Export Credit Guarantee Corporation of India (ECGC) has clarified that the coverage on export transactions to Russia has not been withdrawn. It has been mentioned in various media reports that ECGC has withdrawn its cover on the export transactions to Russia vide its circular dated 25.02.2022; this is factually incorrect. In view of the prevailing situation, ECGC carried out a review of the country risk rating of Russia as per its extant underwriting policy. Accordingly, with effect from 25.02.2022, the cover category of Russia has been modified from Open Cover to Restricted Cover Category – I (RCC-I) for which revolving limits (normally valid for a year) are approved specifically on a case-to-case basis. It is further clarified that this change has been made to ensure that ECGC is able to assess and monitor the risks covered under its export credit insurance policies and to place appropriate risk mitigation measures. The above measure will also enable the exporters / banks in India in assessing the export payment realization prospects from buyers and/or banks in Russia. The customers have been suitably advised to contact their servicing branch of ECGC for cover on shipments to Russia. ECGC continues to monitor the situation and further review of the underwriting policy will be undertaken based on future developments.
Source: PIB
Moody's Investors Service last week raised India's growth forecast to 9.5 per cent for 2022 from the earlier 7 per cent, and to 8.4 per cent and 6.5 per cent for fiscals 2022-23 and 2023-24 respectively, citing high oil prices and supply distortions to be a drag on growth. In November 2021, Moody's had forecast India's economy to expand by 7.9 per cent in fiscal 2022-23. "The economy is estimated to have surpassed the pre-COVID level of GDP by more than 5 per cent in the last quarter of 2021. Sales tax collection, retail activity and PMIs [purchasing managers’ indices] suggest solid momentum," Moody's said in a statement. As per official estimates, the Indian economy is estimated to grow at 9.2 per cent in this fiscal ending March 31.The speed of the recovery from the first lockdown-led contraction in the June quarter of 2020 and subsequently in the June quarter of 2021 during the Delta wave was stronger than expected. Moody's said as is the case in many other countries, the recovery is lagging in contact-intensive services sectors, but it should pick up as the Omicron wave subsides. With most remaining restrictions now being lifted with the improvement in the COVID situation, including the reopening of schools and colleges for in-person instruction across various states, the country is on its way to normalcy. "Our 9.5 per cent growth forecast for 2022 assumes relatively restrained sequential growth rates; thus, there is upside potential to the growth rate. We estimate the carry-over from a strong finish to 2021 will add 6-7 per cent to this year's annual growth," it said. "We expect the RBI [Reserve Bank of India] to begin tightening liquidity measures and to raise the repo rate in the second half of this year, provided that growth momentum continues to improve," Moody's added.
Source: Fibre2fashion
Finance Minister Nirmala Sitharaman on Monday expressed concern over the future of exporters owing to the Ukraine crisis as this is set to jack up international freight rates and crude prices further.She also asked the Indian industry — engaged in the war-torn region — to come up with suggestions to tide over the crisis. “I am more worried about what’s going to happen to our exporters, who are doing very well,” she said while addressing the industry in a post-Budget interaction in Chennai on Monday. She also expressed worry about essentials like sunflower and fertilisers for which the country is dependent on the region. There is likely to be a huge spike in the commodities and fertiliser market. Russia was the largest exporter of urea, NPKs, ammonia, UAN and ammonium nitrate last year. Russia accounts for around 34 per cent of global wheat exports. In oilseeds, Russia and Ukraine contribute 80 per cent of the global sunflower exports and 19 per cent of world’s corn supplies. For India, the edible oil industry is worried and is expected to see a spike in prices as Ukraine and Russia account for 90 per cent of India’s sunflower oil. “As regards to what is going on, it will have a bearing on our immediate imports, and equally, exports to Ukraine. We are rightly worried about what comes from there,” she added, responding to a question by Mallika Srinivasan, chairman and managing director of Tractors and Farm Equipment. The finance minister also raised concerns over the impact on the farm sector as it also forms a considerable share of exports to Russia and Ukraine. India’s bilateral trade with Russia was $11.9 billion in 2021 — $3.3 billion exports and $8.6 billion imports. Indian imports include crude oil, petroleum products, fertilisers, gold and coal. On the other hand, India’s trade with Ukraine last year stood at $3.1 billion — exports at $510 million and imports at $2.6 billion. The FM also said that the ministry is looking into the exports for which payments have already been made. “For all these issues, I would have a comprehensive look. I will have to get a complete assessment done through the concerned ministries,” Sitharaman added. On the other hand, the shipping sector is also expecting freight and charter rates to go up. According to industry estimates, charter rates may even go up by 40 per cent for a 4,200 TEU (20-foot equivalent unit) from $70,000 a day now to even $100,000. She assured the industry that the government is taking stock of all the aspects of the crisis.
Source: Business Standard
India spent $94.3 billion in the first 10 months (April-January) of the ongoing financial year that started April 1, 2021, according to data from the oil ministry's Petroleum Planning & Analysis Cell (PPAC). It spent $11.6 billion in January alone when oil prices had started to surge. This compared with $7.7 billion spending in the same month last year. India's crude oil import bill is set to exceed $100 billion in the current fiscal year ending March 31, almost double its spending last year, as international oil prices trade at seven-year highs. India spent $94.3 billion in the first 10 months (AprilJanuary) of the ongoing financial year that started April 1, 2021, according to data from the oil ministry's Petroleum Planning & Analysis Cell (PPAC). It spent USD 11.6 billion in January alone when oil prices had started to surge. This compared with USD 7.7 billion spending in the same month last year. In February, oil prices crossed USD 100 per barrel and going at this rate, India, which imports 85 per cent of its crude oil requirements, is expected to almost double its import bill to USD 110-115 billion by the end of the fiscal year 2021-2022. The imported crude oil is turned into value-added products like petrol and diesel at oil refineries, before being sold to automobiles and other users. India has surplus refining capacity and it exports some petroleum products but is short on production of cooking gas LPG, which is imported from nations like Saudi Arabia. Import of petroleum products in April-January of 2021-22 fiscal was 33.6 million tonnes worth USD 19.9 billion. On the other hand, 51.1 million tonnes of petroleum products were also exported for USD 33.4 billion. India had spent USD 62.2 billion on import of 196.5 million tonnes of crude oil in the previous 2020-21 fiscal when global oil prices remained subdued in the wake of the COVID-19 pandemic. In the current year, it has already imported 175.9 million tonnes of crude oil. In the pre-pandemic 2019-20 fiscal, the world's third largest energy importing, and consuming nation had spent USD 101.4 billion on import of 227 million tonnes of crude oil. Brent spot prices surged to an over seven-year high of USD 105.58 per barrel on February 24 on fears of supply disruptions after Russia invaded Ukraine. It has dropped to below USD 100 thereafter as those fears receded as the West kept energy trade out of sanctions imposed on Russia.
Higher crude oil import bill is expected to dent the macroeconomic parameters. The country's import dependence has increased owing to a steady decline in domestic output. The nation produced 30.5 million tonnes of crude oil in 2019-20, which fell to 29.1 million tonnes in the following year. During the current fiscal, it has produced 23.8 million tonnes of crude oil so far as compared to 24.4 million in the first 10 months of 2020-21. The target for 2021-22 is 26.1 million tonnes, the PPAC data showed. India's self-sufficiency in meeting oil needs was 15 per cent in 2019-20, which increased to 15.6 per cent in the following fiscal but has fallen to 14.9 per cent in the current financial year. India's import bill for liquefied natural gas (LNG) also increased to USD 9.9 billion during the 10-month period of the current fiscal, significantly higher than USD 6.2 billion worth of imports during the same period in the previous fiscal year, the PPAC data showed. Global LNG prices have spiralled during the past few months, leading to costlier gas imports. These bank stocks have more than 20% upside potential according to analysts. In 2020-21, India spent USD 7.9 billion on import of 33 billion cubic metres of LNG. In the previous fiscal, it spent USD 9.5 billion on import of 33.88 bcm. In the current fiscal, India imported 26.78 bcm of gas, majority of it on long-term contracts linked to oil prices. Petronet LNG Ltd imports gas in its liquid form (LNG) from Qatar and Australia while state-owned GAIL (India) Ltd has long-term import contracts from Russia and the US.
Source: Economic Times
Due to a steep rise in crude oil prices amid the Ukraine crisis, the price of acrylic fibre increased by ₹5-6 per kg last weeek in the Indian market. This pushed up the cost of acrylic yarn by ₹5-6 per kg during the week ending February 26 in Ludhiana, the country’s most prominent man-made yarn market. However, demand of man-made yarn remained weak due to poor buying from downstream industry. Although demand was not encouraging in the yarn market, polyester-cotton yarn did not see any major price movement because higher PSF prices were balanced by bearish cotton. Domestic cotton prices were noted in silent zone on Friday and Saturday. Meanwhile, international cotton prices recorded high volatility along with other commodities due to the recent geo-political developments. On the demand front, traders said that domestic demand for summer season did not pick up as temperature remained at lower level. Export demand also remained weak as exporters have very few orders. Recent international developments are also a cause of worry for buyers, and they are cautious for fresh buying due to uncertainty in garment exports. According to sources, buyers were adopting wait-and-watch policy as they did not want to take blind risk. In Ludhiana, 30 count PC combed yarn (48/52) was sold flat at ₹290-300 per kg. 30 count PC carded yarn (65/35) was priced at ₹240-250 per kg and 20 count PC (recycled) yarn O/E (40/60) was traded up by ₹5 at ₹223-225 per kg. Acrylic NM (2/48) was priced at ₹345-350 per kg and acrylic NM (2/32) at ₹285-290 per kg.
Source: Fibre2fashion
Patna: Trade, commerce and industry bodies in Bihar gave a mixed response to Rs1,643.74 crore Budget allocations for industries and investments for fiscal 2022-23. Bihar Chamber of Commerce and Industries (BCCI) chairman PK Agarwal said it should have been more industries. He said in the pre-budget meeting, a demand was made to increase the budget allocation for the state industries sector, so that their claims could be settled. He said there was a need to form an industrial development fund and create a land bank. Agarwal, however, said the positive thing in the Budget was setting up 151 ethanol factories, which will boost economic development and generate employment. “Solar street lights in all villages, creation of portal for monitoring schemes and a mega skill development centre in every district is a welcome step. The decision to set up tool rooms in every division is also encouraging,” Agarwal said. Bihar Industries Association (BIA) secretary general Ashish Rohatgi told TOI that the industries budget was not as per the expectations of the trade bodies. “An amount of Rs 1,643 crore is lesser as per our estimation of the subsidies which has already been announced and pending with the government. We expected around Rs3,000-4,000 crore for the industries. But the positive side is the increase in the total Budget size even in pandemic times,” he said. “The important thing is that funds provided to the education, heath sectors and panchayati raj will be utilised for infrastructure development, that in turn will encourage small and medium enterprises to set up units in suburbs also,” Rohtagi said. Satyajit Singh, a leading makhana exporter in Bihar, said, “The state budget has included industry and investment as one of the six sutras, but its outlay for industries is less than 0.75% of the total Budget. That has disappointed the investors, private sector and industries as well as the industry department, which has been trying its best for the last one year to bring investments in Bihar.” Sachin Chandra, vice-chairman of the Confederation of Indian Industry (CII)-Bihar Chapter, said ethanol has been a big success story so far and the people would likely to see lots of industries coming up in the state in future. “Projects worth more than 30,000 crore have been approved. So, this is a feather in the cap of industrialisation in Bihar due to great efforts of state industries minister Syed Shahnawaz Hussain. Apart from this, a textile policy that we were expecting in the Budget is missing any mention,” he said. He added: “The initiative of installation of solar lights and streetlights in all the villages will give a great push to the solar power industries. So, this is also a positive development in the field of industrialisation.
Source: Times of India
The rupee recovered from early lows to close flat at 75.33 against the US dollar on Monday in line with the firm domestic equity market and signs of talks between Ukraine and Russia. Sustained foreign capital outflows and rising crude oil prices amid war between Ukraine and Russia are weighing on the local currency, analysts said. At the interbank foreign exchange market, the rupee opened weak at 75.73 against the US dollar. However, it recovered losses to close flat at 75.33 against the greenback. "Rupee traded very weak near 75.75 on the opening trade as the geopolitical tension escalation went one step higher on back of Belarus supporting Russians. But signs of talks between Russia and Ukraine at the Belarus border supported the rupee and the rupee started covering the lost ground," Jateen Trivedi, Senior Research Analyst at LKP Securities, said. The Russian currency ruble tanked about 30 per cent against the US dollar on Monday after Western nations imposed stricter sanctions on Russia. Western countries announced moves to block some Russian banks from the SWIFT international payment system and to restrict Russia's use of its massive foreign currency reserves. Later, Russia's central bank announced measures to support its falling currency. Meanwhile, reports quoted Biden administration officials saying that Germany, France, the UK, Italy, Japan, European Union and others will join the U.S. in targeting the Russian central bank. Global oil benchmark Brent crude futures jumped 5.46 per cent to USD 103.28 per barrel amid war in Ukraine. On the domestic equity market front, the 30-share Sensex ended 388.76 points or 0.70 per cent higher at 56,247.28, while the broader NSE Nifty rose 135.50 points or 0.81 per cent to close at 16,793.90. Foreign institutional investors were net sellers in the capital market on Friday, as they offloaded shares worth Rs 4,470.70 crore, as per stock exchange data.
Source: Business Standard
Coimbatore: Citing shortage of cotton stock in the country, Southern India Mills’ Association (Sima) on Monday urged the Union government to allow duty-free import of 40 lakh bales of cotton. Speaking to reporters here, Sima chairman Ravi Sam said the country is likely to face a 30 to 40 lakh bales cotton shortage owing to the substantial increase in demand and export of around 50 lakh bales. “Due to the unprecedented increase in domestic cotton price, from 135/kg to 219/kg in a year, an increase of around 65%, mills are struggling to meet export commitments,” he said. “The 11% import duty has aggravated the cotton market. As seed cotton price is ruling around 70% higher than the minimum support price, farmers, ginners and traders are hoarding cotton, hoping for further increase in prices. Cotton arrival has drastically reduced to 220 lakh bales in February against 293 lakh bales during the same period last year,” Ravi said. “Out of the 220 lakh bales, 150 lakh bales have been consumed by mills. Thirty lakh bales have been contracted for exporters, 15 to 20 lakh bales are in the pipeline and around 20 lakh bales are with traders and ginners.” Ravi requested Prime Minister Narendra Modi’s intervention in cotton policies. “The plan to exempt extra long stable (ELS) cotton, which is not produced in the country, from import duty, will not have any impact on farmers.” Sima secretary general K Selvaraju urged the government to allow duty-free import of 40 lakh bales to avoid production stoppage and job losses.
Source: Times of India
South Korea has decided to join international sanctions and ban the export of strategic materials to Russia amid the situation around Ukraine, the South Korean Ministry of Foreign Affairs said on Monday."As a form of sanctions against Russia, our government has prohibited the export of strategic materials to Russia, strengthening the export verification procedure," the ministry said in a statement. The statement went on to say that the relevant South Korean departments will consider possible restrictions on non-strategic materials and extension of sanctions against Russia, including 57 items that are subject to the US sanctions, such as computers, sensors, aviation, and space industries and others. Western nations have rolled out a sanctions campaign against Russia after it launched a military operation in Ukraine last Thursday, following requests for help from the people's republics in Donbas. The Russian Defense Ministry said the operation was targeting the military infrastructure of Ukraine only and that the civilian population was not in danger. Moscow says it has no plans to occupy Ukraine and that the purpose of its operation is demilitarization and denazification of Ukraine. Delegations from Russia and Kyiv are expected to hold talks in the Gomel region in Belarus, at the Ukrainian border, in the coming hours.
Source: Business Standard
Netherlands’ Fashion for Good has launched the ‘Untapped Agricultural Waste Project’ to validate and scale technologies that can successfully transform agricultural waste into sustainable textile fibres. Fashion for Good focuses on sparking and scaling technologies and business models that have the greatest potential to transform the industry. With catalytic funding provided by Laudes Foundation, Fashion for Good partners Adidas, Bestseller, Vivobarefoot and Birla Cellulose, and six innovators, the consortium project will assess the technical feasibility of natural fibres created by the selected innovators using agricultural waste such as rice husks, hemp, wheat straw, banana and pineapple, the company said in a press release. Agricultural waste poses significant challenges for farmers in South and Southeast Asia and in many cases the waste is not repurposed and is often burned. Up to 92 million tonnes of agricultural waste is burned annually in India alone, which in 2017 resulted in approximately 149 million tonnes of CO2. At the same time, the extraction and processing of virgin, conventional fibres such as cotton and polyester accounts for up to 39 per cent of greenhouse gas emissions in the textile supply chain – as highlighted in Fashion for Good’s recent report ‘Unlocking the Trillion-Dollar Fashion Decarbonisation Opportunity’. The report charts a funding and solution driven trajectory for the industry to meet its net-zero ambition. Raw Material innovation is essential to reducing these emissions, and the next generation of materials are key if the industry is to decarbonise its supply chain. The 18 month ‘Untapped Agricultural Waste Project’ brings together Fashion for Good partners Adidas, Bestseller, Vivobarefoot and supply chain partner Birla Cellulose as well as six innovators to explore innovations that can repurpose agricultural waste into viable new natural fibre blends. These fibre blends offer alternatives to conventional fibres and have the potential to displace virgin fibres derived from unsustainable materials such as oil. With the support of catalytic funding from Laudes Foundation, the project also leverages findings from their 2021 report, ‘Spinning Future Threads’ authored by the Institute for Sustainable Communities, the World Resources Institute India and Wageningen University and Research. The report maps agricultural waste in eight countries across South and Southeast Asia, identifying the untapped opportunities in agricultural waste streams including rice husks, wheat straw, banana and pineapple production, which are the focus of this project, according to Fashion for Good. The six fibre innovators, AltMat, Bananatex, Chlorohemp, Agraloop by Circular Systems, HempTex India and 9Fiber, will be further developing a variety of different natural fibres and fibre blends with a focus on trialling the highest percentage of agricultural waste, while also achieving the necessary performance requirements. Birla Cellulose will work closely with the innovators providing expertise to develop and prepare their new materials for wider adoption in the fashion supply chain, with the participating project brand partners supporting the testing and eventual scaling of these fibres. This first phase of the project concludes in December 2022. To further drive supply chain adoption and move beyond lab scale, the next phase of the project will pilot the agri-waste fibres from selected innovators in collaboration with partner brands and supply chain players in commercial facilities to produce larger quantities. This next phase ultimately aims to further enable brand offtake agreements and financing to facilitate scaling. “This ambitious project explores a new source of feedstocks for the fashion industry that, if scaled, will help drive both the agriculture and textile industry towards net-zero. We see great potential for these various agriculture waste streams that would otherwise have few secondary uses. By applying innovative technologies to develop natural fibres, we can diminish the pressure on existing natural fibres and shift away from unsustainable materials and sources,” Katrin Ley, managing director, Fashion for Good, said in a statement.
Source: Fibre2fashion
The 7th EU-Africa Business Forum 2022, jointly organised by the African Union (AU) Commission, the European Union (EU) and European business organisations recently, launched the Joint EU Africa Business Declaration to influence policymaking and business activities, and reconcile concrete actions for a sustainable fashion and textile industry of the future. The Declaration calls for setting up an ‘EU-Africa Apparel and Ethical Fashion Fund’ for technology transfer and environmental, social and governance (ESG) support for capacity building and partnerships enhancement among value chain actors to advance compliance with ESG standards. It calls for technology and knowledge transfer, and harnessing the potential of advanced technologies and digital solutions for traceability of sustainability performance and credentials, for small and vulnerable actors.It also calls for supporting small and medium enterprises (SMEs) in an overall green transition to sustainable value and supply chains, for those not yet ready, by financing measures in production processes and reducing trade barriers according to an official release.There is also a clause to set up textile industry hubs across Africa based on the experience by the African Cotton and Textile Industry Federation (ACTIF) and formulate business incentives in the form of tariffs, access to finance and trade facilitation.Textile-apparel is a fast-growing industry in several African countries. In fact, the apparel and footwear industry in Sub-Saharan Africa amounts to $31 billion and is expected to grow at 5 per cent until 2024. Currently, the African continent is responsible for 5.8 per cent of the world’s cotton production and employs more than 450,000 people.The event brought together more than 15,000 experts, government representatives, international organisations and stakeholders.
Source: Fibre2fashion
The Bangladesh government recently raised the maximum wastage rate for raw materials used to produce apparel following strong disagreement with stakeholders on the earlier rates. Though apparel manufacturers hailed the commerce ministry decision, calling it ‘commendable’, they said opportunities do exist to raise the rate further on some value-added products. The ministry had previously revised such rates on December 19 last year. However, the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) strongly disagreed over the rates, and sent a proposal to the ministry, requesting it to increase the maximum wastage rate to 40 per cent. Representatives of the two trade bodies and the ministry then sat for a meeting on February 9. The ministry then re-fixed the maximum wastage rate to produce basic knit items—T-shirts, polo shirts, trousers, shorts, skirts, pajamas, and similar products—at 29 per cent, up by 2 per cent from the previous rate. Apart from the basic items, the authorities also raised the wastage rate for sweaters, socks, jumpers, pullovers, cardigans, vests, gloves and similar items to 16 per cent, which had been fixed at 4 per cent on December 19. For the first time, the authorities have also created separate categories and set a wastage rate for the above items. The ministry has also refixed the highest rate to 32 per cent on special items like rompers, tank tops, dresses, gowns, hoodies, lingerie and similar products, which had been fixed at 30 per cent in December, according to Bangla media reports. BKMEA executive chairman Mohammad Hatem welcomed the refixed rates, saying the previously fixed ones were ‘disappointing and concerning’. But even the new rates have room for improvement for some items, especially for fashionable and value-added items where the wastage rates are higher due to different processing methods, he added. The government set a maximum 16 per cent wastage rate for producing apparel items in 1998. It revised the maximum wastage rates to 27 per cent for basic items, 30 per cent for specialised items and 4 per cent for sweaters and socks on December 19 last year.
Source: Fibre2fashion
