The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 24TH APRIL 2021

NATIONAL

INTERNATIONAL

Gujarat textiles industry losses mount to ₹6k cr, production down 40%

The textiles industry in Gujarat was severely hit last year—first due to the lockdown, and then by the migration of thousands of workers. And just as things were beginning to get back on track, the explosion of COVID-19 cases in the state has now virtually crippled the industry.

According to the Federation of Surat Textile Traders Association (FOSTTA) president Manoj Agarwal, the industry has already suffered a loss of ₹6,000 crore.  The Federation of Gujarat Weavers’ Welfare Association (FOGWA) president, Ashok Jirawala, puts the daily loss at ₹37.5 crore. The way COVID-19 cases have been mounting, as also the deaths, the losses are expected to shoot up.

Agarwal says production is down by over 40 per cent. Lots of workers have returned to their home states fearing another lockdown, while some have gone back for the ensuing wedding season. “Our main markets are Maharashtra and Madhya Pradesh. Almost all the states have lockdown-like measures due to the second wave of the pandemic. Inter-state business travelling is at a standstill. This alone has brought down business by 20 per cent. Retail shops are open from 10 am to 6 pm, but there aren’t many customers. Our market is dependent on wedding shopping. However, weddings are being organised on very low scales, and so spending on clothes has drastically reduced.”

According to Ashok Jirawala, “There are 15 lakh to 17 lakh workers employed in and around Surat in different processes of textile production like weaving, threading, processing, etc. The industry has a production capacity of 4.5 crore metres of cloth on a normal day. Right now, the situation is such that 40–45 per cent workers have already left Surat. So, the daily production has dropped to 2 crore metres. At ₹15 per metre, this works out to a daily loss of ₹37.5 crore. The way things are going, another 20 per cent workers would go back to their native land in the next one month. The huge effect of the pandemic is just not on the textiles industry, but the economy of the entire region.”

The president of Surat Autoloom Weavers Association (SAWA), Sanjay Desai, says that there are 50,000 people working in the 750 waterjet autolooms in Surat district. Due to the pandemic, the units are currently working at 50 per cent utilisation. Last year, the units had remained completely closed due to the countrywide lockdown. “We are still hoping that there will not be any lockdown and the workers who are currently working would continue to do so.

Prime Minister Narendra Modi’s speech on Tuesday was beneficial in a way. He clearly stated that there would not be any lockdown. This will give some confidence to workers and many would stop considering migrating back to their homeland.” There is not much effect of night curfew on production.

Dipak Sheth, president of the Yarn Broker Association (YBA), says that their association has 450 yarn brokers as members who connect weavers to yarn manufacturers. Over 1 lakh workers mostly from Odisha, Bihar and Uttar Pradesh work in the yarn manufacturing sector. Currently, all units are working at half the capacity as 50 per cent workers are absent. Last time, during the lockdown, workers faced problems in getting transport to return to their hometowns due to the sudden rush. This time, to avoid such a situation, many workers are travelling back in advance.” Sheth is also a committee member with the South Gujarat Chamber of Commerce and Industry (SGCCI).

There are about 1,400 textile units in and around Jetpur town in Rajkot district who are engaged in cotton fabric printing. The printed cotton is used in garments and sent to African countries apart from catering to the domestic demand. According to Jayantibhai Ramolia, president of the Jetpur Printing and Dyeing Association (JPDA), workers mainly from Jharkhand, Uttar Pradesh and Bihar work at the Jetpur units. “Last year we had lost more than one and a half month of production. After that, the demand dipped due to market recession.

This time, the workers have not left us but we are facing a low market demand. Our business line passes through Mumbai, which has been severely affected by COVID-19. The Mumbai offices are working partially, and logistics are slow. We also run a business line through Kolkata. However, due to the elections in West Bengal, it is also slow right now. This period is the peak season for cotton fabric, but the demand this year is very sluggish. We keep factories closed for two days of the weekend to protect people against infection as far as possible.”

The overall situation is dismal. Says Jirawala, “We don’t know whether or how the government will be able to help us confront this situation. The least that the government can do is to release our money that they have been sitting on since long time. Input credit worth ₹600 crore is yet to be paid by the government to the textile units. In these difficult times, if the government is not giving us our own legitimate dues, what more can we ask for? It is important to note that even the high court has ordered the payment of this money, but it is still pending from the government.”

Source: Fibre2Fashion News

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Yarn price expected to come down, MoT hints action against mills hoarding yarn stock

In coming days, yarn price may remain under control!

In a virtual meeting, in which Union Textile Minister Smriti Irani and representatives of various trade bodies were present, it was decided that prices will come down to around Rs. 20 per kg immediately.

“Reviewing the situation of yarn price, the Minister of Textiles was not satisfied. So it was decided in the meeting that those who got the Cotton Corporation of India (CCI) cotton on a reduced price/terms not passed over the price reduction to the yarn buyers, would be banned and will not get CCI cotton for the next three years,” shared a representative of a prestigious trade body who don’t wish to be quoted.

Another source also confirming this information added that it was also decided in the meeting that the mills, stocking cotton yarn either for themselves or with traders aiming for a speculative business, would be inspected by the MoT’s officials and will be dealt with strongly if they are hoarding the stock.

“The Minister also hinted that suitable action against them will be initiated through the Competition Commission of India, if any of the mills is found engaged in cartelisation in the matter of artificially fixing high yarn prices,” he further added.

The meeting continued for around 30 minutes.

It may be mentioned here that since last five months, apparel manufacturers are struggling with high yarn price and despite many efforts at various levels, there is still no significant relief for them.

In the last week of March, South Indian mills had assured that they will not raise the price for the month of April but at ground level, rate continued to increase.

Source: Apparel Online

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Finance Ministry relaxes spending norms to boost capital expenditure

In a bid to boost the economy grappling with the fresh COVID-19 wave, the Finance Ministry has relaxed the spending guidelines to enable ministries and departments to undertake capital expenditure totalling Rs 44,000 crore envisaged in the budget for 2021-22.

According to an office memorandum (OM) issued by the Finance Ministry on Thursday, the monthly/quarterly expenditure plan (MEP/QEP) ceilings and restrictions will not apply for expenditure under the capital heads under the budget.

To enable ministries/departments expedite capital expenditure, it said, the cash management guidelines issued by the Ministry of Finance under the OM of 2017 have been relaxed.

"Monthly Expenditure Plan (MEP) or Quarterly Expenditure Plan (QEP) ceilings and restrictions on bulk expenditure items referred in the OM dated August 21, 2017, shall not be applicable for expenditure under the capital heads under the Budget. These relaxations shall take immediate effect and shall apply until further orders," it added.

According to the guidelines, the bulk expenditure items of more than Rs 2,000 crore were timed in the last month of each quarter to utilise the direct tax receipt inflows in June, September, December and March.

Similarly, big releases of Rs 200 crore to Rs 2,000 crore were timed between the 21st and 25th of a month to take advantage of the GST inflows. These restrictions have been removed with the latest OM.

Finance Minister Nirmala Sitharaman in the Budget 2021-22 had announced a sharp increase in capital expenditure and provided Rs 5.54 lakh crore, which is 34.5 per cent more than the Budget Estimate (BE) of 2020-21. "Of this, I have kept a sum of more than Rs 44,000 crore in the Budget head of the Department of Economic Affairs to be provided for projects/ programmes/departments that show good progress on Capital Expenditure and are in need of further funds," she had said.

Over and above this expenditure, the government would also be providing more than Rs 2 lakh crore to states and autonomous bodies for their Capital Expenditure, she had said.

In the BE 2020-21, the government provided Rs 4.12 lakh crore for Capital Expenditure. It was revised upwards to 4.39 lakh crore.

Source: The Economic Times

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Van Heusen launches new sub-brand 'Denim Labs'

Van Heusen, India’s leading power dressing brand from Aditya Birla Fashion and Retail Ltd (ABFRL), has launched its new sub-brand ‘Denim Labs’. Van Heusen Denim Labs ushers in the new age of denim, crafted for the modern-day professionals who need to seamlessly shift between work and play. The brand has also launched a campaign ‘Move In The New Blue’.

The new campaign features the face of the brand and India’s leading Hindi film actor Jacqueline Fernandez.

"Targeting young professionals, Van Heusen Denim Labs is designed to look undeniably sharp and engineered to provide true freedom of movement, infused with an upgrade on style and comfort. Using its rich experience of over 128-years in the workwear category, this new sub-brand stands for fashion and functionality, with each product offering created to provide the perfect blend of comfort, performance, and ergonomics," ABFRL said in a press release.

Van Heusen Denim Labs will offer an entire collection range including shirts, trousers, layering pieces like truckers, jackets and blazers for both men and women. The collection features attractive style elements such as a contoured waist for maximum grip and sleek look, reinforced seams for extra durability, power stretch for easy movement and easy-access pockets. These denims are available in different fits such as skinny, slim, and regular, all of which come in a selection of washes and finishes.

Centered over Jacqueline who is grooving, stretching, swaying, spinning in variety of denims by Van Heusen Denim Labs, the new campaign showcases the broad range of supremely stylish denims perfect for every occasion and mood of today’s style and comfort conscious consumer.

“We have recognised that the country’s younger consumers are seeking comfortable and functional denim wear considering the new norms being implemented across the workplace. We felt this is the best time to launch our new denim sub-brand. Denim Labs encapsulates the authenticity and heritage of Van Heusen with a contemporary and aesthetic personality that will appeal to today’s youth. Our new brand is targeted at the young who are self-driven, passionate, stylish, tech-savvy, ambitious and assertive. With the launch of Denim Labs, we aim to be the most preferred denim brand in the country for young professionals,” Abhay Bahugune, chief operating officer, Van Heusen said.

“With this campaign, we are confident that our viewers will recognise how Denim Labs is a playful yet stylish addition to their wardrobe. Jacqueline has brought the whole idea of #MoveInTheNewBlue alive which will be loved by audience at-large,” added Bahugune.

Source: Fibre2Fashion News

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Benefits of PLI Scheme can be undone by lack of Ease of Doing Business

While hailing the government’s PLI scheme, the industry body MAIT (Manufacturers’ Association for Information Technology) has advocated the need for increased Ease of Doing Business (EoDB) at different state levels.

PLI is a well laid out strategy that pushes manufacturers to revisit their supply chain domestically and aspire for export-led growth, Nitin Kunkolienker, president, MAIT, said at its Electronics Manufacturing Summit held on Thursday.

He added that the scheme is going to bring in a drastic change in the thought process of the government(s)-shifting their erstwhile policy focus-from import substitution to export-led growth, which will, in turn, lead to design-led growth for the nation.

According to the President of the apex body representing India's electronics & ICT hardware sector, the PLI scheme is one of the finest schemes introduced by the government during the last 25 years. “Before PLI, there was no strategy to make India a manufacturing hub. For the first time, we have an output linked incentives plan, which motivates players to bring in efficiency across processes and scale-up. But for PLI to be effective, the government has to crack the whip on Ease of Doing Business (EODB) across states, " Kunkolienker told ET Online.

In terms of ease of doing business, Kunkolienker said the bigger challenge lies within and between states. The disconnect between the Centre and different states is an issue too. “Getting land, power and corruption at some places remain the key bottlenecks hurting electronic manufacturing across the country,” he said.

He also highlighted that ever since the pandemic hit global supply chains, the world realised that depending on one or two supply chains is risky and hence the need is to seize the opportunity by focussing on making India a global hub for electronics.

On the occasion, Harish Krishnan, Vice President, MAIT, asserted that there has been a significant shift in how India used to frame its key industrial policies. According to Krishnan, today there is a clear introspection over India's strengths and its gaps, coupled with an open mind to fill those gaps. "Earlier the focus was on import substitution, but now on export growth. India for India is interesting, but India for the world is what is really exciting," he said.

Source: The Economic Times

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INTERNATIONAL

Bangladesh RMG: Still a major sourcing destination for major brands

After a year of COVID-19 calamity, global apparel brands are putting their faith in Bangladesh RMG as a key sourcing destination of RMG in the coming months, according to a new study carried out by the Centre for Policy Dialogue (CPD), a think-tank based in Dhaka, and the Institute of Policy Studies (IPS) of Sri Lanka.

The discoveries of the study were presented at a recent webinar on ‘Recovery of the apparel sectors of Bangladesh and Sri Lanka: is a value-chain-based solution possible?’

The CPD study said that medium-term challenges will cautiously correlate with the degree to which the COVID-19 is controlled. The 2nd wave has significantly lessened the apparel demand in major markets such as the US, the EU and the UK.

The CPD study found that key sourcing countries – China, Bangladesh, Sri Lanka and Vietnam are major players in the global supply chain of apparel – have either re-shored or over-focused to an inadequate number of sourcing countries during the COVID-19 pandemic period.

Despite the downward scenario in RMG producing countries like Bangladesh, the CPD study depicts that major fashion brands are still counting on the country due to their resilience and capability in dealing with unprecedented scenarios. And proposing that in case of a key global crisis, a redistributive tactic should be maintained to safeguard export orders at least at the pre-crisis level, mainly for countries that have financial limits and weak social support programs to support their suppliers and workers.

While various industry leaders voiced their positivity of a strong comeback.

Rehman Sobhan, Chairman of the CPD, said that the International Labour Organisation (ILO) could consider playing an entrepreneurial role in bringing together international buying countries with supplying countries to restructure the global demand management.

“A tripartite exercise should be carried out, including government, employers, and workers to produce a mutually accommodating system of unemployment insurance to address not just the immediate impact of the coronavirus crisis but a longer-term crisis.”

Mostafiz Uddin, Managing Director of Denim Expert Ltd, said during the crisis, his buyers even did not respond to emails, although they were saying that they were long-term business partners.

Mostafiz Uddin is not hopeful about getting back all of his arrears from the buyers as lead-time, contracts, and prices changed due to the fallouts of COVID-19.

“Brands and retailers should consider us as their business partners meaningfully,” the entrepreneur said.

Husni Salieh, Director for Strategic Transformation at MAS Holdings in Sri Lanka, said the value of a value chain was truly optimized when its stakeholders work collaboratively, particularly during the crisis.

He added that building resilience within a relatively diversified but existing value chain could face the current and future crisis successfully.

Pierre Börjesson, Head of Sustainability for Global Production of H&M Group, called for speeding up digital marketing so that the supply chain was not affected during any disaster.

H&M, which purchases more than $3.5 billion worth of garment items from Bangladesh every year, did not cancel any work order during the pandemic, Borjesson said, calling for social protection for workers.

Dan Rees, Director of Better Work, a flagship program of the ILO, said the only sector-specific measure might not address the existing challenges.

To build strong resilience and protect the workers, trust and cooperation among the stakeholders and a long-term plan were required, he said.

The study said, “There is a limited level of initiatives of major market players to keep the suppliers of major sourcing countries and the world of work in uncertainty to address the medium-term challenges.”

While a substantial shift in the supply of export orders by buyers during the COVID-19 period (January–June 2020) has underprivileged numerous key supplying countries, including Bangladesh and Sri Lanka.

Source: Textile Today

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Turkey's apparel & home textiles exports to rise in 2021

Continuing with the rising trend seen during the post-pandemic period in 2020, Turkey's apparel and home textiles exports are expected to show upward trend during the upcoming period of 2021. Turkey's exports to the US considerably increased last year. Exports to the UK have also grown after the post-Brexit trade agreement took effect this year.

In 2019, Turkey's apparel and home textiles exports were $20.73 billion with monthly average of $1.73 billion. It showed a slight drop of 2.91 per cent to $20.13 billion in 2020. It is forecast that these exports will reach monthly average exports of $1.80 billion during January-August 2021, with a rise of 7.48 per cent compared to the monthly average exports of $1.68 billion in 2020, according to Fibre2Fashion's market intelligence tool TexPro.

Last year, Turkey’s apparel and home textiles exports to the US increased by more than 20 per cent year-on-year to cross the $10 billion-mark. This year, Turkey's exports to the UK have shown a notable growth during January-March 2021 as post-Brexit free trade agreement took effect, according to the Turkish Exporters' Assembly TIM, the organisation with membership of 100,000 exporters representing 61 exporter associations and 27 sectors in Turkey.

Carpets, ready-to-wear and apparels were the major products in country’s exports of 2020. While sales of carpets increased by more than 30 per cent over the previous year, exports of ready-to-wear and apparels climbed by more than 20 per cent in 2020 over 2019.

Turkey has planned to open foreign logistics centres in the target markets, especially in the US. This would further accelerate local exporters' access to markets and stimulate the exports, according to TIM. The logistics centres opened abroad will work as a regional base for exporters, reduce the costs of market access and accelerate access to new markets.

Source: Fibre2Fashion News

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Canada bans flights from India, Pakistan

Canada on Thursday said it is banning all flights from India and Pakistan for 30 days due to the growing wave of COVID-19 cases in that region.

Transport Minister Omar Alghabra said the ban would start late Thursday, speaking hours after India reported a global record of more than 314,000 new infections in the previous 24-hours. Cargo flights from India and Pakistan will continue.

Health Minister Patty Hajdu said half the people who are testing positive for the coronavirus after arriving in Canada by airplane came from India. Flights from India account for about one-fifth of the country's air traffic.

There is also a disproportionately higher number of positive cases among those traveling on flights from Pakistan, she said.

``It makes sense to pause travel from that region while our scientists and researchers better understand the variants of interest,`` Hajdu said.

There are more than 1 million people who live in Canada who have Indian descent. There are 100,000 Canadians who have Pakistani ancestry.

Canada does not have any direct flights from Brazil where cases are also surging.

Vaccinations have ramped up in Canada, but health experts say more contagious variants and a failure to take the right measures against the virus have led to the third wave of infections in Ontario. The premiers of Ontario and Quebec asked the federal government to further restrict people from entering.

Ontario Premier Doug Ford, meanwhile, apologized Thursday for a failed attempt to close playgrounds and allow police to stop and question people who were not in their homes _ measures that created a backlash from police forces, health officials, and the public.

The leader of Canada's most populous province, in his first public appearance since announcing the restrictions, said his government had moved too fast with the measures.

``They left a lot of people angry and upset. I know we got it wrong. I know we made a mistake and for that, I'm sorry and sincerely apologize,'' said Ford, who appeared to choke back tears at one point.

But Ford said he won't resign despite widespread calls for him to do so.

He also suggested his government will offer province-paid paid sick leave for COVID-19 patients but announced no details. The lack of such a program has led to widespread complaints.

The pandemic restrictions Ford's government announced last Friday immediately ran into opposition. Police departments insisted they wouldn't use new powers to randomly stop pedestrians or motorists and doctors complained the rules focused on outdoor activities like playgrounds and golf rather than more dangerous indoor settings.

Restaurants, gyms, and classrooms across the province already had been closed. Most nonessential workers are working from home.

On Saturday, Ford retracted the ban on playgrounds, though outdoor recreation activities such as golf remain forbidden in Ontario, the only jurisdiction in North America that now bans it.

Ontario has been reporting more than 4,000 new cases a day in recent days.

Ford himself is isolating after a staff member tested positive.

``Doug Ford knows he's spiraling and that Ontario voters have lost confidence in his ability to manage this emergency. But ''Sorry, folks`` won't cut it,`` Opposition Liberal leader  Steven Del Duca tweeted. ``His cold-hearted refusal to introduce paid sick days for more than a year has already cost lives.''

Source: The Economic Times

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