India's RIL increases prices of PTA, MEG & MELT; PSF too may go up
Like 2022, 2023 will be a good year for the Indian textile industry
India can be among top 10 in global maritime trade ranking: Minister
ECTA: A new dawn for India-Australia trade relations
DPIIT working on new industrial policy; proposes scheme for Made in India
With chilly weather, Ludhiana's hosiery sector expects clearance of winter wear stock
Export prospects for 2023 remain bleak as key markets face downturn
India muffled from gloomy global outlook: Fitch; Growth to ebb: IMF
INTERNATIONAL
Bed products top in US import of home textiles from Europe
Vietnam's economy grows at 8.02% in 2022, highest in decade
Export will be doing better despite domestic market woes
S.Korea's trade deficit hits record high in 2022
Textile-garment targets up to 48 billion USD in 2023 export turnover
2022 sees Bangla Trade Organisation Bill, RMG Employment Injury Scheme
Cambodia-China bilateral trade volume rises by 19% in 2022: PM Hun Sen
NATIONAL
Reliance Industries Limited (RIL), India’s largest player in polyester value chain, has increased prices of purified terephthalic acid (PTA), monoethylene glycol (MEG) and MELT. Last week, RIL had hiked prices of PTA and MELT, but cut price of MEG. The company reviews price trend in China and fluctuation in crude oil to fix prices of polyester raw materials. Indian market follows the price trend of Reliance as it is the dominating player in the country. According to the market sources, RIL fixed PTA price at ₹79.70 per kg (+1.10), MEG at ₹55.90 per kg (+0.40) and MELT ₹87.55 per kg (+1.09). New pricing of polyester raw materials will come into effect from December 31, 2022. In the beginning of the current fortnight, RIL had cut price of polyester stable fibre (PSF) by ₹3 per kg to ₹99 per kg. But the company may reverse this trend because of uptrend in price of upstream raw materials. The company will review prices probably on Saturday for first fortnight of the new year 2023.
Source: Fibre2Fashion
We should be thankful as 2022 was a successful year for the Indian textile industry and I have no doubt that 2023 will be even more beneficial for our trade. There were headwinds like global recessionary trends, Russia-Ukraine war, volatility in raw material prices, high inflation and now again increasing Covid-19 cases and that too in many countries.But we got FTAs with significant markets like UAE, Australia; schemes like Production linked Incentive (PLI), and significant development has been done with regard to PM Mega Integrated Textile Region and Apparel (PM MITRA) scheme.Similar steps will be growth engines in 2023 as we can have FTA with the UK and hopefully with Canada also. PLI 2.0 will be unveiled in 2023 an under PM MITRA scheme, state-wise allocation of all 7 parks is also to be announced. So this year is also going to be a positive year for our trade.We need to see these developments in a combination with FTAs are creating market opportunities for entire textile value chain, above mentioned Government schemes will help to create capacity, scale of production. And as the Government focus is to promote competitive manufacturing, with volume production, cost will naturally come down.It is not that these development are going to benefit only the industry at the export front, Indian market will also receiving the benefits of these like that allowing the import of 51,000 metric tons of duty-free cotton from January 2023 and 419 metric tons of duty-free cotton from December 29-31, 2022, from Australia would benefit the cotton textiles value chain. It is significant as Indian textile industry has started facing the shortage of quality cotton with the increased demandworld has learn a lot from previous experience and this time Governments are also proactive, it will not be wrong to anticipate that risk should be minimise. Especially in India, when we have the golden opportunity of G20 presidency. In fact this is an occasion to show the India's strengths in textile trade, right from our rich heritage of handloom and handicrafts to industry's stronghold on sustainable practices. Apart from the events or initiatives led by the Government during the G-20 presidency, Trade bodies, as well as companies, should come forward to use this opportunity with their overseas partners. This can be a good platform to convey India's capabilities to global brands and have better business relations, explore more business opportunities with new companies as well We must appreciate our leadership as this year has seen the maximum meetings of the industry with the Ministry of Textiles and this regular communication has helpedindustry we are in right direction towards to achieve the envisaged exports of $100 billion and also the total textile business size of $350 billion in a span of five to six years. But need of the hour is to continue to momentum and to get maximum advantage of current global conditions as our competitive countries are also aggressively working towards to increase their share in global textile trade. At the same time domestic market will be creating more demand as experts has said that India will perhaps emerge as the strongest major economy with 7 per cent growth rate in FY23 amid the fears of the world slipping into recession. And this reflects in the with regard to textile value chain as global brands are continuously entering into Indian market and overseas manufacturers are also now coming forward to invest in India. From 2017-2022, Indian textile industry had FDI of $1.5 billion. In 2023, India will launch its national retail policy and the upcoming budget will be the last full-year budget from the government ahead of the Lok Sabha elections due in early 2024 so, I don't see any reason that there will be any lack from the Government side to support the Indian market, consumer sentiments. So we must see more capex and revenue for the industry in the year of optimism and opportunities. There can't be a better beginning of the New Year with the high hopes of growth.
Source: Bizzbuzz
Indian ports, shipping and waterways minister Sarbananda Sonowal recently said India can be among the top ten countries in world in maritime merchandise trade due to government efforts to modernise and bolster capacity building in the sector. The focus is to carry out such development in a sustainable manner to meet the 2070 net zero emission target, he said. The minister, who did not mention any timeline for achieving the milestone, was addressing the 121st annual general meeting of the Merchants' Chamber of Commerce and Industry. India ranks 18 now in the maritime trade volume list. Projects like 'Sagarmala' and 'PM Gati Shakti' are delivering results and will result in a sea change after all the programmes are rolled out in the next few years, he said ''In 2014, our cargo handling capacity in ports was 800 million tonne and in 2022, it is 1,600 million tonne,'' he was quoted as saying by a news agency. In the inland waterways, the cargo handling has now grown to 109 million tonne from 16 million tonne in 2014. A memorandum of understanding was signed among Paradip, Kandla, Tuticorin ports and Cochin shipyard to achieve sustainable goals, he said. The government aims at developing a regulatory framework and a roadmap for alternative technology adoption for 'green shipping' to foster carbon neutrality, he added.
Source; Fibre2Fashion
The India-Australia Economic Cooperation and Trade Agreement (ECTA), which could double bilateral trade to almost $50 billion in the next five years, entered into force on December 29, 2022. After years of negotiations, this trade agreement was signed this year on April 2. The negotiations for the ECTA began in 2011, were formally re-launched on September 30, 2021, and settled on a fast-track basis by the end of March 2022. India's goods exports to Australia stood at $7.5 billion and imports from the country aggregated to $15.2 billion in 2021-22. It is expected that the ECTA will lead to $10 billion jump in India’s merchandise exports by 2026-27. Besides providing cheaper raw materials to many sectors including steel and coal from Australia, the ECTA would also facilitate increased investments from Australia and will support the Indian manufacturing sector. The ECTA is expected to benefit the Indian economy in over 6,000 sectors. Under the agreement, over 96.4 per cent of Indian goods will get zero-duty access from day one. There will be immediate zero duty on 85 per cent of Australian exports from the first day, and zero to low duty on 30 per cent tariff lines in 3-10 years. The rationalisation or elimination of tariffs will also promote investments in both countries. The agreement covers the entire range of trade and commercial relations, removing trade barriers, and opening a variety of opportunities for both goods and services. Australia trades in around 6,500 tariff lines while India has about 11,500 tariff lines. Previously, most of the Indian exports attracted 4-5 per cent customs duty in Australia, due to which India faced a significant disadvantage compared to the countries having free trade agreements with Australia, such as China, Vietnam, and Bangladesh. The ECTA will enable Indian exports to compete with these nations in the Australian market. It is believed that the agreement will help in raising bilateral trade from $27 billion to $45-50 billion in the next five years. About 96 per cent of Australia’s exports to India comprised of raw materials and intermediate products, thus the tariff concessions offered by India will allow domestic industries to get cheaper raw materials and enhance their competitiveness. It is also the first trade agreement to be signed by India which has a compulsory review mechanism i.e., it will evaluate the impact of the agreement post 15 years of implementation. Textiles and apparel: India exported $541.88 million worth of textile and apparel products to Australia in the first ten months of 2022, up 5.93 per cent compared to $511.53 million in the same period in 2021. The export basket of India mainly consisted of home textile products and apparel products. In the home textiles segment, bed and bath linen (11.45 per cent), furnishing articles (8.67 per cent), and sacks & bags (6.01 per cent) were among the major products that were imported from India in 2022. Curtains and drapes in home textiles is where Indian exports to Australia currently lack, though they are supplied to other countries on a massive scale. The newly enacted FTA has paved an opportunity for India to boost its curtains and drapes exports to Australia by upscaling its existing product portfolio quality. Similarly, in the apparel segment, India currently lacks in the supply of women’s intimate wear to Australia due to competitive pricing offered by Sri Lanka, but there could be a potential boost in this category after the new FTA. India has the potential to meet the textile and apparel demand of the Australian market in desired quantity and quality. The agreement will do away with the duty disadvantage faced by Indian textile and apparel exporters. Duty-free access to home textile and apparel products will bring Indian exports at par with their global rivals and make Indian products competitive in the international market. India’s textile and apparel exports to Australia contribute 5.51 per cent of the total Australian textile and apparel imports and were valued at $604.4 million in 2021. Given the current global economic challenges and the increasing need to diversify supply chains, Indian textile and apparel manufacturers are likely to benefit from this agreement. Currently, India exports a large proportion of its low-value-added commodities such as yarn and fabrics to China, Bangladesh, and Vietnam which use them to produce high-value finished goods and export it to countries such as Australia and other potential FTA partners. With the removal of these tariff barriers through this agreement, India will increase the production of value-added finished goods in the domestic market while increasing the proportion of high-value products in its overall export basket. Leather and footwear: The ECTA will certainly boost India’s footwear and leather exports. Indian products currently have 3-5 per cent market share in the about $2 billion Australian market of footwear and leather accessories, which is largely dominated by China. After duty-free exports, Indian products can compete with Chinese products, and exports are expected to go up by 25 per cent. The agreement will allow products and services not currently exported to Australia to enter the Australian market. ECTA is a stepping-stone towards a full Australia-India Comprehensive Economic Cooperation Agreement (CECA) which will be slated upon outcomes of ECTA and will address deeper market access in new areas including digital trade, government procurement, and cooperation.
Source; Fibre2Fashion
The Department for Promotion of Industry and Internal Trade (DPIIT) is working on a new industrial policy that proposes to increase financing sources for industry and a scheme for promoting Made in India brand, sources said. It has suggested various ways for wider access to finance for the industry such as setting up of a development finance institution to provide finance at competitive rates and considering using some part of foreign exchange reserves for such funding. The draft - Statement on Industrial Policy 2022 Make in India for the world - has been circulated to different ministries for their views and comments. The proposed policy, sources said, is aimed at addressing issues and challenges of industry through certain policy measures to foster and create an innovative and competitive industrial ecosystem in the country. To achieve the goals, it has identified six objectives such as the focus on competitiveness and capability; economic integration and moving up the global value chain; promoting India as an attractive investment destination; nurturing innovation and entrepreneurship; and achieving global scale, and standards. Sources said that the proposal also includes the implementation of an integrated investment promotion strategy by involving district, state, national and international market synergies. About the scheme for Made in India brand, they said it could serve as a platform for manufacturers to demonstrate local value addition which can enhance the country's credibility as a source of quality products. Other suggestions in the proposed policy include providing performance-based loans and incentives for innovation and green growth; leveraging fintech; encouraging MSMEs to choose the corporate bond market; and accepting intellectual property rights as collaterals for loans. Besides, it has suggested enabling supply chain financing; encouraging microfinance institutions to form cooperative groups and finance micro-enterprises at affordable rates. This will be the third industrial policy after the first in 1956 and the second in 1991. It is likely to replace the industrial policy of 1991 which was prepared against the backdrop of the balance of payment crisis. Further, the draft suggests rolling out social security schemes for women workers, and inclusion of labour-intensive industries under the production-linked incentive scheme. It also proposes incentivising public procurement to promote Make in India, creating a national digital grid, developing a robust data protection regime, setting up of a technology fund, and creating a task force to continuously identify skill gaps. For enhancing export competitiveness, the draft has proposed strengthening of the export finance systems. On nurturing innovation, it has proposed the creation of innovation zones at the level of urban local bodies and the formulation of a national capacity development program. The Department for Promotion of Industry and Internal Trade (DPIIT), under the Commerce and Industry Ministry, in August 2017 had floated a draft industrial policy.
Source: Business-Standard
Intense cold conditions prevailing in the northern region have brought cheers to the faces of Ludhiana-based hosiery goods manufacturers who were otherwise looking at a slack season. Industry representatives say they are hopeful of clearance of winter wear stocks in the wake of biting cold conditions in several northern states. The demand for winter wears has started perking up with retailers seeing customers buying jackets, sweaters, pullovers, inners etc. Biting cold weather conditions have been prevailing in the region for the past many days with minimum temperature ranging between 2 and 7 degrees at several places in Punjab and Haryana. According to hosiery industry representatives, the demand for hosiery goods is being seen in Punjab, Haryana, Himachal Pradesh and Delhi. "May be in the coming days, things may improve further," says another manufacturer. "With this demand, the existing stock of goods lying with many manufacturers may get cleared," says the Ludhiana-based manufacturer. However, hosiery manufacturers say the demand from other key markets like Bihar and Madhya Pradesh, has still not picked up because of the delayed winter. They expect retail markets in other states to also see demand picking up for winter wear in the coming days. "Though the overall hosiery season remained slack, the current chill in the weather will help manufacturers to clear their winter wear stocks," says Navin Sood, Ludhiana-based hosiery goods manufacturer. "It will become clear in the first week of January how much the current cold weather conditions had an impact on the demand for hosiery goods," says Sood. Ludhiana's hosiery cluster is famous for winter garments like jackets, sweaters, thermals, cardigans, pullovers, inners, shawls etc. But because of the delayed winter, the hosiery sector saw lower offtake of garments in the current season and did not get repeat orders for winter wear. The industry had even started offering discounts in early December to rev up sales. Otherwise discounts are offered in the last week of December or the first week of January. October, November and December are considered the key months for Ludhiana's hosiery sector which is one of the oldest clusters in the country.
Source: Economic times
A demand slowdown looms over global trade in the new year, and India is unlikely to remain unscathed. New Delhi’s export competitiveness and market diversification attempts will be put to rigorous test in 2023 as its top buyers — the US and the EU — face an extended period of growth deceleration, while China, its fourth-largest export destination, is bruised by the pandemic. India’s export performance, which remained robust until the first half of 2022, started losing momentum in the second half, as external circumstances increasingly turned unfavourable. Nevertheless, in many ways, 2022 proved to be a turning point for Indian trade. Goods exports are estimated to have breached the $400-billion mark for the first time and hit $440-450 billion in calendar year 2022, against $395 billion in 2021. Services exports may have touched a record $295-300 billion in 2022 from $254 billion last year. More importantly, shedding inhibitions over trade deals that were long blamed for exacerbating its trade deficit, India signed a free trade agreement (FTA) with the UAE in February, the first with any economy in a decade. Two months later, it hammered out an interim trade deal with Australia and is expected to start talks for a broader FTA with Canberra in January. New Delhi is now engaged in FTA negotiations with key economies — including the UK, the EU and Canada — and expects at least two of these pacts to fructify in 2023. The government expects duty-free access under the FTAs, in addition to its renewed push for market diversification and product basket expansion, to help exporters turn the tide. But that will be easier said than done, at least in the short run. The World Trade Organization (WTO) recently warned of a darkened 2023 and projected that global trade growth will drop to only 1% next year from 3.5% in 2022. It also cautioned about a contraction if the Ukraine conflict escalates. This means export prospects for countries, including India, could remain far more subdued in 2023 than this year. In fact, according to an earlier HSBC report, global economic growth deceleration explains for roughly a third of India’s trade slowdown. Moreover, economies like the EU have proposed to slap carbon border adjustment measures, which typically aim to tax imported goods, including steel and cement, from countries with less strict climate policies. “India’s exports outlook for 2023 depends considerably on the oil price movement and the recovery in global demand,” said Ajay Sahai, director general and chief executive at the Federation of Indian Exports Organisation. “If oil prices remain around $75-80 per barrel, the global economy and trade may recover fast. The indications so far that prices of oil prices will come down. But we have to be watchful,” he added. Global Trade Research Initiative co-founder Ajay Srivastava said the weak global trade growth forecast is currently influenced by a number of factors — elevated US inflation leading to fears of multiple events of interest rate hikes; Europe reeling under high energy prices; China’s Covid problems and the impact of US sanctions on high tech products; and the Ukraine war. What is also worrying is that, at 2%, India’s share in world trade is lower than its 3.5% share in world GDP. “But the outlook may look up dramatically with the end of the Ukraine war, and China controlling Covid. Both are distinct possibilities,” he said. However, there are silver linings, too. The rollout of 14 production-linked incentive (PLI) schemes in the aftermath of the pandemic will start boosting domestic manufacturing and ultimately prop up exports. Srivastava expected a “steep boost” to India’s electronics exports, as the PLI-supported production goes to market next year. This could somewhat offset the weak growth in traditional sectors like engineering and textiles. Moreover, India’s services sector is expected to defy the sharp growth slowdown in the US and the EU better than the merchandise sector. If anything, the slowdown or recession in advanced economies may brighten the prospects for Indian services exporters, as these countries tend to start diverting a larger number of orders to cheaper destinations to cut down on costs, according to Services Export Promotion Council chairman Sunil Talati. This is especially true of segments like accountancy and legal services. For instance, until November this fiscal, services exports jumped almost 29% from a year before to an estimated $204.4 billion. In contrast, goods exports rose by only 11% until November to $295.3 billion. Meanwhile, goods imports, too, are expected to shoot up to a record $725 billion in 2022, against $573 billion in 2021. Elevated imports inflated the current account deficit to about a decade high of 4.4% of GDP in the second quarter. Of course, the pressure has eased from the December quarter and may remain benign in 2023, as import growth falters.
Source: Financial express
The Indian government is optimistic about the country growing at a moderately brisk rate due to the priority it accorded to macroeconomic stability. The International Monetary Fund (IMF) expects growth to moderate, reflecting the less favourable outlook and tighter financial conditions. Fitch Ratings feels India is somewhat insulated from the gloomy global outlook in 2023, given its modest reliance on external demand. The government’s department of economic affairs’ monthly economic review for October noted that global slowdown may dampen the country’s exports businesses outlook; however, resilient domestic demand, a re-invigorated investment cycle along with strengthened financial system and structural reforms will provide impetus to economic growth going forward. The IMF, whose executive board recently concluded the Article IV Consultation with India for this year, projected the country’s real gross domestic product (GDP) to grow at 6.8 per cent and 6.1 per cent in fiscals 2022-23 and 2023-24 respectively. Uncertainty around the outlook is high, with risks tilted to the downside, the IMF noted. Reflecting broad-based price pressures, inflation in the country is projected at 6.9 per cent in FY23 and is expected to moderate only gradually over the next year, it said. The current account deficit is expected to increase to 3.5 per cent of the GDP in FY23 as a result of both higher commodity prices and strengthening import demand, the IMF added. Fitch Ratings feels declining exports and heightened uncertainty with higher interest rates are expected to slow growth to 6.2 per cent in FY24. Consumption growth is also anticipated to moderate as pent-up demand fades. The general government deficit is expected to fall slightly to 9.6 per cent of GDP in FY23 from 9.8 per cent in FY22, Fitch said. For the Indian government, modest fiscal slippage is anticipated in FY23 with a deficit of 6.6 per cent of GDP (including disinvestment) relative to the 6.4 per cent budget target, it said in December. Revenue growth and expenditure switching will, however, contain the measures’ fiscal toll, while allowing capital spending to remain a priority, and the worldwide economic slowdown is expected to reduce demand for Indian exports, Fitch added. Deloitte India expects India to post 6.5-7.1 per cent economic growth during FY23 amid rising inflation and impending global slowdown. It anticipates 5.5-6.1 per cent growth in fiscal 2023-24 contingent on the revival of the global economy and improving economic fundamentals. An impending global slowdown or even a recession in a few advanced nations as early as the end of 2022 or early next year is likely to make the inflation situation worse, Deloitte added.
Source; Fibre2Fashion
INTERNATIONAL
The United States imported home textiles from Europe worth $621.678 million in the first nine months of 2022. Bed products topped the list with a value of $182.215 million during the period, constituting 29.31 per cent of total home textiles import by the US. Floor products were second on the list, accounting for 25.55 per cent of the total US imports. The US’ imports of floor items from Europe were valued at $158.815 million in January-September 2022, which was 25.55 per cent of the total home textiles imports by the US. The inbound shipment of made-ups was $90.183 million (14.51 per cent), furnishing articles $57.512 million (9.25 per cent), camping $37.067 million (5.96 per cent), window $30.308 million (4.88 per cent), bathroom & kitchen $28.250 million (4.54 per cent), and table $18.815 million (3.03 per cent), according to Fibre2Fashion’s market insight tool TexPro. Sets, worn clothing and used/new rugs were the other home textiles items imported by the US, which totalled $13.067 million (2.10 per cent). In 2021, the US had imported total home textile products worth $830.597 million. Out of which, floor import was $257.192 million (30.96 per cent), bed products $246.893 million (29.72 per cent), Made-ups $107.773 million (12.98 per cent), furnishing articles $77.082 million (9.28 per cent), camping $41.283 million (4.97 per cent) and bathroom & kitchen $36.015 million (4.34 per cent), as per TexPro.
Source; Fibre2Fashion
Despite a recession like atmosphere globally, Vietnam’s economy grew at 8.02 per cent in 2022, which is the highest since 2011, according to the General Statistics Office (GSO). Manufacturing, construction and processing was the major economic driver registering an 8.1 per cent growth rate and contributing 38.24 per cent to the country’s total GDP. Sector-wise, while the retail sector grew by 10.15 per cent, logistics rose by 11.93 per cent during the year. During the year, the European Union–Vietnam Free Trade Agreement (EVFTA), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) helped the Vietnamese economy as these agreements gave access to other countries’ markets. The GSO said that another factor was that the government successfully managed to keep inflation rate below 4 per cent, the target set by the National Assembly. The Consumer Price Index rose by 4.55 pe cent in the last quarter of 2022, compared to the same period of the previous year, resulting in yearly increase of 3.15 per cent. For the year 2023, Vietnam has set a target to achieve growth rate of 6.5 per cent.
Source; Fibre2Fashion
In the first five-six months of the current fiscal year, the export earnings growth has gone through ups and downs. I expect the fiscal to end with double digit export growth till June. Although there is some uncertainty in the European market, there is a kind of growth in the US market. The ongoing crisis in Europe due to the difficulties in the energy sector may last for the next few months. As a result, there may be a negative trend in demand for export products. The growth in the US market is expected to continue. In the meantime, some export orders from China are being shifted due to the tension in the commercial relations between China and the United States and Europe. Bangladesh, like other countries, seems to be able to take advantage of that. Good growth in export earnings is expected till June due to these benefits. However, the shortage of gas has become a major challenge in the export sector at the moment. Non-availability of raw gas for production and washing and dyeing in the textile sector will disrupt exports. The gas crisis was a little less in winter, but this crisis may increase in summer and in the last half of next year. Especially if there is no internal gas expansion or extraction. Production is already disrupted due to the gas crisis in various sectors including ceramics, glass, steel, leather. Liquid fuel has to be bought at high cost due to the power crisis. Entrepreneurs continue to export despite the increased cost. As such, despite some crisis, the performance of the export sector will be quite good in the first six months of next year. The gas shortage may become more severe in the next six months, especially for the textile sector. This crisis will also increase in garment companies that have composite factories. Gas scarcity can also be a crisis for ceramics or other industries. The value of the dollar or the crisis of reserves may worsen the pressure in the coming days. In this case, government initiatives to increase remittance inflow to the country through legitimate channels will be very important. How much assurance the government can give on issues like LC opening and timely import of raw materials will be an important issue for export earnings in the last six months of next year. However, the first installment of the International Monetary Fund (IMF) loan is expected to be released during this period. Considering this, the situation may be somewhat normal. If we divide the entire period of the coming year into two parts, there will be positive growth in exports despite the uncertainty in the first half. However, in the second half, gas supply, foreign exchange reserves, ability to open LCs and due to this the confidence of the buyer institutions may be cause for some apprehension. The export sector is doing relatively well despite the woes of the domestic market. In this situation, it is important to ensure that the process of production, import of materials and export of goods is not hindered in any way. Availability of sufficient dollars to open LC required for import of raw materials should be ensured. At the same time, the government should send a message to the main importing countries of our products through the Ministry of Foreign Affairs that the government has all kinds of initiatives to ensure exports. The associations of the entrepreneurs of the export sector should take initiatives to maintain the confidence of brands and buyers.
Source: Tbsnews
South Korea's trade deficit hit a new record high last year due to faster growth in import than export, triggered by higher global energy prices, government data showed Sunday. Trade deficit came in at 47.2 billion U.S. dollars in 2022, more than doubling the previous high of 20.6 billion dollars tallied in 1996, according to the Ministry of Trade, Industry and Energy. Export grew 6.1 percent over the year to reach a fresh yearly high of 683.9 billion dollars in 2022, but import soared at a faster pace of 18.9 percent to 731.2 billion dollars. The rapid import increase was driven by geopolitical risks in Europe that boosted global energy costs. Import of the country's three major energy sources, including crude oil, natural gas and coal, stood at 190.8 billion dollars in 2022, accounting for 26.1 percent of the total import. The outbound shipment kept a record-breaking trend for the second successive year in 2022, but the export turned downward in the fourth quarter as rapid interest rate hikes in major economies fueled worry about global economic downturn. Semiconductor export added 1.0 percent to hit a new high of 129.23 billion dollars last year despite chip price falls in the second half of last year. Automotive shipment jumped 16.4 percent to 54.1 billion dollars on the eased supply disruptions of chips to make cars and robust demand for eco-friendly vehicles. Oil products shipment surged 65.3 percent to 63.02 billion dollars due to expensive crude oil, and secondary battery export expanded 15.2 percent to 9.99 billion dollars on stronger demand for electric vehicles. Shipment for general machinery, steel and auto parts increased in single digits to 51.13 billion dollars, 38.46 billion dollars and 23.32 billion dollars respectively. Export for petrochemicals, display panels, mobile devices, computers and home appliances declined to 54.29 billion dollars, 21.15 billion dollars, 17.24 billion dollars, 15.96 billion dollars and 8.06 billion dollars each. Shipment to the Association of Southeast Asian Nations (ASEAN) advanced 14.8 percent to reach a record high of 124.95 billion dollars in 2022 owing to solid demand for locally-made chips, display panels and oil products. Those to the United States and the European Union (EU) also recorded new highs of 109.82 billion dollars and 68.13 billion dollars each on higher demand for eco-friendly cars and oil products. In December alone, export diminished 9.5 percent from a year earlier to 54.99 billion dollars, continuing to decrease for the third consecutive month. Import shrank 2.4 percent to 59.68 billion dollars in December, sending the trade deficit to 4.69 billion dollars. The trade balance stayed in red for the ninth straight month. Export for chips, display panels, mobile devices, home appliances, petrochemicals, steel and textile product all went down in double figures last month. Shipment to the United States, the EU and the Middle East rose in single digits last month, but those to the ASEAN and Japan declined in double figures. Import for the country's three key energy sources spiked 27.7 percent from a year earlier to 16.75 billion dollars in December.
Source: English news
Textile and garment exports may reach 47 - 48 billion USD in the positive scenario for 2023 and 45 - 46 billion USD in the lower-case scenario, said the Vietnam Textile and Apparel Association (VITAS). How enterprises adapt to changes in markets will affect their growth in any circumstance, it added. In the positive scenario – instabilities in the global market will be brought under control, all activities of the sector may have recovered by the end of the first quarter. In such case, 48 billion USD in revenue is achievable. However, VITAS President Vu Duc Giang said, in the second scenario under which the global market will recover in the latter half of 2023, export turnover may reach 45 billion USD. In the current context, when international markets do not place long-term textile and garment orders, businesses can switch to producing lower-value items. In 2022, as they started to diversify markets and products, growth was still sustained. In any scenario, textile and garment markets will be unable to bounce back at least in the first half of 2023. However, experts held that there are still certain bright spots next year, noting the COVID-19 pandemic is being put under control, the world getting used to a new normal, the Asia-Pacific predicted to be the fastest-growing region in 2023, China easing the zero-COVID policy, and logistics costs showing signs of declining. Meanwhile, the Vietnam National Textile and Garment Group (Vinatex) said though forecasts had been made early, its members were still surprised at unpredictable changes in 2022 such as the Russia - Ukraine conflict and surges in oil prices, inflation, and interest rates, which caused demand to nose-dive in importing markets. Yet Vinatex estimated its 2022 consolidated revenue at over 19.53 trillion VND (826.84 million USD), up 15% from 2021 and 8% higher than the target, and consolidated profit at more than 1 trillion VND, up 14.6% from the target. These figures were assessed as encouraging amid numerous market difficulties. Pointing out three scenarios, Vinatex President Le Tien Truong said in the best-case one – the global economy will have become stable and geopolitical conflicts been over by the end of the second quarter - exports this year may go up 4 - 5% from 2022. In the middle-case scenario – instabilities will linger on, inflation remain, and interest rates still increase until Q3 – the exports may stay unchanged compared to 2022. And in the worst-case one where the world economy will enter a recession, the 2023 revenue may be about 5% lower annually.
Source: En.vietnamplus
Bangladesh last year saw passage of the Trade Organisation Bill 2022, the Export Policy 2021-24 becoming effective, creation of a digital database of workers, introduction of the Employment Injury Scheme for garment workers, and formation of a joint committee by three garment industry bodies to expedite export and ensure better supply chain collaboration, writes Dipesh Satapathy. Let us take a look at the major developments. Policy The Trade Organisation Bill, 2022, introduced in January and aimed at allowing foreign traders to form joint trade bodies in Bangladesh, was passed in Parliament in April. It replaced the Trade Organisations Ordinance, 1961. Some legal provisions were included for women entrepreneurs in trade organisations through licensing. Bangladesh’s Export Policy 2021-24 became effective from March 23, with the highest priority attached to 14 sectors, including denim, man-made fibre, garment accessories, jute, home textiles and shoes, to boost foreign-currency earnings. It has policies to navigate potential challenges following the graduation from the least developed country (LDC) status in 2026, the fourth industrial revolution, research and development activities and coping with the COVID-induced blow to exporting sectors. The government aims annualised export earnings worth $80 billion during the 2021-2024 period. The Bangladesh Bank in July extended the increased borrowing deadline from the $7-billion Export Development Fund (EDF) for textile millers and readymade garment (RMG) makers to December 31. The disbursement deadline was June 30 earlier. In another notice, it asked banks not to disburse loans from the EDF if clients fail to repay from their export earnings. That was the third such extension. Last January, the central bank raised the loan limit to $30 million from $25 million to help exporters offset the business slowdown induced by the pandemic. In June, the government decided to create a digital database of 3 lakh workers from around 10,000 entities from both the formal and informal sectors. The enlisted workers will receive labour identification numbers during the pilot period. The Labour Information Management System will digitally manage labourers’ information and help develop their skills for workplaces. Germany committed to extend another grant of €191 million to Bangladesh at the latest round of bilateral development cooperation talks in December. The amount now stands at €275.1 million. Since 1972, the overall amount has reached more than €3.2 billion.
Textile & Garments
Bangladesh and Germany signed an agreement in January to support five projects worth €20.15 million, to be jointly implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ) and partner ministries and institutions in Bangladesh. The grant will be used for interventions in the textile sector and for the promotion of e-mobility in Bangladesh. It will also ensure access to clean energy for Bangladeshis. In the same month, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) formed a joint committee to expedite export of apparel items and ensure better supply chain collaboration and mutual benefits. The committee will deal with trade-related issues and settle disputes that arise among garments manufacturers and accessories-packaging suppliers. In March, the government raised the maximum wastage rate for raw materials used to produce apparel following a strong disagreement with stakeholders on the earlier rates. Though apparel manufacturers hailed the commerce ministry decision, they said scope does exist to raise the rate further on some value-added products. The US Agency for International Development launched a $5-million project in March to empower women working in RMG factories in the country. CARE Bangladesh is implementing the project, titled ‘Women Thrive in Bangladesh’, and expanding professional development opportunities for over 100,000 women. The government agreed in June to introduce the Employment Injury Scheme for RMG workers beginning July. The agreement was reached during a meeting between the country’s labour and employment ministry and the International Labour Organisation (ILO) in Geneva. A five-year initiative called Mapped in Bangladesh (MiB) is compiling and mapping export-oriented RMG factory data using the factory census approach. It had mapped 3,723 factories by mid-March. The project is being implemented by the Centre for Entrepreneurship Development of Brac University, funded by Laudes Foundation and the Netherlands government, and being coordinated by BRAC—an international development organisation based in Bangladesh. The central bank in September cut the interest rate on loans under a programme started in 2019 that offers funds to RMG units to reinforce their safety system and improve environmental standards. The initial maximum annual interest rate of 7 per cent was reduced to 5 per cent.
Industrial
Textile mills in Bangladesh have been operating at only 30-40 per cent of their total production capacity since the gas shortage started in March 2022, the Bangladesh Textile Mills Association (BTMA) said in October. At least three-fifths of the 1,700 BTMA member factories were in a vulnerable position due to this. Mills located around Dhaka—in Narayanganj, Araihazar, Madhabdi, Ashulia, Savar, Gazipur, Sreepur, Bhaluka regions, as well as those in Chittagong and Comilla were facing an average of 12-hour shutdowns. The Bangladesh Economic Zones Authority (BEZA) in April signed a term sheet with India’s Adani Ports and SEZ Limited to establish an Indian economic cone at Mirsarai in Chittagong under government-to-government engagement. That was intended to start full-fledged activities for the development of the economic zone. Other processes, including the formation of a company to operate the zone will start in phases. BEZA and the China Road and Bridge Corporation signed a memorandum of understanding in August to begin work on developing an economic and industrial zone in Chattogram’s Anowara sub-district. The zone is fully dedicated to Chinese entrepreneurs and investors. ILO and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) signed an agreement in August to enhance workplace safety and health in ten priority economic sectors. Several capacity-building and promotional activities will be carried out to strengthen workplace safety and health at institutional as well as enterprise levels. The activities will be supported by ILO’s RMG programme funded by Canada and the Netherlands.
Foreign Trade
Australia will continue its duty- and quota-free treatment for exports from Bangladesh even after the country graduates from the LDC status. This commitment was made at a meeting of the first joint working group on trade and investment held in March in Canberra. Apparel exporters will now get cash incentives and subsidies from the government on exports with 20 per cent local value addition as the Bangladesh Bank in May lowered the threshold for value addition from 30 per cent. Local value addition is calculated by deducting the import cost of materials used in production from the net free on board (FOB) export price. Bangladesh leather and leather goods exporters can now apply to the discount committee of the Bangladesh Bank for over 5 per cent discount against export of their items. A circular in this regard was issued in December by the central bank. The apparel sector was the sole beneficiary of the benefit till now. The decision will help such exporters offset the loss of export proceeds they often incur by offering buyers discounts of more than 5 per cent prescribed in the guidelines for foreign exchange transactions. In some cases, buyers bargain for additional discounts after settling the price. If exporters can show reasonable evidence of offering additional discounts, the discount committee will consider it. The Bangladesh Bank in September allowed exporters to retain the value-added portion of export proceeds—the part of the export receipts available after import bills of exporters for back-to-back letters of credit are settled—in US dollars for 30 days instead of 15 days. The decision helped exporters tackle the losses from the USD-taka exchange rate fluctuation. The central bank also permitted exporters to transfer the value-added portion of export proceeds to other banks for the settlement of import bills or liabilities of the EDF. It had instructed exporters in May to sell their export proceeds to the same banks through which they ship goods as many of them sold the dollars to the lenders that offered the higher rate, creating indiscipline in the foreign exchange market. The bank asked exporters in August not to retain the value-added portion for more than 15 days to make the domestic forex market stable.
Sustainability
BGMEA said in December end that 183 garment factories have the US Green Building Council’s Leadership in Energy and Environmental Design (LEED) certification. South Korea-based UN entity Green Climate Fund (GCF) signed a funding activity agreement (FAA) in July with the Infrastructure Development Company Limited (IDCOL) in Bangladesh for a previously-approved project promoting innovative private-sector investment in energy-saving technologies for the country’s textile industry. The FAA was signed on the sidelines of the GCF board meeting in Incheon, South Korea. IDCOL will receive $256.5 million concessional financing to promote energy efficiency in textile and garment sectors in Bangladesh.
Logistics
A direct freight service started in February from Chattogram port to Europe, reducing lead time and costs. The first cargo ship on the route left for the port of Ravenna in Italy in the first week of the month. The route is expected to reduce shipment cost by around 40 per cent. A ship will take 16 days to reach Italy through this route instead of the earlier 40. Bangladesh’s private inland container depots raised charges for services involved in handling export-laden containers by 25 per cent in August citing the hike in fuel prices. The decision was arrived at by the Bangladesh Inland Container Depots Association and the Bangladesh Freight Forwarders Association.
Source; Fibre2Fashion
Trade volume between Cambodia and China reached $14.5 billion in 2022, a rise of 19 per cent compared to last year, according to Prime Minister Hun Sen. He attributed the rise to the Cambodia-China Free Trade Agreement that entered into force in January last year and expressed hope that his country will import more goods to China in future. He was addressing the groundbreaking ceremony for the upgradation of National Road No. 21 and No. 2 in Kampot and Kep provinces, a Cambodian newspaper reported. Cambodia’s exports to China include garments and agricultural products. Imports include cotton, textiles, cotton, metal, construction materials, appliances and electronics, plastics, aluminum, furniture, paper and cardboard.
Source; Fibre2Fashion
