|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
995.16 |
USD/Ton |
-1.53% |
12/14/2015 |
|
VSF |
2123.64 |
USD/Ton |
-0.51% |
12/14/2015 |
|
ASF |
1933.75 |
USD/Ton |
0% |
12/14/2015 |
|
Polyester POY |
961.06 |
USD/Ton |
0% |
12/14/2015 |
|
Nylon FDY |
2371.65 |
USD/Ton |
0% |
12/14/2015 |
|
40D Spandex |
4960.32 |
USD/Ton |
-1.54% |
12/14/2015 |
|
Nylon DTY |
1026.94 |
USD/Ton |
0% |
12/14/2015 |
|
Viscose Long Filament |
2619.67 |
USD/Ton |
-0.59% |
12/14/2015 |
|
Polyester DTY |
5777.22 |
USD/Ton |
0% |
12/14/2015 |
|
Nylon POY |
1209.08 |
USD/Ton |
0% |
12/14/2015 |
|
Acrylic Top 3D |
2185.64 |
USD/Ton |
-0.70% |
12/14/2015 |
|
Polyester FDY |
2119.76 |
USD/Ton |
0% |
12/14/2015 |
|
30S Spun Rayon Yarn |
2790.18 |
USD/Ton |
0% |
12/14/2015 |
|
32S Polyester Yarn |
1596.60 |
USD/Ton |
-0.48% |
12/14/2015 |
|
45S T/C Yarn |
2573.17 |
USD/Ton |
-0.60% |
12/14/2015 |
|
45S Polyester Yarn |
1767.11 |
USD/Ton |
0% |
12/14/2015 |
|
T/C Yarn 65/35 32S |
2201.14 |
USD/Ton |
-0.70% |
12/14/2015 |
|
40S Rayon Yarn |
2945.19 |
USD/Ton |
0% |
12/14/2015 |
|
T/R Yarn 65/35 32S |
2511.16 |
USD/Ton |
0% |
12/14/2015 |
|
10S Denim Fabric |
1.09 |
USD/Meter |
0% |
12/14/2015 |
|
32S Twill Fabric |
0.91 |
USD/Meter |
0% |
12/14/2015 |
|
40S Combed Poplin |
0.99 |
USD/Meter |
0% |
12/14/2015 |
|
30S Rayon Fabric |
0.73 |
USD/Meter |
-0.21% |
12/14/2015 |
|
45S T/C Fabric |
0.74 |
USD/Meter |
0% |
12/14/2015 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.15501 USD dtd. 14/12/2015)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
With the shutdown of production units and cancellation of orders, textile industry is facing a significant setback in production and sales after the recent flooding in Chennai. Chennai buyers have cancelled Rs. 500 crore worth of orders from the Surat textile industry, one of the largest producers of man-made-fabric in India.
Goods returned
Champalal Bothra, Director, Federation of Surat Textile Trader Association, said goods that were sent to Tamil Nadu, which is one of the major markets for Surat textile industry, have been returned and some lost in transit. “It will take another month to ascertain the loss incurred in transit,” Bothra said. Bothra said there had been delay in payments as well. The industry also employs workers from Tamil Nadu and Andhra Pradesh, who were unable to come for work due to the recent rain, affecting their production and sales.
TN units shut down
K Sivakumar, Managing Director, RmKV, a textile manufacturer and retailer, said the manufacturing units in Kanchipuram and Aarani, districts near Chennai, were shut down for the past one month. “There has been a loss of 1-1.5 lakh sarees as we did not have any production since November 10,” he said. The units resumed production on December 12. Sivakumar said, “With the wedding season coming up, we need to work overtime in order to meet the demand.” In order to boost the production, weavers and contractors would be working overtime, he added.
Production loss
Jayashree Ravi, proprietor of Palam Silks, another retailer in Chennai, said some of the production units in Kanchipuram have been affected as the looms were submerged. “We are yet to assess the damage,” she said. Apart from loss of production, the industry is facing significant loss in sales as well. Ravi said the sales in the past month accounted for 15-20 per cent of the normal sales. “If our daily turnover was Rs. 10 lakh, in the last month it was only 15 per cent of that. Our footfall was barely 3-4 in a day and more often than not the place was vacant,” she said. Christmas and Diwali sales have not picked in most of the stores and the business Marghazhi festival brings in has been hit as well. “Marghazhi festival sees many outstation and overseas buyers. With the rain, many of them have cancelled their tickets,” Ravi said.
SOURCE: The Hindu Business Line
Can we raise an export invoice in rupees and get payment in rupees? Is it allowed under Central Excise laws? Can we get drawback when payment is received in rupees?
As per Para A (iv) Part-I of RBI Master Circular no. 14/2015-16 dated July 1, 2014, “there is no restriction on invoicing of export contracts in Indian Rupees”. Further, in terms of Para 2.52 (a) of the Foreign Trade Policy (2015-2020), export proceeds against specific exports may also be realised in rupees, provided it is through a freely convertible Vostro account of a non-resident bank situated in any country other than a member country of the Asian Clearing Union (ACU) or Nepal or Bhutan. Contracts (for which payments are received through ACU) will be denominated in ACU dollars. Central Government may relax provisions of this paragraph in appropriate cases. Export contracts and invoices can be denominated in Indian rupees against EXIM Bank/Government of India line of credit.
Free foreign exchange remitted by the buyer to his non-resident bank (after deducting bank service charges) on account of this transaction would be taken as export realisation under export promotion schemes of FTP. As per Para 2.53 of FTP, ‘Notwithstanding the provisions contained in para 2.52 (a) above, export proceeds realised in Indian Rupees against exports to Iran are permitted to avail exports benefits/incentives under the Foreign Trade Policy (2015-20), at par with export proceeds realised in freely convertible currency.’ There is no bar on realisation of export proceeds in conformity with the above provisions under the excise laws or for payment of drawback.
Can you give us the gist of Reserve Bank’s instructions for making advance payment for imports?
You can send advance payment for imports of up to $200,000, as per Para C.1.1 of RBI Master Circular no. 13/2015-16 dated July 1, 2014. For advance payments beyond that limit, you must get a bank guarantee (BG) or a standby letter of credit (SLB) to ensure that the buyer will supply goods. For customers with a good track record, banks can allow advance payments of up to $500,000 without a BG or SLB. Public sector companies or undertakings run by government, who cannot get BG or SLB, must get a waiver from the finance ministry for remittances exceeding $100,000. When you make advance payments, you must get the imports within six months, except for capital goods for which the time limit is three years.
Who are we required to approach for claiming refund of four per cent SAD paid on imports?
The notification 102/2007-Cus dated September 14, 2007, requires the importer to file a claim for refund of four per cent additional duty of customs paid on the imported goods with the jurisdictional customs officer before the expiry of one year from the date of payment of the said additional duty of customs. CBECC Circular 6/2008-Cus dated April 28, 2008 says that all refund applications under the aforesaid notification will be received by the concerned field formations in their Centralised Refund Section.
SOURCE: The Business Standard
All is not lost on the Special Economic Zone (SEZ) front awarded to the holy city. The Union Government is mulling the proposal to accommodate the SEZ in the ambitious Amritsar-Kolkata- Delhi Industrial Corridor (AKDIC). CPS Navjot Kaur Sidhu, wife of BJP leader Navjot Singh Sidhu, who had pursued the setting up of the SEZ here, said she had learnt it from the Ministry of Commerce that the proposal to establish the SEZ in the holy city was being considered. She added that details besides other information was not available since it was at an early stage. Earlier, regarding awarding of the SEZ status to the holy city, the Board of Approval, Department of Commerce, at its meeting held on March 17, 2006, had decided to issue in-principle approvals in favour of DLF Universal Ltd. for setting up of the three sector-specific SEZs. These sectors were textile, engineering and food processing at Amritsar, keeping in view the recommendation of the state government. The ministry, in its response to an RTI plea filed by Michael, a resident of the city, stated that since the DLF did not pursue further with the Department of Commerce regarding issuance of a formal approval, accordingly the SEZ project was not implemented. It is stated in local circles that property dealers and land sharks made money by purchasing land adjoining the area earmarked for the proposed SEZ on the Amritsar-Jalandhar road since most of the gullible land owners were unaware about the proposed project due to lack of publicity. The market price of the land skyrocketed, touching Rs 2.5 to 4 lakh per acre, depending on the area after the District Town Planner earmarked the area for the dream project announced by the Prime Minister, Dr Manmohan Singh, way back in 2000. The state government had announced to acquire 1,250 acres of land to set up the project.
The government had even notified the acquisition of land for setting up the SEZ in villages of Manawala, Rakhjeeta, Mehma, Pandore, Jheeta Kalan, Jheeta Khurd and Bhaghapurana. The setting up of the SEZ would help in creating thousands of jobs and generation of income, attracting FDIs, technology transfers and strengthening of marketing linkages of the hand tools, auto parts, textiles and agriculture-based industries. The announcement of the SEZ had brought cheer to the residents of Amritsar which had been awaiting a boost for industrial development to bolster its sluggish economy. However, there were others who were not satisfied with the area marked for the prestigious project. The then PM, Dr Manmohan Singh, had announced the 2,500 acre multi-product SEZ which was squeezed to only 1,250 acres. Later, buzz was that the state government had changed the site to the Focal Point.
SOURCE: The Tribune India
The rupee crossed 67 a dollar, following cues from its Asian peers, as emerging market investors braced for an imminent rate rise by the US Federal Reserve for the first time since June 2006. The US Fed is meeting on Tuesday and Wednesday to take a decision on rates and most market participants globally expect the Fed to do a ‘lift-off’.Rupee crosses 67 mark on Fed rate hike jitters Reserve Bank of India (RBI) governor Raghuram Rajan had said last week there was a 70-75 per cent chance the US Fed would raise rates between one and 25 basis points (bps) and that the Indian central bank was ready. Fitch’s arm, India Ratings & Research, said on Monday the Fed would raise its funds rate by 25 bps and the rate normalisation “would remove significant uncertainty and is likely to be positive for the Indian currency”. “Whatever decision the Fed takes, we are prepared for any eventuality,” Rajan said after RBI’s central board’s meeting in Kolkata on December 11.
According to India Ratings, the Fed decision will bring volatility in the interim but RBI’s intervention in both forward and futures markets could smoothen the ride. RBI had surprised the markets last week by saying it would intervene in the currency futures and options market. The currency market is a little jittery. The rupee opened at 67.04 a dollar on Monday, tracking rates at the overseas non-deliverable forward (NDF) market. The Indian currency fell to 67.1250 a dollar level in the intra-day trade and closed at 67.1050 a dollar level, the lowest since September 3, 2013.
Among major Asian currencies, the loss was led by Indonesian rupiyah, which fell 0.920 per cent against the dollar, followed by South Korean won, which dropped 0.441 per cent. Dollar index, which measures the greenback’s strength against major global currencies, went up 0.19 per cent to 97.748. According to currency dealers, RBI was seen in the morning for a brief period, but then it withdrew. Some exporters were seen selling dollars. RBI intervenes through public sector banks. “The fall in the rupee was not much. The market was expecting the rupee to fall to 67.50 a dollar level before the Fed decision, but that has not happened, which means rupee has fared well. It doesn’t seem RBI has any problem with a gradual depreciation. Ten to 15 paise movement is normal in these circumstances,” said Abhishek Goenka, CEO of India Forex Advisors. While the rupee has depreciated 60.050 per cent against the dollar in a year, the domestic currency is strong against its trade partners. The 36-currency trade-based real effective exchange rate (REER) for the rupee was 124.69 at the end of November 2015. REER, which takes into account the rupee’s competitiveness, was 112.77 in 2013-14; 120.02 in 2014-15; and 121.25 a year ago. A figure above 100 indicates strength. “The market is trying to realign itself before the Fed rate hike. There seems to be no other reason for the rupee to depreciate,” said Naveen Mathur, associate director (commodities and currencies), at Angel Broking.
The Indian debt and equity markets have been on a sell-off mode since November. In November, foreign portfolio investors sold, net of buying, Rs 7,629 crore in Indian equities and Rs 3,639 crore in Indian debt. In December so far, the figures have been Rs 3,265 crore and Rs 347 crore, respectively. The yields on the 10-year bond rose 0.06 per cent to 7.784 per cent. The Sensex, the benchmark equity index of the BSE, rose 0.42 per cent, or 105.92 points, to close at 25,150.35 points.
SOURCE: The Business Standard
India has a tough fight ahead at the World Trade Organisation’s ( WTO) trade ministers’ meet in Nairobi this week trying to keep the on-going Doha development round alive while thwarting developed country attempts to introduce new issues such as investments, environment and competition policy. “The US is now openly calling for a closure of the Doha round. Pressure has started building on us. But, we are going to stay put on our demand that the Doha development agenda should not be buried without outstanding issues being resolved,” a government official told BusinessLine .It will also be difficult for New Delhi to get an agreement on a special safeguard measure (SSM) to protect farmers against import surges and a permanent solution to legitimise its public distribution subsidies that it has been pushing for as a part of the G-33 group of developing countries.
Legitimate demands
“The agriculture committee chairman's recent conclusion that a convergence remains elusive in the two areas is discouraging, but we are going to stand by these legitimate demands at the ministerial,” the official said. The trade ministers’ meet in Nairobi on December 15-18 will try to reach an agreement on a small package of issues while taking a decision on how to move ahead. India’s initial hopes of using its consent for a pact on export competition as a bargaining chip for SSMs seems to have dissipated over the past few weeks with developed countries not ready to play along. “It is a grim picture. India has nothing to bargain with. The only thing that the developed countries might be interested in as a give and take is India's willingness to allow introduction of new issues. The country can't afford to do so as it would have adverse political ramifications,” a Delhi-based trade expert said. The developed countries, however, will try their best to bury the Doha round, that was launched 14 years ago and has a mandate that is favourable to developing countries.
US Trade Representative Michael Froman, in a recent article in a publication, said that there was a need to write a new chapter for the WTO that reflected today’s economic realities. He added that it was time for the world to free itself of the strictures of Doha. New Delhi is against the burial of the Doha round and the start of a new one as it wants the WTO to deliver on the promises of a more just and equitable world trade order promised to poorer countries more than a decade ago. Moreover, it does not want multilateral rules in areas such as investment, competition policy or environment as it could encroach on its sovereign policy making space.
SOURCE: The Hindu Business Line
With the Tenth WTO Ministerial starting today in Nairobi, the battle lines are once again drawn between the developed and the developing world over paring trade barriers — who does how much and how rapidly. It wasn’t very different at the December 2013 Bali Ministerial, but this time it appears that the US, the EU and Japan have had enough of the Doha Round. A ‘facilitators’ draft for the Nairobi meet, specifically Part III of the document, reveals an impatience over the lack of progress in agriculture and intellectual property in particular. The context is easily understood. The Doha Round, which began in 2001, argues (as does the Kyoto Protocol in the context of climate change) that the onus to liberalise must fall first on the developed world so that the poorer countries are not denied their development space. With the world economy in crisis and the developed countries battling recession, their patience with the niceties of the Doha Round is running thin; they would like emerging economies to open up their agriculture, industry and services faster than the Doha Round would possibly permit.
Meanwhile, market access to the developed world, as well as services issues such as the movement of people, remains unresolved, which has led to a deficit of trust. India has been under pressure to alter some of its IPR provisions and, as the EU has suggested recently, place a cap on its subsidy to farm producers. This goes against the commitment made by the US and the rest in September 2014 not to bring up India’s farm subsidies at the WTO (its calculation being a bone of contention between the developed and developing camps) till a ‘permanent’ deal is arrived at. In exchange, India has agreed to go along with ‘trade facilitation measures’. Developing countries, in line with the Doha Round principle, have been pushing for a deeper commitment from the US and the EU on farm subsidy cuts. But this is not going to happen. The US and the EU would rather move on with WTO-plus or ‘Singapore’ issues such as competition policy, procurement and labour standards, by introducing them in their regional trade groupings.
They have opened up fronts such as the US-led Trans Pacific Partnership (TPP), where the Doha Round principle of differentiated liberalisation does not hold. The WTO is under pressure to go the TPP way, with the 12 TPP countries accounting for 40 per cent of world GDP. TPP may be viewed as a threat to those out of it, except that there are other blocs such as the China-driven Regional Comprehensive Economic Partnership coming up. This climate of geo-political flux can work in India’s favour. While being “open” to discussing ‘Singapore issues’, India can stick to its post-Bali position on food subsidies (that it may be problematic from a domestic policy viewpoint is another matter). While its IPR laws seek to keep out flippant inventions, a system of ‘minor patents’ is worth considering. In sum, Nairobi points to the existential crisis of the WTO in an age of geo-politically competing mega-trade blocs.
SOURCE: The Hindu Business Line
The situation is grim on the eve of the World Trade Organisation (WTO) conference in Nairobi. Wide disagreement on most issues has marred the preparations, and neither side is prepared to yield ground at all. The climate conference succeeded in Paris because the participating countries were willing to make compromises. With the spirit of compromise absent, the WTO conference would be doomed to failure. Such an outcome will constitute a decisive defeat for multilateralism. Agriculture is a core concern, and representatives of WTO member countries have been grappling with several proposals. A draft proposal on export competition envisages parallel elimination of all forms of export subsidies and disciplines on all export measures with equivalent effect. From India’s perspective, two other proposals also have importance. The first is on public stockholding for food security purposes, which is related to the requirement in the WTO agreement to calculate subsidies based on reference prices that are nearly three decades old. The second is a G33 proposal on special safeguards mechanism for developing countries to protect agriculture against surges in import during times when low prices prevail in international markets.
A proposal for reduction of domestic support on cotton by developed countries and enhancement of market access for cotton and cotton products for least developed countries (LDCs) is of vital concern to LDC cotton producers in Africa. All the drafts under circulation bristle with square brackets, which denote lack of agreement. The benefits package for LDCs is doing better and an agreement on preferential rules of origin appears to be within reach. Unfortunately, here too divergences have developed on the extension of duty-free-quota-free treatment to all LDCs as African LDCs fear that their benefits under the US African Growth Opportunity Act would be diluted. The fundamental question before the conference is whether the Doha Round should be continued to a conclusion in terms of its mandate, or closed without further ado. While developing countries are almost unanimous that the Doha Round must continue, the three big players—the US, EU and Japan—are advocating its unconditional closure.
Another big issue dividing the membership is on the expansion of the WTO agenda to cover new trade-related issues such as investment and competition policy. The comparative ease with which mega-regional trade agreements have made progress is reinforcing public sentiment in these countries in favour of such agreements. They seem to be rejoicing at the enhanced access to both goods and services that mega-regional agreements such as the Trans-Pacific Partnership (TPP) seem to have delivered, and there is great hope that the Transatlantic Trade and Investment Partnership (TTIP) would soon be a reality. Although such access is nowhere near the original expectation and concessions to domestic producer interests have spoilt the party for exporters of rice, dairy and sugar, the drum beating by leaders has led to undiminished exultation. There is satisfaction in the corporate circles too, because intellectual property rights have been strengthened and a foothold created for raising issues related to labour and environmental standards in developing countries.
It would be a grave mistake for the major developed countries to bring about a peremptory closure of the Doha Round. Once the Round has been closed, it would be well nigh impossible to commence multilateral negotiations again any time soon. The most favoured nation (MFN) tariffs and other barriers will remain in position at the post-Uruguay Round level for a long time. The average MFN tariffs were no doubt brought down to very low levels on industrial products in those negotiations, but tariff peaks are still in position for many products. Multilateral liberalisation ensures that citizens are able to buy from the cheapest market and sell to the dearest. Discriminatory liberalisation cannot guarantee such benefit. During the past few decades, the proliferation of regional trade agreements has been a major worry. Non-participants in such agreements have taken comfort from the fact that multilateral liberalisation would progressively reduce and ultimately eliminate the preferential advantage of regional trade agreements. If the current negotiations are abruptly closed and future negotiations are not commenced, such a process will not be initiated.
What’s more, in agriculture there is no guarantee that the largely voluntary reforms and the move towards decoupled income support brought about in the US and EU will remain in position. It is crucial for all countries—and particularly for those which are not parties to existing mega-regional agreements—that a political mandate is given for making fresh efforts to conclude the negotiations in the Doha Round. Securing this must be the main objective of India and other developing countries during the Nairobi conference. Although the concerns regarding public stockholding for food security and special safeguards mechanism are important, there is no urgency for clinching solutions on these matters. Developing countries have been given open-ended immunity against disputes being raised against them on this matter. For India, special safeguards would be needed only after the bound tariffs have been reduced in future negotiations. At present, the general level of bound agricultural tariffs committed by India in the WTO are 100% for primary products, 150% for processed products and 300% for oils. These levels are far in excess of the applied levels, leaving considerable room to manoeuvre for protecting farmers again volatility in international prices, without recourse to safeguards. All these proposals will need to be carried forward to the future negotiations in the Doha Round.
India and other developing countries must concentrate on obtaining a commitment on multilateral liberalisation in the future by continuing the Doha Round. To achieve this end, they should be willing to make a compromise on the other big issue and be ready to discuss expanding the remit of the WTO. This has been a sensitive matter in the past, but the march of globalisation has increased the relevance of topics such as investment and competition policy for a multilateral forum like the WTO. One of the factors driving the major economies towards regional trade agreements has been that in regional forums it is possible to agree on disciplines in these areas. The language reflected in the December 9, 2015, version of the draft text of the Ministerial Declaration, which calls for exploratory discussions on new subjects, appears to be a good basis for agreement.
SOURCE: The Financial Express
India and Saudi Arabia are exploring ways to overcome the issue of exemption from capital gains tax on the proposed $750-million joint fund to facilitate investments into the Indian infrastructure sector. "Unfortunately, we have not been able to move forward on our bilateral fund with Saudi Arabia due to clarifications that are still required on taxation," Anil Wadhwa, Secretary (East), Ministry of External Affairs said at the India-Saudi Arabia Business Council meeting here. The fund, announced during former Prime Minister Manmohan Singh's visit to Riyadh in 2010, is yet to be operationalised as Saudi Arabia wants investments made from the fund to be exempt from capital gains tax in India. The fund will be focussed on channelising Saudi investments into Indian infrastructure projects and promoting joint exploration and production of hydrocarbons. "Basically, the issue is exemption from capital gains tax. If an exception is made, then you have to make an exception for all the funds. So, it's a policy decision," Wadhwa said. "We will go forward in a different framework. We are exploring possibilities on how to overcome that and looking at it very seriously."
Saud Mohammed Alsati, Ambassador of the Kingdom of Saudi Arabia to India, told PTI: "We need to work on tax exemptions for the fund... We are looking at the possibility of exempting the fund's activities and profits here. Alsati said one of the options could be to establish the holding company for the fund in an overseas tax haven like Singapore. The Ambassador termed the anti-dumping duty on some Saudi companies as a "hindrance" in expansion in India. Besides, Wadhwa pointed out that India looks at Saudi Arabia as one of the key interlocutors in the Gulf region. Noting that bilateral trade for 2014-15 had seen a decline to $39.4 billion, probably due to the reduction in global oil prices, he suggested: "We need to diversify our trade relations and also expand our trade basket." The secretary also spoke of efforts to make policies more stable, transparent and provide a level-playing field to both domestic and foreign investors.
SOURCE: The Economic Times
The Indo-African Chamber of Commerce and Industries which recently hosted the I for Afrika event in Ahmedabad, released a white paper during the event highlighting the thrust areas. According to the white paper, I for Afrika targeted new business opportunities, setting up a networking platform for B2B meetings and to showcase Indian capabilities and development. The white paper also said that the Chamber would establish business links with more than 40 African countries and plan strategy to help Indian businessmen increase India's economic footprints in Africa, the Chamber said in a press release. I for Afrika was organized with focus on sectors like agro and food Industry, constructions, infrastructure, energy and power, IT and telecom, textiles, fabrics, apparels and many more to enhance capacity building, initiatives and resource mobilization programme and act as a facilitator for exchange of business cultural, tourism between India and Africa. K L Daga, President of the Chamber said, “We are very happy to note the intensification of India-Africa economic engagement in recent years. Our bilateral trade has multiplied 20 times in the last 15 years and doubled in the last five years to reach nearly $72 billion in 2014-2015. There is growing investment by Indian companies in Africa in a range of sectors, such as telecommunications, hydrocarbons, agriculture, manufacturing, IT, water treatment and supply, drugs and pharmaceuticals, coal, automobiles, floriculture and textiles.”
Indo-African Chamber of Commerce and Industries Secretary General Sunanda Rajendran has said, “For regional investment and trade to prosper, they have to remove obstacles to cross border business and create markets with greater critical mass, coherence and concentrated economic activity. Out of 54 nations in Africa, 26 countries have already achieved the middle income status. “Besides Govt. and Public sector involvement we have to concentrate more on private sector involvement and small investments will be a key to accelerate the growth. We also need to have special emphasize on technology transfer. We are not looking for investing more but looking for better investment.” The event was attended by 250 delegates from nearly 30 African countries including Egypt, Ethiopia, Gabon, Gambia and Ghana. Ethiopia was designated as the “Partner Country” in the vent. ECCSA, the Ethiopian Chamber of Commerce led a 30 member delegation, headed by its Vice President Abebaw Mekonnen. The Vice President in his address, said that his chamber has been striving to scale up competitiveness of local products and services in the global business arena; there by paving ways for knowledge and technology transfer. Besides, ECCSA has also been promoting trade and investment both locally and abroad by organizing business to business meetings and one to one networking arrangements in priority areas of investment; which are believed to be in line with the country's development policies and strategies. The I for Afrika event included seminars on “Doing Business with India” and “Opportunities in Challenges in Africa and Scope for India”, the release said.
SOURCE: Fibre2fashion
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$ 34.39 per barrel (bbl) on 14.12.2015. This was lower than the price of US$ 35.72 per bbl on previous publishing day of 11.12.2015.
In rupee terms, the price of Indian Basket decreased to Rs 2304.13 per bbl on 14.12.2015 as compared to Rs 2385.54 per bbl on 11.12.2015. Rupee closed weaker at Rs 66.99 per US$ on 14.12.2015 as against Rs 66.79 per US$ on 11.12.2015. The table below gives details in this regard:
|
Particulars |
Unit |
Price on December 14, 2015 (Previous trading day i.e. 11.12.2015) |
Pricing Fortnight for 01.12.2015 (Nov 11 to Nov 26, 2015) |
|
Crude Oil (Indian Basket) |
($/bbl) |
34.39 (35.72) |
41.17 |
|
(Rs/bbl |
2304.13 (2385.54) |
2725.87 |
|
|
Exchange Rate |
(Rs/$) |
66.99 (66.79) |
66.21 |
SOURCE: http://www.pib.nic.in
The Trans-Pacific Partnership agreement has enthused garment producer Phong Phu since it is expected to bring more export opportunities, especially in the big markets of the US, Japan and Australia. Pham Xuan Trinh, CEO of Phong Phu, said his firm would install an additional production line comprising machines for weaving, dyeing and sewing in 2016. The line with a monthly capacity of 300 tons of fiber will help the company increase its output and exports. To capitalize on TPP opportunities, his company also plans to cooperate with local and foreign firms to develop its raw material supply chain. Now the Vietnamese garment sector heavily depends on imported materials, mainly from China and some ASEAN countries. But Phong Phu appears to be an outlier since most other companies are uninterested in the TPP and not making preparations to capitalize on it.
According to the Ho Chi Minh City Association of Enterprises, only half of 200,000 small and medium-sized enterprises (SMEs) in the city have information about the TPP. They are not interested in the trade deal and have made no preparations to tap the opportunities or deal with the challenges the agreement could pose, Pho Nam Phuong, head of the HCMC Center for Trade and Investment Promotion, said. Her center has invited enterprises to many free conferences on the TPP, but they are not interested in attending, she said. Asked about their lack of interest, many enterprises said their focus remains on how to survive amid the economic difficulties and not the TPP, which would not directly affect them immediately.
Nguyen Xuan Thai, director of coffee production and export firm Thang Loi, said: "I am not interested in the trade pact. The tariff reduction is not of great significance to us. Our main issue is how to improve our product quality.” Vietnam, which exports coffee beans worth some $3.6 billion each year, already enjoys zero-percent tariff when shipping to main markets like the US and Japan, Thai said. "Thus, TPP will not benefit coffee shipments.” The newly-inked TPP will lower import taxes in many large member economies like the US, Canada, Australia, and Japan. China is not a member. Import tariffs in the US, the biggest buyer of Vietnam’s leading export item, textiles, will be cut from 17-32 percent now to zero.
Despite being expected to benefit the most from the TPP, few of the 2,000 garment firms across the country have shown interest in it. Only large companies seem to have the capability to study and make preparations for the TPP. In fact, many local enterprises are ignorant about the free trade agreements that Vietnam has signed, Phung Thi Lan Phuong, head of the Vietnam Chamber of Commerce and Industry’s FTA Department, said, citing the case of a company which did not know about the ASEAN-Japan FTA until its Japanese partner asked for a certificate of origin to take advantage of the benefits offered under the pact. Many Vietnamese firms have, in this manner, frittered away benefits FTAs offer. Even the few who have asked the VCCI about the TPP mainly focused on tariff cuts and were simply not interested in other important commitments like those on labor, the environment, and intellectual property, Phuong said. Companies interested in the TPP are mainly foreign owned and large corporations based in Hanoi and Ho Chi Minh City, and smaller firms based in provinces do not seem to know about the trade pact, she said. It goes without saying that if they do not know about the TPP, companies cannot lobby or advice the government to amend legal provisions to secure the benefits offered by the pact.
Foreign firms
In contrast to domestic companies, many foreign firms plan to expand in Vietnam to capitalize on export opportunities offered by the trade pact, which scraps tariffs in many markets, including the US, the world’s biggest economy. Jiangsu Yulun Textile Group of China has recently got a license for a US$68-million textile, dyeing, and yarn plant in an industrial zone in Nam Dinh Province near Hanoi. The industrial zone’s managers said the factory would go on stream in the middle of 2016 and produce 9,816 tons of yarn and 21.6 million meters of cloth and dye 24 million meters of both annually. Nam Dinh authorities said a Hong Kong investor wants to build a garment and textile industrial zone on 1,000 hectares in the province. In Ho Chi Minh City, Forever Glorious Company belonging to Taiwanese corporation Sheico has committed a $50-million investment to produce clothing and accessories for water sports. Gain Lucky Limited belonging to China-based Shenzhou International, who makes garments for Nike, Adidas, and Puma, also announced plans to invest $140 million in the city to build a 45-hectare center for designing and producing high-end products.
The mammoth trade agreement is seen as a game-changer for Southeast Asian economies, the Wall Street Journal quoted US think tank Peterson Institute for International Economics as saying. By 2025 membership of the TPP could boost Vietnam’s exports by 29 percent, the institute predicted. The final agreement looks likely to be “the best trade liberalization we’ve seen in 20 years,” Deborah Elms, co-founder and executive director of the Asian Trade Center, said. “I expect there to be quite a stampede” of foreign investment in Southeast Asia when the final text of the agreement is published, she added. The TPP, which has 12 members and encompasses 40 percent of the world’s economic output, is likely to see the smaller members become standout performers. Malaysia and Vietnam, for example, have no other trade agreement with the US, a voracious consumer of both raw materials and manufactured products, meaning their exporters must pay tax on products they ship to the US. The TPP will give member economies preferential treatment, eliminating or reducing tariffs across most industries, giving them a leg up over rivals like China, Thailand and Indonesia who are not part of the deal. But this will be contingent on certain conditions -- for instance, apparel has to be made using yarn and other materials produced in member countries. Vietnamese garment manufacturers are not financially strong enough to invest in their own yarn and textile facilities, and rely on China and other Southeast Asian countries for most feedstock. Local firms also lag behind in marketing and product development skills. In the event, economists fear that the trade deal would benefit foreign firms coming here more than local ones unless the latter develop a better raw materials base and business skills.
SOURCE: The Thanhnien News
The substantial benefits secured through the historic China Australia Free Trade Agreement (ChAFTA) are set to start flowing from 20 December, Australian Trade and Investment Minister Andrew Robb has announced. This follows a critical 'exchange of notes' in Sydney between Australia's Ambassador-designate to China Jan Adams and Chinese Ambassador Ma Zhaoxu which formally confirms that both Australia and China have now fulfilled their respective domestic requirements to enable ChAFTA to enter into force, the Trade Ministry said in a press release. Robb said this was a most significant moment as the government's key objective – despite a very tight timeframe – was to see ChAFTA operational before the end of 2015. “This will deliver a very material early harvest for our exporters in the form of two rounds of annual tariff cuts in quick succession. The first round of tariff cuts will occur on December 20 followed by a second round on 1 January 2016,” he said. “This will save our exporters hundreds-of-millions-of-dollars in extra tariff payments next year alone compared to if entry into force had been delayed until sometime in 2016. The National Farmers' Federation estimates our agriculture sector alone is set to save around $300 million.”
Robb said this outcome would immediately enhance Australia's competitive position in the world's second biggest economy which will be good for growth and job creation. Australia's dairy industry for example expects ChAFTA to result in 600-700 extra dairy jobs in the first year alone. “This is the most favourable trade deal that China has done with any developed economy and it will put us in the box seat to further capitalise on China's rising middle class and increasing demand for the types of high quality goods and services that Australia can and does provide,” Robb said. On entry into force, more than 86 per cent of Australia's goods exports to China (worth more than $86 billion in 2014) will enter duty free, rising to 96 per cent when ChAFTA is fully implemented. Australian services suppliers and investors will also be able to reap the rewards of new and improved levels of access in China from December 20. Consumers will also benefit from more affordable Chinese goods such as electronics, clothing and other household items as tariffs are eliminated, the release said.
SOURCE: Fibre2fashion
Declining exports and collapsing foreign direct investment (FDI) are fast becoming a major stumbling block to ensure any significant economic growth as the concerned ministries do not seem to take any interest in dealing with the issue on priority. Exporters are crying for some genuine support, not mere financial assistance, in order to boost exports which otherwise are on a nosedive that warrants serious attention of the prime minister and the finance minister. The issue toughened when Commerce Minister Khurrum Dastigir Khan reportedly said few days ago that he was unable to address the problems of the exporters because everything was in the hands of Dar sb. Ihtasham ul HaqueThe majority of the exporters hold responsible the current-what they often term-‘unnatural exchange rate’ as one of the major issues that is not helping them to increase exports. They want better exchange rate along with un-interrupted supply of electricity and gas to the textile industry for increasing exports. They maintain that cost of doing business is very high and that unless the government revises downward electricity and gas charges, it would be very difficult for them to even ensure running of the mills. “Where is the textile package that was to be offered about which the prime minister himself had made a promise during a meeting with us,” asked former President of All Pakistan Textile Mills Association (APTMA) SM Tanveer. He said he was the president of the association in October this year when the prime minister had met with the exporters and assured them of announcing the textile package within a month. “The current exchange rate is misaligned to increase exports and without making it realistic, which is certainly unrealistic, we should not hope for any increase in our exports”, he said.
But he regretted that the promise even made by the prime minister himself was not fulfilled and that it was just a political statement made by Mian Sb. Insiders said that the International Monitory Fund (IMF) officials, who were already furious over the announcement of the agriculture package, told the finance minister that no new incentive package including that of textile will be endorsed. Some say the issue was linked to the disbursement of the 10th tranche, out of the three year $6.67 billion bailout package by the IMF. Tanveer said the private sector which is often accepted as the engine of growth is not being provided any genuine support by the government, with the result there is no hope of meeting any export target set for the current financial year. It is generally asked what happened to Pakistan, which is the fourth largest cotton producing country and was the most efficient in spinning till five years ago, but now faces serious problems in competing with the regional economies particularly India and Bangladesh. Energy cost being paid by the Pakistani textile industry is 24 cents compared to 8 cents of India, which shows that the feasibility of competing with even neighbouring countries in terms of boosting the country’s exports is way out.
Sales tax refund is also another serious problem that is causing hardships to the exporters, especially when they are not getting adequate borrowing from the banks. Prime minister’s advisor on revenue Haroon Akhtar had said last week that refunds amounting to Rs40 billion had just been paid to the exporters and that backlog was being cleared swiftly. A recent newspaper report claimed that sales tax refunds are estimated to be Rs210 billion, though the government places it at Rs88 billion after having paid Rs40 billion to the exporters. Interestingly, the Senate committee on finance was informed few days ago that close to Rs200 billion refunds were still to be paid by the Federal Bureau of Revenue (FBR) and that as soon as claims were filed by the exporters and verified, they will be refunded. This is an advance tax that the government charges from them to meet its financial needs. Since the cost of production of the textile industry has gone up significantly due to increase in power and gas tariffs and other utilities, exporters feel constrained to meet their obligations. It is in this backdrop, they want the early disbursement of their refunds so they can meet their export orders without having to borrow from the commercial banks.
APTMA officials maintain that 80 percent textile industry, out of which 50 percent is located in Punjab, has been closed down because of the non-availability of electricity and gas. The issue has been compounded due to increase in import duty, and machinery import will cost more, ultimately further burdening the exporters. The situation in Sindh and Balochistan is relatively better due to the 18th amendment that allows them to utilise their maximum resources particularly gas reserves. But the same hurts Punjab where there is scarcity of gas and is causing problems to the textile industry. Many people perhaps are right to say that the 18th amendment should be done away with to provide the right to the federal government to ensure equitable distribution of energy to all the provinces. The finance minister is believed to have told the prime minister that if he allows any kind of relief package to the textile industry, the IMF would object and that it may not be forthcoming to extend favours especially granting certain waivers during the next review of the Pakistani economy. But regrettably Mr Dar is reluctant to issue orders to clear sales tax refunds. This is because of the poor fiscal situation that forces him to withhold refunds. The million dollar question is why should exporters be penalised due to the failure of the FBR? When the revenue department failed to collect Rs40 billion during the first quarter of 2015-16, it looked easy to stop refunds under one pretext or the other. The commerce minister does not meet textile exporters and exporters of the bed wear industry on the excuse that he is simply unable to oblige them and that the issues concerning tariffs fall under the jurisdiction of other ministries. Perhaps this was the precise reason he did not invite the real stakeholders last week to discuss the declining exports.
Pakistani exporters are losing their market share in the international market because of being uncompetitive due to unnatural exchange rate and rising tariffs. High tariff rates of utilities, many government officials, admit privately, needed to be brought down to support the industry beside doing away with the imposition of GIDC which many people believe is mere a “Jagga tax” (extortion). Independent economists suggest that if the government cannot lower power and gas tariffs for the industry, it must offer some other incentives to boost exports, one of which could be the rationalisation of the exchange rate parity. The gap between the exports and imports is widening, increasing the current account deficit which also needs to be looked into by the prime minister, who perhaps does not have time to address the problems of the business community. It is high time that he fulfils his commitment of meeting all the stakeholders regularly to resolve their problems.
While the falling exports should be the attention of the prime minister, steep decrease in the FDI is another important issue which must not go unnoticed both by the prime minister and the finance minister. According to the State Bank of Pakistan, FDI declined by $112 million or 24 percent to only $351 million in July-Oct 2016 as compared to $462 million in the corresponding period last year. These FDI inflows stood at $652.3 million while outflows amounted to $301.4 million during that period. Likewise, portfolio investment with outflows of $144 million as against the inflows of $167.7 million in the comparable period last year experienced rapid decline of $312 million or 186 percent during the first four months of the current financial year. This is a very serious situation that there are more outflows compared to inflows in which the investors are also repatriating their maxim profit instead of retaining them and further reinvesting within the country.
Chairman of the Senate Standing Committee on Finance and Revenues Salim Mandviwala regrets that the Pakistan Muslim League-Nawaz (PML-N) government has lost the focus with the result everything is going from bad to worse. “The government is not interested to boost exports nor is ready to look into the causes of speedily declining FDI,” he said. “Our rulers are only interested in their own wellbeing and that is why they extend subsidy to the sugar industry but are unprepared to offer the much needed and much promised textile package to the exporters,” the former state minister for finance in the previous Pakistan Peoples Party (PPP) government said. He said there is a huge vested interest of the politicians who own sugar mills, they are getting subsidies, but “I want to warn them that they should stop destroying the country’s economy by doing things that favour them but not the country”.
Mandviwalla said that financial scandals of the PML-N government have started appearing one after the other and in this regards he referred to LNG, the privatisation of PIA, Nandipur power project which according to him involves of billions of rupees. “They (government) are indulging in wrong doings while the economy is on nosedive,” he said, adding that large scale and small scale industries are not performing, hence causing unprecedented unemployment in the country. There is no doubt that matters pertaining to exports and foreign investment depict a very dismal picture of the economy that surely seeks the attention of the higher authorities. It is high time that the government focuses on critical issues like declining exports and collapsing foreign investment by taking into confidence all the concerned people of the industry. There is a consensus among the former finance ministers, former finance secretaries, ex-central bank governors, government economic advisors and the independent economists that the economy is still to be largely revived by giving up the rhetoric and genuinely focusing on unresolved issues. Tall claims being made by the government to achieve broad economic objectives would not do the tricks just by building motorways, metro-bus projects and other development projects within Punjab. Other three provinces will have to be taken on board to deliver, and deliver genuinely.
SOURCE: The News
Hundred textile mills of Punjab have written to the All Pakistan Textile Mills Association (APTMA) to close their units if the federal government fails to address non-viability of the industry and restore its competitiveness. APTMA will call a conference of stakeholders of the entire textile chain, including value-added sector, this month to evolve a joint protest strategy. “About 70 textile mills have already closed down in Punjab due to commercial non-viability and complete gas suspension by the Sui Northern Gas Pipelines Limited (SNGPL), while another 100 are ready to close businesses,” announced APTMA Punjab Chairman Aamir Fayyaz at a press conference after holding a general body meeting of the association here on Monday. He said the textile chain was ready for closure as the government had failed to reduce their cost of business especially power tariff, ban imported yarn and fabrics and announce the much-delayed textile bailout package. He hoped the consultation process would be concluded this week and a final decision is expected next week.
The APTMA leader dispelled the impression created by Finance Minister Ishaq Dar that the textile industry’s demands had been met by the government, saying what the government had offered fulfilled the demands having least financial impact. Fayyaz said millers did not demand any subsidy, but only withdrawal of the unjust surcharge on power tariff “to deny the industry the benefit of low power cost” due to decline in furnace oil rates. APTMA group leader Gohar Ejaz told reporters it was ironical that the government had yet to appoint a textiles minister as the industry had run from pillar to post for redressal of its grievances. He said the commerce ministry had also failed to announce trade policy even six months after the announcement of the federal budget. He urged the government to restore gas supply immediately besides tariff rationalisation of electricity.
SOURCE: The Dawn
After a long and winding journey that started when the World Trade Organization first chose Nairobi as the venue for its 10th Ministerial Conference, known by the acronym MC10, the time has come for us to actualize the dream of hosting the world in Africa. The meeting kicks off on Tuesday in Nairobi, where we expect to receive thousands of visitors. It has been a year of hard work and tough negotiations. It has been a year of give-and-take as more than 160 member countries weighed in on diverse trade issues, asking what will work best for different members and for the world. It hasn't been easy; there is still a lot of ground to be covered in the coming week. But I am glad that we have kept an unequivocal focus on making sure that trade plays a powerful role as an instrument of growth in the world. That work will be taken to the next level in Nairobi, where we hope for a binding agreement on diverse issues that will impact world trade for many years to come.
While the conference is taking place in Nairobi, it is important to underline that this is not just about Kenya. It is about Africa. Nairobi will be flying the flag for the whole continent at this, the first meeting of the WTO in Africa at this level. Having the meeting here underlines that Africa has come of age. The tremendous growth the continent has registered in the last decade has shown that we are truly ready for business. In Nairobi, delegates will witness for themselves the story of Africa rising. (We hope they will also find time to enjoy the beauty and the warmth that this continent offers.) On substantive matters, we have faith in the work that has been done throughout the year and hope that delegates will have the courage to agree and deliver on diverse issues that will have major ramifications for global trade.
Africa has big hopes on issues that touch on areas of agriculture and development. For instance, we hope for good results on measures of export compensation for agriculture as well as measures that boost the capacity of the least developed countries to trade. In September this year, the world met in New York and adopted the 2030 Agenda for Sustainable Development, hailed as an integrated and transformative vision for a new and better world. United Nations Secretary-General Ban Ki-moon called the goals set there an "agenda for people, to end poverty in all its forms." Those goals see trade as a fundamental element of the transformation they aim to bring about. In this, the year of their launch, we hope that the vibrancy and the youth that permeate all facets of life in Africa can offer new impetus to the delegates at MC10 in Nairobi to deliver a transformative declaration for the world. By doing so, they will underscore the important role of trade and the WTO in building a firm foundation for employment and wealth creation for all people. These are important components of the massive reduction of poverty envisioned in the sustainable development goals. On behalf of Kenya and all of Africa, it will be a tremendous honour to welcome the WTO delegates home to mother Africa. We hope they will enjoy their stay and will deliver the results we need and expect.
SOURCE: The All Africa
It is presumed fashion is one of the most fabulous industries. In contrast, the textile design is the most unglamourous. Oddly, textiles are potentially the most rewarding. Nigerians built their fashion industry around textile and fabrics. In South Africa, there is a time the textile industry even out-earned the fashion industry. Then we have Kenya. Fabric is the bane of our fashion's existence. The absence of a vibrant textile industry is crippling Kenyan fashion. If clothes be the music fabric make notes and keys. For the second time the P&G Future Fabrics Conference 2015, Barcelona, underscored that. Attended by media from all over the world, textile mills, fabric and fashion designers, it acknowledged trends in textiles are happening so fast the fashion industry, consumers, textile mills and clothing care experts need a few moments of deliberation. It is exasperating that Kenya sits on the tail end of this train. If we had to quantify, and yes I am about to hit you with numbers, you see a textile industry but not a fashion industry. The government has invested heavily in textiles. Opportunities will explode in the next five to 10 years. This year, they sponsored Origin Africa, a textile conference focusing on cotton, in Ethiopia. Ethiopia is attractive to investors because it has better production and less corruption. Mombasa Apparels EPZ company is set to open a factory in Mtwapa. China sunk Sh44 billion in a 50,000 acre cotton firm in Naivasha which is expected. India invested Sh7.76 billion in Rivatex, which was bought out by Moi University.
CUTTING EDGE
A 2015 McKinsey report said Ethiopia, Kenya, Tanzania and Uganda have the potential to generate Sh300 billion between now and 2025, but only if the big apparel companies set up shop here. H&M are ahead of the pack. Africa is replacing Asia as Europe's manufacturer of choice. This means jobs are being created. More significantly, why are we not getting in front of this with big ideas? Asia and India present an opportunity for training, cultural exchange, refinement of systems, labour and policies that protect us. In fact the textile design student is almost guaranteed a career upon graduation as opposed to the creative fashion rebels. It starts with what British fashion designer Giles Deacon describes as "cutting edge innovative fabrics." Creating his third annual limited edition collection for P&G Future Fabrics, he said "When we started this process three years ago, there weren't a lot of mills making interesting washable fabric. It's why designers were not using their fabric. The mills we started with are now doing very exciting things. We work directly with fabric mills and my in house design team as I would my own collections so I can get the same look and feel."
Giles is legendary for fabric blends seen on red carpets in the UK and US. Fabric blends are causing dramatic shifts in fashion. Pure luxury fabrics like cotton, silk, cashmere and wool were expensive and valued. Synthetics like nylon, polyester and rayon changed the game. Now luxury and synthetic blends are becoming common, altering texture, dyeing processes, manufacturing, cost, look and feel. These new fabrics are altering consumer behaviour which is translated in designs. A fact Scotsman Jonathan Saunders, a fashion designer, knows this too well. His clients include Michelle Obama and Samantha Cameron. "Textile is really close to my heart. Evolution affects designs. Right now consumers want individuality. There is conversation now around fashion cycles taking six months. It is very upside down. We need to be in the same time zone because bespoke fabric is crucial to what we do as designers," Giles, who known for his screen printing and bold colours, told the conference. "Fashion is not only about changing every season. As a designer, what is your point of view, what makes you different and makes the medium of fabric different that allows you to express yourself and allows the customer to express what is different about them. With so many interesting fabrics we have to think about how fabric feels, not just how it looks. It may be gorgeous and tell a story but how does it make her feel? Is she comfortable? You have to consider both," Jonathan said.
DIFFICULT PROCESS
"You have to talk to people with expertise. We even discuss how to launder the fabric." How much do textile mills affect the growth of the fashion industry and how do partnerships with creatives work? Early this week Jonathan closed his label citing 'personal reasons.' Regardless, his words carry. "In my first job my mentor told me the most humbling thing; that we are in the service industry. We have to listen to what the consumer wants." Giles says "As a designer you can come up with ideas very quickly. For a mill to develop and change its entire sourcing structure, fibres, the way it produces and cloth, is very time consuming and quite a difficult process. You can't just go in today and ask for something new. It takes a lot of development." "There is equipment to purchased. They also have to weigh the risk. They have to make sure it is something valuable for them to do. It can make them cautious. The nature of our work has informed them on the journey to make innovative fabrics." With P&G's research indicating people spend five per cent of their income on clothing, he says "Designers need to check what the world is like, what people are looking for in their lifestyles and learn from that." The future of the Kenyan fashion and textile industry lies in the intersection of textile design and technology.
SOURCE: The All Africa
The renewal of the AGOA expected to give a strong impetus to textile and garment shipments from Africa to the U.S., as some Turkish textile manufacturers eye Kenya and Ethiopia for manufacturing operations, but African countries urgently need to upgrade infrastructure and simplify customs procedures. Africa's textile and garment industry is optimistic that its shipments to the United States, the world's biggest market for such products, will surge following the 10-year renewal of the African Growth and Opportunity Act (AGOA) - under the United States' General System of Preferences that allows duty-free imports of a wide range of African products, which was signed by President Barack Obama on June 11, 2015. This is also driving many Turkish, Indian and Chinese textile companies to African countries, particularly Ethiopia and Kenya, to not only flee the rising production and labor costs at home but also to avail of the duty-free exports under the AGOA to the United States.
Conversations with textile exporters in the Kenyan capital Nairobi vindicate the growing optimism among African shippers. U.S. importers of African textiles and apparel were also optimistic, as was evident at the last TexWorld USA show held in New York where many buyers welcomed the AGOA's renewal, which would create a win-win situation for both U.S. importers and sub-Saharan African shippers. Nairobi-based J.C. Mazingue, a trade advisor and a contractor for USAid, told Daily Sabah that the AGOA would provide African shippers duty-free access to 8,000 products in the U.S. market, including almost all the textile and apparel products. "The AGOA renewal will boost shipments of textiles and apparel to the United States, which for Africa is the world's biggest market," Mazingue said, adding that the AGOA will also motivate African and foreign companies to invest in capacity.
Kenya has emerged as Africa's largest apparel exporter, followed by Lesotho, Mauritius and Ethiopia. The Ethiopian government has identified textiles and apparel as a priority industry. East Africa, according to Mazingue, has become the continent's sourcing hub for textile and garment products. Ethiopia, Kenya, Lesotho, Madagascar and Mauritius are well positioned for this. But an obstacle to future growth is African countries' anachronistic infrastructure that can impact the continent's export trade. Mazingue believes that "generally, energy costs need to go down, transportation and logistics need to improve." But Mazingue underscored the "strategic advantage" accruing to textile and apparel manufacturers in Africa because of the availability of the cotton crop, cultivated mainly in the African cotton belt comprising Zimbabwe, Malawi, Ethiopia, Kenya and Egypt. Cotton has become an important factor for Turkish companies. Turkey itself is one of the 10 leading cotton-producing countries and the fourth-largest consumer in the world. The country is, after India and Syria, the third-largest producer of organic cotton with a share of 3.4 percent, and Turkey's clothing industry is the seventh-largest in the world and the third-largest supplier to the European Union.
Nonetheless, developments in neighboring Syria create uncertainty for Turkey's cotton sourcing because three-fourths of cotton production in Syria is said to be controlled by DAESH. According to Turkish textile exhibitors at international trade shows, Turkey is no longer buying cotton from Syria. But it is a fact that the more than four-year war in Syria has led to a sharp decline in cotton production in Syria whose annual production today has fallen to 70,000 tons down from some 600,000 tons before the outbreak of the civil war. African countries are particularly keen to attract job-creating investors, who are even given incentives for such purpose. However, incentives differ from country to country, and are given on a case-by-case basis. According to the Nairobi-based East African Trade and Investment Hub (EATIH), textiles and apparel account for some 90 percent of exports from sub-Sahara African countries to the United States. The bulk of exports is shipped by sea, but small quantities needed for seasonal purpose or last-minute ordering are also shipped by air, as Ivo Seehann, Lufthansa-Cargo's Nairobi-based general manager for Kenya and East Africa, confirmed. Some textile companies that are eager to take advantage of the rising demand in the U.S. for textile and apparel products and also benefit from AGOA's duty-free imports are establishing multiple textile plants. Mombasa Apparel, an AGOA-supported company, launched its fourth textile factory in November 2014 on the coast of Kenya while Taiwan's New Wide Garment, which already has eight factories in Kenya, Lesotho and Ethiopia, plans to further expand its African operations.
Despite the AGOA duty-free privilege, not all African countries have been able to substantially increase their textile and apparel exports. Kenya, Lesotho and Mauritius account for much of apparel exports under the program. In 2014, Kenya exported $423 million worth of apparel to the U.S., followed by Lesotho with $289 million, Mauritius $227 million and Swaziland $77 million. According to a report by the McKinsey management consulting firm, Ethiopia and Kenya in particular have the potential to become bigger players in garment manufacturing. Some European companies, including H&M, Primark and Tesco, have been sourcing their garment needs from Ethiopia, but other countries have also been supplying substantial quantities of apparel.
Inadequate infrastructure and cumbersome customs procedures
While Ethiopia offers cost advantages, Kenya boasts higher production efficiency, but both countries face challenges such as poor infrastructure, cumbersome customs procedures, a dearth of technical and managerial talent and low levels of social and environmental compliance. Africa's textile and apparel exports to the U.S. could potentially quadruple to $4 billion over the next decade through the renewal of the AGOA, creating 500,000 new jobs, as Gail Strickler, assistant United States trade representative for textiles and apparel, said before the AGOA's extension. U.S. clothing imports from sub-Saharan countries in 2014 reached $986 million, up nearly six percent over 2013. However, African countries tend to lag behind in productivity, quality and product range, as Joseph Nyagari, an official at the Nairobi-based African Cotton and Textile Industries Federation (ACTIF), recently told journalists. However, transportation costs are also not consistent. According to the 2015 East Africa Logistics Performance Survey, the cost of transporting a ton of goods through the northern corridor that runs from Mombasa, Kenya to Kampala, Uganda has declined from $ 3,400 to $2,500 over the last five years. On the other hand, the cost of using the central corridor from Dar es-Salaam, Tanzania to Kampala nearly doubled over the same period to $4,500 in 2015 from $2,507 in 2011, making the central corridor twice as expensive as the northern one. But leaders of Kenya, Rwanda and Uganda are working to make the port of Mombasa and the northern corridor more efficient and have helped reduce clearance costs. The three leaders have also committed to speedily upgrade infrastructure connecting their countries, including the standard gauge railway and Kenya's Mombasa port.
Average clearance time for imported cargo at the Mombasa port dropped from eight days in 2011 to four in 2015, while it takes up to nine days to clear goods at the Dar es-Salaam port. Tanzania and Kenya are in a race to quickly develop their ports with both vying to become the region's main transport hub, connecting other landlocked countries like the Democratic Republic of Congo, Rwanda, Burundi, Uganda and South Sudan to their ports. While Tanzania is constructing a new port in Bagamoyo that will have capacity to handle 20 million containers per year, compared with Dar es-Salaam's installed capacity of 500,000, Kenya is constructing a bigger port in Lamu under the Lamu-Port-Southern Sudan-Ethiopia (LAPSSET) transport corridor project.
Meanwhile, the second phase of Mombasa's container port construction in Kenya is expected to start in early 2017. The Mombasa port has emerged as East Africa's main gateway for sea trade connecting the East African hinterland to the world. The port's construction, costing some $213 million, according to the Kenya Port Authority, will create an additional capacity of between 470,000 and 550,000 20-foot equivalent units (TEU). This will be followed by a third phase entailing construction of a 300-meter-long berth and adding another 450,000 TEUs. The ongoing work on phase one should be completed by February 2016. According to local forecasts, annual container throughput is expected to rise from 1.01 million TEUs in 2014 to 1.12 million this year. It is expected to further grow to 1.8 million and upward to 3 million TEUs between 2016 and 2030.
SOURCE: The Daily Sabah
There's enough cotton sitting in global warehouses to make more than 127 billion T-shirts, or 17 for each person on the planet. That's bad news for investors betting prices will rise. World inventories at the end of this season will be the second-largest ever, just slightly less than last year's record, according to a US Department of Agriculture (USDA) forecast last week. It's a signal that supplies will remain ample even after the agency cut its outlook for production. Hedge funds raised their bullish cotton bets to the highest in more than a year, only to face the first weekly price drop since early November. While threats to the American crop helped make the fiber this year's best-performing commodity, the gains may not last much longer as demand slows. China, the world's largest user, is curbing cotton imports by more than 30 per cent, helping to shrink global trade for a fourth straight year, the International Cotton Advisory Committee estimates. "As is the case with most commodities, at the moment, there's no particular shortage of cotton," said Fiona Boal, London-based director of commodity research at Fulcrum Asset Management, which oversees $3.7 billion. "To get excited about the cotton market, we will need to see either a weather event or something else that really changes the Northern Hemisphere producers' mind about growing cotton. Otherwise, it's hard to see prices move substantially higher."
Money managers boosted the net-long position in cotton futures and options by 26 per cent to 60,357 contracts in the week ended December 8, according to US Commodity Futures Trading Commission data released three days later. That's the highest since May 2014. Prices in New York slid 1.5 per cent last week to 63.71 cents a pound. Cotton is one of only two gainers this year among the 22 components of the Bloomberg Commodity Index, which is trading near a 16-year low. But the fiber's rally is starting to dissipate. Prices are now up 5.7 per cent in 2015, paring advances of as much as 13 per cent. Harvesting in the US, the world's biggest exporter, was hampered by heavy rains this year, and output is expected to fall in China and India. That still wasn't enough to make much of a dent in global stockpiles, which are forecast by the USDA to dip just 6.8 per cent from last year's all-time high. The inventories will also be more than 35 per cent higher than the 10-year average. There are signs that production will rebound. The USDA forecast that plantings will climb 13 percent to 9.5 million acres next year, a report showed Friday. Societe Generale SA forecasts prices will average 62.9 cents in the first quarter and 62.7 cents in the second. Prices will also be tempered by slowing global economies and changing consumer preferences toward synthetic fibers, Christopher Narayanan, SocGen's head of agricultural research in New York, said in a telephone interview last week.
Even with recent declines in output, "given stockpiles, I just can't imagine prices moving up," said Lara Magnusen, a La Jolla, California-based portfolio manager at Altegris Investments Inc., which oversees $2.59 billion. Still, US output has been worse than expected after the crop's condition declined throughout the growing season. The government last week reduced its forecast for domestic output 1.9 per cent to 13.03 million bales, citing lower production in North and South Carolina. Analysts had forecast 13.17 million, on average. A bale weighs 480 pounds (218 kilograms). "Producers have been subject to weather risks," which can help to support prices as stockpiles slowly decline, Tracey Allen, senior commodities analyst with Rabobank International in London, said in a telephone interview. "Challenges for cotton at the moment, I suppose, are that the demand side is relatively tepid."
SOURCE: The Business Standard
South African Trade Minister Rob Davies said Monday that African countries were being ripped off their fair share of the proceeds from trade in raw agricultural commodities such as coffee due to its lack of representation at the world market. Citing recent reports showing the worldwide coffee marketing value chain was worth 100 billion U.S. dollars while African coffee exporters earned a paltry 6 billion dollars, Davies said Africa will benefit from its share of the world trade only if it was facilitated to participate internationally. Speaking at the 4th China Roundtable ahead of the WTO Ministerial Conference in Nairobi, Davies said the lack of industries in Africa was to blame for the continent's poor share of the world trade and its low returns from the global trade. "The value chains have not benefited Africa. Africa needs assistance so that it can weather the next wave of the financial crisis. We must industrialise. We can only do this through proper trade policies. It is not the trade rule that is the problem, it is the lack of products to trade across," the minister said. "We must create regional value chains. We must create space to slow down the importation of the finished goods and we must have space to industrialise," the minister said at a panel debate on Africa's perspectives on the future of the trading system after the roundtable.
The debate convened by China is part of a series of debates the WTO Secretariat intends to hold after signing an agreement with China to facilitate the trade participation of poor countries. Lesotho's Minister of Trade Joshua Setipa said while the foreign multinational corporations mostly dominated the international value chains, a requirement for the decentralization of the trading system, especially in the textile sector, would benefit more African countries. "The textile industry can play a role in industrialization in African countries because it requires more labour. It is central to manufacturing. This means it is also a platform for our countries to enter into new sectors like motor vehicle sector where we also provide services associated with the textile sector such as the provision of seats for new vehicles," Setipa said. "We have improved on our volume of trade in Africa. We have also managed to integrate into the global market and the global value chain," the minister added. The WTO is discussing further opening up of markets to produce from African countries. "These global value chains are not a dream. They are already happening," said Aracha Gonzales, the Chief Executive of the International Trade Centre, a technical body created by the WTO. She said to support trade, a new system to support local small and medium enterprises in poor countries was required to ensure these local companies benefit from international trade. The ITC executive said the African region would only benefit from international trade if it manages to create local markets and regional trading blocs that would benefit locally produced goods.
SOURCE: The Shanghai Daily
Crude oil extended its slide on Monday, but steadied after moving within a hair of 11-year lows, on mounting fears that the global supply glut would only worsen amid the price war between leading Organization of the Petroleum Exporting Countries (Opec) and non-Opec producers. Brent and US crude futures fell by as much as four per cent to their lowest levels since the start of the 2008 financial crisis, before paring losses on some short-covering. Traders and analysts were almost unanimous in their opinion that the market would go even lower. Heating oil and diesel futures on both sides of the Atlantic dropped to fresh 11-year lows on mild pre-winter weather and growing inventories. “The energy complex is showing no semblance of support at the start of this new week and some additional price weakness could be forthcoming as volume slips into the upcoming holiday period,” said Jim Ritterbusch, founder of Chicago-based oil consultancy Ritterbusch & Associates. Brent futures was up 5 cents at $37.98 a barrel by 11:55 am EST (1655 GMT).
Earlier in the session, Brent traded just 13 cents above the $36.20 low set in December 2008. Below that level, Brent would be at its lowest since July 2004 — a year when oil was rebounding from single-digits lows hit during the 1998 financial crisis and when talk of a commodities super-cycle was just beginning. West Texas Intermediate (WTI) futures, the US crude’s benchmark, rose 60 cents to $36.22, after making a run to as low as $34.53. WTI’s financial crisis bottom was $32.40. Both Brent and WTI have fallen every day since the Opec on December 4 abandoned its output ceiling. In the past six sessions, the global benchmarks have shed more than 13 per cent apiece. Opec has been pumping near record levels since last year in an attempt to drive higher-cost producers such as US shale firms out of the market. US output has fallen though not by much, while production from Russia — another big non-Opec player — has risen. Opec supply is likely to increase by 1 million barrels per day next year, Morgan Stanley said in a research note. “Almost the entirety of added supplies in 2016 will come from Iran, Iraq and Saudi,” it said. Iran has promised to ramp up supply once nuclear-related sanctions are lifted on its crude exports. Tehran is expected to raise crude and condensates exports by as much as 700,000 bpd by end of 2016.
SOURCE: The Business Standard
The International Monetary Fund (IMF) has praised the UK's recent economic record, but warned of a series of risk that could hit its strong economic performance. "The UK's recent economic performance has been strong, and considerable progress has been achieved in addressing underlying vulnerabilities. Growth has exceeded that of the other major advanced economies, the unemployment rate has fallen substantially, employment has reached an historic high, the fiscal deficit has been reduced, and financial sector resilience has increased," the IMF said in its latest report on UK. The UK economy remains robust and is one of the developed world's leading economies. The IMF said in its World Economic outlook report in October that it expected the UK to grow a respectable 2.5 percent in 2015 and 2.2 percent in 2016. Unemployment figures for the July-September period showed the jobless rate fell to 5.3 percent, the lowest rate since the March to May 2008. The IMF said that "steady growth looks likely to continue over the next few years, and inflation should gradually return to target."
According to the report, as labor market slack is used up, growth is predicted to slow slightly in 2016 and to average around 2.25 per cent over the medium term. With the economy running near capacity, the IMF said growth should be matched by steady increases in employment. But the IMF, which had clashed with UK's Chancellor George Osborne over his austerity drive in the past, issued some stark warnings on risks to the outlook. "There are, however, a number of risks to this broadly positive outlook" with domestic and external imbalances persisting and there were risks of various "shocks". It listed household debt, current account deficit and fiscal deficit as possible flashpoints. "House price growth has eased somewhat over the past year, but remains high. The absence of an associated boom in net mortgage lending helps contain financial risks associated with high house prices" the IMF said. However, it noted that while the share of households borrowing at high loan-to-income multiples has come down, the household debt-to-income ratio has stabilized at a high level despite steady output growth, "leaving some households vulnerable to income and interest rate shocks."
The current account deficit is similarly not a result of funding a household credit boom, but nonetheless is strikingly large, the report said. "Notwithstanding a flexible exchange rate and independent monetary policy, confidence shocks could reduce external capital flows into the UK, which could adversely affect growth." The 2014-15 fiscal deficit stood at nearly 5 percent of gross domestic product (GDP), with general government gross debt reaching 87 per cent of GDP, despite steady progress in reducing fiscal imbalances. While the UK continues to benefit from record low interest rates, "maintaining deficits and debts at these levels would constrain the space to respond proactively to future large negative growth shocks," the IMF noted. The IMF said there were "other uncertainties that may affect the outlook," such as a planned referendum on EU membership which "could weigh on the outlook" and a presumed recovery in productivity growth which, it said, could fail to materialize. IMF Managing Director Christine Lagarde said she “very, very much” hoped the UK remained within the European Union.
SOURCE: Fibre2fashion
The world economy has fallen below forecasts of even six months ago and will grow only modestly over the next two years due to “cyclical and structural headwinds,” including low commodity prices and stagnant investment, the United Nations has reported. It has urged steps to ensure stronger growth. “Stronger and more coordinated policy efforts are needed to ensure robust, inclusive and sustainable economic growth, which will be a key determinant for achieving the 2030 Sustainable Development Goals,” UN Assistant Secretary-General of the UN Department of Economic and Social Affairs, Lenni Montiel said of the ambitious sustainability goals adopted at a UN summit in September. Global growth is estimated at a mere 2.4 per cent in 2015, a downward 0.4 percentage-point revision from forecasts presented six months ago, according to the UN World Economic Situation and Prospects (WESP) 2016 report.
Amid lower commodity prices, large capital outflows and increased financial market volatility, growth in developing and transition economies has slowed to its weakest pace since the global financial crisis of 2008-2009, it noted. Given the anticipated slowdown in China and persistently weak economic performances in other large emerging economies, notably the Russia and Brazil, the pivot of global growth is partially shifting again towards developed economies. The global economy is projected to grow by 2.9 per cent in 2016 and 3.2 per cent in 2017, supported by generally less restrictive fiscal and still accommodative monetary policy stances worldwide, according to the report. “The expected timing and pace of normalization of the US monetary policy will help reduce some policy uncertainties and provide impetus to revive investment,” Hamid Rashid, Chief of the UN's Global Economic Monitoring Unit said while presenting the report.
But preventing excessive volatility and ensuring an orderly adjustment in asset prices also depends on commodity price stabilization and no further escalation in geo-political conflicts, the report noted. Identifying five major headwinds, it cited persistent macroeconomic uncertainties; low commodity prices and diminished trade flows; rising volatility in exchange rates and capital flows; stagnant investment and productivity growth; and a continued disconnect between finance and real sector activities. Weak growth is also adversely impacting labour markets in developing and transition economies, with unemployment on the rise, especially in South America, or stubbornly high, as in South Africa. At the same time, job insecurity is often becoming more entrenched amid a shift from salaried work to self-employment. With persistent output gaps, modest wage growth and lower commodity prices, global inflation is at its lowest level since 2009. Deflation risks in developed economies have diminished, but not disappeared, particularly in Japan and the euro area. Growth in developed economies will gain some momentum in 2016, surpassing the 2 per cent mark for the first time since 2010, the report notes. Economic growth in developing and transition economies is expected to bottom out and gradually recover, but the external environment will continue to be challenging and growth will remain well below its potential.
Monetary authorities need to make concerted efforts to reduce uncertainty and financial volatility, striking a delicate balance between economic growth and financial stability objectives, the report said. Given the massive build-up of private debt in many emerging economies, policymakers need to fine-tune their policy mix – more active fiscal policies, macro-prudential instruments, targeted labour market policies, among others – amid volatile global financial conditions. The report highlights that monetary policies did most of the heavy-lifting since the global crisis to support growth but the time has come for fiscal policies to play a greater role. Well-designed and targeted labour market strategies are needed to complement fiscal policies to re-invigorate productivity, employment generation and output growth. In a positive note on recent trends in environmental sustainability, it noted that global energy-related carbon emissions showed no growth in 2014 for the first time in 20 years, with the exception of 2009 when the global economy contracted. This suggests the possibility that the world might start to see some de-linking between economic growth and carbon emission growth.
SOURCE: Fibre2fashion
