The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 25 FEBRUARY, 2016

NATIONAL

 

INTERNATIONAL

 

Textile Raw Material Price 2016-02-24

Item

Price

Unit

Fluctuation

Date

PSF

974.35

USD/Ton

-0.31%

2/24/2016

VSF

2006.92

USD/Ton

0.38%

2/24/2016

ASF

1911.17

USD/Ton

0%

2/24/2016

Polyester POY

980.48

USD/Ton

0%

2/24/2016

Nylon FDY

2206.08

USD/Ton

0%

2/24/2016

40D Spandex

4825.80

USD/Ton

0%

2/24/2016

Nylon DTY

5708.23

USD/Ton

0%

2/24/2016

Viscose Long Filament

1164.32

USD/Ton

0.66%

2/24/2016

Polyester DTY

2022.24

USD/Ton

0%

2/24/2016

Nylon POY

2095.01

USD/Ton

0%

2/24/2016

Acrylic Top 3D

1053.25

USD/Ton

0.36%

2/24/2016

Polyester FDY

2466.52

USD/Ton

0%

2/24/2016

10S OE Cotton Yarn

1792.44

USD/Ton

0%

2/24/2016

32S Cotton Carded Yarn

2910.80

USD/Ton

0%

2/24/2016

40S Cotton Combed Yarn

3584.88

USD/Ton

0%

2/24/2016

30S Spun Rayon Yarn

2726.96

USD/Ton

0%

2/24/2016

32S Polyester Yarn

1577.96

USD/Ton

0.98%

2/24/2016

45S T/C Yarn

2451.20

USD/Ton

0%

2/24/2016

45S Polyester Yarn

1731.16

USD/Ton

0%

2/24/2016

T/C Yarn 65/35 32S

2114.16

USD/Ton

0%

2/24/2016

40S Rayon Yarn

2864.84

USD/Ton

0.54%

2/24/2016

T/R Yarn 65/35 32S

2420.56

USD/Ton

0%

2/24/2016

10S Denim Fabric

1.07

USD/Meter

0%

2/24/2016

32S Twill Fabric

0.90

USD/Meter

0%

2/24/2016

40S Combed Poplin

0.97

USD/Meter

0%

2/24/2016

30S Rayon Fabric

0.72

USD/Meter

0%

2/24/2016

45S T/C Fabric

0.74

USD/Meter

0%

2/24/2016

Source : Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.15320 USD dtd. 25/01/2016)

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

 

 

Centre looking at extending interest subvention to select merchant exporters

Merchant exporters earlier excluded from the interest subvention scheme for exporters re-launched this fiscal are likely to be extended the benefit in a handful of sectors. “Merchant exporters in sectors such as carpets, handicrafts and certain farm produce, where producers do not export on their own, are likely to be allowed to avail of the interest subvention scheme. The Directorate General of Foreign Trade (DGFT) is working on the details,” a government official told BusinessLine. The interest subvention scheme (re-named interest equalisation scheme), which offers an interest subsidy of three per cent to exporters of a large variety of items, was announced in November for a period of five years beginning April 1, 2015. The scheme covers 415 items spread across 25 sectors such as agriculture & food, auto-components, bicycle parts, handicrafts, electrical engineering items, readymade garments, handmade carpets, toys, sports goods and leather goods. It all includes all exports from micro small and medium enterprises (MSME). “While the idea behind excluding merchant exporters from the scheme was to ensure that only genuine producers of export items benefit from it, a need has been felt to incentivise merchant exporters of items where producers do not directly export. That is the only way exports from these crucial sectors could get a push from the scheme,” the official said. Sectors such as carpet weaving, handicrafts, handloom and a number of farm products are dominated by small players who have traditionally been exporting through merchant exporters. “The DGFT is in talks with all stakeholders, including exporters and the Finance Ministry, to work out how the Cabinet note on the scheme is to be amended. We expect a decision on the matter soon,” the official said.

The interest subvention scheme was discontinued by the UPA government in its last year of rule and was re-introduced by the NDA government last November after long winding discussions between the Commerce and Finance Ministries over what to include and what to leave out. The financial implications of the proposed scheme are estimated to be in the range of Rs. 2,500 crore to Rs. 2,700 crore annually, the actual implication would depend on the level of exports and the claims filed by the exporters with the banks.

SOURCE: The Hindu Business Line

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Textile industry demands incentives in budget

The textile industry has pitched for incentives such as halving excise duty on man-made fibre and filament and changes in labour laws in the budget for next financial year. The textile industry has pitched for incentives such as halving excise duty on man-made fibre and filament and changes in labour laws in the budget for next financial year. The textiles industry has demanded better market access to major markets like the US and EU via trade pacts to help realise its untapped potential. The sector, which is the country's second largest employer after agriculture, contributes nearly 14 per cent to industrial production and 4 per cent to the GDP. "The textile sector can provide jobs to unskilled labourers and women as well, even in rural areas, if we get government's support in the form of higher market access, changes in labour laws and opportunities to scale up," Confederation of Indian Textile Industry (CITI) Secretary General Binoy Job told PTI. Lowering the excise duty from 12 per cent to 6 per cent would certainly reduce the tax burden on MMF reducing its cost to the weaver, CITI said in its pre-budget memorandum. In India cotton consumption dominates with 65 per cent and Man-made Fibre and Filament (MMF) at 35 per cent. "The main reasons for lower consumption of MMF in India is higher cost which could be as a result of manufacturing cost, excise duty and oligopolistic market situation. "The need for reduction in excise duty is established and therefore it should be given serious consideration," CITI said. The Union Budget for 2016-17 will be presented on February 29. "We don't have much access to major markets like the US and European Union. To address this issue, Government should conclude free trade agreement with EU at the earliest and put in place a similar arrangement with US. "Government should bring substantial changes in labour laws and make them more flexible. It will give us an opportunity to scale up," Job said.

SOURCE: The Moneycontrol

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SIMA seeks debt restructuring scheme for textile SMEs

Southern India Mills' Association (SIMA) has urged the Centre to introduce a debt restructuring scheme for SMEs in the textile sector, considering their vulnerability. In a memorandum submitted to Commerce Minister Nirmala Sitharaman here recently, SIMA chairman M Senthil Kumar claimed that the textile industry, particularly the spinning sector, is going through a rough patch. In the absence of profits, several hundred spinning mills are finding it difficult to service their debts. The large-scale units have facility of corporate debt restructuring that give breathing space to financially stressed units once the lenders are convinced of their viability, he said. Such facility was not available for SMEs (the small and medium enterprises) and with the revised NPA norms, both banks and the spinning sector are facing huge problems, he added.

To resolve the problem, SIMA has asked for introduction of a debt restructuring scheme for SMEs, which were highly vulnerable, Kumar informed. India has to necessarily export at least 150 million kgs of cotton yarn per month due to continued fall in demand from China, he said. Also, it has to market the yarn in other countries for which MEIS (Merchandise Exports from India Scheme) benefit is essential to meet additional transport cost, he added. Considering this, the government should extend the 3 per cent export incentive extended to other textile exports for cotton yarn, to revive the export performance, Kumar said.

SOURCE: The Business Standard

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Extend export incentive scheme for cotton yarn, says SIMA

The Southern India Mills’ Association (SIMA) has sought extension of the 3 per cent export incentive for cotton yarn to revive its export performance. Highlighting the sector’s plight to the Union Minister of State for Commerce and Industry Nirmala Sitharaman during her recent visit to this textile hub, M Senthilkumar, Chairman, SIMA, said that the spinning sector has been facing long-drawn recession since April 2014 due to steep fall in yarn exports, while spinning capacity grew steadily due to attractive textile policies announced by the various State governments. Cotton yarn exports, which stood at over 140 million kg/month at the start of the year, slipped to less than 100 million kg/month by April 2014. Attributing this slide to the cotton policy announced by China that year, the SIMA Chairman said “the country has to necessarily export at least 150 million kg of cotton yarn per month to other countries for which the MEIS benefit is essential to meet the additional transport cost.

Free trade pact with EU

By extending the 3 per cent export incentive (for cotton yarn) that is now available for other textile exports, the sector would be able to revive its performance on the export front.” He also emphasised the need for concluding the FTA with EU to achieve the envisaged growth rate and introduction of the debt restructuring scheme specifically for the textile SMEs considering their higher vulnerability. SIMA’s appeal to the Minister comes close on the heels of an awareness programme for the exporting community here on the implication of such trade agreements.

Yarn forward rule

Addressing exporters here on Tuesday, Ravi Capoor, Joint Secretary, Department of Commerce, said “India is not a member of the Trans Pacific Partnership, a club of 12 countries led by the US and Europe. This club controls 35 per cent of the global trade and incidentally Vietnam, Thailand and Brunei among others are members of TPP.

SOURCE: The Hindu Business line

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Child labour law violators may get 3-yr imprisonment

Non-compliance with the child labour laws could lead to an imprisonment up to three years and/or fine of Rs 50,000, as per the relevant Bill likely to be passed in the Budget session of Parliament. Currently, the violations of the  Child Labour (protection & Regulation) Act, 1986 could result in  jail term up to 1 year and a fine of a maximum of Rs 20,000. The child labour Bill, which prohibits employment of children below 14 years in hazardous occupations, was tabled in the Rajya Sabha in 2012. Incorporating official amendments, the Bill was proposed to be tabled in the last two sessions but that was not to be, due to the face-off between the ruling and Opposition benches. Offences of employing any child or adolescent in contravention of the Act by an employers has been made cognizable. This provision would act as a deterrent against the offence of employing a child or an adolescent in contravention of the Act,” a labour ministry official said.

Besides, the bill also proposes for constitution of a child and adolescent labour rehabilitation fund for one or more districts of the rehabilitation of the child or adolescent rescued. Thus, the Act itself will provide for a fund to carry out rehabilitation activities. However, the bill has provided for a couple of exceptions on employing children below 14 years in all occupations and processes. This would not be an offence in cases where the child helps his family or family enterprises, which is other than any hazardous occupations or processes after his school hours or during vacation. Child below the age of 14 years could also be employed in cases where the child works as an artist in an audiovisual entertainment industry, including advertisement, films, television serials or any such other entertainment or sports activities except the circus or any such work which does not affect the school education of the child.

SOURCE: The Financial Express

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Manufacturing sector growth returns to expansion in Feb: SBI Index

Manufacturing activity in the country bounced back and entered the expansion territory in February, says a report. The yearly SBI Composite Index for February is at 51.3, compared to last month index of 47.3. Meanwhile, the monthly Index declined to 49.5 in February, from 52.4 in January 2016. The index captures two components of the manufacturing cycle, namely, month-on-month and year-on-year growth on a scale of 0 to 100. Index above 50 implies growth over previous respective period and less than 50 suggest a contraction over a respective period. The report noted credit growth touched a 10-month high as on February 5, but added refinancing constitutes much of the credit growth, hence it may be difficult to say whether credit growth has picked up materially or in a sustained manner. “In particular, bank credit to domestic export sector has suffered due to fall in external demand as visible in major export sectors like textile, gems and jewellery. This has led to contraction in demand of credit,” Soumya Kanti Ghosh Chief Economic Adviser & GM Economic Research Department SBI. Ghosh added that instances of dumping have made revival of certain sectors difficult, thus depressing the demand of credit.

An index value of 42 to 46 means (moderate decline), 46 to 50 (low decline), 50 to 52 (low growth), 52 to 55 (moderate growth) and above 55 (high growth), it added. The SBI Composite Index rivals the existing data point from Nikkei. It has been developed on the basis of bank’s internal loan portfolio, which mirrors the credit demand in the country, and other data sets available in public domain.

SOURCE: The Hindu

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China trims yarn import from India but Pakistan fills its yarn gap

Spun yarn exports from India were up 2 per cent in volume terms but down 8 per cent in value terms in January 2016. The marginal increase in volume reflect the weakening global demand while the decline in value is explained by falling FOB price and depreciating the INR. Total yarn shipments were at 103 million kg worth US$278.3 million or INR1,856 crore, implying per unit realisation of US$2.70 per kg, down US cents 30 from a year ago.  In January 2016, 85 countries imported spun yarn from India, with China accounting for 24 per cent of the total value with imports plunging 14.3 per cent in terms of volume YoY and declining 23 per cent in value YoY. Bangladesh, the second largest importer of spun yarns, accounted for 19 per cent of all spun yarn exported from India. However, export to Bangladesh jumped 54 per cent in volume and 36 per cent in value. Turkey, the third largest importer of Indian spun yarns, saw volume rising 26 per cent and value by 12 per cent. These three top importers together accounted for more than 48 per cent of all spun yarns exported in January.  While China started importing lesser yarn from India, Pakistan have been filling its yarn gap by increasing import from India. It has emerged to be the fourth largest market in recent months. Over the past three months, since yarn exports to Pakistan have increased from November, the export value to Pakistan have averaged US$14 million during the three months ending January 2016. This was about 50% more than the exports in the same period a year ago. Thanks to the drop in cotton harvest that has also pushed yarn prices up there. However, it is apparent that Pakistan has fulfilled its deficit and may not continue to import large volumes going ahead. A similar trend was visible in in 2013-14.

Meanwhile, Indian yarn exporters have apparently lost their price advantage to the lower end of the Chinese market due to falling cotton fiber and yarn prices there. As a result, Chinese textile spinners were more competitive and fabric makers were strongly resisting foreign offers. During the past three months (November to January), spun yarn export to China have declined sharply, averaging US$90 million as against US$140 million in the same period a year ago.  January import data showed a dramatic fall in China's demand on the international yarn market. Assuming that Chinese holidays have started earlier this year, imports of yarns have fallen 27% in volume terms from January 2015. Imports from Vietnam have however risen in volume terms in January, implying that the market share of Vietnamese yarns have jumped in a year from 18% to 25%, not far from a retreating India, at only 30%. Pakistan has lost 10 percentage points in a year, at 18.5% in January.

SOURCE: Yarns&Fibers

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India to seek relaxation in visa regime during RCEP talks

India will seek further relaxation in visa regime in its negotiations for a mega trade deal at the Regional Comprehensive Economic Partnership (RCEP) involing 16 countries. In the recently concluded 11th round of RCEP talks in Brunei, India had sought further liberalisation of services. It hopes to present its case on services more vociferously in Perth in Australia where the 12th round od negotiations are to take place from April 22, a senior government official told FE. At Brunei, Australia seemed to have supported India’s pitch on services, while some other members raised some issues. RCEP is a trade deal that aims at covering goods, services, investments, economic and technical cooperation, competition and intellectual property rights. At Brunei, the member nations, including China, held talks on duty cuts in goods. India is learnt to have asked members to match their previous commitments with appropriate action. FE had reported in early January that India would be pitching for a more liberalised services regime in its negotiations for a free trade agreement with the EU as well as the RCEP, apart from seeking a trade facilitation agreement in services at the WTO. India is keen on services, as they account for over a half of its GDP.

SOURCE: The Financial Express

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‘Malaysia-India trade growing steadily’

Trade between India and Malaysia continues to grow every year with trade in 2015 valued at 46.82 billion Malaysia Ringgit, a top Malaysian official said. Malaysian investments to India continued to grow and has touched 6 billion Malaysian ringgit, doubling from 3 billion Ringgit earlier and does not include small investments by Malaysian owned SMEs, Ahmad Fajarazam Bin Abdul Jalil, Consul General of Malaysia for South India, said. He was speaking at a meeting organised by the India-Asean-Sri Lanka Chamber of Commerce & Industry on Wednesday. The Consul General will visit Bangalore, and Kochi next week to look at ways to increase tourism. Mr. Jalil said Indian investments to Malaysia have also increased and was valued at 1.9 billion Ringgit. “Those Indian investments in Malaysia has created 14,919 jobs in different sectors including printing and publishing, textiles and textile products, petroleum products, electrical and electronic sectors,” he added. He said there were over 150 Indian companies in Malaysia and there were 170 flights between the two countries with 125 flights just from South India alone. “30,000 people fly every week between the two countries and about 1.56 million people annually either through direct flights or connecting flights,” Mr. Jalil added. Between April 2000 and September 2015, the total inflow into India from Malaysia amounted to $760.5 million, accounting for 0.3 per cent of India’s global inflows, according to a presentation made at the meeting. In 2015, India was Malaysia’s 10th largest trading partner and 12th biggest importer.

SOURCE: The Hindu

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India is gateway to Asian markets: South African minister Rob Davies

Terming India as a gateway to Asian markets and a key-player in the regional economy, South Africa has said the bilateral trade between the two countries has doubled in four years. "Figures showed that trade between South Africa and India increased from R42 billion to over R90 billion over the 2010 to 2014 period and that exports from South Africa to India increased from R22 billion to over R40 billion in the same period," South Africa's Minister of Trade and Industry Rob Davies said. "This is indicative of the high demand for locally manufactured value-added products in the Asian market and as a key-player in the regional economy, India also provides a good platform for South Africa to re-integrate with Western Asia," the minister said. Davies led a delegation of 26 companies for the 7th annual Investment and Trade Initiative (ITI) to India. The four-day visit will see the delegation visiting Hyderabad and New Delhi as part of South Africa's Department of Trade and Industry's export and investment promotion strategy to focus on India as a high growth export market and FDI source

According to Davies, the aim of the ITI is to increase South Africa's exports of value-added products into the Indian market and to explore joint-venture opportunities with Indian companies for investment projects. "This will in turn contribute in meeting the broader objectives of the national-industrial policy and the development of the South African economy," he said. The ITI will mainly target the promotion of South Africa's agro-processing (fruit juices, fresh and dried fruit), chemicals (agro-chemicals, and active pharmaceutical ingredients, mining (beneficiated metal products and jewellery) and capital equipment (mining equipment, safety equipment) sectors.

SOURCE: The Economic Times

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UK exit from EU to hit Indian businesses, professionals: Ficci

One of India's leading industry groups today came out strongly in favour of the UK staying within the European Union, saying the exit of Britain will "create considerable uncertainty" for Indian businesses operating in the country. The Federation of Indian Chambers of Commerce and Industry (FICCI) warned against "considerable uncertainty" for Indian businesses operating in the UK and Europe at the prospect of a British exit (Brexit) from the EU. Dr A Didar Singh, FICCI Secretary General, said in a statement: "Britain is considered an entry point and a gateway for the European Union by many Indian companies, a view echoed by Prime Minister Modi in his visit to UK in November last year." "While deciding on membership of the EU is a sovereign matter for Britain and its people, Indian industry is of the view that foreign businesses cannot remain isolated from such decisions. The UK is a valued economic partner for India and we firmly believe that leaving the EU, would create considerable uncertainty for Indian businesses engaged with UK and would possibly have an adverse impact on investment and movement of professionals to the UK," Singh said.

FICCI's comments come as the campaign both for and against Brexit gathers momentum with British Prime Minister David Cameron launching a UK-wide tour yesterday to make the case for staying in the EU. Earlier this week, Cameron had used trade deals with India to strengthen his stand. "We have secured commitments to complete trade and investment agreements with the fastest growing and most dynamic economies around the world, including the USA, Japan and China as well as our Commonwealth allies India, New Zealand and Australia," Cameron had said. "By their very nature, these EU deals would be bigger and better and a deal with Britain would not even be possible until we have settled our position outside the EU, which means years and years of delay," he said in a statement in Parliament. The UK Cabinet is split over the issue with 17 members in favour of staying in the EU and five wanting to leave. The ruling Conservative party MPs are also split - 142 to 120 in favour of staying.

SOURCE: The Economic Times

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EXIM Bank to provide $150-mn credit for Chabahar Port in Iran

The Cabinet on Wednesday approved a proposal to provide $150-million credit from EXIM Bank for the development of Chabahar Port in Iran. Chabahar Port lies outside the Persian Gulf in Iran and will help in expanding maritime commerce in the region. India is negotiating this project to facilitate the growing trade and investment with Iran and other countries in the region, notably Afghanistan, and also to provide opportunities to Indian firms to enhance their footprint in the region. According to a memorandum of understanding (MoU) signed between India and Iran on May 6, 2015, India is to equip and operate two berths in Chabahar Port Phase-I with capital investment of $85.2 million and annual revenue expenditure of $22.9 million on a 10-year lease.

KEY DECISIONS

  • Other proposals approved by the Cabinet
  • To set up directorates for Atal Innovation Mission and self-employment and talent utilisation in NITI Aayog
  • To raise raw jute MSP by 18.5% to ~3,200 per quintal for 2016-17
  • Agreement between India and the Maldives for avoidance of double taxation of income from international air transport
  • Cabinet was apprised of signing of an arrangement for the establishment of an Indo-French Joint Committee on Science & Technology Cooperation

The ownership of equipment will be transferred to the Iranian side on completion of 10-year period or for an extended period, based on mutual agreement. The Iranian side had requested for provision of a credit of $150 million in accordance with the MoU. According to the MoU, operation of the two berths will commence within 18 months after the signing of the contract. The two berths will be operated by India Ports Global Private, a joint venture between Jawaharlal Nehru Port Trust and Kandla Port Trust — two major ports under the shipping ministry. The Cabinet has authorised the ministries of finance, external affairs and shipping to approve the final contract with Iran and for resolution of any issue arising in implementation of the project. It also authorised the shipping ministry to form a company in Iran to implement the Chabahar Port development and related activities.

SOURCE: The Business Standard

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India's bureaucracy posing hurdles: New Australian trade minister

Australia's new trade minister has criticised India's "strong" bureaucracy for posing hurdles for a favourable business environment, saying sometimes one has to "roll up sleeves and apply a little elbow grease" to make things happen.  "India is a country that has a huge amount of potential and a huge amount of opportunity, but there is a fairly strong amount of bureaucracy. Sometimes it requires you to roll up your sleeves and apply a little elbow grease," said Steven Ciobo early last week. Ciobo, 41, who recently succeeded former minister Andrew Robb, said Australian government was committed towards a free trade agreement with India and free trade with will continue to remain its area of focus. "There are a number of different pokers in the fire. We are looking at, of course, ongoing negotiations around a free trade agreement with India, that continues to be an area of focus," Ciobo told CNBC in New York where he is attending a business week to promote Australia as an investment destination. Ciobo, who will be now be taking over ongoing negotiations over a free trade agreement with India, had said last week before his swearing in ceremony that the free trade deal with India would be hard to close on. "It's not easy. It is going to be hard - there's no doubt about that," Ciobo was quoted as saying by media reports. He also said there was a commitment to secure the deal from the prime Ministers of both the sides. His predecessor Robb, who will stay on as a special envoy, had been actively pursuing the trade deal with India. Ciobo has been a member of the Australian House of Representatives representing the Division of Moncrieff, Queensland for the Liberal Party since November 2001. He served in the Abbott ministry as a parliamentary secretary to the Treasurer between September 2013 and December 2014 and as a Parliamentary Secretary to the Minister for Foreign Affairs and to the Minister for Trade and Investment from December 2014 until September 2015.

SOURCE: The Economic Times

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Global Crude oil price of Indian Basket was US$ 30.06 per bbl on 24.02.2016

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$ 30.06 per barrel (bbl) on 24.02.2016. This was lower than the price of US$ 30.79 per bbl on previous publishing day of 23.02.2016.

In rupee terms, the price of Indian Basket decreased to Rs 2061.21 per bbl on 24.02.2016 as compared to Rs 2113.53 per bbl on 23.02.2016. Rupee closed stronger at Rs 68.57 per US$ on 24.02.2016 as against Rs 68.64 per US$ on 23.02.2016. The table below gives details in this regard:

 Particulars

Unit

Price on February 24, 2016 (Previous trading day i.e. 23.02.2016)

Pricing Fortnight for 16.02.2016

(28 Jan to  11 Feb, 2016)

Crude Oil (Indian Basket)

($/bbl)

30.06             (30.79)

30.05

(Rs/bbl

2061.21         (2113.53)

2040.70

Exchange Rate

(Rs/$)

68.57             (68.64)

67.91

 

SOURCE: PIB

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Vietnamese garment firms expect to achieve target for year 2016

Vietnamese textile company, Garmex Saigon projects 20 percent growth rate in revenue in comparision with 2015 as they have so far ensured enough jobs for the company until the end of the year, unlike previous years, said Le Quang Hung, president of Garmex Saigon. Garmex Saigon reported turnover of VND1.530 trillion in 2015, while abundant orders have led to turnover that may reach VND1.8 trillion this year. However, Hung of Garmex Saigon said that if Vietnamese enterprises cannot change their business methods, the TPP and free trade agreements (FTAs) would not have much significance because the agreements on market opening cannot be fully exploited.

According to Hung, while the number of foreign invested enterprises (FIEs) only accounts for 30 percent of total enterprises in the industry, they make up 70 percent of total turnover. Vietnamese enterprises put out the remaining 30 percent. Deputy chair of the Vietnam Textile and Apparel Association (Vitas) Pham Xuan Hong confirmed that most garment companies have orders for the first and second quarters, while some others have enough orders for the entire year. The target to export $30 billion worth of textiles and garments in 2016 appears to be within reach. Orders from importers have come in abundance, Hong said. The enterprises will have to now restart production after the long Tax holiday and look for workers. Vietnam exported $27 billion worth of textile and garment products in 2015 and the target of $30 billion in export turnover in 2016, or 10 percent higher, appears to be attainable.

The Ministry of Industry and Trade (MOIT) has every reason to be optimistic about production in 2016. The latest report showed that the production index of the textile industry grew by 12 percent in January compared with the same period last year, while the figure was 11.2 percent in the clothing industry. The output of fabric made of natural fiber in January reached 30 million square meters, a 10 percent increase compared with the same period last year, while the output of fabric made of synthetic and artificial fibers rose by 6.5 percent to 63.3 million square meters. In January alone, the textile and garment exports brought $2 billion, up by 5.8 percent over January 2015. Textile & garment companies are optimistic about 2016 and the upcoming years because analysts predict that the Trans Pacific Partnership Agreement (TPP) would bring great opportunities to the industry.

SOURCE: Yarns&Fibers

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Make or break for Vietnam in the TPP era?

Its economy needs urgent reform as a competitiveness study finds it lagging behind its Asean peers Thirty years have passed since Vietnam began its "Doi Moi" (renovation) reform, dismantling the central planning system in pursuit of a market economy. However, the reform was carried out in half-hearted fashion. The effects of this are rampant market as well as state failures, as manifested in the country's multiple ailments: a chronic budget deficit, high public debt, proliferation of non-performing loans and an inefficient yet dominant state sector. According to the World Bank, Vietnam's real GDP growth has significantly slowed from an average of 7.2 per cent between 1990 and 2007 to 5.7 per cent from 2008 to 2014. And compared to its Asean counterparts, its competitiveness has plunged. An analysis by the Asia Competitiveness Institute (ACI) shows that Vietnam's "overall competitiveness" score has plunged more negatively, or further from the regional average, between 2009 and 2013. ACI's Competitiveness Index found that Vietnam remains uncompetitive in a wide array of areas. The most salient, recurring indicators are the prevalence of market distortions; issues of corporate governance and lack of transparency; and quality of human capital. Hence, Vietnam's membership in the Trans-Pacific Partnership (TPP) - it was one of 12 signatories on Feb 2 - may seem to have come at an opportune time. However, the TPP is not the "holy grail" for Vietnam's structural problems. Indeed, high-profile default cases of large state-owned enterprises (SOEs) such as Vinashin and Vinalines are just the tip of the much bigger iceberg of poor governance, corporate graft and misallocation of resources in favour of the ailing state sector. To remedy Vietnam's lack of competitiveness, three pillars of policy reform are required.

Deepening SOE reform Despite three decades of economic reform, SOEs tend to occupy the majority of land allocated for business activity and are often granted a considerable portion of new land provided by the government for business rental. Private firms applying for new industrial land are required to go through complex procedures, which typically take two to three years, and reportedly involve corruption. Another area where favouritism prevails is access to credit. SOEs are still able to obtain bank loans even when their asset size or profitability does not meet the banks' lending criteria.

In terms of market access, while the government usually offers important opportunities for firms to grow and become competitive through state contracts, the eligibility criteria for bidding are clearly biased toward SOEs. Given its economic woes, Vietnam must not militarise or further escalate the dispute, or else it will get side-tracked from reform. Instead, Vietnam should draw on its rising economic leverage from TPP membership to facilitate the conclusion of the Code of Conduct between Asean and China. The promulgation of the third Enterprise Law and the launch of a new round of SOE restructuring in 2005 raised new hopes for private sector development, as well as more robust economic growth for Vietnam. But progress has been notably slow, with the state-owned sector still accounting for a significant 40 per cent of annual total investment in Vietnam.

According to the latest World Bank Report, as of the first quarter of last year, only 29 SOEs were equitised, out of the target of 289 for the whole year. The key obstacle to the reform process lies in big state-owned groups such as Vinalines, MobiFone and Vinacomin. The amount of state resources held by these groups, as well as their impact on the economy, has made it difficult for the government to evaluate and move forward with the privatisation plans. To be sure, levelling the playing field between state-owned and private enterprises is one prominent provision under the TPP. While Vietnam has been granted concessions in complying with this provision, it is vital that Vietnam puts in place fundamental market institutions required for local enterprises to develop and be able to cope with the anticipated surge in foreign direct investment. To that extent, deepening the SOE reform entails relinquishing the state's direct involvement in the economy to focus on its facilitative role of setting transparent rules and enforcing them, while protecting society from negative externalities. Vietnam, therefore, must make it the top priority to move towards a rule-based, transparent and competitive economic environment through streamlining bureaucracy and strengthening capacity building. Building transparent corporate governance Without competitive enterprises, it is hard to envisage how Vietnam could benefit from the TPP. Yet, corporate governance remains problematic even amid the rapid development of the legal and regulatory framework for investor protection. For instance, new laws on independent audits were enacted in 2011, and in 2013, the State Securities Commission of Vietnam (SSC) revised Corporate Governance Regulations and a Model Charter that detail good practice for listed companies. But weaknesses remain in terms of poor disclosure, outdated accounting standards, lack of internal control mechanisms and limited accountability of firm management. In fact, current practices in many public enterprises fall far short of what is required in the revised Corporate Governance Regulations, which also highlights the government's difficulties in enforcing the rule of law. The roles and functions of the SSC could actually be enhanced as an independent supervisory body to ensure compliance. Incentives for firms to uphold accountability to investors should be introduced. For example, the rankings of the Corporate Governance Scorecard could be made public. An organisation dedicated to providing training and technical support to firms could be established, ideally with international industry experts on board or acting as advisers. Upgrading labour skills The central thrust of Doi Moi reform has been resource mobilisation from agriculture to manufacturing and services, on the back of a large young, literate and low-cost workforce.

However, such a model is not sustainable, as competing based on cheap labour is simply a race to the bottom, especially when Vietnam's youth population is shrinking. Only by upgrading labour skills and labour productivity can Vietnam maintain healthy growth and successfully industrialise. After 30 years of reform, firms still find it hard to find skilled workers to fill jobs, particularly managers, executives and technicians. Foreign corporations have also been complaining about the lack of reliable local suppliers. In fact, many foreign textile companies have announced million-dollar investment plans in Vietnam to take advantage of the TPP's "yarn forward" rule. Upstream electronics manufacturers are expected to follow suit to supply technology giants, such as Samsung, Foxconn and Intel, which are already present in Vietnam. Measures to support and upgrade best-performing local firms, as well as pair them with multinational corporations, should be put in place. Tax incentives could be introduced to foreign firms engaging in technology transfer with local suppliers. Most importantly, technical education and training must be revamped in alignment with industry needs. Collaboration between universities, industry associations and multinational corporations is vital. GEOPOLITICAL CONFLICTS MUST NOT DERAIL GROWTH Geopolitically, Vietnam is also at a delicate juncture as tensions with China have reached new levels since May 2014's sovereignty dispute near the Paracel and Spratly islands. Given its economic woes, Vietnam must not militarise or further escalate the dispute, or else it will get side-tracked from reform. Instead, Vietnam should draw on its rising economic leverage from the TPP membership to facilitate the conclusion of the Code of Conduct between Asean and China. By emphasising pluralism, Vietnam could play a critical role in strengthening Asean's unity and preventing the bloc from splitting over China. Singapore, as the third largest foreign investor in Vietnam, is also a TPP member and could become a key strategic partner to Vietnam. If Vietnam fails to address its shortfalls, the window of opportunity may last at most 10 years. Instead of just "renovating" (Doi Moi) the economy, Vietnam has to focus on "revitalising" (Hoi Sinh) it.

SOURCE: The Strait Times

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Plans initiated to improve labour conditions in textile and garment supply chains in Pakistan

The fifth meeting of the Buyers Forum Pakistan was convened by International Finance Corporation (IFC), Netherlands Embassy and the International Labour Organisation (ILO) at Avari Hotel Lahore. According to a press release, 21 participants representing 15 international brands and sourcing companies attended the meeting. The Buyers Forum agreed to collectively work towards improving working conditions in the factories that they work with and influence their supply chains through policy and advocacy and enterprise improvement programmes to promote sector growth through better compliance initiatives. “Policy dialogue on better labour governance, compliance with national labour laws and international labour standards, advisory and training services to improve working conditions for workers in the Pakistani Textile Value Chain were prioritised by the forum as key activities to be implemented in future years”, the press release stated. Rick Slettenhaar of the Netherlands Embassy, representing the conveners of the Pakistan Buyers Forum, complimented the participants on the progress made and urged the Forum to focus increasing its footprint in 2016 to attain concrete results. “Key features of the event included a way forward presented by the Buyers for 2016 and a detailed discussion on the three working groups constituted to support policy advocacy and outreach, enterprise improvement and communications. The Communication group also shared progress made in giving shape to the forum’s website, developed in collaboration with Sustainable Trade Initiative (IDH). The website is planned to be made operational by end of March”, the press release.

GIZ (German Development Agency) representative Romina Kochius, during a briefing session with the Government, diplomatic development partners and other international agencies, delivered a presentation on the key outcomes of the project on the Implementation of Social Standards in Textile Sector in Punjab. She shared that the success of the project is in the social dialogue approach through which the workers and employers jointly work towards issues of workplace compliance which has ultimately reduced industrial conflicts and increased overall efficiency and productivity. Caroline Bates, representing Labour standards in global supply chains: A programme for action in Asia and the garment sector, briefed the participants about the Garment Sector Stakeholders Forum (GSSF) jointly facilitated by the ILO and GIZ. She explained that the GSSF provides a platform to stakeholders to generate debate on issues prevailing in the sector including legislative and institutional reforms, enforcement and implementation mechanisms and recommendations to address them.

The Ministry of Overseas Pakistanis and Human Resource Development, Ministries of Textiles and Commerce signalled their continued commitment to make the textile sector in Pakistan sustainable. Deputy Secretary of Ministry of OPHRD Iftikhar Amjad updated the BF meeting participants that that the Ministry is hosting the Asian Living Wage Conference (ALWC) which will be held from 25-26 May 2016 and will draw participation from eight countries in the region including representation from Government, employers and workers as well as industry representatives in these textile producing countries. Brands from European Union and North America are also invited to take part in the Conference. He also updated the forum on the labour reform agenda that the Federal Ministry is taking forward which will include improving regulatory environment, institutional capacity building and workplace improvement programmes. The Government of Pakistan, Employers Federation of Pakistan and Pakistan Workers Federation had also formulated the country’s third Decent Work Country Programme (DWCP) covering the period 2016-2020 which focuses on four priority areas including Promoting Decent Work in the Rural Economy, Promoting Job Creation for Youth and Vulnerable Groups, Strengthening ILS Compliance through Social Dialogue and Extending Social Protection Floors.

Wajeeha, Section Officer, Research, Development, Advisory Cell at the Ministry of Textiles apprised that in collaboration with Trade Development Authority Pakistan, the Ministry is arranging a TEXPO exclusively for textile products from 7-10 April 2016 in Karachi which will be an open forum for the Pakistani manufacturers and producers to exhibit their products and directly interact with the foreign investors. She also encouraged the members of the buyers’ forum to participate and add value to the Expo, the released stated. Fasih Ahmed, Deputy Secretary, Ministry of Commerce highlighted that despite financial crisis, the textile sector recorded increased exports to the EU market in the 2015 fiscal year with total earnings increased from US$ 6.21 billion during 2013 to US$ 7.54 billion in 2014. This represents an increase of 21%.

SOURCE: The ARY News

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APTMA hails zero-rating tax regime of textile sector

The All Pakistan Textile Mills Association (APTMA) Chairman Tariq Saud has appreciated the initiatives of Prime Minister Nawaz Sharif, Finance Minister Ishaq Dar and Punjab Chief Minster Shahbaz Sharif for reintroduction of zero-rating tax regime for the export-oriented textile industry so as to avoid accumulation of refunds of the industry. He further appreciated the approval for release of Rs 5 million refunds to claimants, for which refund payment orders have already been issued and checks are awaited. He said these initiatives would greatly help manage liquidity issues. However, he added that the textile industry was currently facing serious viability issues that are needed to be addressed through implementation of the textile industry package, which contains implementation of announcement of reducing electricity tariff by Rs 3/KWh through slashing the surcharges levied on the base tariff to bring tariff for industry at Rs 9/KWH that is at par with the region. "The government also needs to provide a system for gas and RLNG at competitive price to the industry to operationalise mills on 24/7 basis to produce exportable surplus," he added.

In order to save the export-oriented textile industry of the country, imposition of GIDC should be taken away from the industry completely, he said, adding that the textile industry has also demanded provision of DLTL at 5% against the export of yarns, fabrics, made-ups and garments to compensate against incidentals of carousel types of levies, surcharges and taxes. "Position of regulatory duty on the dumped/subsidised import of synthetic yarns and fabrics entering to Pakistani commerce meant for domestic consumption," he added. Tariq Saud said an immediate intervention is required to check the surge in the import of synthetic yarn and fabric in domestic market, adding that the government should immediately impose regulatory duty on synthetic yarns and fabrics made of polyester, viscose and acrylic to secure the right to domestic industry on domestic commerce.

The APTMA chairman said there is an immediate need to introduce an effective mechanism to check under invoicing, miss-declaration and unbridled entry of imported yarn and fabric entering to the domestic market. He said the revival of textile industry by reducing cost of doing business would greatly help the textile exports to regain its lost share in the international marketplace.

SOURCE: The Daily Times

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$20 million needed to revamp Zimbabwean textile industry

THE Zimbabwe Textile Manufacturers’ Association (ZTMA) has embarked on a survey to assess the performance of the sector while mobilising funding to help expand the industry. ZTMA vice chairman Freedom Dube yesterday said his organisation was conducting site tours of companies in the textile industry across the country following the end of the annual shut down. “We’re currently engaged in site tours of our members to see who has re-opened after the annual shutdown and also establish what’s happening in terms of their operations,” said Dube. “The survey started in Bulawayo and we’re now moving to Kadoma, Harare and Darwendale. We don’t have any textile company to talk about in Mutare following the closure of Karina Textiles in recent years. I can’t comment on what we’ve found so far until the exercise is finished in the next two weeks.”

Dube said due to operational constraints such as stiԁ competition from imports, liquidity challenges and obsolete plant machinery, local textile firms closed 2015 operating at around 34 percent capacity utilisation. “This is also the reason why we’re carrying out site tours of companies. In terms of funding, textile companies need a combined $20 million working capital and capitalisation,” he said. Among a host of measures, players in the clothing and textile sector want the government to consider extending the rebate on textiles by another year to allow recovery.

At its peak the clothing sector employed over 40,000 people compared to about 8,000 as of last year. Zimbabwe’s textile and clothing sub-sectors consist of three components namely; production and ginning of cotton, transformation of lint into yarn and fabric, and the conversion of fabric and yarn into garments.

 

SOURCE: The Chronicle

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Bangladesh: e-UD for apparel exporters

The National Board of Revenue (NBR) has decided to introduce online utilisation declaration (e-UD) system in a bid to check forgery of documents and abuse of duty-free import facility by apparel exporters. The new system is also designed to expedite the process of exports and imports through the customs ports. Officials said the e-UD will be launched integrating the data of two major apparel exporters' association with that of the NBR. It will also ease the process of issuance of UD certificates. The NBR recently took the decision at a meeting attended by the representatives from the apex chamber body Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), BGMEA, BKMEA, Ministry of Finance, Ministry of Commerce and Bangladesh Bank. NBR chairman, also secretary to the Internal Resource Division (IRD) Md Nojibur Rahman chaired the meeting. The representatives of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) taking part in the discussion urged the NBR to issue UD certificates to its members. With the UD, exporters can import duty-free raw materials for export purposes under the bonded warehouse facility. Officials said a working committee will be formed with the representatives from the exporters, the NBR and the BB to frame a plan for implementation of the online system. The meeting decided to link the servers of the BGMEA and the BKMEA with the Asycuda World server of the NBR. Customs officials will verify the authenticity of UD certificates instantly just after uploading of those by the apparel associations in the customs Asycuda server. Customs officials also can assess quantity of raw materials, approved by the NBR, for executing export orders. Currently, verification of UD takes a long time as the customs officials have to examine the manually submitted UDs by entering server of the apparel associations. The officials faced problems on verification of authenticity of the amended UD certificates. They said many of the UDs go through several amendments but those are not available with the servers of the associations. Introduction of the e-UD will help remove worries about the abuse of the duty-free facility through sale of raw materials in the local market instead of using those for export. doulot_akter@yahoo.com

SOURCE: The Financial Express Bangladesh

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German envoy hails Bangla garment quality

Bangladesh is a reliable sourcing destination for Germany consumers for its high quality garment products, German Ambassador to Bangladesh Thomas Prinz has said. “We are very happy that Bangladesh is a reliable source for high quality garment in Germany,” Prinz told reporters at a press conference held at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) head quarters in Dhaka on Tuesday. The press conference was held to announce the BGMEA-BUFT Journalism Fellowship-2014, under which three winners and a group of journalists will attend a training programme on business journalism in Germany at the end of this month. Germany is the second largest single export destination for Bangladesh's garment products after the US, accounting for $4.33 billion in fiscal 2014-15, according to the Export Promotion Bureau. Prinz said Germany will support Bangladesh in its aim to double its apparel exports. “We want to support Bangladesh in its endeavour to establish a sustainable, compliant, social and profitable RMG sector,” said Prinz. He said the people in Germany are not abreast with the latest developments in Bangladesh's garment sector with regards to workplace safety and labour rights. “The Rana Plaza incident is still fresh in their minds, even though it has been three years since the accident. A lot has been done in the sector since.” He cited the emerging trend of green garment factories in Bangladesh as one of the positive developments that the journalists should highlight during their visit to Germany. “The journalists must provide information on what's going on in Bangladesh.” Prinz also urged them to report back on the constraints of the German retailers on issues such as the fair price. “We do not even find fair prices for products that are produced in Germany -- there is a lot of competition between the brands. So, there are constraints and the journalists have to report on that,” he said. In Germany, a top-selling T-shirt or jeans are selling at low prices, according to Prinz. He, however, said the real value of the work on those products that are made in Bangladesh and sold in Germany should not be so low. Prinz conceded that changing consumers' behavior is extremely difficult.

SOURCE: Fibre2fashion

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