INTERNATIONAL
The Man-Made Textile Research Association (MANTRA) is working on a Rs25 crore pilot project approved by Gujarat Government to manufacture hygiene products and medical textiles, including adult and baby diaper, masks, surgeon gowns and gloves, surgical shoes and blankets at 6,500 square meter of land at Karanj. If all goes well in the next 18 months, Surat, country's largest man-made fabric (MMF) centre will turn into a manufacturing hub for disposable hygiene products and medical textiles. In the pilot project, around 25 percent of the cost will be borne by MANTRA and the rest by the state government. The state government has already released Rs 1 crore for the project. A private player is keen to invest 25 percent in the project cost and in taking up marketing of the products across the country.
MANTRA office-bearers said that this is first-of-its-kind project for hygiene products and medical textiles in the city under public-private partnership model. MANTRA secretary Dinesh Jhaveri said that they will be importing machines to manufacture disposable medical and hygiene products from China. The machines are available at one-third of the price in China compared to those manufactured in Europe. Jhaveri further added that disposal medical textiles are manufactured from non-woven fabrics. In Surat, there are many who manufacture non-woven fabric on shuttle-less looms. The raw material for disposable medical products is available and so production can start without any problem. The disposal medical and hygiene products are the need of the day. There are very few players in southern and northern India who manufacture such products due to which over 90 percent of disposable hygiene products and medical textiles available in India are imported. At present, only 20 percent of the people in India can afford disposable products. Surat aims at becoming a leader in disposable medical products as indigenously made products would come cheaper.
SOURCE: Yarns&Fibers
New Delhi is comparing market access offers made by member countries of the proposed Regional Comprehensive Economic Partnership (RCEP) — including the 10-member ASEAN and China — with India’s industry demands in order to frame requests that could result in improved offers from the partner countries. “This is a crucial phase of the negotiations as seemingly generous offers made by countries could be meaningless if they don’t result in access in areas of importance to a particular country. In our requests to various countries, we will seek market access in sectors that hold potential based on submissions made by our industry,” a government official told BusinessLine. For instance, New Delhi may want China to improve its offers for items such as engineering goods, pharmaceuticals, optical and medical equipment, rice, marine and dairy products, while for members of the ASEAN-bloc the emphasis would be on items such as gems and jewellery, vehicles and auto-components, organic chemicals and textiles and accessories, the official explained. Other members of RCEP include Japan, South Korea, New Zealand and Australia. The negotiations for RCEP — which once concluded could result in the largest trading bloc in the world with a combined GDP of $21 trillion — is taking place in the request-offer mode where members offer market access to other members based on an initial commitment each has taken on over-all liberalisation of items. Other members submit requests for its improvement and the process goes on till a satisfactory agreement is reached.
Stock-taking exercise
The next round of RCEP talks has been scheduled in Brunei from February 15 to 19 and would focus on the offers and requests made by the 16 countries with the aim to wrap up the negotiations after the ASEAN ministerial meet in September, the official said. A stock-taking of the request and offers in the services and investment sector, too, will be carried out in Brunei. India and China have agreed to remove duties on 42.5 per cent of items for each other. The ASEAN bloc, Japan, South Korea and Australia have decided to eliminate duties on 80 per cent of items for India while New Zealand has agreed to do so for 61.5 per cent of items. “We have to be careful while framing our requests because if we become too ambitious vis-à-vis particular members, we can’t complain if they too have high expectations of us. So, a balance has to be maintained,” the official said. It is important for India to negotiate a successful agreement with RCEP members to counter the ambitious US-led Trans-Pacific Partnership (TPP) agreement involving 12 Pacific Rim which includes six members from the RCEP. The TPP has been finalised but is yet to be ratified by the member countries.
SOURCE: The Hindu Business Line
India's trade deficit with China touched a whopping USD 44.87 billion last year and its exports shrank to USD 13.38 billion as bilateral trade registered a marginal increase, totalling USD 71.64 billion, missing the USD 100 billion target set by the leaders of the two nations. The total India-China trade in 2015 amounted to USD 71.64 billion, officials here told PTI quoting release by the Chinese customs. The bilateral trade registered a marginal increase compared to USD 70.59 in 2014.This year China's exports went up to USD 58.25 billion while India's export to China was pegged at USD 13.38 billion, declining from USD 16.4 billion in 2014. While Indian exports continued to decline due to fall in the iron ore and decreasing demand in view of China's slowdown as well as restrictions on exports, it was also attributed to rising dollar which Indian exporters say is having a negative impact on their profits. Indian officials say that the trade deficit is more than USD 48 billion if the unofficial trade between the two countries is taken into account. As the deficit issue continues to be a point of friction between the two countries, India is pressing China to open up more of its markets to IT and Pharmaceuticals which are India's main strengths. While China continues to promise to look into the Indian demand, the fall of exports show that there is little improvement. India and China agreed to form a special task force during the visit of Prime Minister Narendra Modi's to Beijing in May this year to review the deficit issue. But officials say that it has not met so far.
In view of the continued deficit problem, India has been pressing China to step up investments in 'Make in India' and other infrastructure projects. So far Chinese investments amounted to around USD three billion according to Development Research Centre of China. The overall trade between them missed the deadline of USD 100 billion trade set by the leaders of the two countries. Officials say that the marginal increase in trade this year showed that it will be an uphill task to reach the USD 100 billion landmark. The maximum India-China trade recorded was about USD 77 billion in 2011.
SOURCE: The Economic Times
India-Pakistan relations are drawing considerable attention from the world at large, with the two countries now at a point where significant economic gains could serve as a powerful means for conflict resolution. After a hiatus of three years, the bilateral relationship has received a boost, with a series of positive developments in the last one month—the meeting between the two Prime Ministers on the sidelines of the Paris climate summit; the meeting between the two National Security Advisors in Bangkok; Sushma Swaraj’s visit to Islamabad for the Heart of Asia summit; and the recent surprise visit of Narendra Modi to Lahore to greet and meet Nawaz Sharif on his birthday have rekindled hope for the two countries. The underlying message behind these meetings indicates the two governments’ commitment to take the bilateral dialogue process forward and mutually resolve all outstanding issues for attaining long-term peace and economic integration in South Asia. With the foreign secretaries of the two countries slated to meet, all eyes are now set on when an official meeting between Indian and Pakistani commerce secretaries will be fixed, with a focus on fresh proposals to speed up the trade normalisation process.
At this stage, it is expected that Pakistan will grant India most-favoured nation (MFN) status. India should, in turn, announce deeper market access to Pakistan by offering to reduce tariff duties to zero. India has already offered duty-free access to the least developed countries of the SAARC—Afghanistan, Bangladesh, Bhutan, Maldives and Nepal. It also offers duty-free access to Sri Lanka under the India-Sri Lanka bilateral FTA. Offering similar treatment to Pakistan would not only foster trade relations, but would also help in achieving the goals of the South Asian Free Trade Area (SAFTA). The most substantial impact of the trade normalisation process would be on informal trade flows, which are often considered a defining characteristic of the India-Pakistan economic relationship. According to a study done by ICRIER, informal trade flows are estimated to be $4.71 billion in 2013-14. Of this, India’s exports to Pakistan are estimated to be $3.99 billion and imports from Pakistan $0.72 billion. The main export items from India, via informal channels, are jewellery, textiles, machinery and machine parts, electronic appliances, scraps, paper, chemicals, tyres, and betel leaves. India’s informal imports from Pakistan consist of textiles, dry fruits, spices, cement, carpets, fruits and vegetables. The primary reason for informal trade is the high transaction costs of trading, as a result of which traders often resort to trading through third-country ports, mainly Dubai. Today, goods travel from Delhi to Lahore through Mumbai, Dubai and Karachi, making the journey 11 times longer and four times costlier. The move towards trade normalisation would certainly lead to a reduction in transaction costs and consequently shift informal trade flows to formal channels. However, for this potential to be realised, India and Pakistan need to prepare themselves to facilitate the expansion of bilateral trade. The transport protocols between the two countries also need to be amended to allow seamless transportation of cargo in each other’s territory. If the two countries agree to grant transit rights to each other, India could be connected to Afghanistan and further to Central Asia through its western neighbour. Pakistan, meanwhile, will be able to access India’s eastern neighbours.
An increase in trade will be difficult without requisite financial mechanisms. Even though the central banks of India and Pakistan signed an agreement that allowed for the opening of branches by two Indian banks in Pakistan and two Pakistani banks in India in 2005, this agreement has not still been implemented. Without banking services, the provision of letters of credit and the facilitation of cross-border transactions of funds, it will be hard for firms to trade across the India-Pakistan border even when MFN is granted. For several decades, limited people-to-people interactions because of barriers to communication have inhibited information flows that could help expand trade. Creating multilevel channels of communication is important for bringing businessmen of both the countries together—which would help bridge information gaps, reduce misconceptions and generate a significant change in the business environment of the two countries. Finally, there is a need to engage with the media. In both India and Pakistan, the media has a powerful influence on public sentiments. Negative reporting has so far dominated India-Pakistan relationship. It would be much more helpful for reporters to create a positive environment that is conducive to holding talks on trade normalisation between the two countries. The media should try to be optimistic about the benefits of trade normalisation and the possible impact this could have on strengthening bilateral ties and regional integration. Golden moments in the history of India-Pakistan relationship are few and far between. The two countries should capitalise on every opportunity that comes their way. A successful meeting between the foreign secretaries could pave the way for a new era in India-Pakistan relations.
SOURCE: The Financial Express
A fresh plunge on the main global index of the cost of moving major raw materials by sea has potential implications for trade.The Baltic Dry Index (BDI) slid to a level of 402 on Wednesday, a new low, and this might stop much of trade across the Indian Ocean and Asia-Pacific market, say observers. There could be a strong aversion, for instance, to long-term deals. The BDI is an economic indicator issued daily by the London-based Baltic Exchange. “The trade climate is full of insecurity, as charterers are not sure if the price at which they have negotiated is the right low price,” Kiran Kamat, owner of Link Shipping & Management Systems, a leading chartering and shipping company, told Business Standard. “Charterers are unable to take a call, leading to last-minute back out (from deals), even if ship-owners are being flexible.” The index began falling from early August last year, when China initiated a devaluing of its currency. From a high of 1,222, it has lost two-thirds in five months. Wednesday’s level is a three-decade low; the all-time high of 11,793 was on May 20, 2008. Since then, the index has been volatile, being down for much longer than thought likely. A charterer might own cargo and employ a broker to find a ship to deliver for a certain price, the freight rate. A charterer might also be a party without a cargo, taking a vessel for a specified period from the owner and then trading the ship to carry cargoes above the hire rate.
More bad news for ocean trade “There have been very few inquiries and even of those, most were not firm. Of (every) five inquiries, three have failed,” said a ship owner, on condition of anonymity. “The charterers are fixing rates and then trying to trade the cargo. Freight is low enough but still charterers are not able to sell the cargo.” The BDI measures a change in transportation cost of raw materials such as metals, ore, coal, grain and fertiliser by sea. The continuous fall since August followed China’s economic data, which set a strong bearish tone for the bulk trade market across the globe. For, China is the world’s largest importer and exporter of several commodities. A slowing in its economy now indicates a grimmer trade climate. “Interest in fixing freight contracts for a longer period is absolutely absent from the charterers’ side,” said someone from a steel company. “No charterer wants to lock-in freight at a premium to the spot price, as they see little upside over this year. Ship owners might have to consider laying off some of their vessels to stem the slipping freight rates.” On the India-specific trade scenario, sectoral officials said with coal supply higher in the domestic market, the iron ore export market completely out of the picture due to a long-period ban, and a diminished fertiliser trade, small-size Supramax and large-size Capesize vessels are idle, pushing even the ancillary industries out of a job. The latter caters to Capesize vessels, as these ships need constant maintenance. “Shipping is a gamble and one cannot say when things will look up. It's all about being optimistic in the business,” say officials in the sector.
SOURCE: The Business Standard
Global credit rating agency Moody’s and its India affiliate, ICRA, have said that the country’s sovereign rating (Baa3) carries a positive outlook for the year 2016 bucking the trend among similarly rated emerging market peers Brazil, Russia, South Africa, Indonesia, Turkey and the Philippines. The agency observed that healthy domestic growth and accommodative monetary policies will benefit corporates. The ‘Baa3’ rating incorporates credit strengths, such as India’s diversified economy, robust growth prospects, relatively high domestic savings rate and high international reserve buffers. The positive outlook is an indication that there is an increasing probability that actions by policy-makers will enhance the country’s economic strength and, in turn, the financial strength over coming years. “India enters 2016 on the cusp of a cyclical growth recovery, with inflation under control and the economy benefiting from lower commodity prices,” said Atsi Sheth, Associate Managing Director, Moody’s. “However, these advantages will only yield sustainable growth acceleration once Indian corporate and bank balance sheets are repaired, and if the private sector remains internationally competitive,” she added.
According to Moody’s, low inflation indicated a greater balance between domestic demand and supply conditions, and would help India’s private sector remain internationally competitive. And, because corporate profit taxes are an important source of government revenues, stronger corporate profits will support the government’s fiscal consolidation efforts, it said. Corporate taxes at 17 per cent contributed to a significant portion of the Centre’s revenues, Sheth said. ICRA expects the growth of India’s gross value added at basic prices to rise to 7.7 per cent in FY17 from 7.2 per cent in FY16. “We believe the lagged impact of reforms, the pay revision for government employees and pensioners, as well as the likely cyclical upturn in agriculture and rural demand will provide a modest boost to economic activity in 2016,”said Aditi Nayar, Senior Economist, ICRA. However, Nayar added that while the pay revision for central government employees and pensioners was likely to boost consumer demand, it also posed a challenge to fiscal and inflation management. According to ICRA, a normal monsoon in 2016 after two successive years of poor rainfall would boost agricultural output, restore the purchasing power of the farm sector, and boost rural demand.
POSITIVE OUTLOOK
SOURCE: The Hindu Business Line
Urging Japanese companies to invest and manufacture products in India, Power Minister Piyush Goyal today said energy cooperation with Japan will be defining feature of bilateral relationship. “Energy cooperation with Japan will be defining feature of our relationship,” Goyal said while addressing at the Institute of Energy Economics Japan in Tokyo. Goyal is on a visit to Japan to attend the 8th India-Japan Energy Dialogue from January 12 to 14. This is the first ministerial level visit from India to Japan after Japan’s Prime Minister Shinzo Abe visited India in December 2015. “We invite Japanese companies to come to India, Make in India and Conserve Energy in India”, Goyal tweeted. “Japan has 70-80 per cent of lighting from LEDs, we are targeting 100 per cent LED penetration in India by 2019,” a Power Ministry release quoted Goyal as saying.
Speaking on climate change, Goyal said, “USA & Europe with just 10-12 per cent of the world’s populations have contributed 50 per cent of green house gases emissions while India contributes only 2.5 per cent with 17 per cent of population.” The developed countries should support the developing & emerging economies with green technology, low cost finance to keep energy costs affordable, he said. “Climate justice demands that the developed world reassess its lifestyle and consumption of electricity and petroleum products”, Goyal added.
Earlier in the day, Goyal attended three roundtable conferences on Clean Coal Technologies and Efficient Coal Based Power Generation, Super-Efficient Appliances & LEDs and Energy Efficient Petroleum Refining- Energy Audit in Refineries. He will also participate in two roundtable conferences to be held on the theme of Energy Storage Technologies and Smart Grids/Smart Meters on Thursday. Earlier in the day Goyal tweeted, “South grid capacity increased 71 per cent in last 18 months. Investing Rs 42,950 crore to increase it by almost 3 times by 19-20 to ensure cheap power.”
SOURCE: The Financial Express
One month of negative growth of the Index of Industrial Production (IIP) should not be interpreted as the end of industrial recovery, India Ratings and Research said. Industrial production, measured by the Index of Industrial Production (IIP), dropped 3.2 per cent in November 2015. The rating agency said the negative growth in November 2015 is an outcome of a higher base, the slowdown is evident across all the broad-based sectors namely mining, manufacturing and electricity. Ind-Ra said it expects industrial gross value added to grow at 7.3 per cent in 2015-16. Manufacturing growth came in at negative 4.4 per cent in November 2015, the lowest since October 2014. After a relatively robust performance till October this fiscal, a sudden dip in the manufacturing sector performance is indeed worrisome, particularly when the government is focussing on ‘Make in India’ and is trying to revive infrastructure sector growth, the rating agency said.
SOURCE: The Financial Express
The “alarming” outlook for emerging countries hit by collapsing oil prices is more worrying than China’s economic slowdown, ratings agency Standard & Poor’s said. “We are much more worried about the prospects for emerging countries outside of China, and in particular raw material producing countries”, than the Asian giant’s economic woes, leading S&P economist Jean-Michel Six told a news conference. He said falling oil prices that had been a “blessing” for consumers in developed nations had now turned into “bad news” for the world economy. And he highlighted the risks of falling oil prices that have now slumped close to USD 30 a barrel for “the growth and geopolitical prospects in the emerging countries” heavily dependent on commodity prices and especially oil. “We are in a zone of uncertainty and weakness which is becoming alarming,” Six, who is chief economist for Europe, the Middle East and Africa, told reporters.
Brazil is an “extremely serious” case after falling into recession last year, the S&P official warned, pointing to the multi-faceted impact on it from US monetary policy, China, commodity prices as well as its economic policy and governance. China, on the other hand, where concern about its economy has rattled global markets since New Year, is less worrying, he indicated. He said a slowdown in an economy in the throes of transitioning from export-led investment to a domestic consumer focus is welcome. “It would be desirable for the Chinese authorities to abandon the seven per cent (of GDP) target (for growth),” he added.
SOURCE: The Financial Express
State Bank of India (SBI) and Export-Import Bank of Korea (K-Exim) on Wednesday concluded a $500-million (about Rs. 3,300 crore) line of credit. With the signing of this line of credit (LoC), the total facility from K-Exim to SBI will be $1 billion. The latest facility will have a maturity of a maximum 15 years. The agreement was signed by Arundhati Bhattacharya, Chairman, SBI, and Duk Hoon Lee, Chairman and President, K-Exim. Bhattacharya said there is huge opportunity for Korean companies to take part in the Prime Minister’s ‘Make in India’ mission. This LoC will help SBI in arranging long-term foreign currency funds to finance Korean companies setting up manufacturing units or Indian corporates sourcing goods from joint ventures or subsidiaries of Korean companies having manufacturing set-up in India which will be a push to the mission, she added.
Branch in Korea
Meanwhile, SBI has opened its first branch in South Korea, PTI has reported. The Seoul branch is expected to play an important role in strengthening economic partnership between the two nations, the bank’s Managing Director B Sriram said in a statement. With over 135 branches, SBI has the largest presence in foreign markets among domestic banks.
SOURCE: The Hindu Business Line
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 27.32 per barrel (bbl) on 13.01.2016. This was lower than the price of US$ 27.33 per bbl on previous publishing day of 12.01.2016.
In rupee terms, the price of Indian Basket decreased to Rs 1826.30 per bbl on 13.01.2016 as compared to Rs 1828.42 per bbl on 12.01.2016. Rupee closed stronger at Rs 66.84 per US$ on 13.01.2016 as against Rs 66.89 per US$ on 12.01.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on January 13, 2016 (Previous trading day i.e. 12.01.2016) |
Pricing Fortnight for 01.01.2016 (Dec 12 to Dec 29, 2015) |
|
Crude Oil (Indian Basket) |
($/bbl) |
27.32 (27.33) |
33.58 |
|
(Rs/bbl |
1826.30 (1828.42) |
2234.08 |
|
|
Exchange Rate |
(Rs/$) |
66.84 (66.89) |
66.53 |
SOURCE: PIB
Pakistan Readymade Garment Manufacturers and Exporters Association (PRGMEA) has cautioned the government to address the issues of value-added textile sector, as the drop in exports may widen further due Vietnam-EU FTA. PRGMEA Chief Coordinator Ijaz Khokhar asked the government to take preventive measures, following the EU and Vietnam reaching a free trade agreement, as the emerging economy could capture Pakistan's export market, which has already decreased due to high energy cost, discriminating import duties on the industry's raw material and a decline in cotton production. He said that the exports of textile and clothing have been declining sharply during the last six months along with low cotton yield in Punjab. PRGMEA chief coordinator asked PM Nawaz Sharif to personally direct the policy makers for reduction in all input costs otherwise the export-oriented industries would not only close down their operations but millions of workers would also lose their jobs. He said that the PM had committed to hold meetings with export-oriented industries on quarterly basis but no such meeting was held so for.
SOURCE: The Daily Times
The next edition of Textile Forum runs from March 9-10, 2016 at One Marylebone and has attracted a number of new and returning suppliers who will be showcasing luxury fabrics and trimmings for spring 2017. Among the first-time exhibitors is Hand & Lock, embroiderers, whose work can be found within the collections of the top couture houses and bespoke military outfits created by Savile Row tailors. “The company will be displaying samples of its intricate handwork and also looking to secure entries for its international embroidery competition to discover next generation embroidery designers,” a press release said. “Sourcing luxury fabrics has never been easier for designers,” Textile Forum co-founder Linda Laderman said. “Our venue provides an elegant, spacious backdrop that complements our exhibitor's collections, which is why some of the biggest names in the fashion industry have already registered to attend the event," she added.
According to Textile Forum, for spring, bridalwear is a particularly important sector and designers will be spoilt for choice with the plain, embroidered and fancy fabrics offered by exhibitors. These include Bella Tela, Portuguese company Sanmartin and Jose Maria Ruiz (JMR), all of whom have selected the March show to mark their return to the event. Michael's Bridal Fabrics, which is seeing a demand for 3D designs and those with a vintage look said that the next trend will be in silk blend and polyester brocades in ivory and soft pastel colours. While traditionally the spring shows are more womenswear focused, Textile Forum also offers a good selection of menswear fabrics for formal, evening and casual occasion. “Designers will be able to select the finest cloths from Holland & Sherry, which is celebrating its 180th anniversary this year, A W Hainsworth and Dugdale Bros,” Textile Forum informed. There are many returning exhibitors like Laurent Garigue, Solstiss, Henry Bertrand, Bennett Silks, Makowers, Ringhart Fabrics, Tiss and Teint, G H Leathers, Bernstein & Banleys and Alan Litman. For the first time, Textile Forum will be welcoming a garment manufacturer to the show, London-based Plussamples, which specialises in men's and women's soft tailoring, soft separates and light-weight silk and jersey fabrics.
SOURCE: Fibre2fashion
All Pakistan Textile Mills Association (APTMA) has sought imposition of 10 percent regulatory duty on the import of yarns and fabrics to support the domestic trade. Sources told Business Recorder Wednesday that APTMA has sent a written request to ministry of finance for imposition of regulatory duty on these two products, imports of which witnessed some 45 percent surge during last three years. As per supportive statistics provided by APTMA to ministry of finance, during the last fiscal year 2014-15, yarns (chapter 54-55) and fabrics (chapter 54-55) amounting to Rs 92.217 were imported compared to Rs 63.416 billion in FY13. They said presently, a large quantity of yarns and fabrics is being imported from India, capturing the share of domestic market. Therefore, APTMA demands regulatory duty on the import of yeans and fabrics to protect the domestic industry and trade.
According to a letter written by Tariq Saud, Chairman APTMA to Muhammad Ishaq Dar, Federal Minister for Finance, due to high cost of doing business, basic textile industry particularly spinning, weaving and processing sub-sectors have been rendered uncompetitive both in the international and domestic markets. The import of synthetic yarns and fabrics for consumption in the domestic commerce is gradually increasing and now import of man-made fibre yarns and fabrics under Chapter 54 & 55 of the customs tariff (filament & staple fibre) have made threatening inroads in the domestic commerce, he added.
Import data of the Federal Bureau of Statistics (FBS) revealed that import of yarns and fabrics have increased in quantity by 37 percent and 56 percent, respectively from 2012-13 to 2014-15, he maintained. According to chairman APTMA, surge in import of yarns and fabrics in Pakistan is adversely affecting the domestic industry resulting in closures of mills producing yarns and fabrics meant for domestic consumption. In view thereof, he requested the finance minister to provide the domestic textile industry with a level playing field to compete with subsidised imports by imposing regulatory duty @10 percent. He hoped that imposition of RD will enable the domestic industry to withstand the challenge of dumped imports. Previously, in October last year, APTMA urged the federal government to put the import of cotton and synthetic-based Indian textile goods, including all types of yarns, fabric and garments, on the Negative List as unchecked onslaught of imported and smuggled textile goods has created a crisis situation in the textile industry. Accordingly, the federal government imposed 10 percent RD on imports of cotton yarn, grey and processed fabric, particularly from India, to protect the domestic industry. Sources said India is providing safeguards to its to textile industry and creating hurdles in the way of level playing field by having introduced Pakistan-specific duties, reaching highest range of 100 percent.
SOURCE: The Business Recorder
The Trade Development Authority of Pakistan (TDAP) along with High Commission of Pakistan in Sri Lanka with an aim to boost bilateral trade between the two countries to host the Pakistan single-country exhibition (SCE) in Colombo from January 15-17, 2016. At the SCE exhibition over 110 Pakistani exhibitors will participate. Engineering and Agro sector is participating with major number of exhibitors along with manufacturers of furniture, marble and onyx ware, carpets and kilims as well as apparel and handicrafts. Small and medium enterprises (SMEs) will also participate at the exhibition. The Secretary, TDAP, Rabiya Javeri Agha speaking on the forthcoming exhibition said that they are excited to host the Exhibition and hope to showcase the best manufacturing capability of their Country. This is a joint effort of both the countries to establish connections between business communities. Rabiya Agha went on to note that imports from Pakistan will be doubled from the existing US$267 million to US$500 million this year.
Pakistan’s top government body responsible for promoting exports, the TDAP aims to fully utilize the Free Trade Agreement (FTA). The Free Trade Agreement (FTA) came into effect in 2005. However, Pakistan and Sri Lanka were unable to utilize it to its potential. Pakistan can easily double exports to Sri Lanka, in a year’s time by effectively using the duty concessions under the FTA, Javeri added. They have given priority to certain sectors as they believe these are the areas where Pakistan has the potential to multiply its exports. Their next target will be to increase exports to US$1 billion within a few more years. The High Commissioner of Pakistan in Sri Lanka, Maj. Gen. (R) Syed Shakeel Hussain said that Pakistan is the second largest trading partner of Sri Lanka in South Asia. Sri Lanka was the first country to sign a Free Trade Agreement with Pakistan, which became operational from June 12, 2005, allowing trade of 4,000 items between the two countries. Pakistan has only utilized 29% of the FTA concessions so far, therefore, its target is to utilize the FTA first by exporting those products that have huge demand in Sri Lanka. According to Pakistan Bureau of Statistics data (2014-15) Pakistan’s exports to Sri Lanka amounted to US$267 million as compared to US$58 million worth imports from Sri Lanka.
SOURCE: Yarns&Fibers
China’s central bank held the line on its yuan for a fourth straight session on Wednesday while putting the squeeze on offshore sellers of the currency, calming fears of a sustained depreciation — at least for now. Having been alarmed by a near five per cent slide in the yuan since August, investors globally appeared relieved by the stabilisation. Asian share markets outside China rose, and proxies for the yuan in currency markets, such as the Australian dollar, while investors retreated from the safe-haven yen. Chinese shares, however, ended the day sharply lower after a positive start, shrugging off December trade data, which beat forecasts and tempered some of the fears about the slowdown in the world’s second-largest economy. The People’s Bank of China (PBOC) fixed the daily mid-point for the yuan at 6.5630 to the dollar, little changed from firm fixes on the previous two days. The market is allowed to deviate two per cent either side of the daily fix. By early evening the onshore spot rate had firmed to 6.5742 from the overnight close of 6.5756, and offshore the yuan was just a few pips away at 6.5736, also firmer. The central bank has used aggressive intervention to force a huge leap in yuan borrowing rates in Hong Kong, essentially making it prohibitively expensive to speculate against the currency offshore. The implied overnight borrowing rate shot over 90 per cent on Tuesday, and while it moderated to around 10 per cent on Wednesday, the central bank’s signal was clear. "We believe China is sending a strong message to speculators and trying to stabilise RMB depreciation expectations," HSBC said in a research note. The result has been to drag the offshore level of the yuan back toward the official onshore level, closing a gap that had threatened to get out of control just a few days earlier. HSBC said it expected the PBOC would allow the onshore rate to continually adjust in line with its commitment to a more flexible currency regime, and would periodically intervene to squeeze out speculators when the offshore rate strays too far. "High volatility will be the theme for 2016," it added.
LATE SHARE REVERSAL
Domestic equity markets started positively in the morning, clocking up gains of around 1.2 per cent, but went sharply into reverse in the afternoon. The Shanghai Composite Index ended down 2.4 per cent, dipping below the 3,000 mark, while the CSI300 index shed 1.9 per cent. The indexes have now lost around 16 per cent so far in 2016. Analysts said trading volume continued to wane, suggesting many investors were staying on the sidelines or putting their money elsewhere. Perceived mis-steps by the authorities and the wild swings on the forex and equities market had stoked concerns that Beijing might be losing its grip on economic policy, just as the country looks set to post its slowest growth in 25 years. China is expected to post its weakest quarterly economic growth since the global financial crisis, when it releases fourth quarter gross domestic product data on Jan. 19. A Reuters poll of economists forecast growth slipping to 6.8 per cent from 6.9 per cent in the third quarter. The World Bank has forecast growth to slow from 6.9 per cent in 2015 to 6.7 per cent this year.
More positively, trade data released during the morning showed exports denominated in dollars fell much less than expected and in yuan terms actually rose, which could be an early sign that the yuan’s depreciation has helped exporters. A customs spokesman said the impact would weaken over time, however, and China faced challenges in 2016 due to weak external demand. Imports also fell less than expected, and the volume of imports of copper, iron ore, crude oil, coal and soybeans all rose in December from the preceding month. Nomura said the data offered a sign of the economy stabilising, albeit at a low level. "Nevertheless, we still expect growth to resume a downtrend later in the year, given ongoing structural headwinds," it added.
SOURCE: The Business Standard
China’s exports unexpectedly rose last month, while a slump in imports moderated, suggesting a weakening currency may be starting to boost competitiveness in the world’s biggest trading nation. Overseas shipments increased 2.3 per cent last month in yuan terms from a year earlier, the customs administration said yesterday. That increase ends a five-month stretch of decline, and compares with a 3.7 per cent drop in November. Imports extended a stretch of declines to 14 months, falling 4 per cent in yuan terms, compared with a 5.6 per cent drop a month earlier, leaving a trade surplus of 382 billion yuan (S$83.2 billion). The surprising trade data comes as China’s financial markets have erupted in a fresh wave of turmoil, jolting investors around the world. China last week allowed the biggest fall in its yuan currency in five months, and stock prices plunged, sparking concerns about the health of the world’s second-largest economy, though there has been little evidence so far that conditions have deteriorated sharply in recent weeks. The central bank has allowed the yuan to weaken more than 5 per cent against the dollar since August, and sources told Reuters there is some pressure from policy advisers to allow an even sharper fall of as much as 10-15 per cent, which would add to fears of competitive devaluations around the world. But economists are not sure if even a 10 per cent depreciation in the yuan would provide much of a boost to exports given persistently weak global demand. Also, while the yuan has softened against the dollar, it has not weakened as much against other currencies in trade-weighted terms. The central bank kept its yuan reference rate almost unchanged for the fourth day in a row yesterday, after an eight-day run of weaker fixings through Jan 7. “The market was pricing a hard-landing in China and, with the latest trade data and the central bank’s effort to prop up the currency, those fears seem to have been overblown,” said Mr Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen. “Now we’re probably going to see the market go the other way.
Japan’s Nikkei index jumped 2.6 per cent, Hong Kong’s Hang Seng Index rose 1.1 per cent and Singapore’s Straits Times Index edged up 0.2 per cent. Mainland stocks, however, failed to join in a global rebound amid concern large corporate shareholders may take advantage of rallies to sell equities. The Shanghai Composite Index fell 2.4 per cent, closing below 3,000 for the first time since August. As policy makers continue to prioritise stability, Mr Wang Daili, a Singapore-based economist at Roubini Global Economics, said he does not expect the yuan to depreciate again as much as it has in recent weeks. Stronger-than-expected export growth does not justify further depreciation, said Mr Wang. AGENCIES
SOURCE: The Today Online
