RoDTEP rates revised, will benefit the textile industry
India increases textiles rates under RoDTEP; industry hails decision
World is in state of crisis: PM Modi at Voice of Global South summit
IIP growth rebounds to 7.1% in Nov; retail inflation eases to 5.7% in Dec
FTA with Australia game changer for India: Industry stakeholders
India's Karnataka state to set up mini textile parks in 25 taluks
Stocks to buy today: Why experts are bullish on these textile shares — explained
INTERNATIONAL
Brazil's retail trade increases 1.5% YoY in Nov 2022
Oeko-Tex bans PFAS in textiles in 2023 update
7 million people laid off in textile industry, associations claim
Record production growth to control US gas prices in 2023, 2024: EIA
China's CPI increases by 2% YoY in 2022: NBS
US' imports of silk & veg fibre products grow 37% YoY in Jan-Nov 2022
Euro area private consumption rises significantly in Q2, Q3 2022
Bangladesh’s RMG makers getting far below FoB prices than competitor countries
NATIONAL
The Government has notified the revised rates for textile goods under Remission of Duties and Taxes on Exported Products (RoDTEP) for 65 HS codes in the textile and apparel sector as a part of the implementation of the RoDTEP committee report. The initiative is in a bid to rectify anomalies in the RoDTEP rates for certain products. It will surely help achieve the desired target of US $ 100 billion exports for the textile and apparel sector. The cotton woven fabric is eligible for 4.3 per cent RoDTEP rate while the cotton knitted fabrics are extended by only 1 per cent. The RoDTEP rates for lycra blended knitted fabric has been increased from 1 per cent to 2.5 per cent and for 100 per cent cotton knitted fabric, the rate has been increased from 1 per cent to 3 per cent. The revised RoDTEP rates for exports will be effective from 16th January-30th September 2023 and this has come as a bonanza for the knitted fabric exporters, who are facing crisis owing to various external factors including global economic slowdown. The rates for several products including denim, polyester staple fibre spun yarn and also the rate and value cap for viscose rayon spun yarn has been increased from 0.9 per cent to 2.5 per cent with a value cap of Rs.6 per kg. The RoDTEP for woven fabrics of artificial staple fibre has been increased from 1.2 per cent to 2.5 per cent. It is believed that the implementation of the committee report will help boosting of export products like yarn and fabric of polyester and viscose, denim fabric, knitted fabric of cotton, etc. and will give a fillip to India’s textile and apparel exports, which have been on the decline lately. Various representations were made by the Export Promotion Councils (EPCs), industry associations to enhance the rates based on the incidence of duties and taxes. The industry has thanked the Government for this and called it a laudable step for the betterment of the textile sector. T Rajkumar, Chairman, Confederation of Indian Textile Industry (CITI) said that the notification could not have been better timed as India’s merchandise exports have been facing serious headwinds while the revised T&A list has greater potential for exports as the items notified in the list have already recorded more than US $ 2 billion in exports in 2022. Ravi Sam, Chairman, The Southern India Mills’ Association (SIMA), thanked the Government for enhancing the rates and stated that the enhanced RoDTEP rates will boost the exports and align with the Production Linked Incentive (PLI) Scheme announced by the Government thereby enhancing the global competitiveness of Indian textiles and clothing products. RoDTEP scheme is a WTO-compliant export benefit for refund of embedded duties and State levies for all the goods exported from the country. Earlier, the Scheme for Rebate of State and Central Taxes and Levies for export of Garments and Made-ups (RoSCTL) was effective from 7th March 2019, refunding the embedded taxes and levies, the period of which has been extended up to 31st March 2024. Under the RoDTEP Scheme, all other textile products have been covered with suitable rates and value cap based on the incidence of duties and levies furnished by the industry. RoDTEP / RoSCTL benefits have considerably enhanced the global competitiveness of the textiles and clothing products by avoiding export of embedded taxes and levies.
Source: Apparel resources
India has increased the rates of textile goods under Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme. Based on recommendations from the RoDTEP committee, the Indian government has introduced changes in 432 HS codes to make the industry more competitive and has increased the rates to refund up to triple the previous rates. As per the government notification, the cotton woven fabric is eligible for 4.3 per cent RoDTEP rate while the cotton knitted fabrics are extended by only 1 per cent. The RoDTEP rates for lycra blended knitted fabric have been increased from 1 per cent to 2.5 per cent and for 100 per cent cotton knitted fabric the rates have been increased from 1 per cent to 3 per cent. The rate and value cap for viscose rayon spun yarn has been increased from 0.9 per cent to 2.5 per cent with a value cap of ₹6 per kg. RoDTEP for woven fabrics of artificial staple fibre has now gone up from 1.2 per cent to 2.5 per cent. The revised RoDTEP rates will be effective from January 16, 2023, to September 30, 2023. The textile industry expects this decision to bring some relief in the bearish market. The new rates will be helpful for the knitted fabric exporters, who are facing crisis owing to various external factors such as the global economic slowdown. The enhanced RoDTEP rates will boost exports and align with the Production Linked Incentive Scheme, thereby enhancing the global competitiveness of Indian textiles and clothing products, Ravi Sam, chairman of The Southern India Mills’ Association (SIMA) said in a press release. SIMA chief thanked the government for increasing the rates for several products including denim, polyester staple fibre spun yarn and viscose rayon spun yarn. RoDTEP benefits have considerably enhanced the global competitiveness of the textiles and clothing products by avoiding export of embedded taxes and levies. The rates declared with effect from January 1, 2021, were on the lower side for certain key textile products such as man-made fibres, yarns, fabrics, cotton knitted fabrics, etc. Now, the government has enhanced the rates for all deserving products, based on the recommendations made by the RoDTEP committee. According to industry sources, garments and made-ups exports are getting attractive under another scheme Rebate of State and Central Taxes and Levies (RoSCTL) that came into effect from March 7, 2019 to refund the embedded taxes and levies. The period for this has been extended up to March 31, 2024
Source: Fibre2Fashion
Offering to become the voice of the Global South, India on Thursday gave a new agenda to the world on behalf of the countries of the South: ‘respond, recognise, respect, and reform’. Addressing the first session of the two-day special virtual summit, the Voice of Global South summit, which began on Thursday, Prime Minister Narendra Modi set the stage on behalf of developing countries, many of which are united by a history of colonisation. The ‘Global South’ largely refers to countries in Asia, Africa, and South America. “We, the Global South, have the largest stakes in the future. Most of the global challenges have not been created by the Global South. But they affect us more”. He said “the world is in a state of crisis” and told the leaders of developing countries: “your voice is India’s voice” and “your priorities are India’s priorities”. Noting that 5Rs need to recalibrate the relationship between the developing countries and the developed world, he said the world has to respond to the priorities of the Global South by framing an inclusive and balanced international agenda. It has to recognise that the principle of ‘common but differentiated responsibilities’ applies to all global challenges. It must respect the sovereignty of all nations, rule of law and peaceful resolution of differences and disputes; and the world must reform international institutions, including the United Nations, to make them more relevant. The PM said: “We have turned the page on another difficult year that saw war, conflict, terrorism, and geo-political tensions; rising food, fertiliser and fuel prices; climate change-driven natural disasters, and the lasting economic impact of the Covid-19 pandemic. It is difficult to predict how long this state of instability will last”. The PM said most of the problems the world is facing have been thrust upon it by developed countries: “We have seen this in the impacts of Covid pandemic, climate change, terrorism and even the Ukraine conflict. The search for solutions also does not factor in our role or our voice,” he said. He recalled that India has always tried to share its expertise and learning with underdeveloped countries. “We supplied medicines and vaccines to over 100 countries during the pandemic. India has always stood for a greater role of developing countries in determining our common future.” He added: “As India begins its G20 Presidency this year, it is natural that our aim is to amplify the voice of the Global South. “People of the Global South should no longer be excluded from the fruits of development. Together we must attempt to redesign global political and financial governance. This can remove inequities, enlarge opportunities, support growth and spread progress and prosperity”, he said. Modi said developing countries have a common history: “In the last Century, we supported each other in our fight against foreign rule. We can do it again in this Century, to create a new World Order that will ensure the welfare of our citizens. As far as India is concerned, your voice is India’s voice. Your priorities are India’s priorities”. The PM’s speech will set the tone for discussions through the coming months as India’s G20 presidency culminates in a summit meeting of world leaders later this year.
Source: Business-Standard
Union Minister for Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal today said the India US Trade Policy Forum has resulted into a smoother, friendly and trusted business environment for businesses from both sides to expand their trade and investment. He was briefing the media after the conclusion of 13th Ministerial Trade Policy Forum (TPF) dialogue at Washington DC. Shri Goyal said TPF, which was relaunched in a new form in November 2021, has become a very robust and outcome oriented platform to have free and frank discussion on a plethora of issues of mutual interest. Informing about the 13th Ministerial TPF dialogue, Shri Goyal said that issues related to resolving WTO disputes, restarting of exports of wild caught shrimps, speeding up of business visas, resilient supply chains, data flow and addressing climate change were discussed. Shri Goyal said both countries had a robust discussion on finding bilateral solutions to outstanding WTO disputes between them. He hoped for a satisfactory outcome in the next few months over these issues. Explaining the background on exports of wild caught shrimps from India to the US, Shri Goyal said exports were banned by the US due to concerns around turtles in the areas where shrimps were being fished. He said that fruitful discussions took place between both for restarting wild caught shrimps exports from India to the USA. He informed that turtle excluder device which will minimise impact of fishing on sea turtle population has been designed with support from the US. He said exports will be restarted post the successful completion of trials of these devices. He said India has requested USA to expedite the issuance of business visas to facilitate faster movement of business persons across both sides. Another important focus issue was the discussion around strengthening resilient global supply chains. Shri Goyal said both the countries are keen to have an effective and trusted supply chain between them in several areas including telemedicine services. He further informed that discussions took place on environmental issues around sustainable finance to promote innovative clean technology, circular economy, technology required to address climate change. He informed that both nations have shared interest to have greater flow of data between two countries and are continuing engagement on data protection and privacy. He said a data protection and privacy bill which has been put for public consultation by MEITY is an effort by the Indian Government to align the needs of the industry while also maintaining a high standard of data protection and privacy. Minister also announced that a new TPF working group on resilient trade has been created. This new working group will enable both sides to deepen our dialogue on a range of issues which will help us enhance our resilient supply chains and also help us create sustainable bilateral trade relationships to meet challenges of tomorrow. Briefing about his meeting with his US counterpart Secretary Gina Raimondo, Minister said he had a positive dialogue and Secretary will visit India in March with high power delegation of CEOs. He said CEO forums on both sides are putting in lots of effort to come up with a robust framework to help expand trade business and manufacturing. He said several other aspects regarding India’s efforts to become self-sufficient in areas like semiconductor, defence production, strengthening laws around quality standards, were discussed. He also informed India will be hosting the next round of talks on IPEF in February in New Delhi. Speaking about his engagements with CEOs of US companies during his course of visit, the Minister said they are looking at India as a trusted partner to diversify their dependence on the geographies, to expand their own manufacturing set-ups. US Companies have ambitious plans and are looking to invest large capital and bring technology to India. Responding to a question on progress regarding GSP, Shri Goyal said India has requested US to restore GSP. Having said that, he also mentioned that withdrawal of GSP has not been detrimental to growing trade ties. When asked about Mini trade deals, Shri Goyal said both the countries are looking at bilaterally much larger footprints for trade and investments rather than mini trade deals. Focus is on greater market access, ease of doing business between two countries. Speaking about IPEF, he said India stands with USA in its commitment to free and open indo pacific. He said the focus at the level of Ministerial meetings TPF is to set context and principles on which further engagements/negotiations can take place at official level. We have moved out of 1:1 ratio based outcomes and are now looking at bigger substantive outcomes. He informed that progress is being made on specific issues like mangoes issues on agriculture, animal husbandry, FSSAI. Shri Goyal said the G20 presidency is a great opportunity for India, which is today the voice of the global south, a voice of the less developed countries, to bring balance in the G20 discussion on areas of world interest. He said for example in the area of environment, while it’s a collective responsibility of all the countries, its important that developed countries also recognize that developing countries will need affirmative actions such as low cost finance, technology support. He further said G20 priorities in India have been widely welcomed and USA has committed to give full support to India’s efforts to make the G20 truly a vibrant body in which we can discuss issues around sustainability, climate change, poverty alleviation, SDGs. He said G20 presidency is going to be an exciting opportunity for India to provide leadership to many challenges that the world is facing. On G20 engagements in India, he said it will be held in over 56 locations across length and breadth of the country, in every state every UTs. New Initiatives like startup 20 under B20 engagement will also be launched.
Source: PIB
India’s factory output rebounded to a five-month high in November and retail inflation eased marginally to a 12-month low in December, providing the much-needed comfort to the government. These will be the final set of key macro indicators available to Finance Minister Nirmala Sitharaman as she prepares to present Budget 2023-24 on February 1. Data released by the National Statistical Office showed Consumer Price Index-based inflation rate, at 5.72 per cent, remained below the Reserve Bank of India’s (RBI’s) upper tolerance limit of 6 per cent for a second consecutive month in December due to continued moderation in food prices. Meanwhile, factory output, measured through the Index of Industrial Production (IIP), grew at a robust 7.1 per cent in November, mostly due to a favourable base effect. While the mining and manufacturing sectors grew 9.7 per cent and 6.1 per cent, respectively, in November, electricity output clocked double-digit growth at 12.7 per cent. The food inflation rate fell to 4.19 per cent in December, from 4.67 per cent in November, driven by vegetables (minus 15.08 per cent), fruit (2 per cent), and prepared meals (7.76 per cent). However, the inflation rate for meat and fish (5.13 per cent), eggs (6.91 per cent), cereals (13.79 per cent), milk products (8.51 per cent), pulses (3.89 per cent), and spices (20.35 per cent) accelerated during the month. However, core inflation — that excludes volatile food and fuel items — remained above 6 per cent in December, even after marginal deceleration. RBI Governor Shaktikanta Das in his latest monetary policy statement had expressed concern over “sticky and elevated” core inflation, holding that the battle against inflation was not over yet. Retail inflation had been above the 6 per cent mark for three consecutive quarters, forcing the central bank to go on a rate-hike spree, as the six-member Monetary Policy Committee (MPC) hiked the lending rate by 225 basis points (bps) since May to 6.25 per cent in its last meet in December — the highest level since February 2019. Madan Sabnavis, chief economist, Bank of Baroda, believes the RBI will increase rates in the upcoming February policy meeting by another 25 bps. This may be the last hike for this cycle, as the numbers in the months to come are expected to come down due to the base effect. Aditi Nayar, chief economist at ICRA, however, believes the MPC may choose to pause its rate-hike cycle in February, taking into account the lower-than-expected retail inflation print and muted average IIP growth of 1.3 per cent during October-November 2022. Unlike previous few months, all segments at the use-based classification of IIP recorded positive growth in November. After a gap of three to four months, consumer durables (5.1 per cent) and non-consumer durables (8.9 per cent) returned to positive growth, respectively. The volatile capital goods that represent investment demand in the economy grew at a robust 20.7 per cent in November, as did infrastructure goods (12.8 per cent), as the government continued to push capital expenditure through higher public investment. However, seven of 23 sectors, such as tobacco (minus 5 per cent), textile (minus 9 per cent), apparel (minus 11.7 per cent), leather (minus 2 per cent), wood (minus 0.5 per cent), paper (minus 2.3 per cent), refined petroleum (minus 9.8 per cent), contracted in November. Sunil Kumar Sinha, principal economist at India Ratings & Research, believes recovery in factory output has a long way to go, notwithstanding the encouraging IIP print. “At the use-based classification, even now the output levels of two segments, that is intermediate goods and consumer durables, are less than pre-Covid (February 2020) output levels. Therefore, the ongoing industrial recovery will continue to need more policy support,” he added.
Source: Business-Standard
India has high hopes from the recently concluded India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA). Industry stakeholders believe the agreement will be a game changer for multiple Indian industries including textile, jewellery, and leather. The ministry of commerce has been organising outreach programmes to help these industries make the most of the agreement. Balaji, joint secretary of ministry of commerce, recently said at an event that India’s exports would go up to $10 billion by 2025-26 against the present shipment of $7 billion. Under the agreement, Australia has allowed imports of 98.3 per cent items from India at zero duty. Earlier, Indian goods attracted tariffs of about 4-5 per cent, which was a disadvantage as China, Vietnam and Japan have been enjoying zero duty under such trade deals. India's garment exports to Australia are expected to jump by 30 per cent in a year, as per Raja M Shanmugham, former president of Tiruppur Exporters’ Association (TEA). “FTAs are very important between the trading countries in this Universal Market Era. The recently concluded trade deal with Australia can provide big boost for Indian textile exports. FTAs with developed world provide big opportunity for developing countries like India.” Sanjay Garg, president of North India Textile Mills Association (NITMA), commented, “It is the first FTA with any developed economy in recent memory. The agreement will have a significant positive impact on the labour-intensive textile and apparel industry. Indian textile industry, which is facing a shortage of cotton, will have access to duty-free import with certain quantity.” Industry experts feel that government should provide hand-held support to enable exporters to tap the opportunity. They said that exporters need support in the form of liquidity and more to secure export orders and execute them well within time. Australia imported apparel worth $8.382 billion during 2021, in which India’s share was just 3.88 per cent at $286.756 million. It was the fourth largest supplier for Australia, while China grabbed the lion’s share with 62.82 per cent of the total, according to Fibre2Fashion’s market insight tool TexPro. Australia was the tenth largest market for India’s apparel exports in 2021 when a share of just 1.83 per cent out of the total shipment of $14.943 billion. India’s shipment of apparel to Australia recorded a mild growth in recent years. Exports increased to $217.489 million in 2019 from $183.797 million of 2018 but dipped to $191.152 million in 2020 due to the pandemic.
Source: Fibre2Fashion
Chief minister of India’s Karnataka state Basavaraj Bommai yesterday asked officials to set up mini-textile parks in 25 administrative districts (taluks) with more weaver population. Launching the Direct Benefit Transfer (DBT) scheme for handloom and powerloom weavers under the Nekar Sanman scheme in Bengaluru, he said the parks would help weavers, starting from processing cotton to manufacturing garments. Weavers must focus on quality and come forward for exports, and the market must be expanded through digital fora with the backing of the state department of handlooms and textile, Bommai was quoted as saying by media reports from the state. The chief minister interacted with weavers from Bengaluru, Tumkur, Belagavi and Bagalkot.
Source: Fibre2Fashion
After ushering in the new year 2023, stock market has been busy speculating which theme is expected to work in 2023 as 2021 and 2022 remained excellent years for commodity, metal and sugar stocks. In budget 2023, which is also round the corner, market is expecting some booster sops for various sectors that may augur well for stocks of that sector. According to stock market experts, textile theme is expected to work well in 2023 as some budget sops are strongly expected, which may trigger buying interest in textile stocks. Experts were of the opinion that with a rise in disposable income, the need for goods in the Indian textile sector has expanded, resulting in enormous demand in both the local and international level. They further added that Indian textile industry is expected to register a CAGR of 10 per cent in between 2019 to 2026 and advised positional investors to buy Raymond and Aditya Birla Fashion and Retail shares to buy. Speaking on the triggers that may fuel textile stocks in 2023, Sandeep Pandey, Business Partner at Emkay Global Financial Services said, "As a result of the pandemic, Indian textile industry saw a considerable decline; however, as the epidemic winds down, it is anticipated that the Indian textile market would recover and develop at a Compound Annual Growth Rate (CAGR) of 10 per cent between 2019 and 2026 to reach $190 billion. In 2019, the industry contributed 7 per cent to the nation’s Gross Domestic Product (GDP)." India’s textile industry is anticipated to be worth more than $209 billion by 2029, up from a market value of around $140 billion in 2017. During the last five years, the sector has received FDI and several other investments. The ICIL announced a $2.6 million investment in May of 2021. Under the automated approach, the Indian government has authorized 100 percent automation. Sandeep Pandey, Former Deputy Vice President of HDFC Bank Ltd went on to add that the year 2021 witnessed a surge in the exports of cotton, handloom, and yarn goods by more than fifty percent, signifying an upward trajectory. "India is projected to be the second most attractive market by 2025, contributing up to US$ 121 billion, while China is projected to be the most attractive market, contributing up to $378 billion. In 2017-2018, India has one of the fastest-growing economies, with a GDP growth rate of 7.2 per cent. This increases the spending power of the general population and stimulates demand for textile sector goods. This expansion results in a vast array of manufacturing capacities for diverse items that may be shipped both inside India and outside India," said Sandeep Pandey. On textile stocks that one can look at for adding in one's stock portfolio, Chandan Taparia, Derivative & Technical Analyst at Motilal Oswal said, "In current market scenario, budget is round the corner and this would be the last full fledged budget of this incumbent Narendra Modi government. Sop, the budget is expected to be a populist budget and some sops for the textile sector is strongly expected as the industry is one of the major contributors in the national GDP. I would recommend positional investors to buy Raymond and Aditya Birla Fashion shares and hold for first two months. If the stock delivers then decide next course of action after giving a fresh review to the stock and the sector."
Source: live mint
INTERNATIONAL
Brazil’s retail trade in the seasonally adjusted series rose by 1.5 per cent year-on-year (YoY) and decreased by 0.6 per cent month-on-month (MoM) in November 2022. After a rise of 0.5 per cent in October, the quarterly moving average changed by 0.3 per cent in November. Brazil’s textiles, apparel, and footwear sector showed a 16.1 per cent drop in sales in November 2022 compared to November 2021, according to figures by the Brazilian Institute of Geography and Statistics (IBGE). For retail trade, the cumulative index in the year and in the last 12 months reached 1.1 per cent and 0.6 per cent, respectively. There were negative variations in the volume of retail trade sales from October to November 2022 for a number of surveyed sectors including the textiles, apparel, and footwear sector at -0.8 per cent. Regarding extended retail trade, the volume of sales changed by 0.6 per cent in November and the moving average advanced by 0.3 per cent. For Brazil’s extended retail trade, cumulative index over the year was -0.6 per cent and the same index in 12 months was at -0.8 per cent.
Source: Fibre2Fashion
Chemical management specialist Oeko-Tex says the previously voluntary self-assessment will be mandatory for all production sites from April 2023. The move is part of a series of updates to the applicable test criteria, limit values and guidelines for its certifications. The new regulations will finally come into force in the first quarter of 2023, after a transition period. Other introductions include integration of the BHive app from GoBlu into Step, which will enable certified production companies to check sustainability requirements and chemical management in global supply chains. The new Oeko-Tex Organic Cotton certification will verify reliable labelling of organic cotton textiles starting April 2023.
Oeko-Tex STeP goes BHive
The BHive app, developed by GoBlu, enables manufacturers to collect information on all chemical products used on site, via smartphone, and determine which products meet the sustainability requirements of different brands and retailers. All information is automatically recorded in a chemical inventory so that brands can directly access transparent and precise data. Starting April 2023, Oeko-Tex STeP customers can utilise this comprehensive chemical database to reduce labour, time and costs. The intelligent system also aligns compliance with recognised industry standards such as the STeP and ZDHC MRSLs.
New certification: Oeko-Tex Organic Cotton
Starting April 2023, the new Oeko-Tex Organic Cotton certification will focus on reliable labelling of organic cotton textiles. “More and more consumers prefer sustainable textiles, and demand for organic cotton is growing rapidly,” said Oeko-Tex secretary general Georg Dieners. “But how reliable is their labelling?” In addition to the qualitative DNA analysis of the sample material (i.e., Does a product contain genetically modified cotton, yes or no?), a second step involves quantification – determining the proportion of genetically modified cotton in a cotton product. The aim is not only to check production, but to make the raw materials traceable through the supply chain. Dieners explains: “What’s new is that we will start checking for genetically modified cotton at the beginning of the supply chain – at the ginning stage when the cotton fibres are separated from the seed. Then we can follow the flow of goods through all stages.”
Oeko-Tex Eco Passport: Self-assessment to be mandatory in future plus adaptation to ZDHC update
Oeko-Tex Eco Passport certification has consisted of a mandatory CAS number screening and laboratory analysis. The self-assessment and the on-site visit to customers were voluntary. While the on-site visit will remain voluntary until further notice, the self-assessment will become mandatory for all customers’ production sites from April 2023. All certifications issued after 1 April 2023 must be accompanied by a valid self-assessment. For existing customers, there is a possible transition period. Oeko-Tex has issued a general ban on the use of perfluorinated and polyfluorinated alkyl substances (PFAS/PFC) in textiles, leather and footwear for the Standard 100, Leather Standard and Eco Passport certifications. This is in coordination with the ZDHC Manufacturing Restricted Substances List (ZDHC MRSL) version 3.0 and its new Conformance Guidance 2.0. Eco Passport will comply with these requirements in February 2023 to ensure a smooth transition for all customers.
Updates to Standard 100, Leather Standard and Eco Passport limit value catalogues
Additional pesticides have been added to Standard 100, Leather Standard and Eco Passport certifications, such as chlorothalonil in Annex 4 and 6, which were previously under observation. Also, three substances have been reclassified as Substances of Very High Concern (SVHC) that may have serious effects on human health and the environment. In general, having strict requirements for certain substances reduces exposure to the environment, workers and consumers.
Source: Just-Style
About seven million people in textile and textile-related industries have been laid off due to dwindling exports and the government’s failure to end the economic crisis, representatives of the valueadded textile associations said in a joint press conference on Monday The current government does not have any policy to end the various crises affecting textile producers and exporters, they said. The industry is on the verge of closure as many units have already closed down. Several others are planning to either shut down or shift their production abroad. Textile factories are being deprived of necessary raw material and accessories. Letters of credit worth as low as $5,000 are being refused, which has hit in-progress export orders of $500,000 per consignment. It’s causing severe disruption and production delays and has led to the cancellation of export orders. Demurrage on various consignments has increased the cost too much, they said. Despite such a difficult situation, the government is importing expensive luxury cars like BMWs for cabinet members. These imports will have no contribution to foreign exchange earnings. They won’t generate any taxes for the national exchequer and create zero employment, they said. It is ironic that exporters who are bringing dollars into the country have been placed third on the priority list for the import of raw materials, they said. Essential items like wheat and edible oil are the first on the priority list while energy-related imports are second. They complained that the dollar-earning export sector is placed below dollar-spending sectors on the priority list, which shows the poor judgment of policymakers. “How could you spend foreign exchange on essential items and energy if you don’t earn it first?” The government performance in the last nine months is poor, they said. Two finance ministers during this period have failed to resolve the ongoing economic crisis, they added. Neither the prime minister nor the finance minister have bothered to set aside some time to meet the exporters, they noted. The industrial sector cannot operate under extreme financial stress as the alarm bells for sovereign default have been continuously ringing while the government’s finance and economic team appears to be asleep at the wheel, they said. The country is in the middle of a dollar crisis and the economy is facing an emergency-like situation. The current shortage of dollars can be overcome only by promoting exports. The joint press conference of was addressed by Muhammad Jawed Bilwani, coordinator of the Value-Added Textile Forum, Pakistan Hosiery Manufacturers and Exporters Association (PHMEA) Chairman Muhammad Babar Khan, PHMEA Zonal Chairman Khizer Mehboob, Pakistan Knitwear and Sweater Exporters Association Chairman Rafiq Godil and Pakistan Cloth Merchants Association former chairman Abdul Samad among others. Published in Dawn, January 10th, 2023 Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.
Source: The Dawn.com
Anticipating growing US natural gas production that will top prior highs, the US Energy Information Administration (EIA) scaled back its near-term natural gas price forecasts, expecting Henry Hub spot prices will average $4.90/MMBtu in 2023, down from $6.42/MMBtu in 2022. In its January Short-Term Energy Outlook, EIA lowered its first quarter 2023 forecast for such prices by $1.18 to $4.99/MMBtu. The Q2 2023 forecast also fell 25 cents from the previous month's estimates to $4.75/MMBtu. "The natural gas market is particularly uncertain, but we expect that US natural gas production will establish new record highs in both 2023 and 2024, leading to lower domestic prices," said EIA administrator Joe DeCarolis, in a statement. The EIA boosted its total natural gas marketed production forecast for 2023 by 2.36 Bcf/d to 109.11 Bcf/d on average and estimated production will grow further to average 111.24 Bcf/d in 2024. For the first half of 2023, the agency lifted the Q1 production estimate by 980 MMcf/d to 109.58 Bcf/d, and the Q2 forecast by 340 MMcf/d to 108.6 MMcf/d. "Increases in US natural gas production, relatively flat LNG exports, and declining domestic consumption in the electric power and industrial sectors will limit upward pressure on prices in 2023," according to the report. Henry Hub natural gas prices were forecast to average $4.90/MMBtu for 2023 and $4.80/MMBtu in 2024, down from the previous month's estimates of $5.43/MMBtu in 2023. In 2024, even as new LNG export facilities are slated to come online, the agency is expecting robust production will keep gas prices "relatively flat—with the possibility of lower prices". As for the power sector, EIA said that after a 3 per cent rise in total US electricity consumption in 2022, US power use will fall by 1 per cent in 2023, and grow by just over 1 per cent in 2024. Softer demand reflects expectations of a milder summer in 2023, and trends in housing starts are seen resuming growth in 2024. Coal-fired generation is expected to continue its slump, falling from 20 per cent of the US generating mix in 2022 to 18 per cent in 2023 and 17 per cent in 2024. Renewables, by contrast, will continue their ascent, according to the outlook, reaching 24 per cent of the mix in 2023 and 26 per cent in 2024, while gas declines to 38 per cent in 2023 and 37 per cent in 2024.
Source: Fibre2Fashion
China’s consumer price index (CPI), which is used to measure inflation, jumped 2 per cent year-on-year (YoY) in 2022. In December, CPI on a monthly basis remained flat in December, while it surged 1.8 per cent YoY—higher than 1.6 per cent in November, as per the National Bureau of Statistics (NBS). “Prices were generally stable in December thanks to China’s efforts to better coordinate epidemic response and economic and social development, and the country’s adoption of measures to ensure market supply and stabilise prices,” Dong Lijuan, chief statistician with the NBS, was quoted as saying by local media reports. Since November, due to lower international oil prices, prices of diesel and domestic gasoline went down by 6.5 per cent and 6.1 per cent, respectively. Prices of non-food items fell by 0.2 per cent month-on-month (MoM) in December. China’s producer price index, which gauges goods’ prices at the factory gate, dropped 0.7 per cent YoY in December, recent data revealed.
Source: Fibre2Fashion
Imports of textiles and apparel by the United States were mild during January-November 2022, while imports of silk and vegetable fibre products recorded an impressive growth in the same period. US’ imports of silk and veg fibre products grew by 37.39 per cent, which was double the growth rate of textiles and apparel imports during the period under review. The imports reached $2.565 billion during the first eleven months of 2022 from $1.867 billion during the same period of 2021. The US imported silk and veg fibre products worth $2.042 billion in 2021 which was $1.740 billion in 2020, according to the latest Major Shippers Report, released by the US department of commerce. China was the largest supplier of silk and veg fibre products to the US. It supplied these products worth $914.962 million in January-November 2022, an increase of 33.52 per cent from the shipment of $685.251 million during the corresponding period of 2021. China’s share in US’ total imports of silk and veg fibre products was 36.03 per cent in January-November 2022. India, Vietnam, Italy, and Bangladesh were among the top five supplier countries for the US. The inbound shipment from India was $276.989 million during the first eleven months of 2022 which was 44.13 per cent higher than the import of $192.174 million in the same period of 2021. India’s share was 10.73 per cent of the total supplies. The imports from Vietnam were at $248.461 million (9.43 per cent), Italy at $217.958 million (8.60 per cent) and Bangladesh at $136.003 million (5.22 per cent) during the period under review.
Source: Fibre2Fashion
The recent increase in real consumer spending in the euro area masks heterogeneous developments in individual consumption components, according to the European Central Bank (ECB). Total private consumption in the euro area increased significantly in the second and third quarters of 2022, mainly backed by consumption of services, which rose sharply. By contrast, consumption of non-durable goods fell for the third quarter in a row. Moreover, consumption of durable goods continued its downward trend, which began in the last quarter of 2021 until the second quarter of 2022, after which it began to improve in the third quarter that year. While the recovery in total private consumption reflected several factors, including the widespread loosening of pandemic-related restrictions and the gradual easing of supply bottlenecks, the strong rise in energy prices created significant headwinds to consumption growth through its effect on households’ purchasing power, ECB said in Economic Bulletin, Issue 8/2022. The recent sharp increase in energy prices has had a significant impact on households’ real disposable income. Energy supply shocks have weighed considerably on real consumer spending in recent quarters, particularly on durable goods. Total private consumption was significantly affected by energy supply shocks in recent quarters. However, the individual consumption components were affected to varying degrees.
Source: Fibre2Fashion
Recently, International Trade Centre (ITC) recent report titled ‘The Garment Costing Guide for Small Firms in Value Chains’ claims that Bangladesh’s FoB prices are lower than even Pakistan and Cambodia – In addition, the prices Bangladesh’s RMG makers get far below the global average rate. While Vietnam, Indonesia, Turkey and Mexico like apparel manufacturing countries are always getting paid above the global average. Contrary, time and time, it was exposed that for a basic knit T-shirt in Bangladesh, buyers pay $1.47 FOB price. While they source the same quality T-shirt from India with $2.14 FOB. Industry leaders opined that most of the time buyers come here with the mindset to pay less or see the country as a cheap sourcing destination. Although, the ITC report signifies that the unruly reality does not lie with the end-consumers as they are willing to pay better prices to some apparel-making countries but rather less to supplying countries that are impotent to meet their needs. ITC collected data from the USA Govt. Office of Textile Apparel (OTEXA), and examined 10 of Bangladesh’s most vital exports for 2020, matching their FOB prices with those of their 10 biggest competitors for each product. From the ITC tables, it is revealed that Bangladesh gets rates ranging from 32% to 83% lower than the highest rates paid to other suppliers in its competitor countries. The report highlighted that those garment manufacturing countries that have evolved from simple manufacturing operations into a complex service industry – are getting better deals in terms of better FOB prices. While some RMG manufacturing countries have remained focused on simple cut and sewing operations, provide few services and produce commodity-type garments – suffer the most. “To stay in business, these companies need to expand their services. All-inclusive costing is an essential step for this expansion. Accurate costing and valuing are the first steps to moving up the value chain. Without that, the all-important business case cannot be made,” said Pamela Coke-Hamilton, Executive Director of, the International Trade Centre. Here are some of the top exporting apparel items of Bangladesh and their FoB prices and growth comparision with other competitor countries: For instance, the ITC report showed that men’s woven cotton trousers made by Bangladeshi garment exporters got on average $7.01 per piece against its world average rate of $7.72 in 2020. The report highlighted that Bangladesh received 9.20% minus the international average rate. While the same product made by Vietnam gets $10.38, Mexico $8.97, Cambodia $8.81, Indonesia $8.74, India $8.41, Sri Lanka $8.0 and Pakistan $7.10. Out of the top 10, Bangladeshi-made products only – women’s cotton trousers and men’s cotton T-shirts – received rates marginally higher than the worldwide average.
The fundamental problem
ITC report claims that the garment industry in developing countries like Bangladesh is faced with a fundamental problem: increasingly the decisions made are based on an outdated model of reducing costs and therefore do not deliver the solutions required for a service-oriented industry that should focus on value. The industry blames this on incompetent management. Where once CEOs held their position for a decade or longer, their life expectancies are now just two or three years. Blaming this on the inability to keep up with an ever-changing industry. And continuously search for better data and more sophisticated analysis to inform what is going on, the ITC report said. Whereas in fact, the real problem lies with the decision-making process itself. We operate in a world where managers are increasingly more educated, with access to ever-more sophisticated tools, and yet often reach their most important decisions by asking veterans of the industry, the ITC report stressed.
Fairness between the customer and the factory
There is a growing argument that customers (retailers and brands) should pay their factory suppliers a fair FOB price. This discussion began in lower labor rate industries up to the point at which they were often paying prices that were below factory costs. The data is clear, and many factories have been forced to close because of low FOB prices. The conclusion is that the fault lies with the customer and therefore they should be forced to pay a higher FOB price. However, the report said if this problem is seen by using a cost-to-value analysis, then a different picture emerges. The problem is not that customers are paying these factories less, but rather that customers are paying everyone else more. The data is equally clear. Customers pay a lower price because the value provided by the failing factories is worthless. Consider the following data from the OTEXA that analyses 10 of Bangladesh’s most important exports for 2020, comparing their FOB prices with those of their 10 biggest competitors for each product. The ITC report said, in each case, supplying countries such as Bangladesh, Pakistan, and Cambodia are consistently paid below-world average prices. While supplying countries such as Vietnam, Indonesia, Turkey and Mexico are repeatedly paid above-world average rates. The problem does not lie with the customers. They are willing to pay higher prices to some countries but rather less to supply countries that are unable to meet their needs.
Bangladesh’s RMG industry reality and what buyers do
Bangladesh’s readymade garment (RMG) industry is the icon and leader in green factories – having the most number of USGBC LEED Certified factories. At the same time, in recent years, the industry’s value-addition in terms of backward linkage textile, accessories and packaging, R&D, in-design house, and washing has been phenomenal. Yet, the country’s RMG makers suffer for a better price. Worst yet, they are continuously offering lower Freight on Board (FoB) prices for its RMG items from global retailers and brands. On top of that, in COVID-19 times, it was explicitly clear that most brands and buyers were not ethical in their businesses – as they hold the orders, did not clear payments and forced illegal discounts in the manufacturing countries like Bangladesh. Bangladesh apparel industry leaders opined that most buyers have moved to the open costing method and the most disappointingly same buyer offers a better price while sourcing from a Chinese supplier – while lowering the prices in Bangladesh. This is really hurting the industry, as well as, the people. Shovon Islam, Managing Director, Sparrow Group and Chairman of the BGMEA’s Standing Committee on Press and Publicity said, “I partially agree with the ITC report. In recent years a lot of value-addition has been done in Bangladesh’s textile apparel industry. For instance, in the garment and denim washing segment value-addition is world-class. We are only behind Türkiye. Similarly in the denim category, Bangladesh is a leader and we are producing world-class denim products.” “But, our main challenge is over-reliance on 10 to 12 products and over capacity expansion– which has led to internal competition among us and less FoB,” Shovon Islam added. “Similarly, over-reliance on 10 to 12 products has put us in a tight situation. We must need product diversification to resolve this scenario. For example, our competitor Vietnam makes embellishment fashion products in the same categories in addition to more value-added products. What I mean is that instead of basic twill pants like us – Vietnam makes polyester-made pants. Or in the woven category, they increase fabric value and claim higher FoB prices.” “So, we need to add value-addition to be in the same league. It does not mean a massive value-addition overnight. Rather, small but effective value-additions on our regular 10 to 12 products fabric development.” “At the same time, instead of sticking to 10 to 12 products manufacturing – we need apparel product diversification. Like, when a factory has a wide array of product baskets, it can easily eradicate the lack of work order in a particular product. It will also remove the undercutting practice from our industry,” said Shovon Islam.
Source: Textile today
