The divide in the textile business community of Surat once again came to the fore on Monday after the district collector gave permission to open the textile markets in the city for four hours on Tuesday. The Southern Gujarat Chamber of Commerce and Industry (SGCCI) had sought permission last week for opening the market. However, hours after giving the nod, the collector withdrew it citing ‘administrative’ reasons. Interestingly, many textile traders blamed SGCCI for creating confusion. The district administration in its letter to SGCCI president Dinesh Navadiya on Monday morning allowed keeping the markets open from 10 am to 2 pm on Monday and Tuesday. But since SGCCI received the letter late, the message could not be conveyed to the traders in time, yet some of them opened their shops and were fined by police. Congratulations! You have successfully cast your vote Login to view result Meanwhile, the Federation of Surat Textile Traders Association (FOSTTA), which had written to chief minister Vijay Rupani for allowing markets to open after May 12, was not in the favour of opening the markets on Monday and Tuesday for a few hours. SGCCI said that it had made a request to the district administration, on getting representations from different associations of traders, yarn manufacturers, dealers, weaving and processors. “The permission was withdrawn for administrative reasons,” said district collector Dr Dhaval Patel. However, he did not elaborate on it Later, SGCCI in a statement said that there was a question of police permission and when the collector and police commissioner talked to leading traders and trade organizations, they received an opinion that they were fine if the markets will not open for a day. “For last so many years, FOSTTA has been deciding about the operations of all textile markets in the city, some organizations are only trying to gain brownie points by such moves. By keeping the markets open for a few hours was hardly going to make any difference,” said its secretary Champalal Bothra .Last week too, members of FOSTTA and the Textile Task Force constituted by SGCCI had a heated argument outside the office of police commissioner when they went to make different requests for relaxation in the lockdown norms.
Source: Times of India
As India and the European Union agreed to resume negotiations for a free trade agreement (FTA), experts believe the road ahead may not be smooth, amid growing protectionism across countries caused by the outbreak of the pandemic. Experts said reducing tariffs and negotiations could be complex as the markets have changed over the past few years. Besides, growing protectionism around the world has resulted in countries, including India, imposing higher tariffs on items. “When we are talking about market access issues in the goods sector, there will be some challenges. Since the ...
Source: Business Standard
The partial-to-full lockdowns imposed by various states to contain the second wave of the pandemic are likely to have a muted impact on the overall business environment, given strong export demand and improved balance sheets in the past six months, according to a report. Though supply chain disruptions could play out, overall impact on corporates is expected to be moderate to minimal. But, small businesses and retail borrowers are likely to see stresses, India Ratings said in a report on Monday. It added that retail borrowers and small business will see stress, leading to a build-up of potential asset quality issues in the unsecured lending books of lenders and an increase in softer delinquencies in the MFI segment. The assessment will change if there were a stringent national lockdown or a protracted normalisation of activities due to the pandemic, the agency warned and cautioned that the economy in general will have a bumpy road to recovery. The second wave of the pandemic infections will be less disruptive than the rst wave for overall businesses, despite the daily caseload reaching more than four times of the peak level seen during the rst wave. This is because the administrative response is likely to be conned to the regional/local lockdowns and containment zones. The agency believes the rst order impact on corporates will be minimal to modest depending on the industry and size of entities, as it believes that companies are better prepared to operate under localised lockdown conditions while adhering to various guidelines. Another enabler is reports, it said pointing out that while curbs on economic activities will shave o a portion of aggregate demand, export growth could compensate for the same as the global economy is on the mend now. The export growth has been reasonably strong in the past six-eight months and is likely to sustain given the scal push across its key exporting destinations. Consequently, impact on topline (prot) for sectors other than oline retail, entertainment, hospitality, travel and associated services is likely to be minimal for mid to large corporates. The agency also believes that corporate margins could taper o from the extraordinary buoyant levels in the second half of FY21, mainly because of return to normalcy and adverse impact of elevated commodity prices. The impact on margins will be disproportionally higher for medium-to-small entities, than that for the large ones in the commodity user groups. The agency also argues that corporate balance sheets have gained resilience, in view of the healthy pre-tax margins and strong cash-ows since the second half of 2020-21. Moreover, free cash-ows for most sectors have improved due to deferment of capital expenditure (capex) and reduction in working capital, with excess cash being used by many entities to reduce debt or retained as a cushion on the balance sheet. Healthy balance sheets will provide necessary safeguard for larger entities to manage the temporary disruptions, if any in the short term, said the report. Another enabler this time around is more manageable labour challenge, though there could be a bout of disruptions. Unlike the last time, the challenge owing to the reverse migration is not visible in a signicant way. Industry such as auto, auto ancillaries and cotton may face challenges, whereas paper and chemical may stay broadly unaected owing to the dependence on local labour force. On the other hand, construction activity will be hit due to limited availability of key resources because of imposed restrictions or rising infections though some of it is being managed by retaining sta at the construction sites. The agencyAccordingly, the demand-side components of GDP -- private nal consumption expenditure, government nal consumption expenditure and gross xed capital formation - are now expected to grow at 11.8 per cent, 11 per cent and 9.2 per cent year-on, respectively, in FY22. This is as compared with the agency's earlier forecast of 11.2 per cent, 11.3 per cent and 9.4 per cent, respectively. Recovery will be slow and bumpy given the muted incremental countercyclical scal spending. Also, the nature of scal support will be indirect and supportive, rather than any direct stimulus to augment aggregate domestic demand conditions. Additionally, rising ination will restrict any large monetary support through lower interest rates. Given these two restricted levers, the recovery paths of certain sectors especially those linked to services and social distancing could stretch beyond FY22, said the report had in later April revised down its GDP growth forecast for FY22 to 10.1 per cent from 10.4 per cent on April 23.
Source: Economic Times
The price of acrylic staple fibre, CIF NE Asia, increased from $2.11 per kg in January 2021 to $3.04 per kg in April 2021, recording a surge of 44.08 per cent due to the rising prices of feedstock materials such as acrylonitrile. It is expected to rise further by 14.14 per cent to reach $3.47 per kg by June 2021 over the price of April 2021.The prices of feedstock were on an upward trajectory till March 2021 and became stable in the second half of March due to limited buying interests of downstream players amidst rising prices, according to Fibre2Fashion’s market analysis tool TexPro. In the beginning of April 2021, the price of acrylic staple fibre remained steady due to the slight decline in the price of acrylonitrile, causing the sales of acrylic staple fibre to increase slightly. The price of acrylonitrile is not expected to increase in the coming months, and thus sales are expected to rise. Hence, the price of acrylic staple fibre is projected to increase in the upcoming period.
Source: Fibre2fashion
Company turnovers in the European textiles and clothing sector fell between 10 and 20% as a result of Covid-19, but even bigger challenges lie ahead, says Brussels-based Euratex. Serious disruptions in supply chains, soaring energy prices and protective tendencies are threatening the competitiveness of the industry. The European Union’s newly-revised Industry Strategy, launched on May 5th, is addressing very relevant issues, and underlines the need to think carefully about Europe’s industrial base. Euratex welcomes the initiative, including the focus on 14 “eco-systems” and the proposal to develop privileged partnerships with trusted partners. At the same time, it is calling for more consistency by the EU across its different policy areas. “We welcome the recognition that we need a strong industrial base in Europe, but at the same time are struggling to maintain that base,” said director general Dirk Vantyghem. “Our companies face significant challenges related to over-regulation and rising energy and supply costs. It feels like one hand offering you help, while the other hand squeezes you tight. “Our industrial model relies on accessing global markets and we are not calling for the European borders to be closed, but clearly, there is a need to establish global rules to ensure fair competition, and make sure these rules are properly implemented and controlled.” The EU’s proposal to address distortions caused by foreign subsidies in the Single Market, should be welcomed in this context, he added. “Today, as part of this new EU Industry Strategy, we have an opportunity to build a new business model, based on innovation, quality, sustainability and fairness. We look forward to develop such an EU Textile strategy with all stakeholders involved.” The EU textile and clothing industry is an essential pillar of the local economy across many EU regions with around 160,000 companies employing 1.5 million workers and over € 61 billion of exports. Euratex works to achieve a favourable environment within the European Union for design, development, manufacture and marketing of textile and clothing products.
Source: Innovation in Textiles
The US-China trade war has not benefitted Indonesia in the short term, but in the long run, Indonesian mills will be more competitive and can enjoy a surge in sales, as per Zahid Nazir, GM, sales and marketing, PT Argo Manunggal Triasta. The impact of currency depreciation is not significant either as raw material or fibres are imported at US dollar rate. The Indonesian government is also coming in support of the country’s textile industry by imposing strict policies and incentivising textile companies. “The government has imposed strict policies for illegal imports. Incentive plans for upgrading machines have also been provided. Continuous engagement between the government and textile mills for competitive energy prices, port fees, logistic cost and tax incentive has taken place,” Nazir said in an interview with Fibre2Fashion. Talking about the effects of the pandemic on the Indonesian textile industry, he said that the mills have been resilient in adapting to changes. Many of them converted production to health-related products including masks, medical gowns, hospital wear etc.
Source: Fibre2fashion
Pakistan, keen to exit from the grey list of the FATF, is set to introduce new rules relating to anti-money laundering cases and change the prosecution process to meet its remaining tough conditions, a media report said on Monday. Pakistan was put on the grey list by the Paris-based Financial Action Task Force (FATF), the global watchdog for money laundering and terror financing in June 2018 and the country has been struggling to come out of it. The Dawn newspaper reported that the changes being made also include the transfer of investigations and prosecution of anti-money laundering (AML) cases from police, provincial anti-corruption establishments (ACEs) and other similar agencies to specialised agencies. This is part of two sets of rules including the AML (Forfeited Properties Management) Rules 2021 and the AML (Referral) Rules 2021 under the National Policy Statement on Follow the Money approved by the federal Cabinet meeting a few days ago, the report said. These rules and related notifications for certain changes in the existing schedule of Anti-Money Laundering Act 2010 would come into force immediately to be followed by the appointment of administrators and special public prosecutors for implementation. Based on these measures, the FATF would conclude if Pakistan has complied with three outstanding benchmarks, out of 27, that blocked its exit from the grey list in February this year. Several review meetings of the FATF are scheduled to begin in the second week of June, culminating in the next FATF plenary on June 21-25. The three outstanding action points (out of a total of 27) include (i) demonstrating that terrorist financing (TF) investigations and prosecutions target persons and entities acting on behalf or at the directive of the designated persons or entities. Demonstrating that TF prosecutions result in effective, proportionate, and dissuasive sanctions; and (iii) demonstrating effective implementation of targeted financial sanctions against all designated terrorists, particularly those acting for them or on their behalf. Now, the government has decided to appoint dozens of administrators with the powers to confiscate, receive, manage, rent out, auction, transfer or dispose of or take all other measures to preserve the value of the properties and perishable or non-perishable assets to be confiscated under the AML 2010 rules or court orders.
Source: Business Standard
Chinese textile company Challenge signed an agreement with the Gilgit-Baltistan government to train 2,000 workers and provide them jobs in its factory in Lahore, according to Gwadar Pro. Managing Director of the Chinese company Karen Chen and representatives of the government of Gilgit-Baltistan signed the agreement. Qamar Bobi, a businessman who played a vital role in bringing in Chinese investment in Pakistan, was also present. Speaking on the occasion, Karen Chen said that as per the agreement, 2,000 workers would be selected from Gilgit-Baltistan and after training, they would be given jobs in textile establishments in Lahore where the employees would be provided accommodation and food free of charge. Chen said the textile unit employs 3000 people. Gilgit-Baltistan Chief Minister Khalid Khurshid thanked the Chinese company for providing employment opportunities to the people of the region.
Source: Pak Observer
Pakistan plans to boost spending on large infrastructure projects by as much as 40% to create jobs and foster productivity in an economy crippled by the coronavirus pandemic, Finance Minister Shaukat Tarin said.The federal government will earmark as much as $6 billion for development expenditure in the year beginning July, Tarin, who took office last month, said in an interview in Islamabad. The economy needs to expand by 5% next year, he said. “That’s the bare minimum we need for a country this size,” said Tarin, who is due to present a new budget next month for the world’s fifth most-populous nation. “There are almost 110 million youth.” Tarin, a former banker, was appointed last month as the fourth finance minister since Prime Minister Imran Khan’s government took power in 2018. He also served in the role between 2008 and 2010, helping the nation avoid default by securing a bailout from the International Monetary Fund. He comes into office as Pakistan faces a third wave of coronavirus cases, prompting authorities to order a week-long shutdown that may weigh on economic activity and hurt incomes. Tarin’s plan will reverse his predecessor’s decision to lower spending to narrow the budget deficit, which he estimates to be a little above 7% of gross domestic product in the current fiscal year through June, against 8.1% in the previous year. Tarin said he expects the deficit in the next fiscal to be 1 or 1.5 percentage points lower. While balancing the budget will be key for Pakistan’s current $6 billion loan program with the IMF, the new finance minister is negotiating with the organization for more wriggle room to support economic growth. The government’s GDP target for next year is a percentage point higher than the IMF’s 4% projection, and Tarin is seeking to boost growth to 6% in the year after. The Washington-based lender sees the economy expanding 1.5% in the current fiscal period after a rare contraction last year. “We need 2 million jobs every year,” he said. “If we do not go into growth mode, we will have a major crisis on the streets.” The central bank, which has cut interest rates to a three-year low to support the economy, has been on pause mode for a while and has left some of the heavy lifting to the government. “First we have to get more revenues,” Tarin said, adding that he’s targeting about 6 trillion rupees next year in tax authority revenue, compared with this year’s 4.75 trillion-rupee target. “Unless we get more revenues, forget about any incentives to boost the economy.”
Source: Business Standard
