INTERNATIONAL
Textile Raw Material Price 2016-06-30
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1003.57 |
USD/Ton |
1.06% |
6/30/2016 |
|
VSF |
2028.20 |
USD/Ton |
0% |
6/30/2016 |
|
ASF |
1895.80 |
USD/Ton |
0% |
6/30/2016 |
|
Polyester POY |
1002.06 |
USD/Ton |
0.68% |
6/30/2016 |
|
Nylon FDY |
2181.67 |
USD/Ton |
0% |
6/30/2016 |
|
40D Spandex |
4288.11 |
USD/Ton |
0% |
6/30/2016 |
|
Nylon DTY |
2407.36 |
USD/Ton |
0% |
6/30/2016 |
|
Viscose Long Filament |
5610.65 |
USD/Ton |
0% |
6/30/2016 |
|
Polyester DTY |
1226.25 |
USD/Ton |
0.62% |
6/30/2016 |
|
Nylon POY |
2038.73 |
USD/Ton |
0% |
6/30/2016 |
|
Acrylic Top 3D |
2068.83 |
USD/Ton |
0% |
6/30/2016 |
|
Polyester FDY |
1133.72 |
USD/Ton |
0.47% |
6/30/2016 |
|
30S Spun Rayon Yarn |
2708.28 |
USD/Ton |
0% |
6/30/2016 |
|
32S Polyester Yarn |
1652.05 |
USD/Ton |
-0.18% |
6/30/2016 |
|
45S T/C Yarn |
2414.88 |
USD/Ton |
0% |
6/30/2016 |
|
45S Polyester Yarn |
1790.47 |
USD/Ton |
0% |
6/30/2016 |
|
T/C Yarn 65/35 32S |
2708.28 |
USD/Ton |
28.57% |
6/30/2016 |
|
40S Rayon Yarn |
2858.74 |
USD/Ton |
0% |
6/30/2016 |
|
T/R Yarn 65/35 32S |
2181.67 |
USD/Ton |
0% |
6/30/2016 |
|
10S Denim Fabric |
1.33 |
USD/Meter |
0% |
6/30/2016 |
|
32S Twill Fabric |
0.81 |
USD/Meter |
0% |
6/30/2016 |
|
40S Combed Poplin |
1.14 |
USD/Meter |
0% |
6/30/2016 |
|
30S Rayon Fabric |
0.67 |
USD/Meter |
0% |
6/30/2016 |
|
45S T/C Fabric |
0.67 |
USD/Meter |
0% |
6/30/2016 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.15046 USD dtd. 30/06/2016)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Till now known for its famed 'murukku', Manaparai may soon get a textile park giving a potential platform for small powerloom manufacturers to promote their products in both domestic and international markets. With road and rail connectivity, Manaparai is also a hub for minor readymade manufacturing units. As such, a textile park would greatly help in employment generation. At the four-day Buyer Seller Meet, the first ever, inaugurated in the city on Thursday, the Tiruchirapalli District Tiny and Small Scale Industries Association (TIDITSSIA) pitched for the textile park in Manaparai. “We have 25 acres of land in Mondipatti village near Manapparai for the purpose of establishing a dedicated textile park. We are in discussion with the district administration in this regard,” N Kanagasabapathy, president of TIDITSSIA said. According to him Manapparai is an ideal location for a textile park since the quantity of minor readymade manufacturing units and even exporters are highest among the district in nearby Puthanatham village. TIDITSSIA wanted Powerloom Development and Export Promotion Council (PDEXCIL) to help small powerloom manufacturers and promote textile industries in Tiruchy district. According to the association, Tiruchy functions as a textile sector hub for the adjoining districts including Ariyalur, Perambalur, and Pudukkottai. PDEXCIL, which organised the event with the Regional Office of Textile Commissioner at Coimbatore, would also hold an international-level Buyers-Sellers meet in Bangalore by November 2016. The four-day event has an exhibition featuring 23 stalls. “This is intended to benefit the small scale manufacturers to find suitable buyers and establish their brand name. Further, this eliminates middlemen,” said S Sivaraju, regional office in-charge, PDEXCIL.
SOURCE: The New Indian Express
Ten child labourers were rescued by the task force of the labour department from two textile markets located on city's Ring Road on Wednesday. Official sources said the child laboures were rescued from the textile shops, where they were employed for organizing and packing sarees in boxes. All the rescued children hail from Rajasthan and are below 14 years of age. Official sources said the labour department's task force personnel led by assistant labour commissioner, Ashish Gandhi were on the routine survey operation in the textile market on Wednesday. During the operation, the task force team found child labourers from New T.T market and the Shiv Shakti textile market on Ring Road. The child workers were made to sit on the floor, beside the saree stacks and boxes and that they were organsing and packing the sarees in the boxes. A few children were found from the basement of the Shiv Shakti market. "The child labourers were caught during the routine operation by the department. Due to frequent raids in the textile markets, the contractors and traders have had shifted their illegal activity of employing child labours to the residential societies in the surrounding areas. The contractors take the residential houses on rent for running the packaging unit employing the child labours" said assistant labour commissioner, Ashish Gandhi. Gandhi added, "We have noticed around 25 per cent reduction in the textile markets employing child labourers. It is difficult to find children in the new markets, but they are found in the old markets" Around six textile shop owners have been booked and will be prosecuted under the shop and establishment act. According to Gandhi, the child labourers have been sent to the observation home at Katargam and that they will be sent to their hometowns soon.
SOURCE: The Times of India
India’s busiest container port, located near Mumbai, will roll out a cargo container tracking service from 1 July—a first-of-its-kind initiative that will help exporters and importers track their goods in transit. The port, named after India’s first prime minister Jawaharlal Nehru, which handles more than half the cargo containers passing through the country’s ports, will provide logistics data bank services through the Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC) and Japan’s NEC Corp. The plan seeks to bring efficiency in the logistics and supply chain management through the use of information technology that would be used for tracking the movement of cargo containers across the port to the inland container depots (ICDs), container freight stations (CFSs) and end-users. ICD and CFS are off-dock facilities licensed by the customs department to help decongest a port by shifting containerized cargo and carrying out customs-related activities outside the port area.
DMICDC will provide a radio-frequency identification (RFID) tag for each container, which will be tracked through RFID readers installed at different locations. The logistic data bank service will provide the visibility and transparency of the export-import (EXIM) container movement starting from the port and covering the entire movement through rail or road till the ICDs and CFSs. This project will help in reducing the overall lead time of container movement across the western corridor and lower the transaction cost incurred by the shippers and consignees as a result of the predictability and optimization achieved through the logistics data bank services.
The service will cover all the four existing terminals at Jawaharlal Nehru Port, namely Jawaharlal Nehru Port Container Terminal (JNPCT), Nhava Sheva International Container Terminal (NSICT), Nhava Sheva (India) Gateway Terminal (NSIGT) and Gateway Terminals India Pvt. Ltd (GTIPL). The service will be extended to the new container terminal being built by Singapore’s PSA International Pte. Ltd at J.N. Port when it starts operations at the end of 2017.
The logistics data bank service is part of a series of measures taken by the port over the past year to promote ease of doing business by cutting cost and time for exporters and importers. The export cycle time at the port has reduced from 88 hours to 65 hours after the measures were implemented. RFID-based gate automation has become operational in two of the four terminals, while the remaining two will soon implement it. The port has replaced paperwork required for shipments with a Web-based software solution and introduced inter-terminal movement of tractor-trailers between different facilities, cutting at least 7.5km of movement on the road. That has resulted in a reduction in pollution levels, besides fuel saving, reduced empty truck movements, lower turnaround time of trucks and cost of handling. J.N. Port has started publishing on its website the tariff of 33 CFSs and 29 shipping lines that service it, along with tariffs at all the four terminals operating at the port to ensure greater transparency. Exporters and importers have been urging the government to make it mandatory for shipping logistics service providers to disclose the mode and manner of fixing rates, including the elements that constitute tariff, on their web sites or on their premises. J.N. Port is also developing a centralized parking plaza covering 45 hectares which can accommodate about 2,000 tractor trailers. The port has allotted land to set up laboratories for animal quarantine, plant quarantine, textile committee and the Food Safety and Standards Authority of India (FSSAI). Rail-linked CFSs servicing J.N. Port are entitled to a rebate of Rs.728 per twenty foot equivalent unit, or TEU, to encourage movement of containers by rail and reduce congestion on roads. The ICD located at Mulund on the outskirts of Mumbai that feeds cargo containers to and from J.N. Port also gets a similar rebate. A TEU is the standard size of a container and a common measure of capacity in the container business. A TEU can load 15.8 tonnes of cargo. The port has scrapped the daily pre-berthing meetings which are now done online. All the four container terminals will soon have independent container scanners, with the port deciding to install more scanners for select commodities. This will reduce truck detention. The port has widened roads leading to the terminal gates, while the National Highways Authority of India (NHAI) has started work on doubling the four-lane highway linking the port for faster evacuation of cargo.
J.N. Port handled 4.49 million TEUs in the year ended March, the highest since it was opened in 1989. It is looking to load over five million TEUs, driven by further improvements in productivity and efficiency at its four container terminals. With a new terminal under construction, the port’s container loading capacity will more than double over the next seven years, straining the port’s cargo evacuation infrastructure, necessitating a widening of the road linking the port to eight lanes. India was ranked 133rd in trading across borders by the World Bank last year. J.N. Port reckons that the steps taken by India’s biggest container gateway would improve the ranking.
SOURCE: The Live Mint
India has proved to be resilient to the Brexit crisis, World Bank Group President Jim Yong Kim said on Thursday while commending Prime Minister Narendra Modi’s efforts in managing the economy. “Inflation is down, growth is strong and the balance of payments is in good shape,” said Jim Yong, who is on an official visit to India. He however, warned that post-Brexit, there is a great deal of uncertainty, which could impact developing countries, including India. “India has been very resilient but if there is more uncertainty, India is also likely to be impacted.”
Noting that it took Korea more than 20 years to solve the problem of open defecation in rural areas, he said that the Prime Minister’s Swachh Bharat campaign for rural sanitation has made “very good progress”.
An independent RBI
Jim Yong said he expects the Indian government to maintain the independence of the Reserve Bank of India. “The Modi government has made it clear that it will continue with the principle of an independent central bank. I don’t expect any major shifts,” he said,
SOURCE: The Hindu Business Line
India’s core sector expanded at a five-month low in May on account of a decline in output in some sectors, such as steel and cement. Although supply-side constraints have eased to an extent, the revival of industrial performance remains a challenge. The production index for eight core industries grew 2.8 per cent in May, against a robust 8.5 per cent the previous month, pulled down by crude oil, refinery products, steel and cement, show data issued by the ministry of commerce and industry on Thursday. “Despite the uptick in growth of automobile production and turnaround in non-oil merchandise export, the sharp slowdown in core sector growth in May suggests a low likelihood of a meaningful improvement in IIP (Index of Industrial Production) performance in the just-concluded month,” said Aditi Nayar, senior economist at ratings agency Icra. The eight industries are coal, electricity, crude oil, natural gas, steel, cement, fertiliser and refinery products. The index of eight core industries contributes 38 per cent to the IIP. Industrial production had contracted by 0.8 per cent in April, snapping the rising trend seen in the two previous months. Crude oil and natural gas output fell for a third straight month in May, at minus 3.3 and minus 6.9 per cent, respectively. Fertiliser sector output grew in double digits at 14.8 per cent, up from 7.8 per cent growth in April. Coal output growth picked up to 5.5 per cent, as against a 0.7 per cent contraction in April.
Core sector growth slips to 5-month low in May “The turnaround in coal output to a four-month high confirms the view that the contraction in the previous month was temporary, driven by the build-up of inventories,” said Nayar. Steel output grew at a three-month low of 3.2 per cent, as against 6.1 per cent the previous month. Cement production growth was at a six-month low of 2.4 per cent, indicating sluggishness in construction activity. Electricity output expanded by 4.6 per cent in May, against 14.7 per cent the month before.
SOURCE: The Business Standard
India Inc is hopeful that Britain’s exit from the European Union (EU) will enable India to enter into a free trade agreement (FTA) with that country more easily. As both countries share a number of complementarities and there are lower sensitivities, entering into an FTA with Britain will now be faster than with the entire bloc. “Sectors such as automobile will not be as sensitive in an FTA with the UK as with the EU because the UK is not into manufacturing of too many small cars. Similarly, products such as textile from India could gain easier access to the UK,” CII President Naushad Forbes told BusinessLine.
EU region
He, however, added that India should continue pushing for the FTA talks with the EU as the region was important for the Indian industry. On whether Brexit would adversely affect Indian investments, Forbes said that investments made in the UK for items sold in the EU could get affected as uncertainty prevailed over the terms on which such business would be done. “But that is a very small portion of India’s business with the UK and the EU,” he said.
Successor for Rajan
Commenting on the RBI Governor Raghuram Rajan’s term coming to an end in September, the CII chief said that the government should name a strong successor soon. He said that Rajan’s exit would not have any negative fall-out on the Indian economy as a single person could not have an effect on a big economy like India’s.
FDI flow
Forbes said the recent changes made in India’s Foreign Direct Investment (FDI) policy will attract more investments into the country, and the only thing that still needed to be done was make the investment flow automatic in areas where it was still mandated through the government approval route. In areas such as legal services, too, the government needed to open up and allow FDI to come in, he added.
SOURCE: The Hindu Business Line
India and the US have decided to speed up the talks for the long-pending Bilateral Investment Treaty (BIT). The US is pushing India to wrap up the talks either by August, when the second round of annual Strategic and Commercial Dialogue (S&CD) takes place, or latest by November when the next round of Trade Policy Forum (TPF) happens. This year both the S&CD TPF will be held in New Delhi. Both sides are planning to ramp up the talks that have been stuck several times ever since the negotiations commenced in 2009. However, in 2015 when the Modi government released a model BIT text replacing the old 2003 model, the US had been upbeat about concluding the talks before the Obama government demits office. The conclusion of the BIT formed the main agenda of the talks when Prime Minister Modi met US President Barack Obama on June 7 in Washington. Both leaders vowed to expedite the talks, despite “several gaps” emerging from the negotiations, sources told BusinessLine . But interestingly, there was no mention of the BIT in the joint statement due to the talks hitting a roadblock, sources said.
The US is hopeful that talks might reach a “meaningful closure” with the visit of US Secretary of State John Kerry and US Commerce Secretary Penny Pritzker in August for the S&CD and US Trade Representative (USTR) Michael Froman, sources added. This is because in its endeavour to achieve a “high-standard” BIT, the US has been nudging India to look at the investment chapters of the Free Trade Agreements (FTA) it has with Japan and Korea. However, India has recently told the US authorities that the FTAs with Japan and Korea were signed before the new BIT model was finalised and it will not be possible to negotiate the BIT based on those FTAs. “The Japan and Korea investment pacts were signed before the new BIT was finalised. We are only negotiating based on the new text now. The US has to reconsider its position as this is the only model text of BIT that India is now negotiating on,” said a senior Finance Ministry official. India has also indicated that there is no room for compromise in the negotiations.
US investments
During Modi’s visit to the US, Amazon chief Jeff Bezos had vowed to invest $3 billion in India. Besides, American companies that are members of the US-India Business Council (USIBC) have also pledged investments worth $45 billion into India. However, sources indicated that all these investments may never become reality unless the BIT with US is signed as the American investors are seeking safeguards and protection on their investments.
SOURCE: The Hindu Business Line
India has begun an ambitious exercise to renegotiate all its bilateral investment pacts and replace them with the new Bilateral Investment Treaty (BIT). “We have sent notices to all countries with whom India has Bilateral Investment Promotion and Protection Agreements (BIPA) for renegotiation for the new treaty,” said a senior government official. India has signed 83 bilateral trade and promotion agreements with countries including the UK, China and United Arab Emirates (UAE). The last treaty was signed with UAE in December 2013 but it was not enforced. In fact, only 72 treaties are in force as of now. The Union Cabinet had in December last year cleared a new model of the Bilateral Investment Treaty that would give more stability to foreign investors and prevent disputes with multinational companies by excluding matters such as government procurement, taxation, subsidies, compulsory licenses and national security. Sources said the Finance Ministry is awaiting a response from all its treaty countries to initiate negotiations for the new BITs. “The renegotiation will be done on a case-by-case basis as and when a country responds. Till then, the current BIPA will be in effect,” said the official. The government expects the process could take at least a few years to be completed.
SOURCE: The Hindu Business Line
The State Bank of Pakistan (SBP) has warned that if the country's textile sector worsens further, it would have dire consequences for the stability of banks due to their huge exposure in the industry. The Pakistani central bank's Financial Stability Review said that the textile sector's infection ratio is also at an elevated level. The review pointed out that exposure of nine banks in the textile industry is more than 100 per cent of their equity, while that of 13 banks is more than 50 per cent of their equity. “Considering entity-wise high concentration, a few defaults can quickly erode the equity of exposed banks and threaten the stability of the banking sector,” the SBP report said. The gross non-performing loans of the textile sector stood at a high 29 per cent on September 2015, with most of the bad debts were placed in the loss category. The link between the textile and banking sectors entails some risks to the financial stability, said the report. Moreover, banks' exposure in textiles is concentrated to a few large entities. “The outstanding loan disbursement against top-20 companies stands at Rs126 billion. In terms of banks, the exposure to textiles is quite dispersed as 29 of 35 banks are directly serving the industry,” it said.
In addition to sluggish global demand, the prime bottleneck hindering the textile sector's growth appears to be inadequate and expensive energy supply. The use of alternative methods (furnace oil, self-generation of power, etc) may be feasible for a few blue-chips companies in the short term, but may not be appropriate for majority of the firms. Prices of textile products on the international markets have plummeted in the recent past. The international cotton price index fell by 24 per cent from 90.09 US cents per pound in September 2013 to 68.74 cents per pound in September 2015. The decline was even higher (62 per cent) when compared to the January 2011 level. “Sluggish global demand due to consistent recessionary phase in the euro zone and slowdown in China is one of the major reasons for the decline in international prices,” the report said. According to the report, the performance of the textile sector will also depend upon other important factors, including stability of the exchange rate, international and local regulations, political stability and law and order condition in the country. It also pointed out that the preferential access to the European markets under the Generalised Scheme of Preferences Plus (GSP+) status is subject to fulfilment of various conditions. In case the status is withdrawn due to failing of one or a few conditions, it may negatively impact the textile sector exports, the SBP warned.
SOURCE: Fibre2fashion
Textile trade body EURATEX (The European Apparel and Textile Confederation) has published an industry report which claims that the European technical textiles industry is continuing to represent a large share of textile product exports to outside the EU, with a 5.3 per cent increase in exports in the last year.
SOURCE: The Tevo News
With the signing of the Trans Pacific Partnership trade agreement between 12 Pacific Rim countries which China is not a part, the textile industry of China is undergoing palpable change as many countries apart of the agreement threat a power shift in the world’s textile industry. The Woolmark Company key account manager for Hong Kong, Daniel Chan said that despite the slowdown in Trans-Pacific Partnership by the United States presidential and congressional elections, the impact has already been felt by China as companies are trying to move out of China. With the elimination of tariffs set to promote the competitiveness of textile industry, Mr Chan said that the reaction had been immediate, bringing trade momentum from China to Vietnam. The profit margin is low now so manufacturers are trying to save money so when they talk about setting up factories in South East Asia, most were from China or Hong Kong and they have migrated production there. The Woolmark Company Hong Kong country manager Alex Lai, said that the manufacturing and processing of fibres is undergoing a revolution in Asia. Manufacturing is moving from China to South East Asia into Bangladesh, Vietnam, Cambodia, Burma and Indonesia because of labour costs and in the future the TPP tax benefits to export to Europe and US will be attractive. Big businesses in the supply chain are already building their businesses in TPP partner countries. The TPP is anticipated to set widespread new rules for trade, investment, intellectual property, labour, data storage, state-owned enterprises and the environment across 40 percent of the world's economy: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, US and Vietnam. According to the World Trade Organisation, the 12 TPP partners altogether imported $65 billion worth of textiles and $154 billion worth of apparel in 2013, which accounted for a world import share of 20 percent and 32 percent, respectively.
SOURCE: Yarns&Fibers
Contrary to fears of stakeholders, the government is hopeful that overall Britain’s decision of leaving the EU will have zero or nominal impact on Pakistan’s textile exports. Ministry of Textile officials believe that although Britain has announced exit from the EU, but the actual process will be long. British Prime Minister will step down in October, and from October it will take another two years to complete the process, said a high official. He was hopeful that in around two and half years time Pakistan will find some way to have a free trade agreement with Britain, same like EU. Britain will have to honor certain ongoing agreements under its new regime. It would be in favour of Britain to sign new contracts with Pakistan and Bangladesh in textiles, leather and other sectors, official said. However, he admitted that there could be some immediate impact due to weakening Pound Sterling and Euro. With the weakening pound and Euro against dollar, Pakistani textile exporters may face immediate losses, he said. The pound sterling and Euro saw a decline of 2.3 percent in a single day when Britain announced the exit. The people of Britain voted for a British exit, or Brexit, from the EU in a historic referendum on Thursday June 23. According to official data, present Pakistani exports to EU stand at around 4.5 billion dollars.The exports to Britain are 1.3 billion dollars, around 26 percent of total textile exports to EU. The EU signed a law in late 2013 granting Pakistan a special status called GSP-Plus, zeroing tax on certain categories of goods exported to the 27-nation bloc for 10 years. As per official data, Pakistan’s exports to the EU increased by $1.08 billion during the period January to October 2014 as compared to the same period in 2013. Exports to the EU, during January-October 2014, remained $6.38 billion, up by just over 20 per cent from the $5.3 billion recorded in the corresponding period in 2013.
Before GSP-Plus, textile exports faced customs tariffs of between 6.4 and 12 per cent and leather goods and footwear up to six per cent. EU accounts for 25 percent of Pakistan’s exports and 10 percent of imports. Pakistan is exporting mainly textiles and leather products to EU and imported mechanical and electrical machinery, chemical and pharmaceutical products. For last two years, the textile imports have been facing multiple challenges due to lack of pertinent policies and other challenges. The country’s total exports dipped by 14.4 percent during July-December 2015/16. Many believe that despite optimism of government, the already under performing textile sector needs coordinated efforts of ministry of Finance, Ministry of Commerce, and Ministry of textiles to formulate new policies in the rapidly changing international export market.
SOURCE: The Nation
Cotton imports by Pakistan are expected to remain near record-high levels in the year to July 2017, as erratic weather forces farmers in the world’s fourth-biggest producer to trim area under the crop, industry officials said. A supply crunch in Pakistan, at a time when back-to-back droughts have taken a toll on output at top producer India, could boost global cotton prices from their current near 11-month highs. The two countries have already taken turns this year to buy from each other to fill shortages at home. “Cotton area in Pakistan is down around 15 per cent. Despite the government and industry’s efforts, farmers in top-producing Punjab have reduced area,” said Saleem Saleh, acting secretary general of All Pakistan Textile Mills Association (APTMA). Unpredictable weather, such as floods late last year as well as poor rainfall in recent months, and the resultant uncertainty about yields is putting many farmers off cotton, stymieing Pakistan’s efforts to boost local output. “Farmers are finding other crops profitable,” said Shahzad Ali Khan, chairman of Pakistan Cotton Ginner’s Association. The country’s cotton output fell by a third to 9.7 million bales in 2015/16, forcing it to import a record 4 million bales in the year, up from 1.2 million a year ago, according to APTMA. Pakistan annually consumes around 15 million. Even for the season starting Aug. 1, weather has not been supportive and the crop in Punjab has already been hurt by poor rains in May and June, said Khan. Cotton sowing in Pakistan starts from April and harvesting begins in July.
While the country has set a production target of 14.1 million bales for the new season, industry officials say output will fall short and that rainfall over the next few weeks will be crucial in determining yields. “Import requirement is rising as local consumption is rising, but production is stagnant. This year imports jumped due to crop failure. Next year also imports would remain around this year’s level. Actual number depends on production,” Saleh said. Typically lower output in Pakistan implies an exporting opportunity for neighbouring India. In fact, the latter shipped out about 6.5 million bales this season, with Pakistan taking nearly 2 million. “India has freight advantage over other suppliers. Naturally India will be the preferred choice for buyers in Pakistan whenever they start imports,” Cotton Association of India President Dhiren Sheth said. However, India’s move to contract 20,000 bales from Pakistan for import this month indicates supply at the top producer is also running thin.
SOURCE: The Financial Express
Sri Lanka will not qualify for some of the GSP-Plus preferences if and when they get such preferences when UK is out of EU, according to Executive Director of the Institute of Policy Studies Dr. Saman Kelegama. Sri Lankan’s 35 percent of exports to the EU goes to the UK market and 40 percent of textile and apparel exports to the EU goes to the UK market. Kelegama said that the redeeming factors are that there is a two year exit period and during that time, if Sri Lanka could work out a bilateral deal with the UK on the basis of Sri Lanka’s Commonwealth membership, that could offset whatever preferential market access Sri Lanka loses in the UK market due to Brexit. If UK is not a part of the EU, Sri Lanka will lose the duty free benefit and they will have to renegotiate a FTA with the UK, but they will have to do a whole series of FTAs with European nations and others before they get to them. But that will certainly take a long time. In relation to foreign investment, Brexit has already weakened the British pound. Thus, UK investors may consider diverting their investment to countries like Sri Lanka and other such countries where they expect to get a better return. The UK will no longer be required to tie-up its Overseas Development Assistance to the EU’s rules, regulations and directives. It is expected that there will be more direct financial assistance from the UK to commonwealth countries like Sri Lanka as a strategic measure.
On Brexit, Kelegama said that the UK will no longer be obliged to offer quota-based jobs to citizens of the EU. This will open up the job market for skilled and semi-skilled labour from elsewhere. Overall there will be more job openings for Commonwealth country citizens, including temporary workers. In other words, there will be more job opportunities in the UK market for Sri Lankans.
SOURCE: Yarns&Fibers
Garment industry moves to weather possible Brexit influence, vietnam economy, Vietnam’s garment exports to the EU account for approximately 20 percent of the total volume with the UK contributing around 4 percent. Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (Vinatas), said Brexit will definitely have impacts on garment and textile exporters due to the devaluation of the pound and the euro, which influence prices. The purchase power of British and European consumers will change as well, said Giang.
According to Giang, material prices will have to be re-negotiated due to changes in the exchange rate, which will have direct influence on enterprises from the fourth quarter this year, leading to the disruption of orders in 2017. In addition, the Vietnam-European Union (EU) Free Trade Agreement is likely to be reconsidered, he said, adding that how much influence Brexit will have on Vietnam remains unclear. In the short term, Brexit will have immediate impacts on the sector’s production and sale as well as the jobs of Vietnamese workers, eventually influencing export growth rate to the EU this year. In order to limit the impacts caused by Brexit, enterprises who are exporting to the UK and EU markets need to place more focus on traditional markets like the United States, the Republic of Korea and Japan as well as trying to expand their share in new markets like Russia and Eastern Europe with new lines of products. Enterprises also need to build supply chains to make full use of signed free trade agreements and diversify products for both traditional and new markets. Besides, enterprises should take a cautionary approach when negotiating with the remaining importers in the EU to minimise the impacts from the UK’s decision to leave the EU.
As far as the government is concerned, the government needs to accelerate the process of signing trade agreements with the remaining members of the EU. The Government also needs to hold talks with the UK on differences between the Vietnam-UK FTA and the Vietnam-EU FTA, and promptly inform enterprises of the matter. Phan The Vinh, Director of the Agriculture Sowing Joint Stock Company, said Brexit is an opportunity for small- and medium-size enterprises because these companies can consider the UK as a niche market for their products. Do Huy Trung, Director of the Tri Duc Limited Company, said Brexit will more or less influence enterprises but declined to comment because formal talks on Brexit have yet to happen.
SOURCE: The Global textiles
The government has decided to reduce the rate of tax at source for the readymade garment exporters to 0.80% from the proposed 1.50% for next fiscal year 2016-17 in the wake of hectic lobbying from different stakeholders. The tax rate for jute product exporters may also be set at 0.60% considering the prospect of the industry, said the finance ministry officials. Earlier on June 2, Finance Minister AMA Muhith had proposed to set the tax at source on export to 1.50% from existing 0.60% for all the exporters. Since then, leading business chambers and trade bodies have been pressing the government to reduce the tax rate or keep it unchanged at 0.60% for the next fiscal year considering the interest of exporters. According to ministry officials, the proposed tax rate for other exporters may also go down due to huge resistance by different quarters but the rate will not be set below 1% considering the revenue prospects. From July to April of FY’16, the revenue authorities had collected over Tk1,300 crore as tax at source from the export-oriented industries. The government was supposed to get Tk4000 crore from the sector due to the hike in tax at source on the export to 1.50%, however, the revenue amount will now go down as the rate will be slashed.
Reduction of the proposed tax rate will be passed today with the finance bill 2016 at the parliament where the government will make some revisions in income tax, custom duties and Value Added Tax (VAT) measures that will come into effect from July 1. Finance Minister AMA Muhith will propose passage of the bill that included the implementation of the government’s financial proposals and amendments to several laws today. Earlier on June 2, finance bill 2016 was tabled in the parliament with the announcement of the budget for the fiscal year 2016-17. The finance bill 2016, which will be passed today, is also set to bring a relief for individual taxpayers as it may raise the income tax rebate on investment in some specific sectors by individuals to 25% from proposed 20% for the upcoming FY’16-17. “National Board of Revenue (NBR) has already made decision and the Finance Minister has already approved the proposal,” said a finance ministry official. Finance minister AMA Muhith during his budget speech on June 2, proposed to cut the tax rebate limit to 20% from existing 30% for individual taxpayers, apparently to enhance revenue income. However, the decision sparked widespread criticism from different quarters as the stakeholders and economists argued that tax liability of taxpayers would be increase due to proposed reduction of the tax rebate. The government may also reduce the amount of Value Added Tax to be paid by VAT payers for legal action against assessment of revenue authorities during filing of appeals.
With the FY’17 budget, the government has proposed that VAT payers have to deposit 50% of the disputed VAT or penalty before making an appeal to the National Board of Revenue’s appeal commissioners against the assessment or decisions of field-level VAT officials. Another 50% of the disputed VAT will be required in filling an appeal to the Tax Appellate Tribunal against the decision of the appeal commissioner as per proposed measures mentioned in the finance bill 2016. Currently, VAT payers need to pay only 10% of disputed amount at each stage of appeals. However, the government has decided to reduce the amount of VAT to be paid before filing appeal which may be set between 10% to 15%, sources said adding that the decision will come into effect with passage of finance bill 2016.
SOURCE: The Global textiles
