly low-cost nations are starting to set up shop in America. It is part of a blurring of boundaries between high- and low-cost manufacturing nations that few would have predicted a decade ago.
Textile production in China is becoming increasingly unprofitable after years of rising wages, higher energy bills and mounting logistical costs, as well as new government quotas on cotton imports. At the same time, manufacturing costs in the U.S. are becoming more competitive. In Lancaster County, where Indian Land is located, Keer has found residents desperate for work, even at depressed wages, as well as access to cheap and abundant land and energy and heavily subsidized cotton. Keer’s $218 million mill spins yarn from raw cotton to sell to textile-makers across Asia. While Keer still spins much of its yarn in China, importing the raw cotton from America that is slowly changing. The reasons for Keer to move to America were incentives, land, the environment and the workers. Also in China, the whole yarn manufacturing industry is losing money while in America it’s very different, said Zhu Shanqing, Keer’s chairman. Since Beijing and Washington resumed trade relations in the 1970s, the United States has mostly run a huge trade deficit, as Americans consumed billions of dollars in cheap electronics, apparel and other goods made in China. But surging labor and energy costs in China are eroding its competitiveness in manufacturing. According to the Boston Consulting Group, manufacturing wages adjusted for productivity have almost tripled in China over the last decade, to an estimated $12.47 an hour last year from $4.35 an hour in 2004.
In the United States, manufacturing wages adjusted for productivity have risen less than 30 percent since 2004, to $22.32 an hour, according to the consulting firm. And the higher wages for U.S. workers are offset by lower natural gas prices, as well as inexpensive cotton and tax breaks and subsidies. Today, for every $1 required to manufacture in the United States, Boston Consulting estimates that it costs 96 cents to manufacture in China. Yarn production costs in China are now 30 percent higher than in the United States, according to the International Textile Manufacturers Federation. Rising costs in China are causing a shift of some types of manufacturing to lower-cost countries like Bangladesh, India and Vietnam. In many cases, the exodus has been led by the Chinese, who have aggressively moved to set up manufacturing bases elsewhere.
In recent years, the United States has started to get a bigger piece of that exodus. From 2000 to 2014, Chinese companies invested $46 billion on new projects and acquisitions in the United States, much of it in the last five years, according to a report published in May by the Rhodium Group, a New York research firm. The Carolinas are now home to at least 20 Chinese manufacturers, including Keer and Sun Fiber, which set up a polyester fiber plant in Richburg, S.C., last year. And in Lancaster County, negotiations are underway with two more textile companies, from Taiwan and the Chinese mainland.
SOURCE: Yarns&Fibers
China’s central bank cut interest rates and lowered the amount of reserves banks must hold for the second time in two months on Tuesday, ratcheting up support for a stuttering economy and a plunging stock market that has sent shockwaves around the globe. The moves came after Chinese stocks tumbled again on Tuesday, as investors despaired at the lack of policy action from Beijing in response to recent data suggesting the downturn in the world’s second-largest economy was deepening.
The People’s Bank of China (PBOC) said it was cutting the one-year benchmark bank lending rate by 25 basis points to 4.6 per cent cutting one-year benchmark deposit rates by the same amount, and reducing reserve requirements (RRR) by 50 basis points to 18 per cent for most of big banks. Major Chinese stock indexes nosedived more than 7 per cent on Tuesday, hitting their lowest levels since December, following a more than 8 per cent plunge. The plunge had resumed last week despite Beijing’s efforts to arrest a 30 per cent crash earlier in the summer with hundreds of billions of dollars of state-backed share purchases. This time, the government appeared to be sitting on its hands until Tuesday’s response, which aimed at shoring up economic fundamentals rather than underpinning stocks. “Although this has some elements of giving comfort to the market, this is more about giving a real boost to the real economy so the government can continue to have its 7 per cent growth rate fulfilled,” said Liu Li-Gang, China economist at ANZ Bank in Hong Kong. Liu said the RRR cut was the most significant element of the PBOC action, as it would inject 650 billion yuan ($101 billion), into the economy and ease concerns of a “hard landing”.
China, one of the main engines of the world economy, has overtaken Greece at the top of the worry list of global investors, who fret its economy is growing slower than the official 7 per cent target for 2015. The CSI300 index of the largest listed companies in Shanghai and Shenzhen dropped 7.1 per cent on Tuesday, while the Shanghai Composite Index fell 7.6 per cent to close below the psychologically significant 3,000-point level. Underscoring the panic gripping the retail investors who dominate China’s stock markets, all index futures contracts fell by the maximum 10 per cent daily limit, pointing to expectations of even deeper losses. Though the PBOC move came after domestic markets had closed, stock markets in Europe jumped, and US stock futures were also given a lift.
After the turmoil in China rocked world equity and commodity markets on Monday, policymakers elsewhere in Asia sought to soothe fears about the broader impact on the global economy. “I think it’s important that people don’t hyperventilate about these types of things,” said Australian Prime Minister Tony Abbott, whose country is heavily exposed to China, the biggest consumer of its commodity exports. “It is not unusual to see stock market corrections. It is not unusual to see bubbles burst in particular markets and for there to be some flow-on effect in other stock markets, but the fundamentals are sound.” This week’s steep declines have taken Chinese stocks into negative territory for the year to date, although Leland Miller, president of China Beige Book International, pointed out that Chinese equity markets have shown little correlation with the real economy - either on the way up or the way down. “Previous boom-bust cycles in Chinese stocks have also shown little or no connection to (apparent) economic performance,” said Miller, whose firm provides anecdotal survey information about China based on the Fed’s “Beige Book” model.
SOURCE: The Business Standard
Punjab Industrial Estates (PIE) Development and Management Company Chairman SM Tanveer on Tuesday said that a contract had been signed with the China Textile Network Company Limited for planning and designing of the Quaid-e-Azam Apparel Park. According to the contract, detailed designing of infrastructure works, power plant, grid stations and Combined Effluent Treatment Plant (CETP) for establishment of the Quaid-e-Azam Apparel Park on the Motorway-2 near Sheikhupura would be carried out. The company’s Board of Directors also approved the Chinese company as a consultant for the apparel park, he said. The Punjab Industrial Estates was actively pursuing the dream of Punjab Chief Minister Shahbaz Sharif of turning it into the most modern project of its kind in South Asia, he said. He said that the project would provide all necessary facilities to textile and garments sector under one-roof as well as generate thousands of job opportunities and increase exports, would ultimately strengthen national economy. The Chinese company is leading multinational company and specialised in apparel and textile industry. The company has already designed the mega apparel/industrial projects in China such as Suzhou Textile and Clothing Industrial Base having 4,000 acres area, establishment of the Textile Industrial Park in Xianyang having an area of 2,500 acres and establishment of light industrial park in the Inner Mongolia region. Tanveer hoped that the China Textile Network Company would also serve in marketing and promotion of the Quaid-e-Azam Apparel Park project worldwide.
SOURCE: The Daily Times
Falling crude oil prices that have touched a six-and-a-half year low have cast a shadow on the viability of investment in unconventional energy sources. From shale assets, in which Indian companies made a debut when oil prices had soared to more than $100 a barrel, to solar power, where technology costs overbear the zero cost of fuel, analysts are sceptical about the way forward. At present, Brent crude is hovering around $44 a barrel. Analysts say it is too low for oil companies to make economic sense by investing in unconventional energy sources, though shale oil and gas have generated considerable interest from Indian companies. Reliance Industries Ltd (RIL) and state-run Indian Oil Corp Ltd (IOCL), GAIL (India) Ltd, Oil India Ltd, have participating interest in US and Canadian shale gas assets. These companies had farmed into these assets when oil was trading well above $100 a barrel. "The shale gas assets realisation is now negative for Reliance Industries but not for the state-run oil companies as they are still to make some significant investments," said Gagan Dixit, assistant vice-president, Quant Capital.
Falling crude oil prices have already upset RIL's calculations turning its returns negative on average capital employed in its shale gas business. RIL has, so far, invested $8.5 billion in its three shale gas joint ventures in the US. According to an analysis by British bank Barclays, the average return ratios of RIL's US shale assets have declined by two per cent in the June quarter. The returns were earlier estimated to hit double digits by 2021. RIL, in its first quarter report, said it is cutting down on its capital expenditure to $275 million. "We have responded by reducing capital expenditure across all our joint ventures and were able to reduce operating costs by 25-30 per cent, which will improve margins. The decision to divest our interest in EFS (Eagle Ford) Midstream for over $1 billion has been guided by our motive to maximise returns," Mukesh Ambani, chairman and managing director, Reliance Industries, had said during the company's annual general meeting on June 12. GAIL India, through GAIL Global (USA) Inc, has made investments in the Eagle Ford shale gas asset in Texas and holds a 20 per cent participating interest in the joint venture with Carrizo Oil & Gas Inc. "These investments are never made with a short-term view. It would be fair to assess our return on investments accordingly. Besides, a drop in crude oil prices is not here to stay," said a senior executive from GAIL India.
In 2015, many oil majors slashed their capital expenditures. The falling oil prices also affected the rig count in the US, which witnessed a fall since December 2014. However, latest reports have shown that the US shale oil producers have adapted to lower oil prices through optimising costs of production. Companies, however, are still hopeful that oil prices will rise in the long term. In new energy power sources of solar and wind, however, the trend is slightly different. The fluctuating diesel prices are pushing the case for solar based off-grid solutions replacing diesel in agriculture, commercial sites and telecom towers. At current price of diesel, a unit of power is produced at Rs 15-17 a unit, meanwhile solar is at Rs 6-7 per unit. With such a differential, non-electrified rural areas are increasingly switching to solar. The cost of solar power generation has seen a 70 per cent decline from 2010 when solar capacity in the country was mere 2Mw as against 4,000 Mw now.
SOURCE: The Business Standard
