NATIONAL

• Cheap dumping from China troubles Indian textile industry
• Mobile app designed to help Tirupur yarn spinners to crack demand-supply challenges
• Exports slump 20.6% in August on shrinking global demand
• Karnataka clears Toyota project for textile machinery unit
• Govt opens FDI door wider by allowing partly-paid shares
• Global crude oil price of Indian Basket was US$ 44.18 per bbl on 15.09.2015

INTERNATIONAL

• Rule of origin puts Vietnamese garment industry in a spot
• Pak business community hails rate cut
• Textile industry reproaches the gas suspension decision

Textile Raw Material Price 2015-09-15

Source : Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.15679 USD dtd. 15/09/2015)

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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Cheap dumping from China troubles Indian textile industry

The leading textile players are seeking protection for the textile industry from cheap Chinese dumping in India. About 60 per cent of dumping in India is claimed to be done from China, and unofficial estimate of this trade size ranges from 20-40 per cent of the USD 105 billion domestic textile industry.  Udani's firm Kaytee Corporation is one of the largest garment exporters to American retail chains. Udani said that the domestic industry is being harmed by apparel and fabric dumping from China since long and the government should take measures to properly regulate the inspection of the country-of-origin of goods coming to India. He added that once China realizes that no more export can be done in India as per official limit, it ships the same goods to other countries like Hong Kong, Vietnam, Bangladesh and Cambodia for re-shipping it to India to avoid customs inspections. Other large textile makers like Birla Cellulose, Century and many more are also impacted with increased Chinese dumping.  Rajeev Gopal, CMO of Birla Cellulose, the largest viscose staple fibre (VSF) producer in the world, said that until the issue of Chinese and Indonesian dumping in India is resolved, the plan to help propel the local manufacturers will fail.  Cheap dumping of products across the value chain from fibres to yarns to fabrics is claimed to impact the VSF industry thereby affecting the domestic consumption by 8-10 per cent because of such imports.

Source : Yarn and fibre

Mobile app designed to help Tirupur yarn spinners to crack demand-supply challenges

Spinners in Tamil Nadu's textile hub Tirupur have faced acute losses recently as their supplies of polyester and cotton yarn failed to find purchasers. They had to effect a 30% production cut to buttress prices. To help them crack the demand-supply challenges they have designed a mobile app. The app provides a platform for mills to update the last-sold price of their yarn, stock position and related market data.  Prabhu Damodharan, secretary of Indian Texpre neurs Federation, who are putting into paces this idea in the Tirupur market said that the larger issues of global trade are cyclical and beyond their scope of problem-solving, but there is a quick-fix on the domestic front. Historically, the only way their mills came to know of the prevailing rates were the good old word-of-mouth transmission.   The entrepreneur consortium has carved out 80 mills operating in polyester and polyester yarn with a capacity of 20-lakh spindles for this pilot. The survey will be conducted periodically in a month to arrive at a standard price list of yarn from Tamil Nadu mills, which holds at a huge sway in the northern yarn markets. Deepa Lakshmi, joint managing director at Ellen Textiles in Coimbatore said that if she is selling for, say Rs 190 a kg, and a neighbouring mill did it at Rs 200, it means someone is fleecing her Rs 10 for every kilogram she sells. This application can plug that hole in the system.To prevent any animosity between mills, the application protects the identity when data about prices and stock are put in. What is available for every one to see are pure statistics such as average yarn selling price over the last week and average stock positions. Entrepreneurs have begun adding mills from Andhra to the application to widen limits of the survey. The results of this exercise have begun to show. In last four months, excess capacity gave buyers the upper hand and led prices of polyester cotton yarn down from Rs 185kg. Over the past few weeks in operation, the new system has helped Tirupur mills to find buyers for their yarn as high as Rs 161 kg. The average hovers around Rs 155kg now.  For mill owners often boggled by the complexity of the market, the app is a guide.

Source : Yarn and fibre

Exports slump 20.6% in August on shrinking global demand

Export growth plunged 20.66 per cent in August to $21.26 billion — the ninth straight month of fall — as most major export items, including petroleum products, engineering goods, electronics, leather products and readymade garments, took a beating.  “The fall in exports is becoming sharper month-on-month, signalling worsening of global market conditions marked by the turbulence in China,” pointed out Anupam Shah from the Engineering Export Promotion Council.  Imports during the month fell 9.95 per cent to $33.74 billion, mainly due to a sharp decrease in the oil bill owing to low global prices. Items such as project goods, chemicals, plastics, coal and coke, pearls and precious stones also declined. Gold imports increased 140 per cent to $4.95 billion even as the government put in place restrictions to check low-duty imports under the free trade agreement with the 10-member Asean bloc.

Trade deficit up

The trade deficit stood at $12.47 billion compared with $10.66 billion in August 2014, estimates released by the Commerce Ministry show.  Exporters called for immediate intervention by Prime Minister Narendra Modi and Commerce Minister Nirmala Sitharaman. “The Prime Minister and the Commerce Minister should hold consultations with export bodies to draw a roadmap for exports in such challenging times when reaching last year’s exports figure looks difficult,” FIEO chief SC Ralhan said in a statement.  The interest subvention or subsidy scheme, which was provided for in this year’s Budget but is yet to be rolled out, should be announced immediately, FIEO said.

Exports during April-August 2015-16 stood at $111.09 billion, 16.7 per cent lower than the comparable period last year. Imports during the period fell 11.61 per cent to $168.61 billion.  Trade deficit in the April-August 2015-16 was $ 57.51 billion, lower than a deficit of $58.21 billion in the same period last fiscal.

Source : Business Line

Karnataka clears Toyota project for textile machinery unit

Karnataka’s State High-Level Clearance Committee has given the go-ahead to Toyota Industries India Pvt. Ltd to set up a textile machinery manufacturing unit at Vasanthanarsapura Industrial Area of Tumakuru district, according to media reports. Toyota Industries India Pvt. Ltd is investing Rs 410 crore in the textile machinery manufacturing unit. The proposed unit, which was cleared by the SHLCC chaired by Chief Minister Siddaramaiah, has the potential to create jobs for 800 people. (SH)

Source : Fibre2fashion

Govt opens FDI door wider by allowing partly-paid shares

The Centre has further eased foreign direct investment (FDI) norms by allowing partly-paid shares and warrants as eligible capital instruments. This means an Indian company looking to bring in funds can now issue such instruments without any approval. On Tuesday, the Department of Industrial Policy and Promotion (DIPP) said it has amended the ‘Consolidated FDI Policy circular of 2015’ issued this May. With this, an Indian company can issue warrants and partly-paid shares to non-residents so long as conditions specified by the Reserve Bank of India are met. Prior to this, the Consolidated FDI policy had stipulated that these instruments can be issued to a non-resident only after approval through the government route.The Centre’s move comes more than a year after the RBI had said that partly-paid shares and warrants issued by an Indian company would qualify as eligible instruments for FDI/Foreign Portfolio Investment.  The central bank had, however, stipulated that the company issuing paid-up shares/warrants needs to ensure that sectoral caps are not breached even after the shares get fully paid-up or warrants get converted into fully paid equity shares. In July last year, the RBI stipulated that an Indian company whose activity/sector falls under the government route will require prior approval of the Foreign Investment Promotion Board for issuing partly-paid shares/warrants.“The latest government move will make both warrants and partly-paid shares more attractive instruments for FDI as they can be issued without prior government approval (in cases of automatic route),” Lalit Kumar, Partner at law firm J Sagar Associates, told BusinessLine.

Facility sharing

The government has also clarified that ‘facility sharing’ agreements between group companies through leasing/sub-leasing arrangements will not be treated as ‘real estate’ business for FDI policy purposes. The only condition is that the arrangement should be on an arm’s length price and the annual lease rent earned by the lessor company should not exceed 5 per cent of its total revenue. This clarification could bring relief to multinational firms and foreign-owned companies operating in India, say experts. The existing FDI policy has several restrictions on foreign companies undertaking ‘real estate’ activities.

Source : Business Line

Global crude oil price of Indian Basket was US$ 44.18 per bbl on 15.09.2015

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$ 44.18 per barrel (bbl) on 15.09.2015. This was lower than the price of US$ 45.11 per bbl on previous publishing day of 14.09.2015.

In rupee terms, the price of Indian Basket decreased to Rs 2935.08 per bbl on 15.09.2015 as compared to Rs 2993.70 per bbl on 14.09.2015. Rupee closed weaker at Rs 66.44 per US$ on 15.09.2015 as against Rs 66.37 per US$ on 14.09.2015. The table below gives details in this regard: 

Source : Ministry of textiles

Rule of origin puts Vietnamese garment industry in a spot

The inking of a Trans-Pacific Partnership (TPP) is likely to have a clause on the origin of goods, presenting a challenge to Vietnam's textile and apparel industry. The point was brought up at the recently concluded Vietnam-Republic of Korea scientific seminar on garment technology, which was held in Ho Chi Minh City, as per Vietnamese media reports.  The rules of origin is an integral part of the trade agreement and expressing his concerns, Moon Byung-chul, commercial counsellor at the Republic of Korea Consulate General, said at the event, “Vietnam must follow TPP's 'yarn forward' rule of origin, which requires manufacturing textile and apparel products using only the US and other TPP countries' yarns and fabrics to qualify for the benefit of the agreement.”  Vietnam, even after being one of the world's largest garment exporters, still imports raw materials from countries like China and Korea. The lack of weaving, dyeing, and fibre manufacturing units impose challenges on Vietnam's garment sector.  Fearing the high risk of environmental pollution, many dyeing and weaving projects have failed to get licenses from the concerned Vietnamese government authorities in recent times.  Developing an infrastructure equipped with dyeing and weaving facilities and waste treatment plants can help Vietnam wade off the rule of origin concerns and attract foreign investment. (HO)

Source : Fibre2fashion

Pak business community hails rate cut

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and the Karachi Chamber of Commerce and Industry (KCCI) have welcomed the State Bank of Pakistan’s latest rate cut, saying the decision would benefit the country’s export oriented sectors and industrial units, according to media reports. The SBP cut the policy rate by 50 bps to 6 per cent for the next two months. The improvement in macroeconomic indicators, the fall in oil and commodity prices and relatively low inflation led SBP to continue with its accommodative monetary policy stance and slash the policy rate.

Members of the business community described the rate cut as an elixir for the sluggish economy and hoped it would bring better prospects for the investment climate besides providing financial relief to the industrialists. Representatives of almost all the chambers of commerce and industry in the country besides industrial and trade associations, including the All Pakistan Textile Mills Association (APTMA), Pakistan Tanners Association (PTA), Pakistan Cotton Ginners Association (PCGA), Surgical Instruments Manufacturing Association Pakistan (SIMAP), and All Pakistan Marble Mining Processing Industry and Exporters Association (APMMPIEA), said the downward revision in the policy rate would provide more liquidity prospects to the industry, which was already braving high cost of energy and production.

PTA senior member Agha Saiddain said the textile, surgical, marble, sport goods and other major exporters in the competitive international market would get relief on banks’ loans besides lowering the cost of doing business to some extent. The country’s industry needs to get better productivity and bank loans on lower interest rates would provide the industry and exporters to borrow money on lower rates, he added. He said India, Bangladesh, China, Sri Lanka and Thailand remained the leading competitors for Pakistan, so it is vital for Pakistan to produce exporting products on competitive costs. Surplus liquidity in the market is always important and one of the prime reasons behind investment in the industrial sector, he added.  He said the reduced bank mark-up rate would encourage fresh investment in the industry, particularly in leading exporting textile and leather industry besides increasing jobs and exports of the country.

“SBP’s policy will help keep the cost of living, cost of doing business and rate of defaults and unemployment within control. The private sector would be encouraged to raise fresh funds by seeking loans from the banks. The rate cut will also help reduce oil, food and industrial raw material bills,” said Karachi Cotton Association’s senior member Ghulam Rabbani. The KCCI members said different segments of the society were expecting downward revision up to 2 per cent. However, they added that half percent bps cut would also benefit the industry and trade. (SH)

Source : Fibre2fashion

Textile industry reproaches the gas suspension decision

The Pakistan Textile Exporters Association has aggrieved over the authorities’ imprudent decision of gas suspension for industries in winter terming it as a unilateral action.  The association opined that the government should shelve its gas outage plan to bring the country’s economy out of sluggishness, as this suspension would lead innumerable people to lose their jobs and would also affect the industrial growth.PTEA Chairman Sohail Pasha and PTEA Vice Chairman Rizwan Riaz Saigal said that the textile industry is already facing problems and this move of restricting gas would just exacerbate the situation. They further stated that the government should make decisions considering the stakeholders as the country is already facing economic distress in terms of escalating cost of production.  The government wants to propel industrial growth but on the other hand has imposed cruel decisions as a result of which industries in Punjab, particularly textiles, are facing a decline, they added. PTEA has appealed the government to look into the matter and ensure that the textile sector would get gas supply in winter thereby focusing on enhancement of the textile products.

Source : Yarn and fibre