|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1041.95 |
USD/Ton |
0% |
5/12/2016 |
|
VSF |
2037.80 |
USD/Ton |
0.08% |
5/12/2016 |
|
ASF |
1936.37 |
USD/Ton |
0% |
5/12/2016 |
|
Polyester POY |
1018.13 |
USD/Ton |
0.61% |
5/12/2016 |
|
Nylon FDY |
2297.52 |
USD/Ton |
0% |
5/12/2016 |
|
40D Spandex |
4456.72 |
USD/Ton |
0% |
5/12/2016 |
|
Nylon DTY |
1275.54 |
USD/Ton |
0% |
5/12/2016 |
|
Viscose Long Filament |
2120.78 |
USD/Ton |
-1.08% |
5/12/2016 |
|
Polyester DTY |
2113.10 |
USD/Ton |
0% |
5/12/2016 |
|
Nylon POY |
1121.86 |
USD/Ton |
0% |
5/12/2016 |
|
Acrylic Top 3D |
2504.98 |
USD/Ton |
0% |
5/12/2016 |
|
Polyester FDY |
5730.73 |
USD/Ton |
0% |
5/12/2016 |
|
30S Spun Rayon Yarn |
2812.34 |
USD/Ton |
0% |
5/12/2016 |
|
32S Polyester Yarn |
1716.61 |
USD/Ton |
-0.09% |
5/12/2016 |
|
45S T/C Yarn |
2458.88 |
USD/Ton |
0% |
5/12/2016 |
|
45S Polyester Yarn |
2950.66 |
USD/Ton |
0% |
5/12/2016 |
|
T/C Yarn 65/35 32S |
2243.73 |
USD/Ton |
-0.68% |
5/12/2016 |
|
40S Rayon Yarn |
1859.53 |
USD/Ton |
0% |
5/12/2016 |
|
T/R Yarn 65/35 32S |
2151.52 |
USD/Ton |
0% |
5/12/2016 |
|
10S Denim Fabric |
1.36 |
USD/Meter |
0% |
5/12/2016 |
|
32S Twill Fabric |
0.82 |
USD/Meter |
0% |
5/12/2016 |
|
40S Combed Poplin |
1.17 |
USD/Meter |
0% |
5/12/2016 |
|
30S Rayon Fabric |
0.69 |
USD/Meter |
0% |
5/12/2016 |
|
45S T/C Fabric |
0.68 |
USD/Meter |
0% |
5/12/2016 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.15363 USD dtd. 12/05/2016)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
A lot of labourers working in the textile processing units here are as fortunate as 40-year-old Laxminarayana. He is able to take care of his family with regular work on his hand as the borewell in his employer’s unit is still pumping sufficient water. Workers in several other units either get limited work or pray for new work orders so that they can purchase water tankers. The water shortage in this town has only compounded the woes of the textile processing units already in crisis due to multifaceted problems. This has directly affected the workers whose chances of getting regular work has already shrunk.
Drought conditions caused by monsoon failure have depleted groundwater table and dried-up most of the borewells in Sircilla and its surroundings along with the rivulet Manair that has its course abutting the once-textile-rich town. The water woes, in turn, have become a bane for many of Laxminarayana’s friends as getting regular work has become a luxury for them since the units they are employed with have no dependable water source now. Workers such as Alle Balraj and Dubai Ramesh, engaged in units with dried-up water source, count on their luck to get work as the owners have reduced production considerably due to water scarcity and other market-linked problems. “We get work only when the unit owners order for water tankers to run different sections of textile processing from fabric dying to starching, stentering (stretching), sizing, drying and others. It also depends on orders the units get. Or else, we have to bide time at home as we don’t know other work,” said Srinivas, who works for a unit that was shut down on the day of this correspondent’s visit due to lack of water.
Sircilla was the richest town in Karimnagar district once with handlooms, power looms and textile processing units whirring round-the-clock. “There were over 100 units a decade ago, but hardly 70 are surviving now with only 25 to 30 functioning with business hardly meeting sustenance”, T. Damodar, a processing unit owner, explained. “The crisis in textile units coupled with water woes is affecting our lives from children’s education to family’s health needs,” Mr. Laxminarayana observed, wistfully. There were over 100 units a decade ago, but hardly 70 are surviving now with only 25 to 30 functioning with business hardly meeting sustenance.
SOURCE: The Hindu
The Development Commissioner, Ministry of Textiles, India signed a Memorandum of Understanding (MoU) with NDTV to promote the India Handloom brand, comprising 170 handloom producers in 41 product categories, on May 10, 2016. The three-year agreement was signed to promote the use of handloom as a fashion product among the youth. The MoU entails launching a project, Indianroots Fashion Accelerator (IFA) to encourage fresh talent and new and innovative ventures in the fashion industry. It will connect fashion designers with handloom weavers in an organised manner.
Commenting on the partnership, Alok Kumar, Development Commissioner (Handlooms) said, “Our vision is to touch every Indian with the cultural legacy of India. The initiative will help us in our objective of promoting traditional handwoven products of India. This will also help us engage with youngsters and designers who will take our handloom legacy forward.” “We see this partnership as a welcome move. It will collaboratively take forward the vision of India Handloom and the 'Make in India' vision of Honourable Prime Minister, Shri Narendra Modi,” he added.
SOURCE: Fibre2fashion
Making a strong case of expediting free trade agreements with the European Union and Special agreements with Australia and Canada, the Tirupur Exporters Association, said that special trade ties with these countries alone could boost readymade garment exports by 40 per cent, out of which 30 per cent could be to the EU and alone. In a memorandum to the Textiles Secretary, Rashmi Verma during her visit to the knitwear hub, TEA said last year the garment sector exported readymade garments (RMG) worth $17 billion out of which, $6.29 billion value of garment was destined to European Union. There is still strong potential to enhance exports there once the level playing field is provided to the sector, TEA said. While India is still awaiting confirmation from the EU to resume the negotiations for the proposed free trade agreement, that TEA seemed more optimistic than the government. “Once the FTA with EU would come through in September this year, our exports to EU will grow and witness a growth rate of 30 per cent in successive years and get doubled in next three years apart from witnessing an employment generation of 30 lakh jobs,” it claimed.
Requesting the Textiles Secretary to help to expedite the FTA with the EU, it said that in the recent years Indian exporters had elevated their standards to conform with EU norms and made improvements in the garment units to meet their stringent quality requirements. This had led to great improvement in their relations with the European buyers. The eagerly awaited FTA, according to TEA, would dent the market share of its main competitor Bangladesh, which at present enjoys duty free access to European Union due to its least developed country status. In 2014-15, out of Bangladesh's total garment exports of $26 billion, The EU received US $ 15 billion, more than double the Indian garment exports. “We are confident that we could dent the market share of Bangladesh once Free Trade Agreement is implemented due to having additional advantage of being compliances oriented factories at our end”, the TEA maintained. Similarly in Canada, India's competitors like Bangladesh and Cambodia are entitled to the least developed countries tariff treatment while Pakistan and Vietnam also continue to get benefit under General Preference Tariff (GPT) even after January 1, 2015. After imposition of normal customs duty about 20 per cent for Indian garments in Canada, Indian exporters have lost their competitiveness in that country, TEA said. “We are confident that after having Comprehensive Economic Partnership Agreement (CEPA) with Canada, we could compete with these countries effectively and export will grow by 30 per cent,” TEA said in the memorandum. TEA also requested Verma to help expedite the Comprehensive Economic Cooperation Agreement (CECA) with Australia. According to TEA, Indian garment exports to Australia could also grow by 30 per cent once the Comprehensive Economic Cooperation Agreement (CECA) with Australia is signed. The CECA is almost a year behind its scheduled operative date of June 2015.
SOURCE: Fibre2fashion
Arvind Limited, one of the largest integrated textile and branded apparel players has recorded growth in the consolidate revenue by 14% at Rs. 2320 crores for the quarter ended 31st March 2016, as against Rs.2041 crores in the corresponding quarter of the previous year. Consolidated EBIDTA is up by 14% at Rs.297 crores as against Rs.260 crores in the corresponding quarter of the previous year. Profit after tax grew by 14% to Rs. 110 crores as compared to Rs. 97 crores in the corresponding quarter for the last year. For the financial year, the company reported 8% growth in revenue at Rs. 8450 cr. Net Profit After Tax from ordinary activity was lower by 7% at Rs. 371 crores compared to Rs. 395 crores in the previous financial year. Profit After Tax after exceptional items was Rs. 363 crores as compared to Rs. 341 crores in the previous year. The Board of Directors have recommended dividend of 24% for the year 2015-16.
Commenting on the results as well as outlook of the Company, Mr. Jayesh Shah, Director & Chief Financial Officer said: “Our textiles business continues to deliver a strong performance as we continue to pursue a calibrated growth strategy. The brands business continues to demonstrate strong growth with 30% CAGR for Q4. Our established power brands consolidated their market positions and the recent additions in speciality retail formats got off to a strong start. We are also extremely excited to lunch India’s first True Omni Channel Experience - NNNow.com. This new initiative will bring a paradigm shift in the Indian fashion & lifestyle ecommerce space. NNNow.com is Arvind’s attempt to move away from the discount driven ecommerce market to a brand led shopping journeys. NNNow.com redefines shopping for Indian consumers by linking online and offline retail shopping experience”.
SOURCE: The Tecoya Trend
Sutlej Textiles and Industries Limited - a leading manufacturer and exporter of value added dyed yarns (synthetic and cotton mélange - with presence in Home Textiles, in its results for the quarter and year ended 31stMarch 2016 has recording an increase of 16.81& in revenue at Rs. 558 croreas compared to Rs. 478 crore. The main highlights of Q4 FY16 as compared to Q4 FY15 are as follows:
Commenting on the results, Mr. C.S. Nopany, Chairman, Sutlej Textiles and Industries Ltd said “The Financial Year 2016 has been a challenging year due to global economic slowdown and stressed rural economy in the country. Despite these challenging times, I am pleased that Sutlej due to its strategy of focusing on operational efficiency, Organic and Inorganic Growth through capacity expansion both in Spinning and Home Textiles has reported increased revenues and profits during the year. Inspite of challenging headwinds for the sector with margins under pressure, we continue to concentrate on enhancing our scale of operations which will ensure consistent performance coupled with growth. Work on creating new capacities in our Rajasthan Textile Mills for producing value added products and expansion of Home Textiles is progressing as per schedule. Once completed, these will enable us to enhance our domestic as well as global foot-print.”
SOURCE: The Tecoya Trend
India's industrial output rose by 0.1 per cent in March, largely losing the momentum generated in February when it had risen by two per cent, after a three-month fall. The Index of Industrial Production (IIP) rose at a subdued pace in March, as manufacturing growth, which constitutes roughly three-fourths of the index, contracted by 1.2 per cent, government data showed on Thursday. It cumulatively grew by two per cent in the financial year (FY) 2015-16, down from the 2.3 per cent in the previous year. Overall, industrial growth in FY16 slowed to 2.4 per cent from 2.8 per cent in the previous year.
TEPID NUMBERS
In March, the IIP was boosted solely by electricity generation, which rose by 11 per cent from the 9.6 per cent rise seen in the previous month. Annual growth in electricity generation, however, moderated to 5.6 per cent from the 8.4 per cent in the previous year. On the other hand, mining output contracted by 0.1 per cent in March, a sharp fall considering the five per cent growth witnessed in February. The mining sector grew 2.2 per cent in FY16, compared with a 1.4 per cent rise in FY15. Among product categories, radio, TV, communication equipment and apparatus registered the highest growth at 36.5 per cent, followed by tobacco products at 19.8 per cent. Electrical machinery & apparatus on the other hand, continued to fall by the largest margin at 36.2 per cent.
Cables, insulated rubber continued its long streak in contributing the most to the contraction in the index. On the other hand, electricity, commercial vehicles and telephone instruments were the highest positive contributors to growth. On use-based classification, capital goods, considered a proxy of investment demand, continued to contract sharply, falling 15.4 per cent after a 9.8 per cent slide in the preceding month. Annually, it fell 2.9 per cent after a 6.3 per cent rise in the previous financial year. On the demand side, decline in consumer non-durables accelerated to 4.4 per cent from a 4.2 per cent fall in the previous month.
The Met department's forecast of an above-normal monsoon has boosted the outlook for rural demand, which should help arrest the sustained contraction in consumer non-durables over the coming months. Growth in consumer durables, however, increased by 8.7 per cent after growing by 9.7 per cent in February. In March, 13 of the top 25 products within manufacturing showed growth, down from 19 last month.
SOURCE: The Business Standard
Describing the Bankruptcy Code as comprehensive and systemic reform, the Finance Ministry today said the new law will give a big boost to ease of doing business in the country by ensuring a quantum leap for the functioning of the credit market. The Insolvency and Bankruptcy Code, 2016, which was approved by Parliament yesterday, "would take India from among relatively weak insolvency regimes to becoming one of the world's best insolvency regimes", it said in a release. "History was created on May 11, 2016 when the Rajya Sabha passed the Code. With the passing of this Bill, India has crossed an important milestone in becoming a world-class economy. The Lok Sabha had already passed the Bill on May 5, 2016," it said. Hitherto, India was lacking the legal and institutional machinery for dealing with debt defaults as per global standards. Recovery proceedings by creditors either through the Contract Act or special laws such as the Recovery of Debts due to Banks and Financial Institutions Act and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act have not had "desired outcomes". Economic Affairs Secretary Shaktikanta Das maintained that the government's effort will be to create all structures regarding Bankruptcy Code as "early as possible". "We are working on framing the rules and regulations and drawing guidelines (regarding bankruptcy code). We are also looking at administrative issues relating to the Bankruptcy Code," he said.
Commenting on the Code, Misha, Partner, Shardul Amarchand Mangaldas & Co said the new law has various positive features, including the fact that it consolidates bankruptcy and insolvency laws for both corporate and individuals within an effective framework for timely resolution. "However, a major concern in the Code is the provision of handing over of entire management and affairs of the corporate to insolvency professionals during the corporate insolvency process... This would dis-incentivise corporate debtors to voluntarily invoke the insolvency process under the Code," she said. The vision of the new law, according to the ministry's statement, is to encourage entrepreneurship and innovation. "It is true that some business ventures will always fail, but such failures will be handled rapidly and swiftly. Entrepreneurs and lenders will be able to move on instead of being bogged down with decisions taken in the past," it said. The Code empowers operational creditors (workmen and suppliers) also to initiate the insolvency resolution process upon non-payment of dues. In order to develop the credit market in India, in the case of liquidation, financial debts owed to unsecured creditors have been kept above the government's dues in the list of priorities (waterfall).
Currently, action through the Sick Industrial Companies Act and the winding up provisions of the Companies Act have neither been able to aid recovery for lenders nor restructure firms. Also, laws dealing with individual insolvency, the Presidency Towns Insolvency Act, 1909, and the Provincial Insolvency Act, 1920, were almost a century old. This has hampered confidence of the lender and development of the credit markets in India. Resultantly, credit by banks is the largest component of the credit market in India and the corporate bond market has not yet developed to the desired level. The ministry said the government decided to embark on a fundamental and systemic reform which would address this problem, both commercially and judicially. The idea is to come up with a comprehensive solution, which would encompass borrowing by firms and individuals. In recognition of the fact that major sub-components of lending are done by non-banks, particularly the corporate bond market that serves infrastructure projects, bankruptcy reforms needed to have a consistent treatment of default. "While systems of well-functioning advanced economies were studied, the design that was implemented for India reflects a careful judgement about what would work under Indian conditions," the ministry said, adding that "history" was created on May 11, 2016, when the Rajya Sabha passed the Bankruptcy Code unanimously. Pavan Kumar Vijay of Corporate Professionals, a Delhi-based legal and corporate law consultancy firm, said enactment of the Code will "go down in the history of economic reforms in India as a total game changer". "All-time lines are clearly defined and the core is either to restructure or wind up," he said. The Code provides for a fast-track insolvency resolution process for corporates and limited liability partners (LLPs). This will be an enabler for start-ups and small and medium enterprises (SMEs) to complete the resolution process in 90 days (extendable to 45 days in deserving cases). The Code also addresses the important issue relating to cross-border insolvency by providing the enabling mechanism on the subject. The government will come out with a detailed framework for cross-border insolvency at an appropriate time, the Finance Ministry said.
SOURCE: The Business Standard
Notwithstanding delays in domestic policy reforms, India’s economy is “slowly gaining momentum” and is projected to grow by 7.3 per cent this year, a UN report today forecast. The World Economic Situation and Prospect report, in its mid-2016 update, said India is expected to achieve a 7.5 per cent GDP growth in 2017 and the economic prospects of the South Asian region will be “contingent” on the growth trajectory of India and Iran. “India’s economy is slowly gaining momentum, with an expected GDP growth of 7.3 and 7.5 per cent in 2016 and 2017, respectively. Despite some delays in domestic policy reforms and enduring fragilities in the banking system, investment demand is supported by the monetary easing cycle, rising FDI, and government efforts towards infrastructure investments and public-private partnerships,” the report, released here said. China, which grew at about 6.9 per cent in 2015, will continue to witness slowdown in growth, with its GDP projected to grow 6.4 per cent in 2016 and 6.5 per cent in 2017. “A larger-than-expected slowdown in China would have widespread spillover effects through trade, financial and commodity markets, while a further deterioration of commodity prices could trigger debt crises in certain commodity dependent economies,” said the report, produced jointly by the UN Department of Economic and Social Affairs (UNDESA) and the UN Conference on Trade and Development (UNCTAD). The growth estimates for India in the mid-year update are in line with projections made in January this year, when the 2016 World Economic Situation and Prospect report had said that India will be the world’s fastest growing large economy at 7.3 per cent in 2016, improving further to 7.5 per cent in the following year. India’s economy, which accounts for over 70 per cent of South Asia’s GDP, had grown by about 7.2 per cent in 2015. The report added that despite the protracted instabilities and general weakness of the global economy, South Asia’s economic outlook remains favourable, with most countries benefiting from low oil prices. Regional GDP growth is expected to accelerate from 6.1 per cent in 2015 to 6.6 this year and 6.8 per cent in 2017, owing to robust private consumption, strengthening investment demand and gradual progress on domestic policy reforms. Inflation in the South Asian region is projected to remain relatively tame, reflecting subdued commodity prices and lower pressures from supply-side bottlenecks. “This has increased monetary policy space, with prospects for further easing in some economies, including India,” it said.
SOURCE: The Tecoya Trend
India’s trade ties with Mauritius are unlikely to be affected by the amended tax treaty signed bilaterally as the fall in investment inflows, if any, are not expected to impact exports and imports. Strategically, this has resulted in a win-win situation, as Mauritius, too, stands to gain from the amendment, as it will not be seen as a tax haven anymore, an official from the Ministry of External Affairs (MEA) told BusinessLine .The government, however, will adopt a wait-and-watch approach to see how things play out as the treaty gets implemented, and decide on any economic and strategic intervention, if required. “We don’t expect any dip in our trade with Mauritius because the investments that are flowing into India through the country are for production of goods or services for the local market or exports, and not particularly for the Mauritian market,” another official from the Commerce & Industry Ministry said. As per the amended double taxation avoidance agreement (DTAA) between India and Mauritius, India gets right to tax capital gains arising from sale of shares acquired on or after April 1, 2017 in a company resident in India at a tax rate limited to half of the domestic tax rate. From April 1, 2019, full capital gains tax will be applicable on investments from the country.
Little exim impact
While there is some correlation between FDI and trade in terms of trade generated at the intra-firm level or parent-affiliate level, it was unlikely to make a substantial dent in either exports or imports, the official added. India’s exports to Mauritius declined by 55 per cent in 2015-16 to $880 million from almost $2 billion the previous year. The fall was mostly because of a decline in petroleum products as global oil prices have been plunging. India imports very little from Mauritius with total imports in 2015-16 almost stagnating at $20.37 million. The official said this year a surge in FDI was expected to take advantage of the last year of capital gains tax exemption. The actual effect of the taxation move would only be evident after three years when capital gains tax is fully applied. “We have to wait and see how things play out and act only if required,” the official said. The recent amendments to the India-Mauritius DTAA was brought about keeping in mind the fact that in order to be part of global value chains, it is important to be “clean and transparent” as far as taxation is concerned, the MEA official, who was involved in the DTAA negotiations, said. “This was inevitable in the wake of G20’s base erosion and profit shifting initiative. It is now a win-win situation as Mauritius also stands to gain from it, since it will not be seen as a tax haven anymore where anyone can come and park their money,” the official said. India is a profitable market and it will remain so. “Anyway, it was not Mauritian money that was coming to India all this while,” he said.
SOURCE: The Hindu Business Line
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 45.07 per barrel (bbl) on 12.05.2016. This was higher than the price of US$ 43.16 per bbl on previous publishing day of 11.05.2016.
In rupee terms, the price of Indian Basket increased to Rs. 3001.46 per bbl on 12.05.2016 as compared to Rs. 2878.70 per bbl on 11.05.2016. Rupee closed stronger at Rs 66.60 per US$ on 12.05.2016 as against Rs 66.70 per US$ on 11.05.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on May 12, 2016 (Previous trading day i.e. 11.05.2016) |
Pricing Fortnight for 01.05.2016 (13 Apr to 27 Apr, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
45.07 (43.16) |
41.08 |
|
(Rs/bbl |
3001.46 (2878.70) |
2732.23 |
|
|
Exchange Rate |
(Rs/$) |
66.60 (66.70) |
66.51 |
SOURCE: PIB
Pakistan is banking on the land route and a huge demand for its textiles, readymade garments and various seasonal agricultural products such as mango and kinno in India, to notch up $1 billion worth of exports. But for an export push, Islamabad should first grant India the most favoured nation (MFN) status, Pakistan business representatives told their government. Pakistan's commerce minister Khurram Distagir Khan has said textile made-ups and readymade garments from Pakistan have great potential demand in India and that these along with its various agricultural products like green peas can create a huge market in the neighbouring country. Agricultural exports are feasible through land route even with freezing plants of as low a capacity as 200,000 tonnes, he added. These together could help Pakistan increase its exports to India to the tune of one billion dollars within a year, he said
Besides the proceeds from exports, trade between India and Pakistan would help in promoting various sectors, including SME, agriculture, research, tourism and culture sectors in the two countries, the Pakistani minister pointed out. Khan was addressing a meeting of Pakistani counterparts of Pakistan-India Business Council delegation led by Yawar Ali Shah, Pak news agency APP reported. The minister was of the view that land route make Pakistan the most favorable and cost-effective market for India for importing raw material for their agriculture and textile products. The minister assured complete support to the business interlocutors. He said that Pakistan's government would work towards increasing exports from the country. Towards this, the government has decided to provide enough funds to establish a multi-billion 'Expo Centre' in Peshawar during the next budget. The ministry has restructured National Tariff Commission (NTC) as per the legal framework guided by the Supreme Court of Pakistan.
Meanwhile, another delegation of Pakistan Commercial Exporters Association, which called on Dastagir Khan, sought support for exports of gems and jewellery. The minister also agreed that the gems and jewellery products should be included in Trade Development Authority of Pakistan's (TDAP) exhibition calendar. India's stand that it will first ensure a commitment by members of the World Trade Organisation (WTO) over government food subsidy programs before allowing a consensus on the Trade Facilitation Agreement (TFA) has got support from Syed Yawar Ali. Speaking at an India Pakistan Joint Business Forum (IPJBF) in New Delhi, he said that he supported India's efforts to protect farmers' interest in the WTO. The minister also said that India and Pakistan are working towards a resolution and, if all goes well, Pakistan may award the MFN status to India by this year end. However, the Kashmir dispute remains a major roadblock, he added. The Nawaz Sharif government had said last year that it will grant the MFN status to India in 2013, as a part of World Trade Organisation (WTO) obligations.
SOURCE: The Domain B
The Institute of Policy Studies of Sri Lanka (IPS) has said that the Trans Pacific Partnership (TPP) can have a significant impact on trade flows of countries that are outside the trading bloc, including Sri Lanka, as trade would be diverted towards TPP countries where buyers can benefit from purchasing cheaper goods. The size and scope of the TPP makes it a pertinent trade policy issue for both members and non-members like Sri Lanka. TPP is anticipated to transform current global trade patterns and affect all countries, particularly those that rely on the US as an export market and share a similar production/export structure to member countries. The potential for trade diversion – that is, diverting trade away from a more efficient supplier outside a trading block towards a less efficient supplier within the block – is a pressing concern in the rapidly evolving international trade and investment environment.
Preliminary estimates by the IPS indicate that the level of trade diversion/market loss for Sri Lanka due to exclusion from the TPP will be about $39.8 million. This amount is negligible in the context of Sri Lanka's total exports of $11 billion in 2014. A country-wise analysis shows that the biggest loss in exports for Sri Lanka would be in the US (81 per cent). To a much lesser extent, export loss will also take place in Mexico (8.8 per cent), Canada (5.7 per cent) and Japan (1.7 per cent), the IPS said on its website. “Given that the majority of Sri Lanka's loss in exports owing to TPP would occur in the US market, the biggest loss in exports include textiles and apparel: product codes HS 61 and 62 (Articles of apparel, accessories, knit or crochet and not knit crochet), which account for around 90 per cent of total export loss in USA. HS 40 (Rubber and articles thereof) will also experience losses, albeit to a lesser extent. Much of the trade loss will be diverted to Vietnam, which is a signatory to the Agreement and competes with Sri Lanka in the US market in a similar range of products. About one-fourth of Sri Lanka's exports are similar to Vietnam's exports to the US, and in these products Vietnam is almost twice as competitive to that of Sri Lanka. This is not surprising, as Vietnam has been touted as the biggest winner of TPP, and it is expected to boost exports to the US which already Vietnam's largest export market,” IPS said.
Nevertheless, the overall loss of earnings in exports of textiles and apparel to the US of approximately $24 million is very low relative to current total exports earnings of $4.9 billion in 2014. However, trade diversion effect might be lower than estimated due longer tariff liberalization period, safeguards, and restrictive rules of origin, etc., specified under the Agreement to protect import sensitive products like textiles and apparel, which would affect the utilization of the Agreement by member countries. For example, TPP requires a 'yarn forward' rule of origin. It means that all stages of production, starting with yarn spinning, moving to fabric formation and the final garment assembly, must be done using yarns and fabrics from TPP countries. The yarn forward rule has been adopted to prevent third party countries outside the agreement from benefiting from TPP tariff reductions as well as to safeguard the textile and apparel industries of some countries such as the US. Under the yarn forward rule, the ability of countries such as Vietnam to export clothing to TPP made from Chinese yarns and fabrics for instance will be constrained. In the short to medium run, these factors will mitigate the trade diversion risks, by limiting the immediate markets access of the US by Vietnam under the TPP.
While the magnitude of loss from trade diversion due to TPP would be negligible for Sri Lanka when the TPP comes into force, which is most likely to happen after 2018, the TPP is a living agreement and membership will be open to other countries including those in the Asia Pacific Economic Forum (APEC) at a future date. Countries such as Korea, Taiwan, the Philippines, Colombia, Thailand, Indonesia, etc., have expressed an interest in joining the mega regional grouping. Therefore, the risks of trade loss/diversion are likely to increase with time given that Sri Lanka is also not part of the other mega-regional trade agreements under negotiations. Sri Lanka too is looking at TPP and is currently conducting a feasibility study to determine the pros/cons of the Agreement. The country needs to weigh-in the costs and benefits of the Agreement in light of its current position and development needs. While there are likely to be great benefits involved in joining the Agreement, there are a lot of political and economic investments that will have to be made by the country to be ready to enter into such an Agreement at a later date.
TPP is a 'comprehensive and high-standard agreement' going beyond enhancing trade in goods and current multilateral commitments. In fact, only 6 of the 30 chapters in the Agreement covers trade in good issues while the majority of the chapters deal with e-commerce, government procurement, competition policy, state-owned enterprises, intellectual property, labour and environmental protection, etc. According to IPS, some of these aspiring countries will have trouble in meeting TPP's ambitious requirements, due to their protectionist stance toward agriculture and industry. Meanwhile, Sri Lanka should strive to improve the competitiveness of its own exports by creating competitive infrastructure services, promoting export oriented foreign investment, facilitating goods across borders effectively, addressing export market issues through trade agreements, and improving access to inputs of materials, capital, and technology for the export sector, the IPS said.
SOURCE: Fibre2fashion
Emilian Ion, Ambassador of Romania said that the trade volume between Pakistan and Romania had increased from $50 million to $300 million per year but there is a still room to enhance it. During an interview with the Daily Times on Thursday, Ion who is also Dean of the European Union said that Romania was cooperating in education, agricultural and aeronautical fields with Pakistan. Pakistani products are very popular in the European market but still there is great potential to increase the volume. Ion is optimistic towards strengthening bilateral trade relations between two countries. Ion said that the historical relation between Pakistan and Romania (established in 1964) required more concentrated efforts to work together at all levels and promote and consolidate bilateral cooperation in the political, economic, trade and cultural areas.
Pakistan-Romania Friendship Association (PRFA) is wholeheartedly working to cement relations and explore more areas to work. The Dean of EU diplomats believed that there were around 700 Pakistani investors, who were deepening their profitable business ventures in Romania. He further stated that the local business community could export their products especially textiles, garments, leather articles, sports goods, pharmaceutical products, rice and surgical instruments to Romania. To enhance and strengthen relations between Pakistan and Romania, the ambassador enlightened that there was still room to build cooperation between both the countries. Romania and Pakistan have a huge background in economic relations which this trade friendship can fill. Emilian said that he was working on a link between the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Federal Chamber of Romania and this dream would come true soon. Pakistani products like textile, leather, and mangos are very popular in the EU market as well as in Bucharest (Capital), through Romania. Emilian mentioned that during his stay in Pakistan he was to enhance friendly relations between the business communities of both the countries to explore all opportunities.
Romania being a member state of the EU could open gates to Pakistan for trade. Pakistani and Romanian business communities should take advantage of the huge opportunities offered by the two economies, the representative of the seventh largest EU market underlined. He mentioned that around 60-70 Romanian experts had built some economic objectives for the two countries. He also emphasised that Romania built five cement plants in Pakistan which is important to remind as a piece of information for the history in the previous regimes of bilateral relations between the two countries. The Ambassador of Romania also said that he was working on multi-dimensional areas: Romania is a strategic partner of Pakistan, making its target to get the maximum from any opportunity they get their hands on. “Soon you will see Romanian helicopters flying over you” he said. Romania imports cotton, leather, garments, fruits and bed sheets from Pakistan; whereas Pakistan imports white timber, wood furniture, chemicals, cereals, flowers, canola seeds. Romania is highly interested in developing Pakistan’s textile industry. Ion has opened the doors of Romania for Pakistan and now it’s the only country which has four honorary consulates in Pakistan. The Ambassador proposed that the youth of both the countries should also be connected as youth delegations could be helpful in identifying more areas of cooperation to move forward. He mentioned that there were 14 Romanian qualified teachers educating in different universities of Pakistan. He further added that Romania was an attractive tourist destination for tourists from all over the world; therefore, Romania is keen to extend relations in tourism. It will further strengthen the economic relations and improve the legal framework for economic, cultural and bilateral relations. Emilian Ion also said that Romania was also building a parliamentary relation, last year; Pakistani parliamentarian delegation under the leadership of Sardar Ayaz Sadiq Speaker National Assembly had visited Romania and met parliamentarians there. Kamran Michael, Federal Minister of Ports & Shipping visited as well. He also stated in his interview that both countries were exploring more avenues of cooperation in diversified fields. Lastly he stated that, organising of joint cultural shows and frequent exchange of business delegations were the options which could be used to exploit untapped bilateral trade and investment potential in both the countries.
SOURCE: The Daily Times
Mian Rehman Aziz, Regional Chairman and Vice President of the FPCCI during his meeting with Dr Joao Paulo Sabido Costa, Ambassador of Portugal to Pakistan at the FPCCI Regional Office Lahore on Wednesday said that Portugal comes at the eighth place among the top exporting destinations and at 12th place among the top importing member states of the European Union. GSP Plus status of Pakistan favours trade promotion with Portugal. Discussing various matters of mutual interests during the meeting, Aziz further added that Portugal and Pakistan enjoys good diplomatic relations and there is a huge potential for two-way trade between the two countries. Portuguese and Pakistani entrepreneurs need to start exploring the untapped market potential for all the traditional and non-traditional products, especially textile, agriculture, information technology, and sports goods that would be equally beneficial for the two countries. Although, the trade balance is in favour of Pakistan and overall trade is also growing for the last three years, in particular, but its level needs to be enhanced.
SOURCE: Yarns&Fibers
Economic growth across the 19-country eurozone in the first quarter of the year risks being revised lower after official figures Thursday showed industrial production fell by a greater than anticipated 0.8 percent in March. Eurostat, the European Union's statistics agency, said the monthly fall was broad-based, with only energy production posting an increase. March's decline also follows a big 1.2 percent decline in February and means that much of the 2.4 percent surge in January has been erased. The decline was more than the 0.2 percent fall predicted in markets and raises the possibility that the estimate for first-quarter economic growth will be trimmed in a revision due Friday. After all, one of the reasons why the first estimate came in at a strong quarterly rate of 0.6 percent was largely due to the strong industrial production increase in January. Analysts said the poor showing over the past couple of months is further evidence that the eurozone is facing a softer economic outlook in light of a number of factors, including uncertainty over the state of the global economic recovery, emanating in particular from the slowdown in China. "Today's data and the ongoing weakness of industrial surveys support our view that overall eurozone economic growth is set to slow from 1.5 percent last year to about 1.2 percent this year," said Stephen Brown, European economist at Capital Economics. It's the latest indicator to suggest that the eurozone is losing some of the momentum that saw it grow way faster than the U.S. in the first quarter of the year and that has helped get unemployment across the region down. The eurozone is not alone in facing headwinds, many of which are external to the region, such as the British vote on June 23 on whether to leave the EU and waning benefits from low oil prices. Within the eurozone, economic confidence could be jolted by any renewed worries over Greece's future in the single currency bloc, though these appear to be easing, as well as the upcoming Spanish general election.
SOURCE: The CNBC
Troubled lending at China's commercial banks reached 4.6 trillion yuan ($706 billion) at end-March, a jump of 428 billion yuan from December, official data showed, as the pace at which loans are souring has risen amid the country's slowdown. Chinese commercial bank non-performing loans (NPLs) rose to an 11-year-high of 1.4 trillion yuan, or 1.75 percent of total bank lending, the China Banking Regulatory Commission (CBRC) said in a quarterly report published on its website Thursday. At the end of 2015, NPLs accounted for 1.67 percent of all loans. Separate from NPLs, "special mention" loans, or lending potentially at risk of becoming non-performing, rose to 3.2 trillion yuan by end-March, the CBRC said, surpassing 4 percent of total loan volume for commercial banks. For Chinese lenders, the build-up of bad debts, which have increased for 18 consecutive quarters, followed the state-driven credit boom of 2009 and has shown no sign of slowing. This is making policymakers mull unconventional measures to prevent a potential debt crisis. Beijing has given six banks a total quota of 50 billion yuan to issue asset-backed securities with NPLs as underlying assets.
Policymakers are also preparing to reintroduce debt-to-equity swaps, a measure that saved banks from mountains of bad loans in the early 2000s by asking them to convert their loans to troubled state-owned enterprises into shareholdings. Many bank analysts believe the NPL situation in China's banking sector is far more severe than official data suggests, as some banks adopt untimely loan recognition and turn to off-balance sheet lending to hide bad debts. In a report this month, CLSA said NPLs may account for 15 percent to 19 percent of loans. The growing volume of troubled debt has pushed Chinese lenders to shrink their loan-loss allowance ratio - a measure of cash set aside as a percentage of reported NPLs - to a six-year-low of 175 percent in the first quarter, CBRC data show. Two of China's Big Four state-owned lenders saw their Q1 provision ratio drop below a regulatory threshold of 150 percent, as rising bad debt write-offs eroded their capital buffers.
SOURCE: The Economic Times
