NATIONAL

• Commerce department seeks government support to prop up exports
• Ease of doing business key to achieving bilateral goals of $500 billion with India: US
• India a 'shining star' in global economy: Nirmala Sitharaman
• ASSOCHAM: 2015-16 to be worst year for exports in 5 years

INTERNATIONAL

• Pakistan Textile exports up by 11.24pc to $1.02b in August
• APTMA chief seeks textile package before Eid
• Kenyan govt targets to raise Sh100 bn in textile and apparels by 2017
• Global Crude oil prices falls on strong dollar, concerns over supply glut
• Five-fold increase in Indo-US trade ambitious and apt, says Nisha Desai Biswal
• Bangladesh should prioritise Chittagong port development

Textile Raw Material Price 2015-09-21

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.15688 USD dtd. 21/09/2015)

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

Commerce department seeks government support to prop up exports

Faced with falling exports, the commerce department has sought fresh government support to prop up the flow of goods from the country.  Sources said more funds have been sought for the Merchandise Exports from India Scheme (MEIS) in addition to Rs 9,000-10,000 crore for reviving the interest subsidy scheme for select sectors.The scope of the interest subvention scheme is almost identical to the one announced by UPA although the coverage is proposed to be expanded to cover more engineering products, processed food items and electronic goods. The interest subsidy scheme is expected to cost around Rs 2,000 crore annually but funding has been sought for five years to provide policy certainty , said sources.  The request for more assistance comes at a time when exports are down over 16% during April-August and have registered a decline for nine months in a row. With commodity prices continuing to fall, analysts are already lowering the forecast for the current year and say exports will be significantly lower than last year's level of $310 billion.

A revival of exports is also critical for a pick-up in the industrial production. Despite a slight improvement in demand in Europe and other parts of the globe, non oil exports too are witnessing a decline although a large part of the contraction is due to a fall in the value of petroleum products shipped out of the country. The global export outlook too is not buoyant and pressure is mounting on traditional sectors such as engineering and textiles too.  For a government that has been trying to get the economy back on the rail, trade has been off the radar with the commerce department unable to convince the finance ministry about loosening its purse strings so that some benefits can be added.  For instance, despite identifying trade as a priority, the Narendra Modi government failed to announce a trade policy during the first year of its office, although it was overdue. When it finally announced the policy last April, it could not get the finance ministry to provide significantly additional funds. Even the demand for reviving interest subsidy has been pending for months but the government has been unable to decide on it.  Given the falling oil prices, the pressure on government finances has eased substantially, potentially freeing up funds for an export push. But sources said that the revenue department has so far not responded to the commerce department's proposal, which was sent a few weeks ago.

SOURCE: The Economic Times

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Ease of doing business key to achieving bilateral goals of $500 billion with India: US

Ease of doing business is key to boosting Indo-US bilateral trade and achieving the goal of increasing it to USD 500 billion, US Commerce Secretary Penny Pritzker said.  Trade ties between India and the US have never been better and the two-way commerce has nearly tripled in recent years with India becoming the fifth fastest source if FDI to America, she said. "The (Narendra) Modi Government has streamlined bureaucratic decision making processes, raised Foreign Direct Investment limit in insurance, defense and railroad infrastructure and establish commercial court that speed up the resolution of business disputes," Pritzker said, adding that the US commends Modi and his team for this progress.

The first India-US Strategic Dialogue, announced during the India visit of US President Barack Obama in January this year, is being hosted by the Secretary of State John Kerry along with Pritzker at the Department of State.  External Affairs Minister Sushma Swaraj arrived to lead the Indian delegation for the dialogue which also includes Commerce Minister Nirmala Sitharaman and Power Minister Piyush Goyal.

Ease of doing business, a step initiated by Prime Minister Narendra Modi, is key to boosting bilateral trade and achieving the goal of increasing it to USD 500 billion, Pritzker said.  "However, even with these positive steps, India is only America's 11th largest trading partner and 18th largest export market. Our commercial relationship has simply not lived up to its enormous potential," Pritzker said at the event organised by the Carnegie Endowment for International Peace, a top American think tank.  "We can only succeed by working together," she said, while calling for a heightened engagement between the private sectors of the two countries.  Top corporate leaders from both the countries were scheduled to meet here under India-US CEOs Forum to come out with its recommendations to the two governments. The forum has already established an work plan for the future, she said, adding she has received some 17 recommendations from them.  The initial work plan focusses on the joint priorities of the two countries, ease of doing business, infrastructure development, innovation and entrepreneurship, standards and global supply chain, Pritzker said.

Noting that Modi has committed to moving India in the top 50 rankings of the Ease of Doing Business of World Bank, she said improving contract system and modernising bankruptcy practices are central elements to achieving that ambition.  Teams from India and the US would study best practices and speed up enforcement processes. US officials will share tools used by judiciary to manage documents, she said.  "We will begin a series of judicial exchanges between our experts in the coming year," Pritzker said.  On helping India develop bankruptcy laws, she said Commerce Department officials recently travelled to India.  "Our primary objectives are clear, to make it easier for foreign and domestic firms to do business in India and the US to deepen our ties of trade and commerce and to strengthen our bilateral commercial bonds in ways that benefits workers and businesses in both our country," Pritzker said.  By working on these, the two countries could have an extraordinary opportunity to help Modi achieve his vision of lifting hundreds and millions of Indians out of poverty and into the middle class, she added.

SOURCE: The Economic Times

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India a 'shining star' in global economy: Nirmala Sitharaman

Notwithstanding a financial crisis being experienced by major economies like China, India "stands out" as a "shining star" in the global economy and is sustaining a certain momentum despite challenges, Commerce and Industry Minister Nirmala Sitharaman said. "India today stands out in (the) global economy," Sitharaman said in her remarks at a panel discussion on 'US-India Economic Ties: Ready for Takeoff?' organised by Carnegie Endowment for International Peace, a top American think tank, here. Global demand, economy and prospects of looking at what could happen in next few months require a lot of light and positive energy, she said, adding that the depression in demand is showing on all the economies.  "Notwithstanding, I still say, India stands out, to borrow a phrase from my finance minister as a shining star, because if you look at the parameters, we are still going to have between seven to seven and half per cent growth and that for an economy that still has challenges is sustaining a certain momentum within the Indian economy in spite of the global demand where it is," Sitharaman said. "India gives you a steadier picture," she noted, referring to the "responsible" behaviour of the Indian stock markets to the Chinese economic crisis. "India offers certain sense of stability, which today economies long to have," she said, adding that the fundamentals of the economy are very strong. "India is an inviting investor's domain. I would like every investor to look at it," Sitharaman said.

In a world of depression where demand is not rising, here is a market which is waiting for quality goods, is the best place for investors and is the best place to produce, she said. For all this, the current government is addressing all the impediments including infrastructure and other lacunae, the minister said. In just 15 months, Sitharaman said India is an energy surplus country. Private sector investment in India's infrastructure sector, she said, is headed towards 50 per cent by 2017. Sitharaman assured the Washington audience that the Indian government is taking several steps to address the challenges being faced by the Indian economy. The Centre, she said has worked with the state governments towards ease of doing business. Sitharaman said with the political will that Prime Minister Narendra Modi has been showing in pushing India to be a better economy and with the red tape that would no longer be known for what it has been known for, will only make India a better place for all the investors.

SOURCE: The Economic Times

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ASSOCHAM: 2015-16 to be worst year for exports in 5 years

In a gloomy forecast, Assocham has said India's merchandise exports are going to hit the lowest in five years at the end of 2015-16 closing the current fiscal between $265-268 billion, significantly lower than $310 billion in the previous fiscal, mainly due to a sharp erosion in commodity prices in the global market and slump in their speculative demand as reflected in futures trading. “Indian exports had achieved a landmark of $300 billion in 2011-12 for the first time making the country a sizeable player in global exports. Afterwards somehow, for one reason or the other we could reach a maximum of $314 billion in 2013-14, only to fall in the following year at $310 billion. But the fall this year is going to be very steep,” the Assocham study on “Export Outlook in the face of commodity Meltdown”, said. However, it is not as if the entire export drop is coming around on the back of fall in demand for Indian goods. It is only that the global merchandise economy has moved away sharply from a very high cost, ultra bullish commodity situation to a bearish and low cost situation where demand relates mainly to the actual consumption which is rather low key.

“The pricing power as was being mirrored in the futures trading markets all over the world – be it for crude oil, metals, coal, copper or even edible items turned out to be rather myopic and has totally disappeared. Thus, there is no sentiment build-up around commodities and thus the demand is actually restricted to the real consumption. Nobody is willing to bet for futures and thus there is a meltdown in prices”, the Assocham study noted. It further stated that with the erosion in price tags, the exports in value terms have dropped while in volume, the scenario is not that bad across sectors. “Like in the world of technology, disruptive changes are also taking place in the real world of goods exports. It will take time before we adjust from the next fiscal when the low base impact would kick in,” Assocham Secretary General D S Rawat said.

Bulk of India's export basket comprises commodities, be it engineering goods (mostly iron ore /steel and other metals), petroleum products, which have been hit in value terms. For instance, for the month of August, the exports of engineering goods are down 29 per cent and petroleum products by 47.88 per cent. However, the erosion in consumption demand, which is more disturbing is seen in leather goods, apparels, gems and jewellery. “These products are not a commodity play and reflect the slowdown in consumption and pressure on the consuming economies. For India, they mean a large scale employment”, the study noted. Export of leather products saw a decline of close to 13 per cent while the export of readymade garments fell 7.32 per cent in August. Gems and jewellery witnessed a modest gain of 2.66 per cent on the back of changing gold prices, the study said.

SOURCE: Fibre2fashion

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Pakistan Textile exports up by 11.24pc to $1.02b in August

Pakistan’s textile exports have rebounded in August 2015 after witnessing slump from last several months. Textile and clothing exports witnessed double digit growth of 11.24 percent in August from a year ago, suggested data of Pakistan Bureau of Statistics (PBS) released here on Monday. Exports of textile and clothing recorded at $1.02 billion in the previous month as against $889 million of a year ago. The unprecedented growth was mainly driven by substantial increase in export proceeds of raw cotton, cotton cloth, yarn, knitwear, bed wear, towels and readymade garments.  “The textile exporters have exported the goods in August, which were stuck in July due to the lower prices in international market. The exporters then sold the textile goods in August at much lower rates at international market that resultant in huge losses to the textile exporters,” said Gohar Ejaz former Chairman All Pakistan Textile Mills Association.

Pakistan’s textile exports were continuously declining from last many months due to the energy shortage, which decreased the country’s overall exports. “Textile sector is confronting with several issues including tax refunds, additional taxes and higher energy prices and its shortage in the country, which are hampering the exports,” said another official of the All Pakistan Textile Mills Association (APTMA).  He further said that we had asked the Prime Minister Nawaz Sharif on September 11, 2015 to remove extra taxes, give competitive energy prices as compared to the region, electricity at nine US cents per unit and imposition of duties on semi-finished textile products, especially from India and China. “We had also requested to clear our tax refunds and devise a mechanism to avoid their delayed payments and allow the rupee to come to a realistic market value,” he added.

On the other hand, the government had assured the exporters to give an incentive package to boost the country’s exports in next few weeks. “Prime Minister Nawaz Sharif’s recent comprehensive meeting with exporters’ organisations signals a paradigm shift in government’s export approach that will give a massive boost to Pakistan’s exports. New policy directions and granular knowledge were generated in this consultation, which will form the basis of an export promotion package to be announced soon by the Prime Minister, as well as inform the Strategic Trade Policy Framework 2015-18 due to be announced shortly by the Ministry of Commerce”, said Commerce Minister Engineer Khurram Dastgir Khan.

According to the Pakistan Bureau of Statistics (PBS) data, product-wise details showed that raw cotton export witnessed a steep decline of 6.89 percent during the month under review from a year ago. Exports of cotton cloth surged by 3.25 percent, knitwear by 8.9 percent, yarn 8.9 percent, knitwear 21.17 percent, bed wear 16.98 percent, towels 27.98 percent, art, readymade garments 30.43 percent and silk & synthetic textile export enhanced by 4.07 percent during August 2015. Meanwhile, export of cotton yarn, dipped by 13.38 percent; cotton carded or combed by 100 percent and export of tents, canvas & tarpulin reduced by 48.69 percent.

Meanwhile, the PBS showed that Pakistan’s overall exports have significantly decreased by 10.27 percent to $3.4 billion during first couple of months (July and August) of the current financial year from $3.8 billion of the corresponding period of the previous year. Similarly, country has imported goods worth of $7.2 billion during July-August period, which are less than from the imports of $7.9 billion of the same period of last year. Therefore, trade deficit has recorded at $3.8 billion during first two months of the year 2015-16 as against $4.1 billion of the previous year with reduction of 8.4 percent. Import bill of oil witnessed a decline of 35.28 percent to $1.6 billion in first couple of months (July-August) of the ongoing financial year 2015-15 from $2.5 billion in the same period last year. Import of crude oil declined by 28.73 percent and petroleum products by 38.81 percent. However, the import bill of food products witnessed a decline of 7.88 percent to $768 million as compared to $834 million. The import of milk and its products witnessed an increase of 5.78 percent; pulses 44.42 percent, sugar 100.39 per cent, spices 38.07 percent and all tea 61.62 percent.

SOURCE: The Nation

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APTMA chief seeks textile package before Eid

All Pakistan Textile Mills Association Chairman SM Tanveer has appealed to Prime Minister Nawaz Sharif and Federal Finance Minister Ishaq Dar for announcement of the textile industry package. "Serious textile industrialists are planning downstream integration to add another $13 billion to the exports and help the country to get rid of loans from international donors at eight percent mark up," he added. "An increase of $13 billion export in next three years would create another 13 million jobs in the country." He said the Prime Minister had himself agreed in his five hours long meeting with the textile industry associations on September 11 that Pakistan textile industry had been lagged behind in the region and he had assured of announcing a textile package within five days. The industry was eagerly waiting for the announcement of textile package from the prime minister, he added.

Tanveer maintained that the high cost of doing business was constantly resulting into closure of textile units. Therefore, the PM had directed to reduce the power tariff by Rs 2.15 per unit soon after the meeting when the textile industry associations had advocated for supply of electricity at nine cent per unit in line with the regional competitors. However, he lamented that in a situation where the textile industry was not viable on Rs 13 per unit, the mills have received Rs 18 per unit electricity bills for the current month. It is ironical that the industry was vying for Rs 9 per unit electricity while the power distribution companies have issued Rs 18 per unit electricity bills.

He said the textile industry was sustaining losses over the last one year and the mills are facing problem in paying salaries to their staff. Besides, he stressed, the imposition of Rs 200/MMBTU gas infrastructure development cess with retrospective effect has added fuel to the fire. The issue is yet pending with the Supreme Court after a decision in favour of industry from the higher courts. The government should immediately implement the Senate Committee on Textile Industry recommendations on the GIDC issue, he demanded.  He has further proposed the government to impose 20 percent regulatory duty on the import of textile raw material right from yarn to garments. It would ensure an early revival of the industry, he added. He said the domestic textile industry had a potential of $7 billion per annum, which was being marred by the unbridled entry and dumping of the highly subsidised textile products from India and China. The import duty on textile products in Pakistan was merely five percent against 30 percent in the competing countries. It needs an immediate upward revision.

He said the government should also announce rebate on the textile exports as an incentive under the focus market policy even if it was unable to devalue Pak rupee against dollar. The competing countries were already offering heavy rebate on exports, he added. He said a production capacity of $3.5 billion was already in dormant while another $2 billion capacity was under a severe threat of closure in case no immediate revival takes place with the intervention of the State Bank of Pakistan. He has suggested the government to constitute a joint committee of APTMA and the SBP to deal with the situation. Also, he said, that step would boost investors' confidence to fetch new investment through BMR and secure the export orders.  He said an uninterrupted energy supply on priority was a must for textile industry but depressing reports were emerging every now and then that there would be no gas available to the textile industry in coming winter. Such an uncertain situation would make it difficult for the industry to get export orders for the upcoming fall and winter season. Therefore, this is high time to ensure energy supply to the industry on regionally competitive price.  He assured that the government would be in no need of seeking $500 million from the IMF in case it revived the textile industry and enabled it to earn foreign exchange out of domestic sources. He has expressed the hope that the prime minister and the economic managers would understand the severity of the situation and announce a textile package before Eid.

SOURCE: The Business Recorder

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Kenyan govt targets to raise Sh100 bn in textile and apparels by 2017

Industrialisation Cabinet Secretary Aden Mohamed has hired Mr Rajeev Arora , the Former African Cotton and Textile Industry Federation director to advise the ministry on reviving the sector. The Kenya government will now give tax incentives to 10 local and 11 multinationals, as well as reduced energy rates, to encourage them to set up shop. It also targets to raise Sh100 billion in textiles and apparels by 2017.Export firms will pay US cents 9/kwH, against the industry average of US cents 14/kwH, with a promise that the rate will be cut further to US cents 7/kwH in two years.The companies will also enjoy the benefits of export processing zones (EPZs) and will require only one licence from the county and national governments. Twenty one companies have expressed interest in cotton manufacturing. Other incentives include 10-year tax rebates and a 20-year period to amortize capital investments. They will also be allowed to employ more than 2 percent expatriates. The ministry will help these employees get work permits. The firms will also access local markets through a window to sell 20 percent of what they export without paying duties. Arora said that you can have duty free imports for the exports, and no value added tax for local manufacturing in the EPZs. Two of the multinationals had signed up to set up shop. Meanwhile, China's Jiangsu Lianfa firm is planning to set up a textile factory in Naivasha, worth Sh40 billion. It is set to produce textiles worth Sh153 billion ($1.5 billion). The factory will source cheaper power from Olkaria geothermal plant. Following the extension of the African Growth and Opportunities Act (Agoa) with the US for the next 10 years, Kenya has been tipped to enjoy a boom.

SOURCE: Yarns&Fibers

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Global Crude oil prices falls on strong dollar, concerns over supply glut

Oil prices fell in Asia today, reversing sharp gains in the previous session, hit by a strong dollar and persistent concerns over a global supply glut. US benchmark West Texas Intermediate crude for October delivery, which expires at the end of the trading day, eased 39 cents to $46.29 in late-morning trade after spiking 4.1 per cent at its close in New York yesterday. Brent crude for November dipped 37 cents to $48.55 a barrel following a 3.1 per cent surge in London. “A resurgent US dollar weighed on crude prices. However, an improved risk tone could cushion oil prices on the downside,” said Bernard Aw, market strategist at IG Markets in Singapore. The dollar climbed after three Federal Reserve presidents put the argument for borrowing costs the rise by year’s end, to soothe concerns about the global economy that were stoked by the bank’s decision to hold fire.

A strong greenback makes dollar-priced oil more expensive for holders of weaker currencies, hurting demand and prices. Analysts have said yesterday’s strong price rebound looked more like a technical correction from heavy losses last week as the fundamentals of a crude oversupply outrunning demand remained intact. Traders are also closely monitoring the progress on Iran’s compliance under a deal with western powers to curb its nuclear ambitions in return for the lifting of sanctions that will allow it to export more oil.

SOURCE: The Hindu Business Line

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Five-fold increase in Indo-US trade ambitious and apt, says Nisha Desai Biswal

United States Assistant Secretary of State for South and Central Asia Nisha Desai Biswal has said that Washington wants to see India rising and become a global economic engine, and that is why the ambitious target of increasing bilateral trade between the two nations five-fold to 500 billion dollars is apt. “It’s a very ambitious target, but, when you have the world largest economy and the third largest economy, you should have ambitious targets. Recently, a major report was put out by the Petersen Institute that talks about what is at stake for India. It talks about a potential of 60 percent increase in terms of export-led-growth in GDP. That’s why we have set such ambitious targets because we want to see India rise. We want India as a global, economic engine,” Biswal told ANI here. “It is really about creating the ease for business to be able to partner with each other and invest in each other and that is really what is at stake here… there is a huge potential there for both countries,” she added.

During the India-US Strategic and Commercial Dialogue (S and CD), several bilateral, regional and global issues of mutual interest would be discussed between the two sides. The S and CD is expected to review the entire gamut of bilateral relations between India and the US and also identify possible areas for future cooperation, including in strategic, defence and security; energy and environment; science and technology and space; health, education and human development; third country engagement; economy and finance; and trade and investment fields.

SOURCE: The Financial Express

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Bangladesh should prioritise Chittagong port development

A leading Bangladeshi economist has declared that the country will not be able to emerge as a middle-income country and achieve the $50 billon garment export target without prioritising development of Chittagong, according to media reports in Bangladesh. “We cannot achieve the $50 billon export target without opening and widening a second hub for the sector in Chittagong after its huge growth in Dhaka and its adjoining areas,” said Hossain Zillur Rahman. Rahman made the comments while addressing a roundtable on “realising $50 billion target for the garment sector: the Chittagong mission”.

Bangladesh Garment Manufacturers and Exporters Association or BGMEA and the Chittagong Research Initiative jointly organised the event. Chittagong has the growth potential to attain such goal, he said. Plans are underway to build alternative ports in Payra and Matarbari, although the Chittagong port still has comparative advantages, said Salehuddin Ahmed, former governor of Bangladesh Bank. Ahmed thinks it will be difficult for Payra port to reach the same level as the Chittagong port. Payra would rather serve only the southern region, he said. Saifuzzaman Chowdhury, Bangladesh's junior minister for land, described proper connectivity as the key to Chittagong's development. “Chittagong would remain technically isolated from the capital if connectivity is not properly improved. We cannot just let it go like that.”

While presenting his keynote paper, Rahman emphasised improving productivity of garment factories, including enhancement of workers' skills. Bangladesh should go for a twofold market strategy: wider access to the existing primary markets in the US, UK and Canada and looking for new markets in China, Japan and India, he said. Deep-sea ports and other ports like the one in Payra will become a reality after 20 to 30 years, he said. He stressed the need for capacity enhancement of Chittagong port, as it would be a core part to boost garment exports.

SOURCE: Fibre2fashion

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