The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 14 JULY, 2016

NATIONAL

INTERNATIONAL

 

Textile Raw Material Price 2016-07-13

Item

Price

Unit

Fluctuation

Date

PSF

1015.72

USD/Ton

0.07%

7/13/2016

VSF

2118.13

USD/Ton

1.21%

7/13/2016

ASF

1883.45

USD/Ton

0%

7/13/2016

Polyester POY

1031.41

USD/Ton

0.95%

7/13/2016

Nylon FDY

2182.41

USD/Ton

0%

7/13/2016

40D Spandex

4260.18

USD/Ton

0%

7/13/2016

Nylon DTY

2040.40

USD/Ton

0%

7/13/2016

Viscose Long Filament

2055.35

USD/Ton

0%

7/13/2016

Polyester DTY

1143.52

USD/Ton

0.66%

7/13/2016

Nylon POY

2406.63

USD/Ton

0%

7/13/2016

Acrylic Top 3D

5574.11

USD/Ton

0%

7/13/2016

Polyester FDY

1255.63

USD/Ton

0.60%

7/13/2016

30S Spun Rayon Yarn

2690.64

USD/Ton

0%

7/13/2016

32S Polyester Yarn

1666.70

USD/Ton

0%

7/13/2016

45S T/C Yarn

2399.15

USD/Ton

0%

7/13/2016

45S Polyester Yarn

2825.17

USD/Ton

0%

7/13/2016

T/C Yarn 65/35 32S

2167.46

USD/Ton

0%

7/13/2016

40S Rayon Yarn

1778.81

USD/Ton

0%

7/13/2016

T/R Yarn 65/35 32S

2092.72

USD/Ton

0%

7/13/2016

10S Denim Fabric

1.33

USD/Meter

0%

7/13/2016

32S Twill Fabric

0.80

USD/Meter

0%

7/13/2016

40S Combed Poplin

1.14

USD/Meter

0%

7/13/2016

30S Rayon Fabric

0.67

USD/Meter

0%

7/13/2016

45S T/C Fabric

0.66

USD/Meter

0%

7/13/2016

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14948 USD dtd. 13/7/2016)

The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

 

 

Textiles ministry package giving out less TUFS disbursement

The central government in its recently announced a Rs 6,000-crore package for the sector, aim of generating 10 million jobs and boost export by a cumulative $30 billion over three years. But disbursement of funds under the Technology Upgradation Fund Scheme (Tufs) of the Union textiles ministry shows a dull picture. Against Rs 24,000 crore of disbursements under Tufs in 2008-09, it was only Rs 11,000 crore in 2014-15 from a total allocation of about Rs 17,800 crore under the various Tufs —modified, restructured and revised-restructured. From 2013, investments have come down. Tufs disbursement by the government has also reduced subsidies, said K Selvaraju, secretary-general of the Southern India Mills Association. The disbursement excluded the spinning industry, where the potential is high for new investment. The earlier Budget saw an allocation of Rs 1,480 crore, as against a backlog of Rs 8000 crore. Only certain mills received funds, till December 2015, said a source, on condition of anonymity. The apparel industry wants hastening of Tufs disbursement, especially to spinning, weaving and fabric making units, to boost the overall export. As apparel exports is facing stiff competition from Bangladesh and Vietnam, growing at 14 and 11 percent annually; India’s is eight percent only. Selvaraju said that under the new minister, they are hopeful all these issues will be sorted out .

SOURCE: Yarns&Fibers

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Smriti Irani has taken charge as Textile Minister when the industry is in its worst phase

Before the cabinet rejig last week only few had anticipated that Smriti Irani will be removed as HRD Minister. Giving her the charge of the Textile Ministry was even more surprising. Some called it a “demotion” to an “insignificant ministry” from the all-important education portfolio, though those associated with the textile industry expect that she will add some significance and value to the ministry. At the same time, they are also worried, because of her aggressive approach, that she should not end up creating controversies as she did as HRD Minister. For, at the time she has taken charge as Textile Minister the industry is going through its worst phase. The slowdown in the Textile industry is not sudden. It has been more than two years now when the industry went into the reverse gear, and there is no sign and indication that it is on the course of bouncing back.

According to the Textile Ministry data, India has a total of 22.5 lakh power looms. Of them, more than 50% are in Maharashtra - with Bhiwandi and Malegaon, two Muslim dominated pockets, having the largest chunk. While Bhiwandi has about 8 lakh power looms, Malegaon has a little more than 2.5 lakhs producing more than 07-cr meters of grey fabrics every day. Besides Bhiwandi and Malegaon, Ichalkaranji, Sholapur and Dhule are other major textile clusters in Maharashtra.  Elsewhere in the country, Surat and Ahmedabad in Gujarat, Coimbatore, Erode and Tirupur in Tamil Nadu, Panipat and Ludhiana in Haryna and Punjab respectively also have a good presence of textiles and associated trade. Pali, Balotra and the neighboring cities in Rajasthan are known for textile processing units while some big cotton yarn mills are located in Coimbatore, Tirupur and other South Indian cities. However, market reports and surveys of the last six months indicate that almost every textile center is reporting slowdown and drastic decline in production. Slowdown and recession are not new for the people who are associated with the industry. But, the current scenario is not only worst but it is the longest.

Majority of the industrialists - some in the field since last more than thirty years, say they had never faced such a situation prevailing for such a long time. The situation has reached to a stage when few of the weavers who were not able to repay their debts committed suicide – a phenomenon, unlike in the case of farmers, not common in the textile industry. Power loom industry is known for its 24/7 culture and work style. Owing to the slowdown, however, about three months ago, it was decided that the power looms will run 5-6 days in a week and for 16 hours a day only. It was expected that after a good monsoon the situation will take a positive turn. However, when the market opened after Eid vacations, it reported further decline. The result is that power loom units which were closed on July 6 for three days to celebrate Eid are still closed. There are various reasons cited to explain the problems and difficulties faced by the industry. On top of them are the anti-dumping duty imposed on synthetic yarn and the free flow of Chinese cloths in local markets.

Power loom industrialists say that due to anti-dumping duty on synthetic yarn, the cost of cloths produced in the country is more than 30% as compared to the same quality produced in China. And, since the import from China does not have any restrictions, there is no way they can compete with Chinese fabrics. Duty should be imposed on Chinese imports, not on synthetic yarn, majority of them feel. In case of cotton yarn, most of the spinning mills have currently stopped production due to the shortage of cotton, which is expected to improve only in October/September when the new crops come.

Interestingly, the government of India had few years back, giving the control of cotton yarn to the Cotton Corporation of India (CCI), fixed the uniform rate of cotton to help farmers. Industry insiders however allege that the CCI has been currently hijacked by few big players and hoarders. The result is that the cotton stock which is available at present is being sold at Rs.42,000 to 46,000 a candy (356 kg) as against Rs.30,000 to 32,000 about two months before. If the government does not take suitable action against the hoarders, situation will worsen even further, say the spinning mill owners.

Under the prevailing situation, textiles exports has drastically declined. To address the decline in export, the government had about a fortnight ago announced a package of about 6000 cr rupees. The industry insiders are however of the view that the focus of this package is just apparel and readymade garment industries. Whereas, they say, all sections of the industry are currently needing remedial measures and urgent attention. Irregular and expensive electricity supply and lack of latest and modern machineries are other factors that are adding to the woes and poor state of the textile industry. The textile ministry had in the last decade through various schemes like Technology Upgradation Fund Scheme (TUFS) taken consistent efforts for modernization. Despite these efforts, the ministry was able to install just about 2.5 lakh modern looms, according to its own report.  Last 2-3 years has seen tremendous interest by the power loom owners who were eager to install modern machines using the funds provided under the TUF scheme. However, their interest ceded after the 2015-16 budget when the TUFS subsidy was reduced to 10% from the earlier 30%. Textile industry is the largest in India after agriculture employing millions of people through direct and  indirect jobs. Any negligence or lackluster approach is bound to have a long term impact on the overall economic growth of the country. This is why people are looking with interest and anticipation at Smriti Irani – to know what the new Textile Minister has in her kitty for the betterment of the ailing industry.

SOURCE: The Ummid

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Join PM Suraksha Bima Yojana: Irani Tells Textile Industry

Union Textile Minister Smriti Irani today appealed to textile industry to join 'Pradhan Mantri Suraksha Bima Yojana' (PMSBY) for the benefit of workers. "I congratulate the Clothing Manufacturers Association of India (CMAI) for organising largest ever apparel trade show and urge the industry to take part in the 'Pradhan Mantri Suraksha Bima Yojana' in which by paying a premium of Rs 1 per month, the worker will get an insurance cover of Rs 2 lakh," Irani said after inaugurating the 63rd National Garment Fair here. The PMSBY will benefit garment workers immensely, as largest number of people work in the textile sector in the country after agriculture, she said. CMAI president Rahul Mehta said the total size of the domestic apparel industry is estimated at around Rs 2,50,000 crore. "Out of this, the (size of) organised market is Rs 74,250 crore (30 per cent) whereas (size of) unorganised market is Rs 175,750 crore (70 per cent). The domestic apparel industry's size is estimated to double within next 7 years," he said. The garment B2B Fair, said to be the largest ever so far in country, has 742 stalls displaying 812 brands.

Approximately, 40,000 retailers from across the country are expected to visit the three-day expo. "For the first time, an Iranian delegation with 12 members belonging to Tehran Garment Union will visit the fair. The Iranian garment market is estimated at USD 16 billion, of which, 40 per cent comes from domestic sources and rest through imports. "India has been absent from there due to an extremely high import tax by Iranian government – 55 per cent on apparel and 32 per cent on textiles," Mehta said. He said Iran has agreed to reduce import duty to 20 to 25 per cent in 2 years. "Iran offers immense opportunities for Indian export with a combination of western, traditional taste, he added. Textile Commissioner Kavita Gupta said the draft National Textile Policy is ready and it would be presented to the Cabinet for approval.

SOURCE: The Outlook India

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DGFT highlights steps for ease of doing business

The government has said that the efficacy of a slew of initiatives under the new Foreign Trade Policy is reflected in the fact that the annual trade data indicates that the share of the manufacturing sector in India's total exports has increased from 64 per cent in 2014-15 to more than 69 per cent in 2015-16. The analysis carried out by DGCIS shows that important sectors like cotton yarn/fabrics/made-ups and handloom products, RMG of all textiles among others, have recorded significant increase in 2015-16 over 2014-15. In response to questions raised by the exporters on the major initiatives taken by Directorate General of Foreign Trade/ Department of Commerce to promote trade and improve Ease of Doing Business, DGFT's Director General Anup Wadhwan briefly summarized the major initiatives relating to policy simplification, reducing cost of capital through interest subvention, document reduction, IT initiatives like online filing of applications, creation of trade portal and training and outreach activities. Wadhwan said the New FTP consolidated 5 different schemes for rewarding merchandise exports under the earlier policy into a single scheme, namely Merchandise Exports from India Scheme (MEIS) which was introduced on April 1, 2015. The government also accepted the request of exporters to do away with Landing Certificates and approved extending MEIS benefits for the already notified products to all countries, which was implemented from May 4, 2016. This afforded dual benefit for most exporters as not only the landing certificate was dispensed with, the MEIS benefits were also extended to cover all countries. He also pointed out that the Interest Equalization Scheme notified by the Reserve Bank of India (RBI) on December 4, 2015, reduces cost of capital by allowing 3 per cent interest equalization on Pre and Post Shipment Rupee Export Credit to eligible exporters. The scheme addresses the problem of high interest rates that the exporters had to pay. All products manufactured and exported by SME are eligible under the scheme

Additionally, for ease of doing business, the number of mandatory documents required for exports and imports have been reduced to 3 each. Earlier, 7 documents were required for exports and 10 for imports. A major simplification was carried out for the first time exporters who are required to obtain Import Export Code. DGFT did away with the issuance of physical copy of IEC and introduced IEC wef Apr1, 2016. The application, processing and issuance was completely made online where no physical application was required to be submitted.

SOURCE: Fibre2fashion

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Smriti Irani opens NGF

Textile Minister, Ms. Smriti Irani, inaugurated the 63rd edition of National Garment Fair (NFG) organised by Clothing Manufacturers Association of India (CMAI) here. While congratulating the CMAI for organizing the fair, Ms. Irani appealed upon the association members and NGF exhibitors to support the Pradhan Mantri Suraksha Bima Yojna in which by paying a premium of Re One per month, the benefit to the worker will be insurance cover of Rs. 2 lakh. In response the Textile Ministers’ appeal, Mr. Rahul Mehta, President, CMAI agreed that the association would participate for the benefit of garment workers.

Giving details of the textile and apparel package cleared by the Cabinet for resurgence of the industry, Ms. Irani informed that the Textile Ministry had today circulated the draft of the duty drawback guideline with the industry association and next week the entire industry will be called upon for a meeting with the Textiles Secretary in order to notify the guidelines. Mr. Irani said that she was keep to know where are the bottlenecks at the centre and state level that we can assist the industry and assured the industry that Textile Ministry’ support in expeditiously resolving the issues confronting the industry. Meanwhile, Mr. Mehta informed that this year NFG is spread over approximately 550,000 Square feet with 742 Stalls displaying 812 Brands. This NGF is India’s Largest Ever Garment Fair held so far. Approximately 40,000 retailers from all over India are expected to visit this 3-day expo, he informed. East India Garment Manufacturers and Exporters Federation is participating for the first time in this Fair, Mr. Mehta said and added that there is Bengal Pavilion with 25 brands from East India, Iranian Delegation with 12 members belonging to Teheran Garment Union are also visiting the Fair. This is also first time when Iranian Delegation visited Fair, it may be noted here. Mr. Mehta informed that the market in Iran was US$ 16 billion, of which, 40% came from domestic sources and rest met through imports. India has been absent from there due to an extremely high import tax by Iranian government – 55% on apparels & 32% on textiles. After the Indian delegation’s visit, Iran has agreed to reduce import duty to 20 to 25% in 2 years. Iran offered immense opportunities for Indian export with a combination of western & traditional taste, he said.

SOURCE: The Tecoya Trend

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Spinning mills’ profitability likely to get hit as domestic cotton prices surge

The profitability of spinning companies in the second quarter of 2016-17 likely to get hit, with domestic cotton prices surpassing international cotton prices, adversely impacting the yarn demand and export prospects for the spinning industry, ratings agency ICRA said. Domestic prices of ginned cotton have increased significantly—from about Rs 90-92 per kg in April to around Rs 122 per kg now. Slow growth in domestic consumption and stagnation in exports are likely to adversely impact demand and export competitiveness of the Indian yarn, the agency said. According to Anil Gupta, vice-president, corporate sector ratings, ICRA, slower cotton sowing and decline in cotton sown area apart from cotton stocking by intermediaries could have led to this sharp rise in prices. As per ICRA estimates, the profitability of spinning industry will be adversely impacted because of the price rise as it faces challenges of slow growth in domestic consumption and high reliance on exports.

Gupta further said that both the factors are a challenge for the mills to sell their production and one can see a decline in capacity utilization and also contribution margins, to prevent inventory build-up. The spinning players, who may have stocked inventories for four to five months in March 2016, may witness improved profitability as they are likely to gain from higher yarn prices. ICRA said that stability in cotton prices is most critical for a profitable textile industry as it minimizes the risks of inventory losses and the need for a price hike for the existing and future orders. However, many spinning companies expected cotton prices to be stable in 2016, and the cotton inventory stocking was not beyond two months in March 2016.

SOURCE: Yarns&Fibers

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Exports decline have bottomed out, may improve: Nirmala Sitharaman

Decline in exports have bottomed out and the outbound shipments are expected to witness gradual improvement in the coming months depending upon pick up in global demand, Commerce and Industry Minister Nirmala Sitharaman said. She said that global demand pick up is still not as much as “we would like it to be”. “Problems persist in many countries. Brazilian economy is in trouble. European Union is going through the after effects of Brexit. UK itself is looking for starting fresh negotiations. “So while there is a hope…the exports having bottomed out and its now showing signs of improvement, (but) will still have some way to go before they really steadily move upwards,” she told PTI in an interview.

Exports of top 5 sectors dip 31% in SeptemberExports of top 5 sectors dip 31% in September Exports fell for the 18th month in a row in May, though marginally by 0.79 per cent to $ 22.17 billion as several non-oil sectors such as engineering and gems and jewellery saw a rise in outward shipments. Exporters body FIEO too has stated that decline in exports has largely been arrested and non-oil exports have turned positive after a long gap. Exports have been falling since December 2014 due to weak global demand and slide in oil prices. However, since December last year, the pace of contraction is slowing down. During April-May 2016, exports contracted by 3.74 per cent to USD 42.73 billion. The key sectors which are still showing negative growth include pharmaceuticals, some agri products and textiles.

SOURCE: The Financial Express

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Indian Economy needs outward-oriented growth to clock 8-10% rate:CEA

Stating that Brexit will leave a “muted” impact on India, Chief Economic Advisor (CEA) Arvind Subramanian today said the economy can’t achieve 8-10 per cent growth rate without “outward-oriented growth strategy”. “There will be some impact of Brexit on India. But broadly impact will be muted… We can’t achieve 8-10 per cent growth without outward-oriented growth strategy,” Subramanian said at an event organised by ‘India Policy Forum 2016’. “If you (India) have outward-oriented growth strategy, you can sell in domestic markets also,” he added. On the economic growth still above 7 per cent level despite exports falling for the last 17 months, the CEA said “If you look at export volume (non oil volume), India by no means is outlier. Decline in exports is due to slowdown in world demand.”

Noting that India is a service sector powerhouse, Subramanian — who was Senior Fellow at the Peterson Institute for International Economics — said that he thinks government’s ‘Make in India’ and efforts to improve manufacturing sector is essential to achieve higher growth rate. Subramanian said India can still achieve 15 per cent export growth and can raise service export from 0.2 per cent to 1.5 per cent. Talking about protectionist measures adopted by developed countries, the CEA said India and other developing countries should keep their economies open. He said post Brexit, Germany’s role has become usually large. “Germany is running world largest Current Account Surplus,” he added. Subramanian noted that post Brexit, Trans-Pacific Partnership (TPP) negotiations will be test case. In lighter vein, he said, “after Brexit we can say, perhaps hyper globalisation is dead, long live globalisation”.

SOURCE: The Financial Express

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Session on foreign trade

Joint Director General of Foreign Trade (JDGFT), Kochi, in association with Federation of Indian Export Organisations (FIEO), organised a training session on Foreign Trade Policy, international trade, promotional schemes and banking for exporters under Niryat Bandhu Scheme here. The session was designed to give exposure for exporters in international trade and in international business stream. DK Singh, Additional DGFT, was the chief guest. R Muthuraj, Joint Director General of Foreign Trade, Kochi, and AK Vijaykumar, Assistant Director, FIEO, aksi spoke.

SOURCE: The Hindu Business Line

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Vizag to host BRICS meet

The third BRICS (Brazil, Russia, India, China and South Africa) urbanisation forum will be held here from September 14 to 16, the theme being ‘Building responsive, inclusive and collective solutions in urbanisation’, according to a press release. The forum was established in 2011 and the first forum was held in New Delhi in 2013 and the second in Durban the same year. The level of urbanisation among BRICS countries is 90.6 per cent (Brazil), 73.8 per cent (Russia), 62 per cent (South Africa), 56 per cent (China) and 31.3 per cent (India), according to a study.

SOURCE: The Hindu Business Line

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Rupee hits 1-month high of 67.05, up 13 paise

The rupee today recovered by 13 paise to close at one-month high of 67.05 a dollar on fresh selling of the American currency by banks and exporters in view of sustained inflows from foreign funds amidst weakness of dollar in the overseas market. The rupee opened higher at 67.10 as against yesterday's closing level of 67.18 at the Inter-bank Foreign Exchange (Forex) market and firmed up further to 67.0275 before closing at one-month high of 67.05, showing a gain of 13 paise or 0.19 per cent. The rupee had last settled at 66.76 per dollar on June 10, 2016. The rupee hovered in a range of 67.0275 and 67.2150 per dollar during the day. The dollar index was trading lower by 0.12 per cent against a basket of six currencies in the late afternoon trade. Meanwhile, the RBI fixed the reference rate for the dollar at 67.2046 and euro at 74.3484. In cross-currency trades, the rupee moved down further against the pound sterling to end at 89.00 from 88.27 yesterday while recovered against the euro to 74.27 from 74.46. The domestic currency continued to rule firm against the Japanese yen at 64.07 per 100 yen from 64.73. Pramit Brahmbhatt of Veracity Financial Services said, "The rupee opened stronger by 8 paise at 67.10/USD compared to previous close of 67.18/USD, on back of positive cues from global equity market." "Taking cues from domestic equity market, the rupee remained positive for the day, but faced resistance at 67/USD. In domestic equity market, we witnessed mild profit booking at higher levels, thus to close the day Nifty ended with negligible loss of 2 points at 8,519 levels. Thus the rupee ended with a gain of 13 paise at 67.05/USD. Trading range for the spot USD/INR pair will be 66.80 to 67.20/USD," he added.

SOURCE: The Economic Times

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India hopes to overtake Bangladesh, Vietnam in garment exports

India's government has approved a 60 billion-rupee ($894 million) package aimed at creating millions of jobs in the country's textile and garment industry. The package is also meant to boost exports from the garment sector, which lag behind those of Bangladesh and Vietnam. India was ahead of the two countries in garment exports from 1995 to 2000. Neighboring Bangladesh, now the world's second largest apparel exporter, after China, surpassed India in 2003. Vietnam did so in 2011, despite India's established value chain from fiber to apparel manufacturing. "Bangladesh, as a least-developed country, gets preferential access in terms of duties to both to the EU and the U.S.," said Arvind Singhal, chairman of Technopak, a consultancy that focuses on fashion retailing and other sectors. "For Vietnam, it is the same in the case of the U.S., which is the largest clothing importing market [along with] the EU. So, there's certainly an advantage in favor of Bangladesh and Vietnam." For India, a country of 1.25 billion, however, "it is the domestic market which is much bigger than the export market," Singhal said. "So India does not have to worry only about exports. The garment industry will do well in India [due to rising] domestic demand as its economy grows." The government package for the textile industry is aimed at creating 10 million jobs, 70% of which are to go to women, in the next three years. It includes a slew of labor-friendly measures to promote job creation, economies of scale and exports. The government expects the steps to lead to a cumulative increase of $30 billion in exports and to $11 billion worth of investment over the next three years. "India has the potential to be the global leader in the apparel sector," Finance Minister Arun Jaitley told a media briefing last month.

India's textiles industry contributes about 14% to industrial production, 5% to GDP and 11% to the country's export earnings. It employs over 40 million people directly and 60 million indirectly. The $108 billion industry is expected to reach $223 billion by 2021. Rashmi Verma, the secretary in the Ministry of Textiles, said the garment sector has huge potential. We have the entire value chain in India, from fiber to apparel manufacturing," she said. "In Bangladesh, they don't have cotton fiber, which they have to import. But we have fiber, yarn, fabric, and we also do processing and garment manufacturing, which is a very big advantage." In China, she noted, wages have now increased, and the focus shifted from textiles to technology. "So their global market share [of 40%] is coming down and a vacuum is being created which can be beneficial for us," Verma added. "If the latest government package for the textiles sector is implemented properly," Verma said, "we will be able to overtake Vietnam and Bangladesh in the next three years in garment exports."

Bangladesh concerned?

Analysts and those in the industry, meanwhile, feel international buyers are unlikely to leave Bangladesh despite the recent terrorist attack in a popular Dhaka cafe that targeted foreigners. Twenty-two people were killed, including nine Italians, many of whom worked in the garment sector. Seven Japanese, an American and an Indian national also lost their lives. The attack, on July 1, shook Bangladesh's $26 billion apparel industry, which contributes 80% to the country's exports and employs 4 million people. The Islamic State group claimed responsibility. Now there are fears in Bangladesh that major apparel chains like Sweden's H&M Hennes & Mauritz, Japan's Uniqlo, America's Gap and Britain's Marks and Spencer may rethink sourcing from the country. The strike followed a spate of targeted killings of religious minorities, secular bloggers and liberal activists. The Islamic State group and al-Qaida also claimed responsibility for these attacks. Bangladesh's government, however, says homegrown terrorists are behind them. On whether H&M is reconsidering its Bangladesh sourcing, Hacan Andersson, a company spokesman, said in an email that the South Asian country "is an important sourcing market for us." Andersson did not elaborate on H&M's business strategies in Bangladesh or India.

Mohammed Hassan Imam, director of Bangladesh's DBL Group, an apparel maker and exporter whose clients include H&M, Puma, Esprit, Wal-Mart and Marks and Spencer, feels the recent terror attack -- the first such strike in the country to target foreigners in a major way -- is a big concern. "At the same time, [terrorism] is a global issue," he said when asked whether Bangladesh's prevailing security situation will affect the country's garment sector, largely dependent on foreign investment. "In our organization also, foreigners from countries such as the Philippines and Thailand are working, and we are ensuring their security," Imam said. "Definitely people are worried about the security situation in Bangladesh, but I don't think it is going to hit the industry."

Technopak's Singhal also feels Bangladesh's garment industry is unlikely to come under pressure. "When you look into sourcing, money matters the most," he said. "As long as Bangladesh remains the cheapest country in the world to source, buyers will stick to it." He noted that similar concerns were raised after the collapse of the Rana Plaza complex, just outside of Dhaka, in April 2013. The worst garment industry disaster in Bangladesh's history claimed more than 1,100 lives and triggered calls for reforms of a sector known for grim factory and living complexes as well as low pay, about $70 a month. Kazi Rashed, the chief executive at Golden Moon (Bangladesh), an Italian leather footwear company, said the recent attack has not affected business. "We mainly procure leather from Bangladesh," he said, "and sometimes from India and China, also."

SOURCE: The Asian Review

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Post Brexit, EU committed to partnership with India

Despite the exit of Britain, the European Union remains committed to its partnership with India, EU Ambassador to India Tomasz Kozlowski said on Wednesday. “My statement is that the EU remains committed to its partnership with India after Brexit,” Kozlowski aid in an interaction with the media here. “India is an important actor in the international arena,” he said. He said that while India was the EU’s 10th trading partner, the EU was India’s largest trading partner. “Last year, trade between India and the EU stood at 100 billion euros,” he said. “Let me tell you, trade between both sides is very much balanced.” According to Kozlowski, the India-EU summit during Prime Minister Narendra Modi’s visit to Brussels in March this year invigorated the partnership. “The summit adopted a number of agreements that are very result-oriented,” he said. “We have analysed all Indian flagship programmes.” He said that the EU has made some suggestions regarding the flagship programmes of India but stressed that these were not in the form of assistance but as a partnership.

While the EU-India clean energy and climate partnership has been launched, the EU-India startup partnership would be launched in October this year, the Ambassador, who hails from Poland, said. He said that the European Investment Bank (EIB) has launched a credit line of 1.2 billion euros for Indian partners. “The EIB has offered 450 million euros to the Lucknow metro,” Kozlowski said. “The EIB will also open its branch in India later this year,” he stated, while adding that EIB loans were not commercial but concessional. He said the EU was cooperating with India on international issues, including nuclear non-proliferation, cyber security, anti-terrorism and anti-radicalisation. Asked about the EU’s position on Britain’s exit, the Ambassador said: “EU regrets but respects Brexit.”

Pointing out that Britain was still a member of the EU, he said that it would take two years to negotiate its exit under Article 50 of the EU constitution. He said the remaining 27 members of the EU were determined to remain united. Stating that though though the EU faced crises like financial, migration and now Britain’s exit, Kozlowski said that it has managed to handle such matters in a better way now. “After the financial crises in Greece, Spain and Iceland, we have introduced a lot of instruments which have made us more resilient,” he stated. “The European Central Bank has taken new roles for financial management.” As for migration from hot spots in North Africa and the Middle East, he said that though there were many challenges, now the situation was better. “Last year, we decided to have European border and coast guards,” the Ambassador said. “The EU is committed to contribute to world peace,” he added.

SOURCE: The Financial Express

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Exim Bank inks pact for $45 mn loan to Kenya

Exim Bank has extended a loan of USD 44.95 million to Kenya for a textile factory and development of small and medium enterprises.  The loan, known as line of credit, has been granted on behalf of the Indian government. The Export-Import Bank of India said in a press release that it has "extended Lines of Credit to the Government of of USD 29.95 million and USD 15 million for financing the upgrade of Rift Valley Textile Factory (RIVATEX East Africa Ltd) and for development of various small and medium enterprises in Kenya respectively".  The loan agreements were signed in Nairobi, Kenya on Monday, by Exim Bank CMD Yaduvendra Mathur and Henry K Rotich, Cabinet Secretary, The National Treasury, Kenya in the presence of Prime Minister Narendra Modi and the Kenyian President Uhuru Kenyatta. With this loan agreement, Exim Bank has now placed 207 Lines of Credit, covering 63 countries in Africa, Asia, Latin America, Europe, Oceania and the CIS, with credit commitments of over USD 14.95 billion. These credit are used to finance exports from India. Under the LOCs, Exim Bank will reimburse 100 per cent of contract value to the Indian exporters. Besides promoting India's exports, Exim Bank loans enable demonstration of Indian expertise and project execution capabilities in emerging markets.

SOURCE: The Business Standard

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British PM May seen leaning on India to boost growth

Bilateral ties between India and UK are expected to undergo a paradigm shift as Theresa May succeeds David Cameron as the new Prime Minister. May, who was previously UK Home Secretary, emerged the sole contender for the Prime Minister’s post. She also becomes UK’s second woman Prime Minister after Margaret Thatcher. Just as her name was announced as the successor to Cameron on Monday, May stated that her goal will be to create a “strong, new, positive vision for the future” of UK. However, what remains to be seen is how her vision with UK’s partner countries shapes up, especially India. Cameron was regarded to be closer to India. “Everything depends on what the terms of negotiations will be between Britain and EU. We are closely watching the developments. I strongly believe with Brexit happening, UK will look at India more than ever before. India-UK ties are much stronger and it does not depend on any individual,” Naushad Forbes, President, Confederation of Indian Industry (CII), told BusinessLine . He believes May will be equally looking towards India for the growth of the UK economy just as Cameron did. India invests more in the UK than in the whole of EU. The combined turnover of these businesses has increased by £4 billion in 2015 to £26 billion, said a report by Grant Thornton UK LLP in association with CII.

FTA and Masala Bonds

The UK has already made it official that it wants to expedite a Free Trade Agreement (FTA) with India that can be implemented when Britain officially leaves the EU. Britain’s Business Minister Sajid Javid visited India last week meeting the senior Ministers of the Narendra Modi government as well as officials of the Tata Group. “I am confident that a deal can be done on this. India already has trade agreements with over a dozen countries. The efforts to make a deal with the EU have made little progress in nine years. India and the UK should now move quickly to come to bilateral arrangements,” said Conservative Party Leader Geoffrey Van Orden. On the other hand, Masala bonds are expected to get a boost with the UK showing signs of stabilisation, albeit slowly, experts believe. “Business will be as usual, rather it might grow with UK needing India more than ever before. India, China and the Commonwealth Territory at large will be crucial for the new PM to look at,” said Sanjaya Baru, a foreign policy expert, who was also advisor to former Prime Minister Manmohan Singh.

SOURCE: The Hindu Business Line

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Textile Industry Indonesia: Sluggish Exports, Weak Domestic Market Share

Indonesia's textile and textile products industry remains under pressure this year. Exports of Indonesian textile and textile products are only expected to grow 1 percent to USD $12.3 billion in full-year 2016, below the 3 percent target that was set by the Indonesian Textile Association (API). API Chairman Ade Sudrajat said exports in the first quarter only reached USD $2.6 billion. Moreover, even on the domestic market Indonesia has trouble to compete with imports of cheap textile and textile products from Vietnam and China. The textile industry, one of the oldest industries in Indonesia, is a key industry within Southeast Asia's largest economy as it - being labor intensive - creates employment opportunities for millions of Indonesians. Although, by far, China is the world's top textile producer and exporter, Indonesia cannot be labelled a "small player" being ranked among the world's top ten largest textile producers.

With China's economy facing several problems, including rapidly rising minimum wages, Indonesia could expand its role in the global textile industry. However, Indonesia too is facing problems, including higher minimum wages as well as relatively high energy tariffs. As such, other textile producing nations in Southeast Asia (Vietnam, Cambodia and Myanmar) are seemingly more successful in taking away some of China's market share on the global stage. More alarmingly, these regional rivals are gaining market share in Indonesia itself where consumers' purchasing power has weakened in recent years and are therefore eager to purchase the cheapest textiles available. Sudrajat says Indonesian textile producers now control a domestic market share below 30 percent. In fact, during the Idul Fitri holiday, when consumption usually rises, he detected no significant rise in domestic textile sales.

Recently, the Indonesian government cut electricity tariffs for domestic labor intensive industries in an effort to support domestic industries. The textile industry is one of the industries that is considered most-badly affected by the country's economic slowdown after 2011. However, this incentive is yet to have a positive impact on Indonesia's textile industry. Sudrajat says it will require much more structural changes in order to boost the domestic textile industry and prevent more bankruptcies as well as mass layoffs. Moreover, for Indonesia it is difficult to compete with Vietnam on markets in Europe and the USA because Indonesia is not engaged in free trade partnerships with these regions. As such, Indonesia's textile exports to Europe are subject to import duties in the range of 11- 30 percent, while Vietnam can export its textile products to the European Union without being charged import duties. This makes Vietnam's products much more competitive.

Sudrajat says the industry needs to seek non-traditional export markets in order to expand its export base. For example Turkey and Iran are countries that could be a new target. Soon, an Indonesian delegation will visit these countries to seek opportunities for Indonesian textile exports. Earlier, Indonesia's Ministry of Industry said Indonesia's textile industry should diversify and start to offer materials for the nation's flourishing fashion industry. Currently, the domestic fashion industry is still highly dependent on imports.

SOURCE: The Indonesia Investments

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Chinese textile industry puts up mega show amid slump

Amid a slump in the broader industry, the Chinese textile industry has put up a great display at the 17th edition of its annual Textile and Apparel Trade Show in its biggest market, the United States. The exhibition is aimed at reinvigorating the industry, which has seen slowing customer demand over the past several years, the organisers said on Tuesday, the opening day of the three-day event at the Jacob K. Javits Convention Center in Manhattan, New York. It has been no easy task to ensure the growth and success of this trade show at a time when the international textile industry is experiencing a historic reshaping in terms of supply chains and purchasing power," observed Gao Yong, vice-president of China National Textile and Apparel Council (CNTAC). The mega-show is running concurrently at the Javits with other trade shows Texworld USA, Apparel Sourcing and Home Textiles Sourcing. It features more than 800 textile and fabric companies from 20 countries, 569 of which are from China. More than any other market, a high-quality one like the US calls for top suppliers, Gao said adding that Chinese textile suppliers had always paid attention to the demands of their clientele. As labour costs in China grow and many clothing companies shift their workforce to other Asian countries such as Vietnam, Pakistan and Bangladesh, China's textile exports have declined. However, US is the only country where its textile exports have been steady — there was a 1.5 % increase in exports in 2015 over 2014, according to California Apparel News.

Last year, Chinese textile exports fell for the first time in six years, dropping 5 % to $ 286.8 billion. Exports to the European Union fell 10.6 % year-on-year and to Japan by 12 %. Exports to ASEAN countries fell 1.7 %, according to customs data from China. Nonetheless, US is still China's top textile partner, with those exports accounting for 17.2 % of the country's total exports. The shipments make up 38 % of the US market, Gao said. Zhang Qiyue, China's consul general in New York, said that textiles and apparel particularly reflect the "growing business ties between the US and China". In the period from 2000 to 2015, bilateral textile and apparel trade grew from $ 6.2 billion to $ 48.5 billion, she said. The organisers of the event are China National Textile and Apparel Council (CNTAC), China Council for the Promotion of International Trade, Specialized Textile and Apparel and Messe Frankfurt.

SOURCE: Fibre2fashion

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Pakistani textile firms set to gain from increasing cotton prices

According to Insight Research, textile firms in Pakistan are likely to benefit from the global increase in cotton prices, particularly firms that produce value added products. The benefits will materialise in the shape of higher margins on existing cotton and textile inventory, and a revival in textile operations after the emergence of a better global demand scenario. These subsequent benefits are indicated by increase in the number of shares of textile firms traded at the Pakistan Stock Exchange (PSX) and the percentage increase in the firms’ share prices. Gul Ahmed recorded an increase of 0.61 per cent in its share price; Kohinoor Textiles witnessed an increase of 1.63 per cent, Nishat (Chun.) saw a surge of 0.65 per cent while Nishat Mills Ltd’s share price increased by 2.20 per cent on Wednesday. According to a prediction by the United States Department of Agriculture (USDA) in its recent report, some of the countries will have lower cotton inventory levels in 2016/17. This prediction has led to a 13 per cent increase in global cotton prices. The reasons for this shortfall are mainly an increase of 1.5 million bales of cotton demand by China and lower production in Pakistan and India. Even though the United States had a 1 million bale increase in its production for the year, the prices are still expected to rise as a recent demand for the government’s reserves sales indicates that mills are consuming more cotton than previously estimated. Production levels in Greece and Uzbekistan have also reduced. World 2016/17 ending stocks are now projected at 91.3 million bales, a reduction of 9 million from the starting level.

SOURCE: The Pakistan Today

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China's textile imports to EU slide in 2015

China's imports to the European Union in textiles and clothing have been witnessing a steady decline, over the last five years, especially in garments sector. Whereas in 2010, its market share of EU textiles and clothing imports stood at 40.8%, this had fallen to 35% by 2015, according to a European Apparel and Textile Confederation (Euratex) bulletin. The leading position of China has continued to be eroded by the increasingly vigorous entry of the other production zones such as SAARC (South Asian association for Regional co-operation) whose market share during the period rose from 19 % in 2010 to 24.6 % in 2015. The tendency for China seemed to be more and more textile exports whose production was facilitated by more sophisticated and productive machinery, at the expense of garments which are much more labour intensive, the Euratex said in an overview of the bulletin released. The Mediterranean countries, which have long enjoyed the advantage of their proximity to the EU-28, have experienced the same scenario as China. Although this area continued to be a major supplier, its share had contracted from more than 20% in 2009 to 18% in 2015. The textile and clothing imports share of ASEAN (Association of South East Asian Nations) also grew to EU share from 6% in 2010 to 8.6% in 2015.

In 2015, these four zones accounted for 86% of total extra-EU textile and clothing imports. EU-28 imports originating from these groupings primarily related to clothing goods. Clothing products represented 80% of total imports, a +10.5% gain in value terms. Among products, China prevailed as the main supplier of woven garments even though its share continued to shrink at 37.6% to the benefit of South Asian countries. Even in knitted garments category, china's share declined to 34 % much to the advantage of SAARC and ASEAN zones. On the export front, demand for EU clothing weakened strongly in Russia and Ukraine during 2015. The 28-nation bloc struggled to make gains regardless of a few definite trading advantages, Euratex reported. In 2015, 57.5% of extra-EU exports went to four main defined groups: the Mediterranean countries with 13.7%, the group of autonomous countries with 11.8%, the EFTA group of countries with 14.2% and the NAFTA group with 17.8%. Woven fabrics were the major textiles exported by the EU. These represented 24.4% of total textile and clothing exports. The NAFTA zone and the Mediterranean countries are the biggest purchasers of textile goods (yarns, fabrics, knitted fabrics and special textiles). Among clothing, woven and knitted articles represented respectively 32% and 17% of total EU textile and clothing exports. These are of particular interest to developed countries. EFTA and NAFTA areas make up the two main buyers, both for woven items with 17% and 18.5% respectively and for knitted items, with 21% and 15.5%. These market shares of clothing purchases were up sharply for the NAFTA area. For the zone of emerging countries in Asia, demand was steady with a total share of purchasing of made up garments of 24.8%.

SOURCE: Fibre2fashion

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Vietnam garment business likely to face export difficulties post Brexit

Vietnam’s textile and garment businesses likely to face difficulties in export from the fourth quarter this year as the pound and euro’s depreciation will affect buy and sale prices of importers and the price difference between currencies will be lower than before, under the impact of Britain’s exit from the EU, according to the Vietnam Textile and Apparel Association. Moreover, Brexit is said to cause some purchasing power changes in the EU and Britain. The association wants domestic businesses to try quickly building local and foreign supply chains to diversify lines of products for new markets. The association to limit Brexit influences on production and trading as advised domestic businesses who have been exporting to Britain and the EU to boost exports to traditional markets including the U.S. and South Korea and broaden their business to new markets such as Russia and Eastern Europe.

SOURCE: Yarns&Fibers

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Foreign garment, textile tech companies bank on Vietnam

Foreign companies providing technology solutions for textile, garment, and footwear production have been increasingly active in Vietnam, taking advantage of the expected growth of the industry. On July 7, French company Lectra announced the opening of its subsidiary Lectra Vietnam. Lectra, which provides technology solutions dedicated to industries using fabrics, leather, technical textiles, and composite materials, has been present in the country for over 20 years, represented by its agent Ly Sinh Cong Trading Service Company (LSC) for the past twelve years. The new subsidiary will take over LSC's team and assets. According to the company, this represents a key step in Lectra’s development plan in Asia. “Vietnam is one of the most dynamic Southeast Asian economies. It is a top choice for manufacturers who focus on production cost and brands seeking to diversify supply. The Trans-Pacific Partnership (TPP) agreement signed in February 2016 will reinforce the attractiveness of the country, where Lectra already has many customers, including very large Asian companies,” said Lectra’s CEO Daniel Harari. Yves Delhaye, Lectra’s managing director for the ASEAN, Australia, the Republic of Korea, and India, said that the company aims to develop even further its already close ties with companies present in the country. “Several of our Chinese and RoK apparel customers manufacture a portion of their products in Vietnam. They are very interested in innovative solutions to improve product quality, operation efficiency, and the productivity of their factories. Moreover, a growing number of automotive industry players are investing in Vietnam. Lectra will be there to help develop their production," he said.

Lectra is not alone in its quest to cash in on Vietnam’s growing garment manufacturing industry. Earlier this month, New Zealand company ShapeShifter, which provides software to optimise production for industrial users of textiles, leather, and metal, announced that it is finally setting up its customer support team in Vietnam this year, after twelve months of pushing its sales activities in Asia, particularly in Taiwan (China) and Vietnam. CEO Tim White said he expected the demand for Shapeshifter’s products in Vietnam and surrounding Southeast Asian nations would increase as the region engage in more worldwide trade. Meanwhile, the German Textile Machinery Association (VDMA), as the representative of 130 textile machine and equipment manufacturing companies, met with Vietnamese companies in the textile and support industries in Hanoi and Ho Chi Minh City last week, to introduce the latest German technologies. Thomas Waldmann, managing director of the VDMA, also cited the TPP as a key reason for the association’s interest in providing machinery to the Vietnamese textile manufacturing industry. “Due to the recently signed TPP, Vietnam is increasingly becoming a much preferred textile manufacturing location for companies worldwide,” he said. Truong Van Cam, deputy chairman of the Vietnam Textile and Apparel Association (VITAS), which supported the event, said a considerable proportion of technologies in the Vietnamese current textile and apparel industry needed to be transformed to improve quality, especially for those supplying cloth for garment production for export. The textile, apparel, and footwear industries, all of which are rated amongst Vietnam’s major export sectors, with a total annual turnover of US$27 billion in 2015, are expected to benefit the most from the lowered tariffs after the TPP comes into effect. Fellow TPP members, such as the US and Japan, are also Vietnam’s largest export partners in textile and footwear, bringing great opportunities to Vietnamese exporters in these sectors.

 Source: The Global textiles

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China exports stabilise in June as imports post slight drop

China's exports stabilised in June - the latest indicator to show the world's second - biggest economy is steadying. Overseas shipments rose 1.3 per cent in yuan terms from a year earlier, the customs administration saidon Wednesday. Imports fell 2.3 per cent to leave a trade surplus of 311.2 billion yuan ($46.5 billion). Trade in dollar terms typically is posted shortly after yuan data. The yuan posted a fifth straight drop last week, the longest losing streak this year, signalling policy makers are more tolerant of further weakening. A weaker yuan may give a boost to export competitiveness if sustained, especially if global demand can weather recent upheavals including Britain's decision to exit the European Union. Wednesday's trade data clearly illustrate the impact of a fast RMB depreciation, as exports improved somewhat while imports fell further," Zhou Hao, an economist at Commerzbank AG in Singapore, wrote in a note, using the abbreviation for renminbi, an alternative name for the nation's currency. China sees "obvious" obstacles in foreign trade amid a severe and complex environment, the customs administration said in a statement accompanying the data. Factory-gate deflation eased for a sixth straight month in June, an official factory gauge was largely stable, while a services measure perked up. Data Friday is forecast to show the economy expanded 6.6 per cent from a year earlier in the three months through June, according to a Bloomberg survey of economists.

SOURCE: The Business Standard

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Crude oil has a new normal

The first half of 2016 is done with and crude oil — the lifeline of the global economy — is the third best performer in the entire non-agro commodity space, with returns of around 30.5 per cent in international markets. On the MCX, the commodity has gained by around 32.5 per cent, as a 2 per cent dip in the rupee supported the rise in the same timeframe. June marked the fourth straight month of an average price rise in Brent and WTI futures. Both Brent and WTI crude oil touched the $51 mark on June 9, just a week after the OPEC meeting on June 2. Prices have rallied to the highest point in 2016, stoked by continuing outages in Nigeria and Canada and a steady decline in US oil production. The combination of a cut by OPEC and non-OPEC countries saw global supply drop by around 4 million barrels per day in June itself.

The Nigeria factor

Sabotage in Nigeria’s oil sector has been a big boost for OPEC nations, who were reluctant to cut oil output, as OPEC’s oil output rose in June to its highest level in recent history, according to a Reuters survey. In the current context, Nigeria’s output has partially recovered from militant attacks and Iran and Gulf members have boosted supplies. Production in Nigeria has risen to about 1.9 million barrels per day (bpd) from 1.6 million, due to repairs and no major attacks taking place on pipelines in the Delta region.

New paradigm

We are in a situation where the $50 mark has become a new $100 mark for oil and the question now is whether oil markets will rebalance or not in the second half of this year. The answer remains yes. Even in January, when the price of oil fell to its lowest level since November 2003, the oil market re-balanced itself, though a lot of surplus oil would be added to bulging stocks. On the contrary, US inventories are showing signs of withdrawal. It fell by 2.2 million barrels for the week ending July 1. Crude inventories have declined for seven consecutive weeks. Overall, crude inventories are down by 18.84 million barrels since the last week of April, indicating that refineries are processing more crude and the incremental demand is kicking in.

Outlook

In 2016, cuts in global capital expenditure (capex) are expected to continue to be significant, negatively impacting the amount of new oil discoveries. Some $290 billion is estimated to be cut from companies’ capex in 2015/16, according to OPEC (Organization of Petroleum Exporting Countries). Between 2016 and 2018, the industry is expected to invest around $40 billion per year in exploration, less than half its investments during 2012-14, according to OPEC. This clearly indicates that the extra barrel of oil will be hard to come by in the coming months. From a three-month perspective, we expect WTI oil prices (CMP: $45/bbl) to move higher, towards $56 while MCX oil prices (CMP: Rs. 3,007/bbl) can move higher towards Rs. 3,600.

SOURCE: The Hindu Business Line

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