The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 5 APRIL, 2016

NATIONAL

 

INTERNATIONAL

 

 

Textile Raw Material Price 2016-04-04

Item

Price

Unit

Fluctuation

Date

PSF

1041.19

USD/Ton

0%

4/4/2016

VSF

2113.23

USD/Ton

0%

4/4/2016

ASF

1935.84

USD/Ton

0%

4/4/2016

Polyester POY

1048.90

USD/Ton

0%

4/4/2016

Nylon FDY

2298.33

USD/Ton

0%

4/4/2016

40D Spandex

4473.25

USD/Ton

0%

4/4/2016

Nylon DTY

1149.16

USD/Ton

0%

4/4/2016

Viscose Long Filament

2545.13

USD/Ton

0%

4/4/2016

Polyester DTY

5748.90

USD/Ton

0%

4/4/2016

Nylon POY

1272.56

USD/Ton

0%

4/4/2016

Acrylic Top 3D

2128.65

USD/Ton

0%

4/4/2016

Polyester FDY

2120.94

USD/Ton

0%

4/4/2016

30S Spun Rayon Yarn

2869.05

USD/Ton

0%

4/4/2016

32S Polyester Yarn

1712.18

USD/Ton

-1.77%

4/4/2016

45S T/C Yarn

2468.00

USD/Ton

0%

4/4/2016

45S Polyester Yarn

1866.43

USD/Ton

0%

4/4/2016

T/C Yarn 65/35 32S

2128.65

USD/Ton

0%

4/4/2016

40S Rayon Yarn

3007.88

USD/Ton

0%

4/4/2016

T/R Yarn 65/35 32S

2313.75

USD/Ton

0%

4/4/2016

10S Denim Fabric

1.37

USD/Meter

0%

4/4/2016

32S Twill Fabric

0.82

USD/Meter

-0.19%

4/4/2016

40S Combed Poplin

1.17

USD/Meter

0%

4/4/2016

30S Rayon Fabric

0.69

USD/Meter

0%

4/4/2016

45S T/C Fabric

0.69

USD/Meter

0%

4/4/2016

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.15425 USD dtd. 04/04/2016)

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

 

Textile exporters seek review of trade pacts to make globally competitive

The textile exporters have been seeking review of India’s trade agreements like the Free Trade Agreements (FTAs) and Preferential trade Agreements (PTAs) to check decline in India's merchandise exports have been contracting for the last 15 months. India's 40% of the total exports are handled by the MSME sector which feels that it's the country's trade agreements which are not helping them much for competing globally. In India's merchandise exports, the top 20 categories account for four-fifth of the total exports. Even in top export categories like textiles, India is exporting low value commodities such as cotton yarn or apparel rather than technical textiles, say industry experts.

Experts opine that India has signed many trade pacts, more for geo-political reasons rather than commercial reasons. MD of Neetee Clothing, Animesh Saxena said that although the textile and garment exporters did not suffer as much as the other sectors in the past few months, still there is a “policy paralysis” from the government side. Saxena further added that their internal costs are very high. Also, the trade agreements are against them. Bangladesh and other countries have free access to European market but our materials are 10-12% costlier than theirs. As Vietnam is India’s competitor now, India should finalize its stuck treaties. The government should also bring down the internal transaction costs and port charges to make Indian exporters competitive.

Meanwhile, Arvind Sinha, President of the Textile Association (India), said that they need to expand their capacities now as government is formulating new policies and the falling exports could be blamed on the global slowdown. According to industry body Assocham, one case is the South Asian Free Trade Agreement, which has not resulted in any significant export gains. India's trade deficit has widened with the ASEAN. Further, most of India's PTAs are shallow in terms of product coverage. For example, the India-Mercosur PTA doesn't include textiles and apparel items, which face prohibitive import duties of up to 35 percent. India's trade pacts have exacerbated inverted duty structure – high import duties on raw materials and intermediates, and lower duties on finished goods – that discourage the production and export of value-added items. Thus, apparel can be imported into India duty free while its raw material –manmade fibres attract an import duty of 10 percent.

SOURCE: Yarns&Fibers

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Surat power looms to keep units closed to cut down production

Surat is the country's biggest man-made fabric (MMF) centre having over 6.5 lakh powerloom weaving machines, employing over 8 lakh workers manufactures over three crore meter of fabric per day. The Powerloom weavers owing to dwindling demand for fabrics and the rising price of yarn have decided to keep their units closed for two days a week to cut down production. A meeting in this connection was held on Friday where weavers from various industrial areas including Ved Road, Katargam, Sarthana, Bhestan, Unn, Udhana-Magdalla, Varachha, Kapodara and Bhatena have unanimously decided to keep their units shut for two days in a week. The decision has been taken to reduce over-production in the weaving units. Leaders of the powerloom weaving sector said that around 90% of the weaving units in the city have implemented the two days closure starting from April 1. The weavers are also likely to take decision on cutting down the wages of the textile workers in the coming days. Devesh Patel, president of Ved Road Weavers' Association said that production of polyester fabric is all set to reduce due to the two-day closure of units in a week. The weavers will keep their units closed on weekends in order to bring down production.

According to Industry sources, the demand of polyester fabric in domestic and international market has decreased in the last two months following economic downturn and the increasing prices of fuel and inflation. President of Federation of Gujarat Weavers' Association (FOGWA), Ashok Jirawala said that the two days closure has been implemented in the weaving units starting from April 1 to arrest the dwindling demand of fabrics and increasing prices of yarn. The yarn spinners have been taking the benefit of the anti-dumping duty on various yarns imported into the country.

SOURCE: Yarns&Fibers

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Locals, activists demand reopening of dysfunctional textile mill

What seemed like a rosy picture of employment way back in 1977 has turned into a nightmare for the residents of Shivnagar Katai Mill village. Years after then Prime Minister Indira Gandhi inaugurated the Shivnagar Katai mill, locals near the factory have demanded reopening of the mill, which was shut down in the year 2000. Most villagers were pushed into manual labor after the mill was shut down. With the development of the Partapur industrial area, all routes for water drainage were blocked off. As a result, parts of the village have practically turned into swamps, rife with disease. Now, local residents and activists are demanding that the mill be opened again. Shivnagar Katai Mill village is barely two kilometers from the Partapur air strip, which is the proposed site for Meerut's airport.

Pankaj Sharma, convener of city-based NGO Meerut Nagrik Adhikar Manch, said, "The mill was shut down because it was runing into losses. Not only did the closure of the mill result in loss of jobs, it made lives worse for them in general. The village used to have a drainage system but it got blocked after the Partapur industrial area came up. There is a large drain about half a kilometer from the village but the Meerut Municipal Corporation has not bothered to connect it to the village. If the mill starts again, at least the village will get some attention and basic facilities like drainage. It is ironic that while the counting of votes after most elections happens inside the dysfunctional textile mill, politicians have forgotten about the people who live in the village next door."

The village is categorized as an "urban village" under the jurisdiction of the Meerut Municipal Corporation (MMC). While villagers say they have been paying taxes, they have not received much attention from the civic body. "We pay our taxes to the MMC but the village stinks. There is no proper drainage system in place. There is no way for the sewer water to exit the village. People have taken to digging trenches in front of their own houses and they dump water here. The sewers have not been cleaned in four years now," said Raj Kishore Sharma, a chemist in the village. He added saying, "The sale of medicine goes up during the monsoon because of diseases. There were at least ten cases of dengue last year." Congress has also demanded the reoprning of the mill. "The mill is a part of our party's legacy since Prime Minister Indira Gandhi had inaugurated it. It has been closed for over 15 years now and that has pushed many workers to the brink of starvation. In the interests of the people, the mill should be restarted. We have written several letters to the district administration and the state government, but nobody has given us a satisfactory answer," said Congress district secretary Nazmuddin Saifi.

SOURCE: The Times of India

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Workers on strike in Tirupur

A section of workers in Tamil Nadu’s Tirupur knitwear cluster are on strike demanding the rollback of a recent amendment in the Employees’ Provident Fund (EPF) scheme, according to which the employer’s component in the EPF corpus can only be withdrawn when the employee turns 58. Currently, the workers are striking in three units in Tirupur. Exporters fear the strike might spread to more units.  Tirupur Exporters Association (TEA) has asked the Union labour minister to address the problem immediately as it could cripple the Rs 23,500-crore sector. The amendment was done by the Union labour ministry through a notification in February. “The amendment in PF norms has created a lot of resentment among the workers,” said TEA president A Sakthivel. The cluster employs around 400,000 workers directly, and out of which 70 per cent are women. There are around 70,000 workers from other states including Odisha, Bihar and Uttar Pradesh. There are workers from Nepal as well.

Notably, it’s mostly the north Indian workers who are on strike in Tirupur. These workers typically leave their jobs after working for four or five years owing to various reasons such as marriage, better job prospects in their native states, starting their own ventures, etc. These workers can’t afford to wait to turn 58 years to claim their PF money. “Due to the strike, production has been got affected and the units will have difficulty in meeting their export delivery schedule. These units might also incur financial losses and lose out on future orders,” said Sakthivel. Manpower is critical to the garment sector and the success of Tirupur exports is mainly attributed to the prompt delivery schedule. “With the shortage of labour, no export unit will take big orders,” Sakthivel added.

SOURCE: The Business Standard

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'Importers can avail of customs duty exemption and concessional CVD'

Can an importer simultaneously avail of exemption of basic customs duty under one notification and exemption of additional duty of customs (CVD) under another notification?

Yes. In its circular no. 41/2013-Cus dated October 21, 2013, the CBEC clarified that an importer, while availing of BCD exemption on steam coal under notification No. 46/2011-Customs, dated June 1, 2011, can simultaneously avail of concessional CVD at two per cent under S. No. 123 of notification No. 12/2012-Customs, dated March 17, 2012. Again, in its circular no. 334/5/2015-TRU dated April 30, 2015, the CBEC has clarified that importers can avail of the benefit of notification No. 12/2012-Customs, dated March 17, 2012 for the purposes of BCD [i.e. S. No. 197 to 203 as amended by notification No. 46/2012-Customs, dated August 17, 2012] and simultaneously avail benefit of S. No. 127 of notification no. 12/2012-Central Excise, dated March 17, 2012 for the purposes of CVD where such imports are for use in the manufacture of other fertilisers.

Is service tax payable on interest on loans?

No. Services by way of extending deposits, loans or advances — in so far as the consideration is represented by way of interest or discount — falls under the negative list of services under Section 66D(n)(i) of Finance Act, 1994.

We received advance payment from a foreign buyer for export of our goods, but we could not export within one year of receipt of advance payment, due to some problems at our end. Now, we want to return the money to the foreign buyer, but our bankers are saying that this cannot be done. Can you tell us the correct position, giving a suitable reference?

As per proviso to Para B. 8(1) of RBI Master Circular no. 14/2015-16, “in the event of the exporter’s inability to make the shipment, partly or fully, within one year from the date of receipt of advance payment, no remittance towards refund of unutilised portion of advance payment or towards payment of interest, shall be made after the expiry of the said period of one year, without the prior approval of the Reserve Bank”. Therefore, you may approach RBI through your bankers for necessary permission.

For procurement of our components from local sources, we have an excise exemption notification that requires us to follow Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable and Other Goods) Rules, 2016. Can we claim CVD exemption on the basis of the same excise exemption?

The Customs may deny the exemption on the grounds that the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable and Other Goods) Rules, 2016 cannot be followed by importers. In my opinion, you can contest that on the basis of judgments in the cases of Solar Pesticides 1992 (57) ELT 201 (Bom), Hindustan Electro-Graphite Ltd. [1993 (65) ELT 46 (Tribunal)], Thermax Pvt. Ltd. [1992 (61) ELT 352 (SC)] and Malwa Industries Ltd. [2009 (235) ELT 214 (SC)]. I suggest that you go through these judgments and then take an informed decision.

SOURCE: The Business Standard

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Manufacturing PMI at eight-month high

India’s manufacturing sector performance is estimated at an eight-month high in March because of improved demand from domestic and export markets. However, rising prices could make the central bank hold key rates, according to Nikkei India Manufacturing Purchasing Managers’ Index (PMI). The seasonally adjusted PMI remained firmly above the threshold of 50 for a third consecutive month and jumped up to 52.4 in March from 51.1 in February. A reading above 50 on the PMI denotes expansion while that below 50 indicates contraction in activities. “PMI data suggest we should expect another quarter of robust economic growth in the last quarter of the 2015-16… Despite gathering momentum, growth of production and new orders still remained below trend rates however,” said Pollyanna De Lima, Economist at Markit and author of the report, while warning that inflationary pressures are on the upside and could mean a pause on interest rates. The Manufacturing PMI is the last set of data before the Reserve Bank of India announces the monetary policy for 2016-17 on Tuesday. Last week, official data revealed that the eight core sector industries grew at a 15-month high of 5.7 per cent in February.

Noting that there has been “solid growth”, Lima said, “March’s survey suggests that inflationary pressures in manufacturing are on the upside, with cost burdens rising at the quickest pace in three months and output charge inflation reaching a 16-month high…This build-up in inflationary pressures may lead the RBI to hold off from cutting rates.” The report noted that cost inflation accelerated and the rates of cost and charge inflation were at three- and 16-month highs, respectively. However, production growth accelerated to the fastest since August 2015 and new business inflows increased and was the most pronounced since July last year. It further said that while these positive developments encouraged companies to buy more inputs, workforce numbers were largely unchanged with less than 2 per cent of survey participants reporting job creation.

SOURCE: The Hindu Business Line

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India close to achieving 8% GDP growth: Panagariya

Banking reforms and job creation are the two biggest current challenges, said Arvind Panagariya, vice-chairman of the NITI Aayog. The country is close to achieving eight per cent annual growth in gross domestic product (GDP), on the back of good infrastructure development, he added. “The advance estimate for 2015-16 pegs GDP growth at 7.6 per cent and the fourth quarter is expected to clock 7.8 per cent, quite close to the target of eight per cent,” he said, at the annual session of CII. Amitabh Kant, chief executive officer at the government’s think tank, said there was a need for more reliance on the domestic market. “We’re creating jobs but there is gross under-employment. To counter this, we need big manufacturing firms,” said Panagariya. Wages were rising in China and India needs to capitalise on this. “The Centre is working on this through its skill development initiatives and in two years, the numbers of seats in industrial training institutes has risen by 20 per cent,” he added.

On the government’s retreat regarding a tax on the employees provident fund, he said taking half a step backward after taking two-three steps forward was okay as long as one was walking. “Reforms will happen under the present government but we need to be patient,” he said. Kant felt India needed to look at manufacturing for export. “The challenge is to look at the right size and scale, and think of global markets to drive growth, as was done by China.” Jamshyd N Godrej, chairman, Godrej & Boyce Manufacturing, said the two biggest deficits the country needed to bridge were in physical and social infrastructure.

SOURCE: The Business Standard

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GST a key factor in improving ease of doing business: Das

Expecting an early passage of goods and services tax (GST) Bill by Parliament, Economic Affairs Secretary Shaktikanta Das said administrative machinery is ready to implement the new indirect tax regime, which will be a key component in improving ease of doing business. "I think the biggest contribution to ease of doing business in our country will be made if GST is implemented in time. We are quite hopeful and optimistic that Parliament will definitely very soon appreciate the urgency of GST and have the Constitution Amendment Bill passed," he said. Addressing industry leaders at a CII event here, Das said the administrative machinery is "fully geared" both at states and central level to implement the GST at the earliest. "GST is critical component of improving ease of doing business. Apart from having a common market, which will make our cost of production and our competitiveness far more effective...(GST) will also make a big contribution to logistic cost and transactions costs that we today are faced as economy," the Secretary said.

Quoting an estimate, Das said a truck carrying goods, on an average, remain stranded at different check points for 48 hours. Implementation of the Goods and Service Tax (GST) will help in removing such bottlenecks, the Secretary said. The GST bill was passed by the Lok Sabha in May last year and is pending ratification by the Rajya Sabha or Upper House, where the ruling NDA does not have a majority. Congress is opposing the bill in current form and demanding that a cap on GST rate be included in the Constitution Amendment Bill. Keen on getting the much delayed GST bill approved by Parliament in second half of the Budget Session beginning next month, Finance Minister Arun Jaitley recently said he will reach out to the Congress again to persuade it to support the legislation. The GST Bill, India's biggest indirect tax reform since independence, seeks to replace a slew of central and state levies, transforming the nation of 1.3 billion people into a customs union. After it is approved by the Rajya Sabha, the legislation needs to be ratified by half of the 29 states so as to roll out GST possibly by October 1.

SOURCE: The Business Standard

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RBI cuts repo rate by 25 bps to 6.5%

In its first monetary policy review for the financial year 2016-17, the Reserve Bank of India announced a 25 basis point reduction in the repo, or repurchase rate, which is the rate at which banks borrow from the central bank. One basis point is one hundredth of a percentage point. The repo rate now stands at 6.5%.  The RBI also left the cash reserve ratio unchanged at 4%. The rate cut had been widely expected, although the quantum of the cut had had mixed backers. Reuters poll had predicted an interest rate of 25 basis points.Essentially, the cut suggests that the RBI has taken note of the central government’s commitment to fiscal discipline. In the Budget for FY2017, Finance Minister Arun Jaitley had reaffirmed the government’s intention to contain fiscal deficit at 3.9% of GDP.

Additionally, retail inflation, for long a thorn in the side of monetary policy, seems to have finally been brought under control, even though much credit for that may lie at a creeping global slowdown led by China.  Inflation has eased to 5.18% in February. While that is still higher than the RBI’s own target of 5% for March 2017, expectations are that it could fall to as low as 4% in coming months. A weakening El Nino could also help bring a good monsoon and further drive down food prices – which carry the most weight in the Consumer Price Index (CPI) – in the second half of the fiscal Wholesale inflation has been in negative territory for all of FY2016, a trend that is likely to continue. The domestic investment cycle has also been slow to pick up.  A Business Standard report points out that Indian private sector companies are not expected to press the pedal on fresh capital expenditure in the financial year 2016-17, or FY17, mainly because of low capacity utilisation of existing units, highly leveraged balance sheets and static demand.

Companies have also complained that credit remains tight because of high interest rates, while Governor Raghuram Rajan has made his displeasure clear that banks have not passed on the 125 basis point reduction in repo rates since January 2015 to borrowers. However, factory output in March jumped to an 8-month high of 52.4, as shown by the Nikkei/Markit Purchasing Managers’ Index. This was the third straight month of manufacturing expansion. Additionally, the new orders sub-index, which reflects domestic demand, rose to an 8-month high of 53.9, encouraging firms to increase output.

SOURCE: The Business Standard

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European Investment Bank to open regional office in Delhi by year-end

The European Investment Bank or EIB that supports long term investments for development projects in India will open a Regional Office for South Asia here by end of the year to augment its operations in the sub-continent. Last week Werner Hoyer, the President of the European Investment Bank, announced that the world's largest multilateral public bank would strengthen engagement to support long-term investment in India. Speaking alongside Prime Minister Narendra Modi at Brussels last Wednesday, President Werner Hoyer confirmed the European Investment Bank's firm commitment to supporting long-term investment crucial for environmentally sustainable social and economic development in India and announced the opening of a Regional Representation for South Asia in New Delhi by the end of the year. "The European Investment Bank has supported long-term investment across India for more than 20 years that has helped to harness renewable energy, strengthened industry and reduced carbon emissions. As the world's largest multilateral public bank and a global leader in financing climate action, the European Investment Bank recognises that the time is right to increase our engagement in India. The opening of a regional office of the EU Bank in the sub-continent will ensure closer ties with public and private partners across the country, where our financial strength and technical expertise can benefit crucial long-term investment in India" pointed out Hoyer outlining EIB plans.

The summit also provided an opportunity for EIB's largest ever financing in India, a EUR 450 million (Rs.33 billion) investment for the first metro line in Lucknow. Finance contracts for the first tranche of the European Investment Bank long-term loan for the Lucknow Metro were signed by Jonathan Taylor, European Investment Bank Vice President responsible for Asia and Manjeev Singh Puri, Ambassador of India to Belgium, Luxembourg and European Union last Wednesday in Brussels on the sidelines of the 13th edition of the India-EU Summit. The EUR 450 million long-term loan will be used to finance the first metro line in Lucknow, including both construction of the 23km long new metro line and a fleet of metro trains. The line is the first part of an expected broader metro network planned for the capital of Uttar Pradesh. Once operational the new metro is expected to increase use of public transport from 10% to an estimated 27% in the city of 3 million people. "Investment in sustainable public transport is essential not only to improve urban mobility, but also to reduce carbon emissions, address health issues and cut time lost in traffic. The European Investment Bank is pleased to support the new Lucknow Metro project and build on our unique track record of supporting long-term investment in sustainable transport around the world. This new support also represents the European Investment Bank's first sovereign loan to the Republic of India and marks a new era in our engagement in the country" said Jonathan Taylor, European Investment Bank Vice President responsible for lending operation in Asia and climate action worldwide. President Werner Hoyer and Modi discussed the European Investment Bank's support to the country in areas of sustainable development and climate action, where the EU Bank has increased its commitment to 35% outside the EU. The European Investment Bank has provided more than EUR 1.34 billion for long-term investment in India since the first operation in 1993.

SOURCE: The Economic Times

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India, Australia getting closer to a deal on FTA: Sitharaman

Negotiations on the free trade agreement (FTA) between India and Australia are progressing substantially and the two countries are probably “close to a deal”, Commerce & Industry Minister Nirmala Sitharaman said on Monday. Speaking at an event organized by industry body Confederation of Indian Industry (CII), Sitharaman said she had met the Australian trade envoy earlier in the day and hoped for quick progress on the matter. The talks for a comprehensive FTA started in 2011 but differences, mainly on tariff reduction in certain product categories, have lengthened the process. Australia is pushing for tariff reduction in dairy products, fresh fruit, pharmaceuticals and wines. India wants zero duty on automobile parts, textiles and fresh fruit. India has also demanded greater access in the services sector. "We have made our offers. But renewed and refined or enhanced offers are awaited. In services also, we are negotiating for a better offer from Australia having given our own wish-list," Sitharaman told reporters.

Earlier, Finance Minister Arun Jaitley had said he expected substantial headway in negotiations for the agreement. Several rounds of negotiations have been completed, besides removing non-tariff barriers. Bilateral trade was $13 billion in 2014-15, up from $12.1 billion in FY14. On a related note, the minister said India is very keen to conclude the Bilateral Trade and Investment Agreement (BTIA) - the FTA between India and the European Union. She added that she will be writing to EU to "quickly" arrange a meeting between chief negotiators of both countries. While a joint EU-India Agenda for Action 2020 has been adopted by both countries as a common roadmap for the India-EU Strategic Partnership in the next five years, not much headway has been made on BTIA. The BTIA negotiations had remained deadlocked since May 2013 over growing differences regarding greater market access sought by both sides for merchandise exports. However, Commerce Ministry officials said the EU is seeking the lowering of tariffs on automobiles and wine products.

Issues related to facilitation of greater movement of professionals from one country to another, arising out of the Mode 4 provisions of the 1995 General Agreement on Trade in Services is another point of contention between the two sides. This also involves India's demands to be classified a data- safe country, which will help Indian information. Two-way merchandise trade between India and the EU stood at $98.5 billion in 2014-15. Also, responding to whether the government was considering more steps to deal with cheaper steel imports from abroad, Sitharaman said no more steps are planned. "If the steel ministry is looking into it, we will have to wait and hear from them," she said. In February, the government imposed MIP on 173 steel products ranging between $ 341 to $752 per tonne (nearly Rs 23,065.24-50,865.28) to give relief to domestic steel producers against cheap in-bound shipments. The MIP will remain in place for six months only. The government has also imposed a safeguard duty on certain steel products. Sitharaman also said the new guidelines for e-commerce will provide a level playing field to both online and offline stores by bringing in greater clarity. Stating that the market is free and the government does not believe in interfering in it, the minister pointed out the guidelines have also assured brick and mortar stores of fair competition.

SOURCE: The Business Standard

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Global Crude oil price of Indian Basket was US$ 36.58 per bbl on 01.04.2016

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$ 36.58 per barrel (bbl) on 01.04.2016. This was higher than the price of US$ 36.35 per bbl on previous publishing day of 31.03.2016.

In rupee terms, the price of Indian Basket increased to Rs 2426.33 per bbl on 01.04.2016 as compared to Rs 2411.50 per bbl on 31.03.2016. Rupee closed stronger at Rs 66.33 per US$ on 01.04.2016 as against Rs 66.41 per US$ on 30.03.2016. The table below gives details in this regard: 

Particulars

Unit

Price on April 01, 2016 (Previous trading day i.e. 31.03.2016)

Pricing Fortnight for 01.04.2016

(12 Mar to 29 Mar, 2016)

Crude Oil (Indian Basket)

($/bbl)

36.58                 (36.35)

37.29

(Rs/bbl

2426.33            (2411.50)

2491.72

Exchange Rate

(Rs/$)

66.33*                 (66.33)

66.82

 

SOURCE: PIB

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Vietnam strong in textile exports

 “The textile and apparel industry cannot be characterized as a low value-added industry because it possesses labor-intensive as well as high-value added segments,” it noted. The report confirmed that China remains the leading producer in all product categories but there are still pockets of opportunity for other countries to benefit from further globalization. Other countries have also benefited from production relocation away from China by investors, including Vietnam. From 2000 to 2014 Vietnam’s compound annual growth rate (CAGR) was the highest, at 18.3 per cent. It now has a global market share of 3.8 per cent, putting it sixth in 2014 from 21st in 2000. In footwear Vietnam is the fifth-largest producer, providing 7.8 per cent of exports to the EU.

The ratification of the EU-Vietnam FTA will further benefit the country’s apparel industry but its strict rules of origin require Vietnam vertically integrate its textile and apparel industry to maximize the potential gains. As at 2014 the EU received 20.9 per cent of Vietnam’s total apparel and footwear exports. As China’s overall wage competitiveness diminishes, Vietnam can whittle away its market share in the apparel segment. ASEAN accounted for 16.6 per cent of imports to the US, with Vietnam leading the way in the apparel, leather, and footwear product categories. The US is Vietnam’s largest export market for apparel and footwear, constituting 36 per cent of its total.

SOURCE: The Global Textiles

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Bangladesh-textile goods export to eurozone, Govt increases cash incentive

The government on Monday revised the cash incentive scheme for the current fiscal year of 2015-2016, raising the rate of incentive for textile products export to the eurozone area and leather goods. Potato starch will also get 20 per cent cash incentive against export proceeds. Bangladesh Bank on Monday issued a number of circulars in this regard. According to a circular, the government increased the rate of cent cash incentive for export of textile products to the eurozone area to 6 per cent from the current 4 per cent. The sector gets the cash incentive as an alternative to the duty bonds and duty drawbacks facility. The rate of cash incentive for export of leather goods has also been increased to 15 per cent from the current 12.50 per cent. The exporters who have already received the cash incentive at the existing rate will also be allowed for the additional benefit and for that, they will have to apply within 30 days of the issuance of the circular.

Another circular of the central bank said that potato exporters would have to submit a certificate issued by the Bangladesh Potato Exporters Association for availing the cash incentive which is 20 per cent of export value. The government has also increased the ceiling of freight on board value of frozen shrimp to $4.98 a pound from $3.79 a pound for availing the existing cash incentive while the ceiling has been increased to $1.97 a pound from $1.10 a pound for export of other frozen fish.

SOURCE: The Global Textiles

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Nigeria: Textile workers union demands raise in power generation

The National Union of Textile Garment and Tailoring Workers of Nigeria (NUTGTWN) has called on the Nigerian Federal Government to concentrate on generating more electricity for domestic and industrial needs instead of increasing electricity tariff. The union said in a communiqué at the end of its 11th National Delegates Conference in Kano in northern Nigeria that energy was critical to industrial development of the country. The union acknowledged that there was a great challenge of power in Nigeria with less than 5,000 megawatts to a population of 170 million people, contending that the current energy output of about 1,500mw was a reflection of the perennial energy crisis that was yet to be addressed.

According to the union, experiences across countries have shown that Nigeria cannot end power poverty with privatization of power generation and distribution and that the Federal Government should invest massively in power generation and distribution infrastructure as part of the efforts to create the enabling environment for re-industrialisation. The union called on the Ministry of Power to concentrate on generating more electricity for domestic and industrial needs instead of increasing electricity tariff. The communiqué noted that the union witnessed tougher times with continued closure of textile factories, redundancies and attendant loss of members, stressing that in spite of these intimidating conditions, the union remained focused and committed to the aspiration of pioneer textile workers who desired strong but democratic organization of workers in the Nigerian textile industry capable of defending the rights and interests of workers at work and in the society. The communiqué said: “The union has remained steadfast and proud of steady progress in core areas of union activities; collective bargaining and improvement in working conditions, defence of workers’ rights, health and safety and general working conditions and unionizing the unorganized amongst others.”

SOURCE: The Star Africa

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2016 State Of The U.S. Technical Textiles Industry

The year 2015 was a pivotal time for both the U.S. and global technical textiles industries. However, other than in the automotive segment, it was not a particularly exciting year of increases in the end-market segments for technical textiles. The U.S. economy grew 2.4-percent in 2015, which matched the growth in 2014. What is more worrisome is the lackluster fourth quarter of 2015 and a slow start to 2016. Many economists feel America already is in a manufacturing recession. A stagnant economy spells at least caution for the technical textiles industry. The slowdown in the rest of the world and the strong U.S. dollar also pose a challenge to the domestic textile industry seeking to export.  Many of the factors that will significantly influence the industry for years to come including a pending end to the decrease in military spending, the conclusion of negotiations on a free trade agreement, foreign-owned plant expansions, the passage of a massive commitment to address the crumbling transportation infrastructure and a severe drop in fuel prices.

Military

The U.S. Department of Defense (DoD) funding has been fundamentally shaped by the legally binding cap on appropriations as detailed in the 2011 Budget Control Act (BCA). It required defense spending decreases for fiscal year (FY) 12 through FY21. Frequently, military cutbacks are associated with the term sequestered. This only technically happened though in 2013. It is the threat of sequestering that binds the spending limits. If the spending goes over the actual budget, sequestering takes place, which results in automatic cuts across the board. A subsequent Bipartisan Budget Act of 2013 raised the DoD base budget — the budget for all activities other than those associated with ongoing combat operations in Afghanistan and the Middle East — for FY16 from $523 billion to $548 billion.

TechTexMilitary

Military products remain one of the largest segments for technical textiles in the United States. Photo by Petty Officer 1st Class Michael C. Barton. Despite the drastic past three-year reduction, military products remain one of the largest segments for technical textiles. The U.S. Defense Logistics Agency’s (DLA’s) Troop Support’s Clothing and Textile Directorate supplies more than 8,000 different items ranging from uniforms and body armor to tents and ammunition pouches. Table 1 shows a breakdown in the DLA’s actual and anticipated FY14 through FY17 purchasing (in millions). Even with the BCA limits in FY15, the budget called for an increase in the Individual Equipment Category. But many of the planned purchases did not happen and, most likely, the entire $350 million budget authorization was not used. There was, for example, an anticipation of 190,000 tents and shelters to be procured in the FY15 budget, but a spot check of the numbers through October showed far fewer shelters actually have been ordered. The military shelter contractors are seeing consolidation and refocus. Business has declined with the military by 40 to 50 percent from just a few years ago. It’s difficult to maintain a viable business with trained employees if one is dependent on military orders. The year 2015 began with eight primary shelter providers:

During the year, Camel was sold to a private equity investor and HDT purchased DHS Technologies, the creator of the DRASH™ — Deployable Rapid Assembly Shelter — shelter system. Military industry consolidation also hit ballistic vest manufacturers and this even was a noted concern in the report that accompanied the 2016 DoD Appropriations Act. As a result of the defense spending cutbacks, the military has become more creative about working with less funding. One example is the force protection evolution of the ballistic vest. There are an estimated 400,000 of the Improved Outer Tactical Vests (IOTV) in inventory. The changes in camouflage pattern from Universal Camouflage Pattern (UCP) to Operational Camouflage Pattern (OCP) and protective barrier enhancements developed since then have made the vests in inventory outdated. Rather than discard and purchase new vests, which are estimated to be worth $791 per unit, a team from the DLA’s Troop Support has worked on a project over the past several years to convert these non-compliance vests into compliant vests at a cost of $412 each.

By retrofitting, rather than purchasing new vests, the DLA has saved taxpayers an estimated $56 million so far, and the potential overall savings total $150 million once conversion is complete. Good for the taxpayers and the military but, of course it means fewer vests being made by the textile industry. A decade ago, during the height of the Afghan and Iraq conflicts, the U.S. Army ordered 1.7 million IOTV vests. Today, the annual estimated need is 40,000 vests. Another cost-saving initiative that has an impact on the technical textiles industry is the consolidation of combat uniform camouflage patterns. Prior to 2002, there were two basic combat uniform pattern designs — woodlands and desert — for each of the four service branches. Starting with the Marines in 2002, 10 new distinct patterns were introduced over the next decade, each designed for a specific application within each military branch. The transition to the Universal Camouflage Pattern (UCP) for the U.S. Army alone cost $5 billion. Eight years later, in 2010, the Army again decided to change from UCP to a newer version of the Operational Camouflage Pattern. The transition cost is estimated at another $4 billion. The process began in July 2015, and the Army expects to fully transition by October 2019. The Government Accountability Office (GAO), investigating the spiraling costs camouflage design, found more than $12 million has been spent developing many of these designs. In a scathing report sent to Congress in 2014, the GAO said: “Although the Army, Air Force, and Marine Corps stated that they have established certain requirement for combat clothing, performance standards were mixed and not specific to the combat environment. The effectiveness of the camouflage was not one of the operational criteria used to measure performance.” GAO estimated that a consolidation of designs for combat uniforms used by all services could save at least $80 million.

Recent increased involvement in Iraq and Syria support has caused an uptick in foreign military sales (FMS) of equipment and combat uniform needs. FMS items include 11,000 sets of desert battle dress uniforms, 12,000 assault packs, 71,000 ammunition pouches and 12,000 grenade pouches. The support likely will increase over the next year. The Berry Amendment continues to protect the textile markets of products used by the U.S. military and Homeland Security. Three basic factors important in the Berry Amendment are:

  • If a product made of textiles can be sourced in the United States, procurement stays in the domestic industry;
  • The procurement threshold is $150,000 before the Amendment applies; and
  • The amendment does not necessarily apply to certain high-tech products such as chemical protective clothing that may be sourced within some North Atlantic Treaty Organization countries.

Despite these protective measures, improved enforcement is still needed. In August 2015, the U.S. Navy conducted an audit of 55 contracts to determine whether they were compliant with the Berry Amendment and the Buy America Act. Eleven of the 23 contracts worth $73 million were not in compliance with the Berry Amendment, and 12 of 32 contracts worth $1.2 million were not compliant with the Buy America Act. The most common non-compliance cause was because the purchaser was not aware of the requirements.

Transportation

In the United States, a record 17.5 million cars and light trucks were made in 2015 — a 15.7-percent increase over 2014. At an average of 28 square yards of fabric used per vehicle, that’s an increase of 16.8 million yards. Industry consolidation continues in the airbag supplier industry. A few years ago there were 17 manufacturers of automotive airbags; today, there are only a handful because automotive manufacturers are facing consolidation, as well as requiring them to become global players. In 2015, Livonia, Mich.-based TRW Automotive was acquired by Germany-based ZF Friedrishschefen AG; and in January 2016, Sterling Heights, Mich.-based Key Safety Systems announced it was being acquired by China-based Nigbo Joyson. The automotive supplier industry tends to cluster around its customer. This is why there has been a burst of composite and nonwoven plant developments and expansions in the southeastern United States as companies such as BMW, Volvo, Volkswagen and Mercedes-Benz locate assembly plants in the region.

In 2015, the global industry estimates were $20 billion for airbags and $9 billion for seatbelts. Looking at 2015, the airbag market situation can be characterized as the good, the bad and the ugly. The good is that the markets for airbags and seatbelts are growing both because of increased car production and, in the case of airbags, because of the increased number in each vehicle. Airbags now account for almost 19 percent of all automotive textiles according David Hart, PCI Consulting Group. New mandatory safety regulations requiring cars sold in Brazil and India to have airbags now is in place and will be adding a significant increase in the number of airbags used globally. In developed nations, automotive manufacturers strive to receive high safety ratings through programs such as the New Car Assessment Program and this becomes a significant market driver for adding more airbags. The bad is only bad in the immediate future. A few countries, including the fourth-largest car maker in Mexico, have not made airbags a mandatory safety feature. General Motors CEO Mary Barra recently defended GM’s decision not to include airbags in cars being made for Latin America and it’s a financial decision. Cars with airbags increase the costs by 8 to 10 percent.

The ugly, of course, is the association with recalls as part of the Takata airbag system. The number of vehicles affected is up to an incredible 20 million and growing. Neither the production nor the fabrication of the airbag has anything to do with the actual problem, which is the choice of propellant to inflate the bag, but unfortunately the bag gets a bad rap because of the phrase “airbag system.” As recently as 2014, Takata was estimated to have about a 25-percent share of the airbag market. Its difficulties have put pressure on the other remaining bag manufacturers not only to match the record growth of vehicle manufacturing, but also to make up some of Takata’s lost market share as car makers look elsewhere for a supplier.

Protective Workwear Expansion

According to a recent research report, thermal protection is the major driver in the protective clothing market, followed by visibility and mechanical properties. The flame-resistant (FR) fabrics market can be broadly segmented into apparel and non-apparel. Flame resistant fabrics going into the U.S. protective workwear industry was a $720 million market in 2015. Image ©TenCate Protective Fabrics 2015 Market research reports stated FR fabrics going into the U.S. protective workwear industry was a $720 million market in 2015. The progression of distinct market penetration has ensured a steady growth of FR workwear over the past few decades. Besides the obvious applications such as firefighter protective equipment, the use of FR garments is seen in the mining, refinery, industrial, petrochemical, healthcare, and utility industries — almost every industry where there is a risk of fire or severe heat. In the last five years, there has been a massive expansion into the oil and natural gas industry. However, FR workwear growth stalled in 2015 because of the slowdown in oil and gas resource development. More than 129,000 oil and gas jobs were eliminated during the year. Fewer workers equals fewer buyers of FR-treated workwear.

Another market driver is the increased understanding of work hazards such as arc flashing, drilling and dust. Federal agencies such as the Occupational Health and Safety Administration (OSHA) are demanding increased worker protection. Medical protective clothing can shield medical professionals from harmful pathogens. These garments not only protect medical professionals, but also patients from possible contamination from non-sterile garments. There was a surge in medical protective clothing after the 2014 Ebola crisis. There may be another surge in light of the Zika virus or as other potential pandemics occur. In addition to the physical protection offered by workwear garments, the other driver for basically all major markets of protective clothing is comfort. The importance of comfort cannot be overstated. Comfort can impact whether workers wear their personal protective equipment. This results in a blending of the fashion and protective industries. Gone are the days of utilitarian work uniform in many cases.

SOURCE: The Textile World

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Chinese delegation to attend Texpo Fair to be held in Pakistan

The Texpo Fair which is scheduled be held from 7 to 10 April in Pakistan, a eleven member Chinese delegation of China Chamber of Commerce for Import and Export of Textile and Apparel will be attending, said Chief Co-ordinator Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Ijaz A. Khokhar . The PRGMEA will arrange factory visits for the Chinese delegation and B2B meetings with its members adding that the visit of delegation was the result of MOU signed between PRGMEA and China Chamber of Commerce for Textile (CCCT) to promote and expand cooperation between Pakistan and Chinese textile and apparel companies. It is first time that a Pakistani garment sector body signed such an agreement with overseas stakeholders for strengthening mutual trade of garment and textile. The MoU was signed during China Asia Textile Forum 2016 held at Shanghai. The MOU between PRGMEA and CCCT would go a long way and help Pakistani value-added garments to find their way in Chinese market as it has a lot of opportunities from Pakistani merchandise . Ijaz said that it is expected that Chinese companies will establish their units at China Pakistan Economic Corridor (CPEC) economic zones through joint ventures with local companies adding PRGMEA will play its instrumental role after striking this deal with CCCT. PRGMEA and CCCT also agreed to deal with managing business contacts, seminars, business meetings, exhibitions and fairs as well as other arrangements to make potential partners and export possibilities available in the two countries business entities. Ijaz said that both organizations will assist each other in small and medium size business development, provide technical assistance, search for partners for trade and joint ventures as well as render other services of interest for business entities.

SOURCE: Yarns&Fibers

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