The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 8 SEPTEMBER, 2015

NATIONAL

INTERNATIONAL

 

Textile Raw Material Price 2015-09-07

Item

Price

Unit

Fluctuation

PSF

1131.05

USD/Ton

0%

VSF

2076.73

USD/Ton

0%

ASF

2415.26

USD/Ton

0%

Polyester POY

1107.48

USD/Ton

0%

Nylon FDY

2529.15

USD/Ton

0%

40D Spandex

5655.24

USD/Ton

0%

Nylon DTY

2780.49

USD/Ton

0%

Viscose Long Filament

5812.33

USD/Ton

0%

Polyester DTY

1374.54

USD/Ton

0%

Nylon POY

2340.64

USD/Ton

-1.32%

Acrylic Top 3D

2603.77

USD/Ton

0%

Polyester FDY

1209.59

USD/Ton

0%

30S Spun Rayon Yarn

2749.08

USD/Ton

0.57%

32S Polyester Yarn

1775.12

USD/Ton

0.89%

45S T/C Yarn

2780.49

USD/Ton

0%

45S Polyester Yarn

1916.50

USD/Ton

0%

T/C Yarn 65/35 32S

2340.64

USD/Ton

0%

40S Rayon Yarn

2890.46

USD/Ton

0%

T/R Yarn 65/35 32S

2560.57

USD/Ton

0%

10S Denim Fabric

1.10

USD/Meter

0%

32S Twill Fabric

0.93

USD/Meter

0%

40S Combed Poplin

1.02

USD/Meter

0%

30S Rayon Fabric

0.74

USD/Meter

0%

45S T/C Fabric

0.75

USD/Meter

0%

Source : Global Textiles

 

Note: The above prices are Chinese Price (1 CNY = 0.15709 USD dtd.09/07/2015)

The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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Spinning units seek level field, lower duty on synthetic fibres

The South India Spinners Association (SISPA) has decided to draw the attention of the Centre and State governments to provide a level playing field and enhance competitiveness of the smaller spinning units in the State. At the 24th Annual general meeting of the association, SISPA President Varatharajan appealed to the Centre to bring down the duty on synthetic fibres (presently at 12.36 per cent) on par with cotton.

“Synthetic yarn spinning units faced inconsistent supply of synthetic fibres as this is supplied by three manufacturers – Reliance Industries, Indo Rama Synthetics and Bombay Dyeing. Mills which need to import the fibre are forced to pay 23 per cent duty, making the yarn less competitive in the domestic market. There is, therefore, an urgent need to reduce the duty on par with cotton,” the SISPA President said and pointed out that the country is positioned well to manufacture and supply yarn and fabrics. But inadequate export incentives hampered the trade. The association has resolved to request the Centre to provide an export incentive of 7 per cent to encourage consistent and substantial export volumes. Varatharajan reiterated a long-pending demand towards reduction of the Hank Yarn Obligation from 40 per cent to 10 per cent and the need to redirect Cotton Corporation of India to function as a bridge between the cotton farmer and the mill sector and not a TRADING  body. Reverting to State-specific issues, the association has appealed to the Tamil Nadu government to reduce VAT on cotton, cotton yarn and synthetic yarn from 5 per cent to 2 per cent, abolish the one per cent cess on sale of cotton and cotton waste and facilitate marine discharge by establishing processing centres in coastal areas for cost-effective processing of yarn, fabrics and finished goods.

Source: The Hindu Business Line

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Spinners ask government to provide capital subsidy

Spinners are planning to reduce the cost of energy consumed by purchasing new energy efficient motors and energy saving electrical equipment. Therefore, the South India Spinners’ Association has proposed the State Government to provide capital subsidy on these energy saving machines. The Association has come up with various other resolutions in their annual meeting and saving on energy consumed was one of them. It was also decided to request the Government to facilitate setting up marine discharge facilities in the coastal areas for the benefit of the textile processing sector. Due to shortage of sufficient processing facilities within the State, a large quantity of cotton yarn and fabric is processed in the northern States. According to the association, the Cotton Corporation of India should facilitate direct selling of cotton to the spinning mills as the traders and mediators are now purchasing huge quantities and hence mills are not able to get fair prices. The association expects the Union Government to support the export of yarn and fabric so that the manufacturers can grab opportunities in the global market. Hank yarn obligation should be reduced to 10 per cent from 40 per cent as its consumption is reducing in the country.

Source : Yarn and fibre

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Yarnex 2015 coming up soon in textile hub of South India

The seventh edition of India International Yarn Exhibition - Yarnex 2015 , the only sourcing event of its kind to be held in the textile hub of South India that will bring together under one roof the manufacturers of yarns, both natural and man-made fiber types, from across the country and overseas.  Yarnex will see 51 exhibitors displaying textile products like value-added fibres and yarns. Supplier of services related to the textile and apparel industry will be also participating in the show.  At Yarnex, visitors will get the opportunity to see spandex fibres, BCI yarns, organic yarns, colour mélange and dyed yarns, modal yarns, recycled polyester yarns, metallic yarns, iridescent yarns, antique yarns, fancy yarns, etc.  Among companies exhibiting at Yarnex are; Reliance Industries, Indian Rayon, Indorama Industries, Grasim Industries, RSWM Ltd, Amarjothi Spinning, Brightex Corporation from Japan, Damodar Industries, etc.

According to the organisers, YARNEX 2015 will provide access to high quality buyers from Tirupur, Coimbatore, Salem, Karur, Erode, Madurai, Komarapalayam, Mumbai, Delhi, Ahmedabad, Gurgaon, Bangalore, Hyderabad in India and the USA, Myanmar, Sir Lanka, UK, Italy, China Thailand and Middle East from overseas.  YARNEX comes from the S S Textile Media stable, an organization that has been successfully conducting the Fabrics & Accessories Trade Show in Bangalore for 10 years and has added HOMTEX – the India International Home Textile Exhibition in 2012 to its portfolio. Yarnex will be taking off from September 10-12, 2015, at the India Knit Fair Complex in Tirupur.

Source : Yarn and fibre

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PSTPA urges State govt to enforce uniform compliance by all dyeing and bleaching units

Textile units operating out of Perundurai SIPCOT Industrial Growth Centre bewailing over losing out on competitiveness in pricing of products due to enormous expenditure involved in complying with the Zero Liquid Discharge (ZID) norms. Of the nearly 50 textile processing units in the SIPCOT complex, about 15 industries closed down operations over the last four years after incurring losses.  An equal number among the existing units find themselves in a similar predicament, as retaining customer base in export market is pretty difficult due to disadvantageous pricing, S. Selvaraj, joint secretary, Perundurai SIPCOT Textiles Processors Association (PSTPA), said.  While on the one hand Tamil Nadu has pioneered implementation of Zero Liquid Discharge (ZLD) system for industrial units generating harmful effluents,

Mr. Selvaraj said that they lose out as the units that do not comply with ZLD norms are able to sell their products for Rs. 15 to Rs. 20 lesser per kg in the export market. It is difficult to survive in the absence of a level-playing field. The units exiting from SIPCOT are moving to other States where the norms are not so stern.  Industrial units in SIPCOT are now in the process of raising the height of the solar evaporators from the ground level by a few feet. The Tamil Nadu Pollution Control Board had directed the units to do so to rule out mixing of hazardous waste in the form of the end-salt with soil.

The State Government has offered to establish Common Effluent Treatment Plants by announcing a Rs. 700 crore package for the dyeing and bleaching units elsewhere in Erode and neighbouring districts that have been releasing their untreated effluent into water bodies. The Tamil Nadu Water Investment Corporation that would be implementing the Rs. 700 crore project for CETPs is learnt to have given consent to visit SIPCOT next week to study scope for investing in a common facility for Reject Management benefitting the existing 35 textile units.

The PSTPA has urged the State Government to enforce uniform compliance by all dyeing and bleaching industries. The PSTPA has also emphasised in its appeal to the Government, there must also be power concession for running the biological treatment system that needs to be operated round-the-clock. Likewise, subsidies given to CETPs must be also extended to individual ETPs.

Source : Yarn and fibre

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No big yuan effect on India, says economist

Policy makers in India looking to take advantage of the crisis in China may be in for disappointment, if arguments put for- ward by Andrew Freris, chief executive officer of Econosis Advisory, a Hong Kong-based advisory firm, prove true. He says India should rather concentrate on market reforms, infrastructure Investments and a substantial revamp of elementary education. These reforms, particularly in elementary education, may not have an immediate impact, but will take years to yield results, he cautions.  Freris argues "there is nothing specific here that could benefit India in terms of pol-icy specifically designed to take advantage of China's problems". He argues that foreigners cannot be attracted to Indian equity markets because of the poor state of the Chinese market. "Foreign investors will buy Indian paper on the basis of its valuation and on the basis of macroeconomic expectations, and not because China is having a crisis," he says.  The recent devaluation of the yuan sent shock waves through global markets. Analysts contend that China is devaluing its currency to improve its export competitiveness. This move, many argue, will have far-reaching ramifications for countries like India.  However, devaluation will have a limited impact on India's export competitiveness because of the little overlap between the countries. The impact of a devaluation will be modest on India's exports says Freris. "Opportunities for India to benefit from, or be harmed by the current woes of China's equity market, are very limited," he says in a research note.This is because of two reasons. First, India and China have little export product overlap and second the yuan devaluation is too small to make a significant difference.  The author argues the "recent devaluation has been massively misinterpreted as an effort to make Chinese exports more competitive". The larger issue that he raises is "how Indian exports may compete more effectively forgetting this minor 3 per cent adjustment in the exchange rate".  Even if the exchange rate was to change in favour of India, Freris says "it would not make India more competitive vis-à-vis China simply because of the lack of product overlaps". He says petroleum products and jewellery account for roughly 30 per cent of India's exports. In contrast, over 40 per cent of China's exports are mechanical and electronic goods. Further, unlike India, where agricultural products account for 10 per cent of exports, China exports little or no agricultural produce. This lack of product overlap reduces potential gains or losses on account of fluctuations in the value of the yuan.  Surprisingly though, he discounts sectors such as machinery, metal products, fabrics, textiles, electronics and plastics, arguing these are "subsidiary areas for both economies compared to the main export sectors".

He argues "India's growth benefits infinitely more by policies of market liberalisation, infrastructure investment, and a massive overhaul of elementary education. None of these policies' suggestions will have an immediate impact on growth. Indeed one should talk of decades rather than years, especially over education policy".  On the underlying fundamentals of the Chinese economy, Freris argues the country will not face a severe crisis but is rather going through a cyclical downturn. This view has been challenged by several analysts, many of whom argue that actual growth is much lower than official estimates.

Source: The Business Standard

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Indian rupee at fresh two-year low against US dollar, still doing better among BRICS

The rupee hit a fresh two-year low of 66.83/$ on Monday but was still the strongest currency among BRICS nations and also among many other emerging market currencies even though it has fallen more than 5% so far in 2015. The Indian currency shed 0.54% to hit an intraday low of 66.86/$ before settling at 66.83/$ for the session on the back of strong dollar demand from banks in anticipation of outflows as local shares traded in the red. The 30-share Sensex ended at a 15-month low while the 50-share Nifty ended at the weakest level in two months. Lack of clarity on the US Federal Reserve’s likely move next week at its rate-setting meeting has kept most currencies, including the rupee, weak against the dollar. Ananth Narayan G, regional head of financial markets for South Asia at Standard Chartered Bank, notes that the latest jobs data from the US did little to provide clarity. “The data was mixed and that was a bit of disappointment,” Narayan said.  On Friday, data showed that the US economy added 173,000 individuals on its payroll in August, far lower than most market estimates of an addition of more than 200,000. However, unemployment rate for the largest economy fell to its lowest since January 2013. The imminent rate move of the Fed along with China’s devaluation of the yuan in early August has dragged currencies across geographies.  Back home, the rupee has lost 5.56% since January with bulk of that depreciation (around 4%) over the last one month triggered by China’s devaluation of the yuan.  In the last one month, however, its BRICS counterparts barring Chinese yuan — Brazilian real, Russian ruble and South African rand — all have depreciated more. Other emerging market currencies such as Malaysian ringgit, Indonesian rupiah and Turkish lira too have fallen by more than 5%. Economists expect the rupee to trade in a range going ahead. “Given the ample foreign exchange reserves to combat the volatility in the rupee — the Reserve Bank of India had close to $354 billion in foreign exchange reserves as of 14 August 2015 — the rupee will be range bound,” said CRISIL in a report. Part of the rupee’s outperformance relative to most of its emerging market peers comes from the fact that the Reserve Bank of India has been intervening in the market to curb volatility.  The fall in foreign exchange assets during August indicates the central bank’s possible interventions. Currency dealers said that on Monday a handful of public sector banks were seen selling dollars around 66.80/$ but it could not be confirmed whether the selling was at the behest of the RBI. Further, foreign portfolio investors have not been fleeing India like they did in 2013 and have been net investors in debt for up to $46 million so far this month. The confidence of investors comes from the fact that the country’s reserves are near all-time highs and the central bank has assured at regular intervals that it would not hesitate to step in to curb volatility of the rupee.

SOURCE: The Financial Express

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India's Q1 GDP grows 7%, slowdown triggers concern

India's economy grew 7 per cent in the first quarter of the current financial year, well below expectations and slower than the preceding three-month period, denting the Modi government's optimism about a strong recovery and adding to pressure on the central bank to cut rates. The core sector index which measures the output of eight infrastructure industries rose just 1.1 per cent in July, pointing to the challenge facing the government in boosting investment and growth.   A relatively deficient monsoon with 11 per cent shortfall has raised concerns about rural demand with the festive season round the corner. GDP at current prices, which includes the effects of inflation, was up only 8.8 per cent compared with 13.4 per cent in same quarter last year, suggesting that there are hardly any inflation pressures.

The slowdown is consistent with private forecasts that see India slowing from 7.3 per cent growth in FY15 because of the deceleration in the Chinese economy that's likely to pull down overall global growth. Ratings agency Moody's has already lowered its growth estimate for the year to 7 per cent from 7.5 per cent estimated earlier, citing concerns on reforms and other factors.  Commenting on the latest GDP data, Federation of Indian Export Organisations (FIEO) Pesident S C Ralhan said that decline in merchandise exports by 16.75 per cent (contributing to about 15 per cent of GDP) and service exports by 7.08 per cent (with a share of about 7.5 per cent in GDP) had pulled down the GDP growth by over 3 per cent.  Ralhan said that achieving 8 per cent GDP growth in 2015-16 would be possible only if exports show an overall growth of at least 10 per cent during this fiscal, which at the moment looks challenging as first four months have produced negative results. Apex industry body ASSOCHAM has also expressed concern over the latest GDP figure.  “Agriculture, mining, manufacturing, electricity, gas, water supply and other utility services remain to be key areas of concern as the gross value added for all these sectors has slowed down in Q1 of 2015-16 vis-à-Vis Q1 of 2014-15, though some progress is seen in trade, hotels and communications and construction sectors,” said Mr Rana Kapoor, president of The Associated Chambers of Commerce and Industry of India (ASSOCHAM) He also called for a rate cut by the Reserve Bank of India. “Easing of monetary conditions would lead to a lower lending rate framework that would aid both consumption and investment demand, therefore the RBI in its upcoming bi-monthly monetary policy must give due consideration to reviving the industrial growth in the country,” he said.  ASSOCHAM also expressed concern over anticipated slow down in pace of reforms. “The Government needs to keep on pushing at more ground level reforms and improve implementation so as to realize the economy's true potential,” Kapoor said. (SH)

Source : Fibre2fashon

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Finance Secretary holds a review meeting with the Secretaries and Chief Economic Adviser of the Ministry of Finance

Takes Stock of work in progress and Pending Policy Issues; Also reviews issues relating to Budgetary Exercise for the General Budget 2016-17. The Finance Secretary Shri Ratan P. Watal held a coordination cum review meeting with the Secretaries and Chief Economic Adviser of the Ministry of Finance here today. The Finance Secretary took stock of the work in progress and discussed pending policy issues in different Departments of the Ministry. He called for expeditious action in such matters. This was the First Meeting taken by Shri Watal after becoming the Finance Secretary at the beginning of this month.  The aforesaid meeting also discussed issues relating to better coordination among all the Departments of the Ministry especially in view of Budgetary exercise which has already started. Such Meetings will be now held on regular basis and to begin with, on weekly basis. The meeting was attended among others by Shri Shaktikanta Das, Secretary (DEA), Dr. Hasmukh Adhia, Revenue Secretary, Ms. Anjuly Chib Duggal, Secretary (DFS), Ms. Aradhana Johri, Secretary (Disinvestment) and Dr. Arvind Subramanian, Chief Economic Adviser (CEA).

Source: PIB

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Firms with annual turnover of Rs 25 lakh might not attract GST

Companies with an annual turnover up to Rs 25 lakh might be exempted from the proposed national goods and services tax (GST). The Centre and states are likely to settle for this threshold as they finalise the GST laws.  According to finance ministry officials, the draft of these laws is expected to be ready by the end of this month. The Centre and states are working on a mechanism to avoid dual scrutiny of companies by them. "The thinking now is that all legal entities with an annual turnover of up to Rs 25 lakh will be completely exempt. This will be applicable to one TIN (Taxpayer Identification Number)," said a ministry official.  The government is looking to reconvene Parliament's monsoon session to get the Constitutional amendment Bill on GST passed in the Rajya Sabha. Three Bills - on the Centre's GST (CGST), states' GST and Integrated GST -would come up after the Constitutional Bill is cleared. Work on the drafts is on.  States wanted a threshold of Rs 10 lakh to protect their revenue, while the Centre has assured them full compensation for five years. Besides, firms with an annual turnover between Rs 25 lakh and Rs 75 lakh will have an option to pay a flat rate of one per cent or GST rate. If they decide to opt for one per cent rate, firms will not get input credits because of which many, particularly dealers, may choose the GST rate.The exemption limit from value added tax and service tax across states - except the North-East - is close to Rs 10 lakh turnover. "There will be an impact on revenue but it will depend on how many under the Rs 25 lakh to Rs 75 lakh annual turnover bracket opt for the one per cent rate. If 60-70 per cent opt for it, there will be loss of revenue for states but they will also get compensated by the Centre," said Bipin Sapra, tax partner, EY. From the manufacturing point of view, it was important to keep the exemption limit higher, he added. While these are likely to be part of the GST laws, a final decision on this is to be taken by the yet-unformed GST Council. This is to be constituted within two months of enacting the Constitution amendment. It would comprise the Union and state finance ministers and will be empowered to take key decisions on GST.

The idea is that entities with a turnover of up to Rs 75 lakh will not attract any checks or audits from either the state or the Centre. The Centre will give states a free run on compliance checks for companies with annual turnover above Rs 75 lakh and up to Rs 1.5 crore. "Here, the Centre will only do online scrutiny. And, if states detect non-compliance with respect to CGST, only the Centre will issue a notice. States cannot issue a notice on our behalf," said an official. However, in case of companies with annual turnover of more than Rs 1.5 crore, there will be concurrent audits by both the state government and the Centre.  "The government is still discussing a mechanism of a risk-based selection so that the checks by Centre and states do not overlap," said the official.  The government on Sunday made a renewed appeal to Opposition parties to help pass the Constitutional amendment through an extended monsoon session. It is vital that this be cleared at the earliest for the government to stick to the GST implementation timeline of April 1, 2016. The three draft legislations will lay down the fine print of the uniform indirect tax regime.

Source: The Business Standard

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Global crude oil price of Indian Basket was US$ 46.69 per bbl on 07.09.2015

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$ 46.69 per barrel (bbl) on 07.09.2015. This was lower than the price of US$ 48.16 per bbl on previous publishing day of 04.09.2015. In rupee terms, the price of Indian Basket decreased to Rs 3116.09 per bbl on 07.09.2015 as compared to Rs 3197.82 per bbl on 04.09.2015. Rupee closed weaker at Rs 66.74 per US$ on 07.09.2015 as against Rs 66.40 per US$ on 04.09.2015. The table below gives details in this regard:

Particulars

Unit

Price on September 07, 2015 (Previous trading day i.e. 04.09.2015)

Pricing Fortnight for 01.09.2015

(Aug 13 to Aug 27, 2015)

Crude Oil (Indian Basket)

($/bbl)

46.69              (48.16)

46.03

(Rs/bbl

3116.09          (3197.82)

3024.17

Exchange Rate

(Rs/$)

66.74              (66.40)

65.70

Source : Ministry of textiles

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World textile trade takes a hit, exports and imports slump

World export trade in textile and clothing declined by 7.32 per cent from $316.06 billion during Jan-May 2014 to $292.93 billion during Jan-May 2015, the Cotton Textiles Export Promotion Council (Texprocil) said in its Overview of Current Trade in Textiles & Clothing. The document cites figures from Global Trade Information Services, Inc. (GTIS) Geneva, a leading supplier of international merchandise trade data.  Amongst the top ten markets, Vietnam reported the highest growth of 10.04 per cent followed by Bangladesh reporting second highest growth rate of 2.17 per cent during Jan-May 2015. India reported a decline of 7.58 per cent with exports falling from $17.39 billion in Jan-May 2014 to $16.07 billion in Jan-May 2015 China being the largest exporter with $99.76 billion showed a decline of 3.91 per cent followed by Italy with 17.44 per cent.

Textiles and clothing import trade reported a decline of 7.37 per cent from $274.42 billion during Jan-May 2014 to $254.19 billion during Jan-May 2015. During the period Jan-May 2015, USA was the largest importer and recorded a growth of 3.99 per cent. In Europe, Germany, UK , France and Italy reported negative growth. Vietnam which ranked 8th on the list, recorded a growth of 2.39 per cent during Jan-May 2015. (SH)

Source : Fibre2fashion

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US remains largest export market of Vietnamese garment and textile products

The U.S. has remained Vietnam’s largest export market among 200 countries and territories worldwide, a position it took over from the EU, which had held it since 2012, at the end of last year. According to official figures from the General Statistics Office (GSO), Vietnam earned $28.5 billion from shipments to the U.S. in 2014, up 19.6 percent compared with 2013. Vietnam ran a US$17.2 billion trade surplus with the U.S. in the first eight months of this year, a 20.3 percent rise from $14.3 billion the country earned in the same period last year.  The Southeast Asian nation raked in $22.1 billion from exports to the U.S., while spending $4.9 on importing American products during the eight-month period, the GSO said.  Of the nearly 40 groups of exported goods shipped to the U.S., garment-textile generated the largest turnover, nearly $6.3 billion, accounting for 33.4 percent of the total. Shipments of Vietnamese garment and textile products to the U.S. are expected to top $11 billion this year, a 12.24 percent year-on-year rise, the Vietnam Textile and Apparel Association said in a report in July

The group of fabrics may have the chance to grow in the coming time after Vietnam signs the Trans-Pacific Partnership (TPP) free trade agreement. The agreement is a proposed regional free trade pact aimed at eliminating tariffs and lowering non-tariff barriers that is being negotiated by 12 countries throughout the Asia-Pacific region, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. However, joining the TPP will also cause a new challenge for Vietnamese textile and garment businesses, as the Southeast Asian country will have to follow the “yarn forward rule of origin,” which means that all items in a garment from the yarn stage onward must be made in one of the countries party to the pact, according to the American Chamber of Commerce in Vietnam.  Currently, about 60-90 percent of garment and textile materials in Vietnam come from non-TPP markets like China, Taiwan, and India.

Source : Yarn and fibre

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Algeria, Turkey signs partnership agreement on integrated textile complex project

Algerian-Turkish partnership agreement was signed on integrated textile complex project in south-western province, Relizane (300 km southwest of Algiers) on Thursday. The Minister of Industry and Mining Abdeslam Bouchouareb chaired the signing ceremony. The agreement was signed by the chief executive officer of the national public group of clothing industry CH, Mohamed Bouchama, and the CEO of the Turkish group, Taypa Mesut Toprak, specializing in textile.  The complex project estimated at an investment DZD150 billion, to be launched next November, will include eight integrated plants to specialize in the manufacturing of material and hosiery items, a training school in textile trades as well as a business centre and various other facilities. The project will be delivered in 36 months from its launch to meet the needs of national market. Of the total production, forty percent will go to the domestic market while 60 percent will be exported. The project is also expected to create 25,000 jobs.

Source : Yarn and fibre

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Oil falls more than 3% on oversupply

Oil fell more than 3 per cent on Monday, hit by weaker Chinese equities and record North Sea crude production data that added to global oversupply concerns. The US Labor Day holiday helped keepTRADE thin. Brent crude for October was down $1.60 at $48.01 a barrel by 1545 GMT, having reached an intraday low of $47.70. US crude for October was down $1.45 at $44.60, having reached an intraday low of $44.30.

Source: The Business Standard

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Saudi Arabia to allow full foreign ownership in retail

Saudi Arabia will ease restrictions on foreign investors to let them own 100 percent of retail and WHOLESALE businesses, the government said on Sunday as the world’s topOIL exporter embarks on a new drive to attract Investment and diversify its economy. The Saudi Arabian General Investment Authority (SAGIA) announced the reform to U.S. businessmen during a visit by King Salman to Washington, adding that the changes would be subject to conditions, which would be revealed at a later stage. The increase in maximum foreign ownership from the present level of up to 75 percent for retail and wholesale businesses comes after tumbling oil prices have slashed Saudi government revenues. SAGIA wants to attract more high-end investors into the kingdom to create white collar or technical jobs for Saudi citizens, introduce new technology and maintain economic growth – goals that may become increasingly important if oil prices stay low.

The agency is streamlining its investment rules and visa regulations for investors, it said, adding that the new regime would come into force next year. Meanwhile, a Saudi official said Deputy Crown Prince Mohammed bin Salman had told U.S. businessmen that state-owned OIL giant Saudi Aramco would open a series of new projects in refining, distribution and support services to foreign participation. The official added that there might also be new opportunities for foreign banks to enter the kingdom, as most banks already operating there were nearing maximum credit limits imposed by the central bank. Banking subsectors such as services for individuals and smaller companies would be among areas for new opportunities, the official said, adding that U.S. banks entering the kingdom could have a Market share of $150 billion in the next five to 10 years. He did not elaborate on how this figure would be attained. New foreign direct investment in Saudi Arabia fell to $9.3 billion in 2013, the most recent year for which data is available, from $12.2 billion in 2012, figures from the United Nations Conference on Trade and Development show.  Finance Minister Ibrahim Alassaf said at the weekend that the government was cutting unnecessary expenses and delaying some projects to compensate for low oil prices, though projects that are important for the economy would go ahead.

Source: The Financial Express

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