Textile industry in Tamil Nadu should invest more in renewable energy to remain competitive, said Ravi Sam, chairman of Southern India Mills’ Association (SIMA). Speaking at the annual meeting of the association here, Mr. Ravi Sam, who was reelected chairman of the association for 2022-2023, said the cost of grid power has crossed ₹ 8 a unit in almost all the major textile manufacturing States, except those having hydel power generation capacities. This has impacted the cost competitiveness of the textile industry in the country. Cost of energy accounts for over 40 % of yarn manufacturing costs and it has become imperative for the textile mills to plan for 100% captive power generation, be it wind or solar. Mr. Sam said the combination of wind power, solar power and IEX power has tremendous advantage and will enable the textile industry to remain competitive. He also appealed to the Chief Minister to reconsider the steep increase in demand charges, wheeling charges, transmission charges and 6 % annual increase in tariff linking the same to inflation rate. On the raw material front, he said the country turned cotton deficit from being a cotton surplus one this season and hence production at textile mills dropped 30 % to 50 % between July and October. He urged the Central government to address the structural issues on the raw material front for the textile industry. S.K. Sundararaman and Durai Palanisamy were re-elected deputy chairman and vicechairman of the association.
Source: The Hindu
Indian textile industry has urged the government to take effective steps for stabilising raw material/fibre prices. The industry emphasised on raw material security during a meeting of the reconstituted Board of Trade (BOT). Commerce and textiles minister Piyush Goyal said that exports are the core area of focus to make India a developed nation by 2047. In his opening remarks at the first meeting of BOT Goyal said, “Global confidence in India’s prospects for growth were truly immense and called on the domestic industry to overcome all weaknesses when it comes to grabbing the plethora of growth opportunities available to the nation. The world is already looking at India as a superpower.” The meeting was attended by various state ministers and other senior officials of key line ministries and states, all major trade and industry bodies, Export Promotion Councils and industry associations. There were 29 new non-official members who were also invited for the first time in the BOT meeting. The new BOT has been constituted by merging Council for Trade Development and Promotion with Board of Trade. Goyal stressed on the need to enter into more free trade agreements (FTAs) with developed nations. He urged participants of the BOT meeting to focus on the possibilities each sector has in FTAs. Concluding his address, the minister said that all the issues raised by the participants will be addressed and the suggestions made by them in the meeting will be considered. The BOT meeting focused on export target setting, the new Foreign Trade Policy (FTP) (2022-27), and the strategies and measures to be taken to take forward domestic manufacturing and exports. Representing the textile industry, Narendra Goenka, chairman of the Apparel Export Promotion Council (AEPC), said that there is a continuous increase in the prices of raw cotton. The trend is expected to continue considering the global shortage of cotton. The crop is under stress this year in Pakistan, Brazil and the US. Plus, the ban on China’s Xinjiang cotton has already disrupted supply chains across the globe. Goenka added that the government should intervene for regulating export of raw cotton/cotton yarn appropriately, and thereby ensure continuous availability of raw material at a competitive price. He said that the industry will be able to achieve the export target of $17.2 billion for the year 2022-23, in spite of the recessionary trend being felt in most of the garment importing countries. AEPC chief also pitched for PLI-2, extension of ATUFS, advance authorisation on self-declaration basis, and deletion of condition of making transferee liable and making this applicable to existing scrips under the RoSCTL for garment exports.
Source: Fibre2fashion
The textile industry in the southern Indian state of Tamil Nadu, which is already facing challenges due to costlier raw material and muted export demand, will now have to gear up for yet another challenge as the state government has increased the power tariff. The hike in electricity cost will raise production cost for spinning mills and knitwear factories. The approximate net power tariff increase for the textile industry works out to ₹1 per unit. Since 1 kg yarn manufacturing needs on an average 5 units of power, the production cost will increase by ₹5 per kg, according to the Southern India Mills Association (SIMA). So, for a spinning mill having 25,000 spindles, the power tariff increase per year would be to the tune of ₹1.2 crore. “This will affect the competitiveness of the downstream sectors like powerloom, handloom, garment and made-ups segments that already raise voices against any increase in yarn price,” SIMA chairman Ravi Sam said in a communication mailed to the media. Compared to the raw material rich (cotton and man-made fibres) states like Gujarat and Maharashtra, Tamil Nadu based units are already uncompetitive and are unable to make sizable investments in modernisation, capacity expansion and green field projects, the communication said. Separately, the Tiruppur Exporters’ Association (TEA) said that the knitwear sector is already affected due to various adverse factors like increased yarn prices and the Russia-Ukraine war which has decreased the purchasing power of the European consumers. As a result, the export orders to the Tiruppur knitwear sector have drastically reduced. A similar situation is prevailing in the US market also due to high inflation there. Stating that micro and small sized units are neither in a position to absorb the power tariff hike nor pass on the same to the foreign buyers, TEA president Raja M Shanmugham cautioned that the combined negative factors may put a question on the survival of units and may lead to loss of employment for those who work in these factories. Both SIMA and TEA have made an appeal to chief minister MK Stalin to reduce power tariff to save the state’s textile industry.
Source: Fibre2fashion
India's April-June current account deficit likely jumped to highest in nearly a decade: Poll Synopsis The median forecast in a Sept. 9-15 Reuters poll of 18 economists showed India's current account deficit last quarter was $30.5 billion, or 3.6% of gross domestic product, the widest in nine years. Worsening global factors leading to expensive imports took a toll on India's trade deficit. The April-June current account deficit is expected to spike to highest in nearly a decade, a Reuters poll found. Higher commodity prices and Rupee at 80 contributed to the worsening trade gap and bloating the CAD. The median forecast in a Sept. 9-15 Reuters poll of 18 economists showed India's current account deficit last quarter was $30.5 billion, or 3.6% of gross domestic product, the widest in nine years. Forecasts ranged between $28.5-$34.0 billion or 2.4%-5.0% of GDP. For the Jan-March quarter, the deficit was less than half that size at $13.4 billion, about 1.5% of GDP. "A near decade-high current account deficit last quarter transpired in an environment where the trade imbalance almost hit a new high every month and the rupee sunk to new record lows every week," said Vivek Kumar, an economist at QuantEco Research. "Pressures for funding the current account deficit are already being felt in the currency, and in an environment where most global central banks are tightening and the RBI's currency reserves are declining, those pressures are likely to intensify." While the rupee has depreciated around 7% against the greenback since January 2022, it had lost around 20% during the taper tantrum crisis of 2013 when the U.S. Federal Reserve suddenly cut its government bond purchases. Even as New Delhi responded to a widening trade gap by raising import duty on gold at the end of June, the full extent of that measure will only show this quarter. With the Indian rupee expected to trade around its lifetime lows against the dollar into next year and prices of crude oil due to stay elevated, the current account shortfall is set to remain near a decade high until the end of this fiscal year.
Source: Economic Times
Synopsis Last month, Indian Ambassador to Moscow Pavan Kapoor also noted that Russia-India trade turnover had been growing in both volume and scope in recent months. He added that businesses in both countries had been working to overcome the obstacles to closer cooperation posed by sanctions. Samarkand: Trade turnover between India and Russia has soared nearly 120% so far this year, according to Russian presidential aide Yury Ushakov. “Our relations are actively developing, the trade has also increased significantly with supplies of Russian oil, coal and fertilizers increasing,” the Ushakov told journalists ahead of the Shanghai Cooperation Organization (SCO) meeting in the Uzbek city of Samarkand on September 15-16. According to Ushakov, the two nations are currently working on bilateral measures to expand the use of national currencies, the ruble and the rupee, in mutual settlements. Recommended by Last month, Indian Ambassador to Moscow Pavan Kapoor also noted that Russia-India trade turnover had been growing in both volume and scope in recent months. He added that businesses in both countries had been working to overcome the obstacles to closer cooperation posed by sanctions. Moscow and New Delhi were reportedly discussing mutual acceptance of Russia’s Mir and India's RuPay payment cards, as well as options to implement each other’s interbank transfer services: India’s Unified Payments Interface (UPI) and SPFS, the Russian alternative to SWIFT. India has been boosting purchases of Russian crude over the past six months, while the US has repeatedly urged New Delhi to support a price cap on Russian oil. However, India has been reluctant to join the Western sanctions on Moscow, placing domestic energy security above geopolitical conflicts.
Source: Economic Times
At a more macro level, Fitch now expects world GDP to grow by 2.4 per cent in 2022 - revised down by 0.5 percentage points (ppt) since the June assessment Global rating agency Fitch has lowered India's economic growth forecast for fiscal 2022- 23 (FY23) as measured by gross domestic product (GDP) to 7 per cent from its June 2022 estimate of 7.8 per cent. It now expects the GDP to slow further to 6.7 per cent in FY24 as compared to its earlier forecast of 7.4 per cent. "The (Indian) economy recovered in 2Q22 with growth of 13.5 per cent year-on-year (y-o-y), but this was below our June expectation of an increase of 18.5 per cent y-o-y. Seasonally adjusted estimates show a 3.3 per cent quarter-on-quarter (q-o-q) decline in 2Q22 though this seems to be at odds with high-frequency indicators. We expect the economy to slow given the global economic backdrop, elevated inflation and tighter monetary policy," Fitch said. The Reserve Bank of India (RBI), Fitch believes, will continue raising rates to 5.9 per cent before the year-end. The RBI, it said, remains focused on reducing inflation, but said that its decisions would continue to be “calibrated, measured and nimble” and dependent on the unfolding dynamics of inflation and economic activity. "We therefore expect policy rates to peak the near future and to remain at 6 per cent throughout next year," the rating agency noted. Global growth At a more macro level, Fitch now expects world GDP to grow by 2.4 per cent in 2022 – revised down by 0.5 percentage points (ppt) since the June assessment – and by just 1.7 per cent in 2023, a cut of 1 ppt. The eurozone and the United Kingdom, Fitech said, are now expected to enter recession later this year and Fitch forecasts that the US will suffer a mild recession in mid-2023. The biggest forecast cuts, according to the report, have been to the eurozone in response to the natural gas crisis. US growth has also been revised down to 1.7 per cent in 2022 and 0.5 per cent in 2023, revisions of 1.2pp and 1.0pp respectively. "The European gas crisis, high inflation and a sharp acceleration in the pace of global monetary policy tightening are taking a heavy toll on economic prospects. Fitch Ratings’ September 2022 Global Economic Outlook (GEO) includes deep and wide cuts to global GDP forecasts," wrote Brian Coulton and Pawel Borowski of Fitch in their latest assessment of global economy. In contrast to the role of QE in the pandemic, they said, central bank policies are no longer supportive of fiscal easing to protect households and firms from economic shocks. With liquidity conditions tightening, large-scale fiscal easing could push up long-term real interest rates. Central banks are now much more concerned about inflation becoming entrenched, threatening the medium-term credibility of inflation targets. A de-anchoring of inflation expectations would require more aggressive tightening – with higher output costs – later on. Hence, they are now focused on using their monetary policy tools to bring down inflation, with the near-term impact on activity and jobs a secondary concern," Fitch said.
Source: Business Standard
US and European importers of merchandise like apparel, bags and jewellery are asking their Indian suppliers to ship cheaper products, as the purchasing power of consumers in those markets has declined due to inflation. Ajay Sahai, Director-General of the Federation of Indian Export Organisations (FIEO), said that what one is seeing is that low-value products are witnessing good traction, and this year exports will be high volume but less-valued products. “The trend is being witnessed by the textile, gems and jewellery, cosmetics and other industries,” added Sahai. It is to be noted that inflation is above 10 per cent for the first time in 40 years in the UK. And in the US, inflation in August was firmer-than-expected, with the consumer price index increasing 0.1 per cent from the previous month. This high inflation is taking a toll on the consumer’s pocket, forcing them to cut down on spending, especially on discretionary items. That is getting reflected on the orders for Indian exporters from their biggest markets.
Source: Apparel Resources
India Ratings projects GDP growth of 7.2 percent in July-September FY23 quarter, 4 percent in October-December and 4.1 percent in February-March India Ratings became the latest agency to cut its FY23 gross domestic product forecast. On Thursday, the ratings agency cut the forecast to 6.9 per cent from 7 per cent, joining other institutions who have cut their projections to below 7 per cent since the release of the April-June quarter GDP data. “Despite private final consumption expenditure (PFCE) and gross fixed capital formation (GFCF) growth coming in better than our expectations in Q1, the agency expects the slowdown in the growth of government final consumption expenditure (GFCE) and worsening of net exports to weigh on the FY23 GDP growth,” India Ratings said in a statement. On Thursday, global rating agency Fitch also lowered India's economic growth forecast for FY23 to 7 per cent from its June 2022 estimate of 7.8 per cent. It now expects the GDP to slow further to 6.7 per cent in FY24 as compared to its earlier forecast of 7.4 per cent. India Ratings projects GDP growth of 7.2 per cent in July-September FY23 quarter, 4 per cent in October-December and 4.1 per cent in February-March. “Recovering the lost output due to COVID-19 will be a long haul. Our estimate shows that even if GDP grows at 7.6 per cent every year after FY23, then also India would be able to catch up with pre-pandemic trend growth only by FY35”, said Sunil Kumar Sinha, Principal Economist. The agency did say that India’s biggest strength continues to be domestic economic activity, which has shown more resilience compared to the rest of the world. It said that it expects the growth momentum to sustain, averaging around mid-single digit in the remaining quarters, mainly buoyed by the upcoming festival season. “However, ‘K-shaped’ recovery is neither allowing the consumption demand to become broad based nor helping the wage growth especially of the population that are part of the lower half of the income pyramid,” the agency said. “Household sector, which accounts for 44-45 per cent of the gross value added, has witnessed nearly flat or negative growth in their real wages (adjusted for inflation) since FY19. Wage growth in June 2022 in real terms stood at about negative 3.7 per cent in urban areas and negative 1.6 per cent in rural areas,” it said. India’s Q1FY23 GDP came in at 13.5 per cent, despite the low base of the equivalent period of 2021-22, when economic activity was severely impacted by the Delta wave of the pandemic. Sequentially, GDP contracted 9.6 percent in Q1FY23 compared with Q4FY22. The RBI had projected Q1FY23 GDP growth at 16.2 pe rcent. After the official data, a number of banks and financial institutions slashed their economic growth estimates for the current financial year. These included State Bank of India, Goldman Sachs, Citigroup and ratings agency Moody’s
Source: Business Standard
The government must explore avenues for sustainable gas supply to the export industry in order to sustain export volumes, adequate supply of energy at regionally competitive tariffs is a must, and this requires rethinking gas allocation priorities, adjustments, and a major gas conservation drive. Pakistan is faced with an increasingly complex economic situation wherein the Balance of Payments crisis has spiraled out of control. The economy is fast deteriorating, with a highly devalued currency, inflationary pressure and a misplaced policy of high-interest rates creating even more cost-push inflation. This is in addition to structural issues in our import bill which need to be addressed, as well as a focus on consumptive rather than a productive use of resources. These issues can only be resolved through a government-backed strategy of sustained export growth and the development of an export culture. The textile industry provides a reliable pathway to counter the crisis that has emerged from regressive policy measures and consecutive loans, as it comprises 66% of the country’s exports and is eager to contribute to its sustained economic growth through an influx of valuable foreign exchange. However, severe strains on liquidity and economic stability paired with the brunt of the climate crisis have stifled ease of doing business and made maintaining the current momentum of exports difficult. Understanding the matter better APTMA’s ambitious target of $50 billion in textile exports in the next 4 years is rooted in past success, predicated on the supply of regionally competitive energy. While the commitment of regionally competitive energy tariffs of 9 cents/kWh for electricity and $9/MMbtufor gas/RLNG for a year’s time has been an instrumental measure for exporters, the non-provision of competitive energy rates in the month of July had a major negative impact on exports which the industry is still reeling from, as confidence in policy continuity has been severely tested. The existing capacity is not fully utilized at present, due to energy supply and quality constraints (especially gas/RLNG) over the last 6 months. This inability to effectively leverage full capacity has reduced Pakistan’s exports by approximately $800 million per month, or $10 billion per annum. At present, competition in textiles is becoming increasingly fierce in the midst of the ongoing global recession. Inflationary pressures are increasing the price of inputs, thereby negatively impacting the competitiveness of exports. Price competitiveness and prompt delivery of quality products will therefore be increasingly instrumental in determining which countries are able to enhance or even maintain exports. The government must explore avenues for sustainable gas supply to the export industry in order to sustain export volumes, adequate supply of energy at regionally competitive tariffs is a must, and this requires rethinking gas allocation priorities, adjustments, and a major gas conservation drive. It is of utmost importance to commit energy rates for the entire +year – if not for the full 4 years – as the current procedure whereby electricity rates are notified on a month-to-month basis is unsustainable. Furthermore, the supply of Gas/RLNG to the exporting sectors in Punjab, hosting more than 50 percent of the total installed capacity in Pakistan, and requiring 200MMcfd gas/RLNG, must take precedence over other industries based on economic rationale. Given the quality of grid supply and the delay in the expansion of electricity connections, the supply of adequate gas/RLNG becomes critical. The government is urged to restore the priority of the exporting sector and to evaluate and ensure the best use of scarce resources for the economic stability of Pakistan. Despite the fact that our currency has depreciated by 60-70% within the last year, exports have become worth over Rs. 3 trillion, yet the working capital has not increased. In fact, 50% more working capital is needed to cover the gap created by exchange rate depreciation. The industry requires double the amount of working capital that is currently available. The export cycle lasts up to 5-6 months wherein the liquidity of the sector remains tied up in the process of sales tax till refund (6 months). It would therefore be prudent to restore the SRO 1125 i.e., Zero Rating for the entire textile value chain in order to meet the working capital requirements. This policy measure in combination with the continuation of RCET would be essential in enabling the textile sector to continue on its journey to achieving its FY23 target of $24 billion. For a strong export culture, imports of the export-oriented sectors must be allowed hindrance-free admission into Pakistan. In a recent circular issued by the External Relations Department of SBP, it is clearly mentioned that there are no restrictions on the import of raw materials and machinery/spare parts for export-oriented units. However, imports under Chapters 84 and 85 are restricted due to requiring prior approval for imports of export-oriented units against all economic rationality, and exporters have been unable to clear goods for up to 3-4 months. The country is resultantly suffering huge economic losses due to illogical delays in approval by SBP. There are serious concerns over the delay in the opening of such LCs of machinery parts which are regular consumables of the textile machines essentially required to run and maintenance of textile machinery. Moreover, this allowance for imports under Chapter 84-85 only caters to direct exporters and indirect exporters are neglected which is a matter of grave concern as indirect exporters provide the intermediate goods to exporters. Further delays will severely affect maintenance and constrict the entire value chain, resulting in a production shutdown and irrecoverable export losses. Further restricting export growth is the absence of GSP+ Without this preferential status in trading with the EU, Pakistan would have to bear an MFN tariff of 12% under most traded chapters (42 and 61 to 63). For Pakistan to remain in the scheme for 10 more years, it must ratify and implement five new conventions in addition to the previous 27. Additionally, for a better approach, it must begin negotiations with the EU on tariff lines not falling under the GSP+ preferential status for the next GSP+ agreement. The recent floods have wiped out much of our cotton crop, and the textile sector is seeking out strategies to buy cheaper cotton abroad, as it is crucial to arrange its raw materials and ancillary requirements at the lowest cost possible on an emergency basis for the sector to continue meeting the export orders. Furthermore, there is uncertainty in Pakistan’s investment climate due to regressive policies as well as political instability – a serious impediment to economic progress. Not only does it shorten policymakers’ horizons leading to suboptimal short-term macroeconomic policies, but it is also the cause of frequent policy U-turns and leads to non-completion of ongoing projects. This scenario paired with mounting debt and continued reliance on foreign loans leaves Pakistan with a weak economy and a lack of direction. Due to the uncertain investment climate caused by regressive policies and an unstable economic environment, any more delays or non-delivery of export orders will further worsen our Balance of Payments which is already under extreme pressure, and the industry is at high risk of losing valuable international clients. The development of a sustainable export culture has never been more critical – not only to protect our economic sovereignty but our very existence as a nation-state that is under threat in the face of this unprecedented crisis.
Source: Global Village Space
The UK-Vietnam Free Trade Agreement (UKVFTA) is being perceived to be behind the increasing flow of quality foreign direct investment (FDI) into Vietnam in sectors like green finance, renewable energy, hi-tech manufacturing, digital transformation, healthcare, education and climate change adaptation, beyond conventional sectors like manufacturing, processing and mining. These new sectors are a priority for Vietnam as the country is striving to build a digital economy and promote green growth. The United Kingdom was the 15th largest investor out of 139 countries and territories pouring capital into Vietnam, with total investment worth nearly $4.2 billion as of August 20. This accounted for around 1 per cent of the total FDI value into the country. The United Kingdom invested in 25 new projects in August, bringing the total number of projects with UK investment to 478, according to a Vietnamese media report. The multilateral trade policy department under Vietnam’s ministry of industry and trade also feels that domestic enterprises have great scope to enhance investment cooperation with and promote technology transfer from the United Kingdom. They can also participate in the UK industrial and energy supply chain and export industrial products to the United Kingdom. The department feels domestic enterprises must pay attention to technical requirements and UK hygiene and safety standards to prepare carefully in terms of business plans and product development to integrate with the UK’s supply chain network. In addition, they also need to pay attention to regulations related to sustainable development such as labour and environment because the UK is very interested in those issues, the department added.
Source: Fibre 2 Fashion
China and Uzbekistan agreed to develop and deepen all-round cooperation in areas including interconnected transport infrastructure, free economic zones and the Belt and Road Initiative, according to the joint statement from the two countries on Thursday. The statement came after a meeting between Chinese President Xi Jinping and Uzbek President Shavkat Mirziyoyev on Thursday morning in Samarkand. In the joint statement, the two sides said that since China and Uzbekistan established diplomatic relations 30 years ago, the people of the two countries have marched forward hand in hand as brothers, writing a glorious chapter in the history of bilateral friendship for generations. The two sides agreed that since China and Uzbekistan established the strategic partnership 10 years ago, the two countries have maintained candid, open and constructive high-level communication, and have built efficient collaboration mechanisms in such areas as politics, diplomacy, economy and trade, as well as peopleto-people exchanges. Xi emphasized at their meeting that China and Uzbekistan should firmly support each other on issues concerning national sovereignty, independence, territorial integrity and other core interests, move faster to synergize their development strategies and promote common development. On Thursday, Xi received the Order of Friendship conferred by Mirziyoyev. The Order of Friendship is the highest honor conferred by Uzbekistan on foreign individuals in recognition of their special contribution to growing friendly relations with Uzbekistan, resolving international and regional hotspot issues or supporting the national development of Uzbekistan. This is the first time of awarding the Order. President Mirziyoyev said the historic state visit of Xi to the country coincides with the 30th anniversary of the establishment of China-Uzbekistan diplomatic relations and the 10th anniversary of the establishment of the Uzbekistan-China strategic partnership, which will elevate the Uzbekistan-China comprehensive strategic partnership to a new height featuring new vitality and new prospect. Mirziyoyev said Uzbekistan is firmly and unequivocally committed to the one-China principle, firmly supports China's position on matters concerning its core interests including those related to Taiwan and Xinjiang, and will always be a good neighbor, good friend and good partner worthy of China's trust. One notable result from the state visit was the signing of a trilateral Memorandum of Understanding concerning cooperation on the Kyrgyz section of the China-Kyrgyzstan Uzbekistan railway project. The joint statement agreed to speed up the railway construction in a bid to deepen interconnected transport infrastructure and effective transportation channels between China and Uzbekistan. Another of the highlights within the joint statement was that the two sides agreed to actively push forward the synergy between the Belt and Road Initiative and the development strategy of "New Uzbekistan" for 2022-2026. Uzbekistan also said it supports the Global Development Initiative (GDI) put forward by China and believes that the initiative will actively contribute to the realization of the United Nations Sustainable Development Goals as planned. On bilateral trade, Uzbekistan agreed to increase exports of textiles, shoes, chemicals, agriproducts and nonferrous metals to China, while China promised to speed up the approval of animal and plant quarantine permits for specific categories of products. Uzbekistan also said the country is willing to participate in the China International Import Expo which is to be held in November this year. Meanwhile, China is willing to support Uzbekistan's accession to the WTO. For the country to develop social and infrastructure construction projects, China is willing to consider offering concessional loans to Uzbekistan, according to the joint statement. Both agreed that the priority for safeguarding regional security and stability will remain the fight against the "three forces," - terrorism, separatism and extremism - as well as drug trafficking, smuggling of arms, ammunition and explosives and cross-border organized crime. In the joint statement, China and Uzbekistan also reaffirmed that a peaceful, stable, developing and prosperous Afghanistan serves the common interests of Afghanistan and other regional countries. Underlining their respect for the independence, sovereignty, territory integrity and ethnic unity of Afghanistan, the two sides stressed non-interference of the country's domestic affairs and noted that they will uphold the "Afghan-led, Afghan-owned" principle. They also agreed to enhance coordination on Afghanistan-related issues within the Shanghai Cooperation Organization, the coordination and cooperation mechanism among neighbors of Afghanistan and other frameworks, with the aim of advancing peace and reconstruction of Afghanistan.
Source: Global Village Space
The California State Assembly has announced the passing of its ‘Safer Clothes and Textiles Act’ which would ban the use of certain chemicals in new fabrics and textiles. The law specifically targets per- and polyfluoroalkyl substances (PFAS) which have been proven by various studies to be toxic and can pose significant health risks, as noted by the Natural Resources Defence Council (NRDC). The act will head to Governor Newsom, who the Assembly said is expected to sign it into law, meaning it would come into force from January 1, 2025. If implemented, the bill would ban the manufacture, distribution, sale or offering for sale of any new textiles containing regulated PFAS. In addition, it would also require manufacturers to use the least toxic alternative when removing PFAS from their textiles in order to comply. The move builds on California’s efforts surrounding “the PFAS crisis”, with it previously implementing laws addressing the substances in food packaging and children’s toys. In a release, the state’s assembly said: “Banning PFAS in textiles not only helps prevent direct exposure to toxic PFAS, but also helps reduce the flow of PFAS into drinking water.”
Source: Fashion United
Lenzing Group is continuing to expand its global clean electricity portfolio by gradually transitioning to green energy at its production site in Nanjing. This will enable its Chinese subsidiary Lenzing Nanjing Fibers to use electricity derived solely from renewable sources from 2023 onwards, reducing the site’s carbon emissions by 100,000 tonnes annually. Lenzing only recently announced the transition to green electricity at its Indonesian production facility. In 2019, Lenzing became the first fibre producer to set a target of halving its carbon emissions by 2030 and becoming climate neutral by 2050. This carbon reduction target has been recognised by the Science Based Targets Initiative. In Nanjing, Lenzing is currently investing in cutting its carbon emissions and converting a standard viscose production line to 35,000 tonnes of Tencel branded modal fibres. Thanks to this move, the Chinese site will exclusively produce eco-friendly specialty fibres, the company said in a press release. “Demand for our wood-based, biodegradable specialty fibres is constantly rising. We see enormous growth potential, especially in Asia. Thanks to our investments in China and other Lenzing sites around the world, we will be better positioned to meet this growing demand in future. At the same time, we are continuing to make considerable progress towards achieving a carbon-free future and becoming a champion of circularity,” said Robert van de Kerkhof, chief commercial officer for Fiber at Lenzing. Man-made climate change is one of the most pressing problems of our time. The fashion industry has an extremely negative impact on the environment due to its fast fashion business model and the growing consumption of fossil resources in textile production. Lenzing’s sustainably produced specialty fibres under the Tencel brand help its customers, especially brands and retailers, to reduce their global footprint immensely. Specialty fibres are Lenzing’s key strength. The company aims to generate more than 75 percent of its fibre revenue from the wood-based, biodegradable specialty fibres business under the Tencel, Lenzing, Ecovero and Veocel brands by 2024. With the launch of the lyocell plant in Thailand in March 2022 and the investments in existing production sites in China and Indonesia, the share of specialty fibres in Lenzing’s fibre revenue is set to exceed the 75 percent target by a significant margin as early as 2023.
Source: Global Village Space
Kenya’s much anticipated presidential election recently concluded with the Supreme Court confirming President William Ruto’s victory. In the runup to this close contest, Kenya’s political discourse was for once focused on economic and policy concerns. As the new government takes up the reins of administration, trade will feature in the policy solutions to ongoing challenges like rising unemployment rates, Kenya’s large public sector debt, concerns around equitable taxation, and the residual effects of global shocks such as the coronavirus pandemic and the Russia-Ukraine war. In charting the direction of the country’s post-election economic policy, trade will be important in various ways: its volume, bridging Kenya’s trade deficit, and the country’s external relations. A cursory look at Kenya’s international trade reveals some striking patterns (see figure 1). The country’s total merchandise trade volume in 2020 amounted to $21 billion or 21 percent of GDP. More than 16 percent of this total is from trade with China (the country’s top trading partner), followed by the EU ($2.9 billion), India ($1.8 billion), and the United Arab Emirates (UAE) ($1.2 billion). The United States (nearly $1.0 billion) is Kenya’s fifth-largest trade partner. Other major economic partners include Uganda and Tanzania, both in East Africa. These trade relationships with major external partners will shape the new Kenyan government’s policy objectives especially around increasing the productivity of agriculture, manufacturing, and small businesses. Kenya’s international trade is also an area where great power competition could play out. The country’s main exports to the United States, in 2019, were fairly diversified and included woven apparel ($286 million); knit apparel ($168 million); edible fruit and nuts ($55 million); ores, slag, and ash ($52 million); and coffee, tea, and spice ($41 million). This trade was enabled in large part by the Africa Growth and Opportunity Act, the preferential market access agreement for countries south of the Sahara. Meanwhile, Kenya imported aircraft ($59 million), plastics ($58 million), machinery ($41 million), and cereals ($30 million) from the United States. There are ongoing discussions between the United States and Kenya for a free trade agreement as Kenya seeks to become a manufacturing hub for U.S. companies looking to diversify or relocate out of China. In the interim, the two countries signed the U.S.- Kenya Strategic Trade and Investment Partnership (STIP) in July 2022, an agreement that identified areas around which to “develop an ambitious roadmap for enhanced cooperation with the goal of negotiating high-standard commitments in order to achieve economically meaningful outcomes.” The initial areas of collaboration include agriculture; digital trade; micro, small, and medium enterprises; supporting the participation of women, youth, and others in trade; collaboration on standards setting; and trade facilitation and customs procedures. The U.S.-Kenya STIP was launched against the backdrop of China’s rapidly rising trade relationship with Kenya. Since 2000, China-Kenya trade has grown nearly thirty-fold, from $106 million to $3.5 billion in 2020. As these trade volumes have grown, so has Kenya’s trade deficit. The country’s total trade deficit as of 2020 stands at around $9.7 billion, and China ($3.3 billion) accounts for about one-third of this imbalance (see figure 2). Between 2015 and 2019, for instance, Kenya’s main exports to China were “titanium and zirconium ores and concentrates” (around 60 percent), vegetable textile fibers (4.9 percent), and petroleum oils (4.7 percent), among others. Its major imports are “electrical machinery and equipment (19 percent); nuclear reactors, boilers, machinery, and mechanical appliances and parts (18 percent); iron and steel (7 percent); and plastics (6 percent).” Closing this trade deficit is a salient topic that features regularly in diplomatic engagement between the two countries. Indeed, it was one of the announcements at the 2021 Forum on China-Africa Cooperation. In January 2022, China and Kenya also signed six bilateral trade agreements that focused on removing tariffs and other trade and nontrade barriers. These agreements promised access to China’s large market for Kenyan exporters and included protocols to facilitate bilateral trade, especially exports of avocados and aquatic products. In August 2022, Kenya became the first African country to export fresh avocados to China. Beyond the United States and China, Kenya has strong and growing trade relations with other major countries. The UAE imports refined petroleum, tea, and meat from Kenya. In July 2022, the UAE and Kenya announced the start of trade negotiations to initiate a comprehensive economic partnership agreement that aims to reduce trade barriers between the two countries. With this agreement, the UAE will invest in Kenya's vital economic sectors, such as tourism and agriculture, and boost non-oil trade and investment. Kenya also signed an economic partnership agreement with the UK in December 2020; the agreement provided quota-free and duty-free market access for all Kenyan products, including manufactured and processed ones. The agreement also guaranteed tariff-free access to Kenya’s market for UK suppliers of machinery, electronics, and technical equipment, among others. Within Africa, Kenya is a critical actor driving some aspects of regional integration. With its 2021 GDP of $110.3 billion, it is the largest economy and major driver of rapid integration in the East African Community (EAC). It is no surprise, therefore, that Kenya ranked second on regional integration in Africa. The EAC ranks highest on the Africa Regional Integration Index, with the free movement of people as its most robust dimension. An Afro barometer survey on East African integration shows that 52 percent of Kenyans approve of the free movement of goods, services, and labor. However, there is still a gap in public awareness and support for this integration. Kenya’s notable progress in securing regional and international trade deals is positioning the country as an important trading economy. It will be crucial for Kenya to balance its overlapping and complicated relationships with the great powers, its trade ties with neighbors in the EAC, and its interest in advancing the African Continental Free Trade Area. As Kenya’s new president takes office, trade policy will be at the heart of the country’s plans to close its trade deficit, generate jobs, increase public revenues, and boost productivity.
Source: Carnegie Endowment
Turkiye’s retail turnover for textiles, clothing, and footwear with current prices (2015=100) increased year over year (YoY) by 94 per cent on an annual basis and 5.1 per cent on a monthly basis in July 2022. Retail sales of textiles, clothing, and footwear with constant prices (2015=100) in July 2022 decreased by 1.6 per cent compared with the same month of the previous year. While the country’s retail turnover with current prices jumped by 114.8 per cent in July 2022 compared with the same month of the previous year, it surged by 2.6 per cent compared to June 2022, according to a press release by the Turkish Statistical Institute (TurkStat). Moreover, retail sales volume with constant prices increased by 2.0 per cent in July 2022 compared with the same month of 2021.Retail sales volume with constant prices decreased by 0.3 per cent in July 2022 compared with June 2022. In July 2022, textiles, clothing, and footwear sales decreased by 1.1 per cent. The annual changes regarding retail sales indices refer to the change of calendar adjusted index values compared to the same month of the previous year. Monthly changes in retail sales indices denote the change in seasonally and calendar adjusted index values compared to the previous month.
Source: FIbre2fashion
