The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 19 JULY, 2016

NATIONAL

INTERNATIONAL

 

Textile Raw Material Price 2016-07-18

Item

Price

Unit

Fluctuation

Date

PSF

1014.90

USD/Ton

0%

7/18/2016

VSF

2242.05

USD/Ton

0%

7/18/2016

ASF

1883.32

USD/Ton

0%

7/18/2016

Polyester POY

1031.34

USD/Ton

0%

7/18/2016

Nylon FDY

2212.16

USD/Ton

0%

7/18/2016

40D Spandex

4259.90

USD/Ton

0%

7/18/2016

Nylon DTY

5573.74

USD/Ton

0%

7/18/2016

Viscose Long Filament

1263.02

USD/Ton

0%

7/18/2016

Polyester DTY

2040.27

USD/Ton

0%

7/18/2016

Nylon POY

2055.21

USD/Ton

0%

7/18/2016

Acrylic Top 3D

1150.92

USD/Ton

0%

7/18/2016

Polyester FDY

2421.41

USD/Ton

0%

7/18/2016

30S Spun Rayon Yarn

2780.14

USD/Ton

0%

7/18/2016

32S Polyester Yarn

1659.12

USD/Ton

0%

7/18/2016

45S T/C Yarn

2398.99

USD/Ton

0%

7/18/2016

45S Polyester Yarn

2929.61

USD/Ton

0%

7/18/2016

T/C Yarn 65/35 32S

2212.16

USD/Ton

0%

7/18/2016

40S Rayon Yarn

1793.64

USD/Ton

0%

7/18/2016

T/R Yarn 65/35 32S

2137.42

USD/Ton

0%

7/18/2016

10S Denim Fabric

1.33

USD/Meter

0%

7/18/2016

32S Twill Fabric

0.81

USD/Meter

0%

7/18/2016

40S Combed Poplin

1.15

USD/Meter

0%

7/18/2016

30S Rayon Fabric

0.67

USD/Meter

0%

7/18/2016

45S T/C Fabric

0.66

USD/Meter

0%

7/18/2016

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14947 USD dtd. 19/07/2015)

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

 

Govt rejects anti-dumping duties on MMF from China

Dealing a major blow to the man-made fabric (MMF) industry, Textile commissioner Dr Kavita Gupta has rejected their claims that the powerloom sector in Surat was losing business badly due to under-voiced import of synthetic fibres from China. “Chinese fabric is not a problem, there must be other factors as well,” Dr Gupta told reporters in Surat on the sidelines of the inauguration of the Textile week organized by the Southern Gujarat Chamber of Commerce and Industry (SGCCI). In response to what action government had taken on the application of domestic MMF manufacturers seeking anti-dumping duty on Chinese synthetic fabrics, she said the textile ministry had gathered all the import data from the customs and other agencies in June and found that the extent of impact due to import of Chinese fabric in the country is just 3 per cent and for Surat it is a meager 5 per cent. "I request the industry stakeholders and associations to submit substantial data regarding the reason for the closure of so many powerloom units in the state,” said Dr Gupta expressing concern over the developments in Surat, which has the country's largest man-made fabric industry has upgraded machines in most powerlooms.

Earlier, while inaugurating the week-long business show, she said Surat has been identified for development as a mega cluster and most likely IL&FS which has been project consultant for major textile sector projects such as Tripura and in Tirupur, would be chosen for Surat too. "We are in the process of finalizing an agency for developing a mega cluster project. Surat is among the MMF mega cluster that we are thinking about. In all probabilities, we are going to finalize IL&FS for the cluster development project," Dr Gupta said. Meanwhile, the SGCCI has demanded that the embroidery and zari sectors in Surat be included in the recently announced Amended Technology Upgradation Fund Scheme (A-TUFS) of the Textiles Ministry.

In a memorandum to Textile Commissioner, the industry body said at present only the embroidery machines that are used in the readymade garment units qualify for subsidy in A-TUF, and there is no mention of the Zari units the A-TUF scheme at all. A cluster like Surat has around 1.50 lakh embroidery units in the decentralized and unorganized sector. However, each process in garments manufacturing is carried out by distinctly by different units. Despite of this the embroidery sector has been excluded from getting the benefits of subsidy under A-TUF, the industry organization said. On the other hand, cops winder, considered as an import machinery in weaving preparatory is excluded from the machinery list under A-TUFs, it added.

SOURCE: Fibre2fashion

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Textile exports may rise 6% to USD 40 bn in FY17: ICRA

Textile exports is expected to grow at 6 per cent to USD 40 billion in 2016-17, mainly driven by the expectations of growth in the apparel segment and higher fibre prices, according to ICRA research. The sector has witnessed a de-growth of 2 per cent in 2015-16, ICRA said in an update on the Indian textile industry. “Despite volume growth in most of the segments, de-growth in the value of textile exports during 2015-16 was driven by lower fibre prices (cotton as well as polyester). “For 2016-17, while raw-cotton export is expected to decline, other segments, especially apparels, will see positive volume growth, especially due to improved export competitiveness supported by the recent financial package for the textile industry,” ICRA VP, Corporate Sector Ratings, Anil Gupta said.

ICRA has estimated that apart from the apparel segment, volume growth in textile exports is also expected in other segments like textile made-ups and home furnishings. The average prices for fibre are also likely to stay higher in this fiscal compared to the previous year, which will support the growth in value of textile exports, it added. “While the outlook on volume growth is positive in all the segments except raw-cotton, yarn export volumes may also come under pressure due to the recent spurt in domestic cotton prices. This spurt can also partially offset the benefits of the recent financial package for the textile industry,” Gupta added. Textile exports continued to decline by 6 per cent and stood at USD 5.7 billion for first 2 months in this fiscal against USD 6.1 billion in the year-ago period due to lower fibre prices, it said. Polyester and cotton prices stood lower by 10 per cent and 4 per cent, respectively till May 2016, which is reflected in the decline in value of exports. However, with the recent spurt in domestic as well as international cotton prices, the growth in value terms is expected to turn positive in the coming months as the higher input costs will partially be required to be passed on to the buyers, ICRA pointed out.

SOURCE: The Financial Express

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Demand for inclusion of embroidery and zari sectors in A-TUFS by SGCCI

In cluster like Surat, the country’s largest man-made fabric MMF hub, there are around 1.50 lakh embroidery units working in decentralized and unorganized sector. Each process in garments manufacturing is carried out by distinctly by different units. Despite of this the embroidery sector has been excluded from getting the benefits of subsidy under Amended Technology Upgradation Fund Scheme (A-TUFS). On the other hand, cops winder, considered as import machinery in weaving preparatory is excluded from the machinery list under A-TUFs. The Southern Gujarat Chamber of Commerce and Industry (SGCCI) office-bearers stated that the embroidery machines qualify for subsidy in A-TUF only if they are used in the readymade garment units only while; the Zari units have found no mention in the A-TUFs. The SGCCI has demanded that the embroidery and zari sectors in MMF hub in Surat should be included in the recently announced A-TUFS by the Ministry of Textiles. The SGCCI submitted a detailed list of memorandum to Textile Commissioner, Dr Kavita Gupta, who was on a day's visit in the city on Saturday.

SOURCE: Yarns&Fibers

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MoS for Textile Ajay Tamta inaugurates India International Garment Fair 2016

India International Garment Fair (IIGF) is one of the largest and most popular events in the international apparel fairs arena. The event serves as an ideal platform for overseas garment buyers to source and forge business relationships with India's best apparel and fashion accessories manufacturers and suppliers. It's a must-attend event for global fashionistas and textile giants.

SOURCE: The DD news

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Textile processors increase job charges by 15%

Textile processors in in Surat have unanimously decided to increase job charges by 15 per cent on processing of all kinds of finished fabrics from Tuesday. A meeting in this connection was held under the aegis of South Gujarat Textile Processors Association (SGTPA) here on Monday. The hike in job charges has resulted following average increase of around 25 per cent in raw material costs, including lignite, coal, chemical and labour charges in the last few months. The processors demanded that the job charges be hiked in order to sustain the textile processing sector against increase in raw material costs. At present, the MMF cluster in the city manufactures around 2 crore metre of fabrics per day. There are 6.5 lakh powerloom weaving machines, out of which around 3.5 lakh machines have been shut in the last few months. There are around 400 textile dyeing and printing mills located in the city, including Sachin and Pandesara, and on the outskirts at Palsana.

SOURCE: The Times of India

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Raymond to build up brand presence in Middle East and South Asia

Raymond, fabrics and garments company as part of its overseas push is now planning to build up its brand presence in the Middle East and South Asian countries. The company is also supplying fabrics to leading garments manufacturers in the US, Europe and Japan. Sudhanshu Pokhriyal, president (suiting) Raymond Limited said that their products get acceptance in 55 countries. Now they are aiming to make the brand Raymond even stronger in the Middle East and South Asia. He said that the company recently opened an office in Dubai, which would look after the middle eastern markets.

Talking about textiles division of Raymond, he said that it contributes about 35 percent to the overall revenues. The division's revenue in last fiscal was Rs 2,300 crore, which was expected to grow at 10 per cent year-on-year. For Raymond in terms of sales eastern region is the biggest and largest portion of sales comes from the retail outlets and multi-branded outlets. Regarding the suiting business, it is growing in single digit, which was mainly due to the sluggish economic growth.

SOURCE: Yarns&Fibers

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India can grow at 8% or more over the next decade: CEA

The Indian economy can grow at rates of eight per cent or more over the next decade, Chief Economic Adviser to the Finance Ministry Arvind Subramanian said on Monday. “We are already growing at over seven per cent. Growth of eight per cent or more is eminently doable, subject to the international environment being cooperative,” he said at the launch of the book India's Long Road: The Search for Prosperity. The economy grew 7.6 per cent in 2015-16 and the Finance Ministry is eyeing eight per cent growth this fiscal on the back of a good monsoon. However, Subramanian said the expectations of big bang or radical reforms in India are “historically unreasonable standard”, noting that a higher growth trajectory and reforms will be led more by the competitive federalism of States. “The incentives of reforms are shaped in different ways...for a country like India that is not facing a crisis and is unwieldy with power widely dispersed,” he said.

Stressing that he is very “hopeful about India”, Subramanian said change is coming in the country through measures of the Centre but more importantly through the dynamism from decentralisation or competitive federalism. “That will be the way forward for India,” he said, adding, “My standard is of persistent, encompassing and incremental reform.”

Exchange rate

Subramanian said there is no control over the exchange rate due to opening up of the economy to inward capital flows over the last 15 years. “We have progressively opened up to all kinds of capital flows,” he said in response to a query.

SOURCE: The Hindu Business Line

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Rupee needs to remain strong to fight import-led inflation, say experts

Reserve Bank of India (RBI) Governor Raghuram Rajan’s assertion that the rupee was fairly valued might have its roots in the economic reality that the country is facing and not necessarily taking into consideration the numbers put forward by indices that measure the domestic currency’s strength.  The Real Effective Exchange Rate (REER) shows that the rupee should depreciate sharply, but that won’t be helpful for an import-dependent India where the quantum of exports easily gets dwarfed by the quantum of imports. A strong currency helps in fighting some of the import-led inflation. Theoretically, going by the metrics alone, the domestic exchange rate needs to be at 74-75 a dollar level to be on a par with its export competitors. Compared to that, the rupee closed at 67.20 a dollar on Monday. “Yes, the Real Effective Exchange Rate (REER) shows that the rupee is overvalued. But, the rupee should remain strong to lower import bill and therefore, the present exchange rate can be termed to be fairly valued,” said Jayesh Mehta, head of treasury at Bank of America Merrill Lynch. “Gold import bills are coming down because of a clampdown on corruption, oil prices are low and foreign direct inflow is strong. If the rupee does not strengthen now, when will it ever do so?” asked Mehta.

Rupee needs to remain strong to fight import-led  inflation, say experts The concept of REER is used to gauge a currency’s strength vis-a-vis its trading partners or export competitors after adjusting for inflation, expressed as an index. The normal level is 100 and anything above indicates overvaluation. REER is expressed in a six-currency basket, taking into account India’s major trading partners — the US, the Eurozone (comprising 12 countries), the UK, Japan, China and Hong Kong. Also, a 36-currency basket that takes into account a wider gamut of India’s trading partners and export rivals is also formulated. On a 36-currency basket, the rupee’s trade-based REER index was at 110.68 in June, down from 111.32 a year ago. This indicates that the rupee indeed has depreciated vis-a-vis a variety of its trading partners. On an export basis, REER was 112.92, against 113.87 a year ago, indicating that the rupee has bettered on its competitiveness, if only mildly. 

Another concept called Nominal Effective Exchange Rate (NEER), which strips the inflation differential between trading partners, is used to gauge the fair value of rupee. And these concepts, instead of just the market level of exchange rate, are increasingly becoming important metrics for currency valuation at a time. In China, for example, the government does not take into account the spot rate, but REER is the all important gauge. “Given volatile cross-currency movements, the NEER and REER have become important metrics for currency valuation,” said Saugata Bhattacharya, chief economist at Axis Bank Ltd. “These, however, need to be interpreted with due caution. Rather than absolute levels, comparison with past trends as well as cross-country position is useful determining valuation," Bhattacharya said.

In a speech on March 12, RBI Governor Raghuram Rajan had said that to retain competitiveness, “the rupee has to depreciate by the inflation differential vis a vis a trading partner.” The inflation differential between the developed country (India’s export destination) and India is roughly four per cent. Therefore, the currency ideally needs to depreciate by four per cent every year. However, according to RBI’s own calculation, the country’s productivity differential with its trading partners (how efficiently India produces similar goods) works out to around 1-1.5 per cent. Therefore, the local currency should depreciate by 2.5-3 per cent per annum for the rupee to be truly on a par with its competition. That is not the case now as the rupee had depreciated only 1.55 per cent in a year.  Perhaps comforting, is that India’s nearest competitors have seen their currencies appreciate against the dollar by a significant margin. Most of India’s competitors, except China and Mexico, have seen their currency appreciate against the dollar and that explains the moderation in REER numbers.

SOURCE: The Business Standard

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No cut throat rivalry between India, China in Africa: Media

Competition between India and China in Africa is rising but it doesn't necessarily result in cutthroat rivalry as their increasing presence in the African continent can be complementary to each other, an official media report said.  "Indian Prime Minister Narendra Modi's recent visit to Africa has drawn great attention globally not only because the trip was his first visit to the continent since he assumed office in 2014, but also due to the increasing focus on competition between China and India in strategic and media circle," it said. "As an emerging power, it is reasonable for India to strengthen its bilateral ties with African countries. Nowadays, there are more than two million ethnic Indians living in South Africa alone, with some becoming members of parliament and political leaders who have enormously promoted India in that country and the rest of the continent," it said. "Some observers believe that China and India are competing to increase their presence in the continent. It might not be wrong, however, the negative effect of this competition need not be exaggerated too much if we see it in the objective way," an article in the state-run Global Times said. "The common presence of these two countries in Africa doesn't necessarily mean irreconcilable or cut-throat competition. Since China and India are two emerging powers, their increasing connections with other regions are definitely logical even if competition exists," it said. "It would be absurd to predict an absolute competition mode considering that the complementary features between China and India are very obvious as China is good at providing investment and technology while India has been doing well in people-to-people interactions," it said. "If India's interaction with African countries can bring positive momentum to local development, China will also benefit from such moves," it said adding China and India have important common interests in Africa. As members of the BRICS mechanism, China, India and South Africa have been keenly pursuing economic cooperation and reconstructing global orders, it said adding that this is one of the key and promising cooperative points for the "elephant" and the "dragon".

SOURCE: The Economic Times

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India US agree to enhance cooperation in maritime sector

American Ports have evinced a keen interest in a comprehensive port-led development, especially the ambitious Sagarmala programme, Indian officials said as the Union Road Transport and Highways Minister Nitin Gadkari concluded his week-long trip here. During his meeting with officials, Gadkari explored joint venture opportunities with India’s flagship container handling Jawaharlal Nehru Port (JNPT) to promote transfer of technology and enhance bilateral commerce. The Union Minister offered investment opportunities in building and developing new ports, construction of new berths/terminals in existing ports, coastal economic zones, dredging, ship building, ship repairing, ship recycling, development of inland waterways and coastal and cruise shipping, he said.

The Sagarmala project with 150 projects have potential of mobilising USD 50-60 Billion of infrastructure investment and another USD 100 Billion of promoting industrial growth. Gadkari said, the government has agreed to provide maritime clusters for ancillary industrial support and design centres, as well as financial assistance to meet the challenge of lack of competitive advantage due to heavy subsidies provided by major shipbuilding countries to their shipbuilding industry. He also highlighted the vision of Sagarmala, envisaging reduction of logistics cost for EXIM and domestic trade with minimal infrastructure investment, aimed at creating four million new direct jobs and another six million indirect jobs. Gadkari told the US maritime sector that thematic studies and action plans have been developed across sector for implementation, prominent elements of which include coastal shipping revolution, coastal industrial Greenfield plants, reduced time to export container by five days and reducing cost to export by USD 50 per container.

Earlier, Gadkari reached Los Angeles from San Francisco by road, as his officials said Minister wanted to have a first hand experience of the of the latest techniques in road engineering, highway construction, road signage and other effective measures for road safety along this prestigious ocean route. “Undertaking a coastal drive by road from San Francisco to Los Angeles, the distance of 800kms was covered by Gadkari in 10 hours, to gain, what he said, first-hand experience of the latest techniques in road engineering, highway construction, road signage and other effective measures for road safety along this prestigious ocean route,” an official said.

SOURCE: The Financial Express

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India to sign new bilateral treaties in next few months

India will likely sign a bilateral investment treaty (BIT) within the next few months with the US, Canada or Cambodia. That taxation matters have been kept out of the BIT is not a cause of concern, as the nations with which India is negotiating the agreement have been assured that the provisions under Double Taxation Avoidance Agreement (DTAA) are adequate to provide protection to foreign companies operating here, government sources told Business Standard. BIT, the model draft of which was cleared by the Union Cabinet in December 2015, is expected to eventually replace the existing bilateral investment protection and promotion agreements (BIPPAs) that India has signed with 72 nations. India will also sign BITs with countries it has had no comprehensive investment agreements with before, including the US. BIT keeps taxation out of its ambit with the idea that foreign companies finding themselves in a tax row with the government will not be able to invoke the investment treaty their parent country has signed with India, as is the case with BIPPA.

EVERY LITTLE BIT HELPS

  • Govt negotiating BIT with Asean nations, US, Canada, Russia, Australia, among others
  • BIT keeps tax out of its ambit
  • Officials say partner nations being assured that DTAA will provide adequate protection
  • Nations still said to be unhappy with some BIT provisions
  • US has stated more talks on BIT needed

The model BIT states that India or any other country cannot nationalise or expropriate any asset of a foreign company unless the law is followed, is for the public purpose, and fair compensation paid. Public purpose is not defined in any treaty India has signed with other nations. The BIT states that dispute-resolution tribunals, including foreign tribunals, can question ‘public purpose’ and re-examine a legal issue settled by Indian judicial bodies. “The government is negotiating BIT with a number of countries, including the US, Canada, Australia, Russia, China, New Zealand and Association of Southeast Asian Nations (Asean) nations,” said a senior official aware of the developments. The Asean is a regional grouping comprising Thailand, Cambodia, Laos, Malaysia, Indonesia, Brunei, Singapore, the Philippines, Myanmar and Vietnam. “The closest we are to wrapping up negotiations is with the US, Canada and Cambodia. So, any one of these could be signed first,” the official said. “The issue of tax not being covered by the treaty is not a contentious one between us and our global partners, as we have assured them fair protection under DTAA,” the person added. However, the optimism by the government on signing BITs, especially regarding the US, is in contrast with what Richard Verma, US Ambassador to India, had written in a guest column for Business Standard earlier this month.

In his piece titled US seeks more talks on investment treaty, Verma wrote: “In India’s recent model draft BIT, there were departures from the high standards that we had seen in other treaties India had negotiated. The new model actually substantially narrows the scope of investments covered by the treaty and requires that disputes be exhausted in local Indian jurisdictions before alternative investor-state dispute mechanisms can be initiated. We will keep working to narrow our gaps, but today, unfortunately those gaps do prevent us from moving forward and putting in place the kind of structural protections that investors in both our countries have come to expect in international commerce.” Government officials said that in case of countries with which India has signed BIPPA, first those agreements will be notified as null and void before the new BITs are signed.

British telecom major Vodafone had invoked the India-Netherlands BIPPA, seeking international arbitration in its long-drawn Rs 20,000-crore tax dispute, following the cancellation of conciliation talks. Similarly, Finnish mobile handset maker Nokia resorted to this for resolving the tax department’s claim of liability, existing and anticipated, for seven years from 2006-07. Cairn Energy, too, recently demanded compensation under the ambit of the India-UK BIPPA for the Rs 10,200-crore tax notice slapped on Cairn India.

SOURCE: The Business Standard

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Global Crude oil price of Indian Basket was US$ 44.37 per bbl on 18.07.2016

The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 44.37 per barrel (bbl) on 18.07.2016. This was higher than the price of US$ 44.15 per bbl on previous publishing day of 15.07.2016.

In rupee terms, the price of Indian Basket increased to Rs. 2977.60 per bbl on 18.07.2016 as compared to Rs. 2960.89 per bbl on 15.07.2016. Rupee closed weaker at Rs. 67.10 per US$ on 18.07.2016 as against Rs. 67.07 per US$ on 15.07.2016. The table below gives details in this regard:

Particulars

Unit

Price on July 18, 2016 (Previous trading day i.e. 15.07.2016)

Pricing Fortnight for 16.07.2016

(June 29, 2016 to July 13, 2016)

Crude Oil (Indian Basket)

($/bbl)

44.37             (44.15)

45.17

(Rs/bbl

2977.60       (2960.89)

3043.55

Exchange Rate

(Rs/$)

67.10             (67.07)

67.38

 

SOURCE: PIB

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South Asia benefits as China EU clothing share slides

 

China's share of the value of EU clothing imports has declined steadily over the last five years to the benefit of south Asian countries, particularly in lower-end products, according to new data. The leading position of China has continued to be eroded by the increasingly vigorous entry of the other production zones, according to a European Apparel and Textile Confederation (Euratex) bulletin. In 2010, China's market share of EU textiles and clothing imports stood at 40.8%. However, this had fallen to 35% by 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," Euratex explains. The main beneficiary was the South Asian Association for Regional Cooperation (SAARC) zone – Bangladesh, India, Maldives, Nepal, Pakistan, and Sri Lanka – which has gone in the opposite direction to China since 2010. From 19% in 2010, its market share of textiles and clothing imports rose to 24.6% in 2015. The ASEAN (Association of Southeast Asian Nations) zone, which is smaller than the SAARC area, showed enough drive and economic dynamism to grow its share of textile and clothing imports from 6% in 2010 to 8.6% in 2015. The Mediterranean countries, however, experienced the same scenario as China. Despite having long enjoyed the advantage of their proximity to the EU-28, and still a major supplier, their share contracted from more than 20% in 2009 to 18% last year.

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. Looking at products, China remained the main supplier of woven garment imports. However, at 37.6% its share continued to decline to the benefit of South Asian countries whose shares rose. The Mediterranean countries, as the traditional suppliers of the EU-28 in this segment, lost more ground, ending up with a 16.5% share. But while there are concerns that increasing costs are undermining the competitiveness of China's garment production on the world stage, recent figures confirm it still remains the largest source for apparel buyers as rising prices are largely being offset by productivity gains. No other country can match China in terms of the size of its supply base, its range of skills, its quality levels, its product variety and the completeness of its supply chain. The country also continues to lead the way when it comes to efficiency and infrastructure.

China manufacturing activity shows signs of recovery

EU exports With regard to EU exports, the region struggled to make gains, according to Euratex. In 2015, around 57.5% of extra-EU exports went to four main groups: the Mediterranean countries with 13.7%, autonomous countries with 11.8%, EFTA countries with 14.2%, and NAFTA countries with 17.8%. In 2014, these four groups accounted for 59% of extra-EU textile and clothing exports. The decline was, for the most part, linked to exports to the autonomous group – Armenia, Azerbaijan, Belarus, Kazakhstan, Moldavia, Uzbekistan, Russia, Ukraine – in particular due to the embargo on exports to Russia. Woven fabrics were the major textiles exported by the EU last year, representing 24.4% of total textile and clothing exports. The NAFTA zone and the Mediterranean countries are the biggest purchasers of textile goods, which include yarns, fabrics, knitted fabrics and special textiles. In terms of clothing, woven and knitted articles represented 32% and 17% of total EU textile and clothing exports, respectively. EFTA and NAFTA countries were the two main buyers, both for woven items with 17% and 18.5% respectively, and for knitted items, with 21% and 15.5%. Demand was steady among emerging countries in Asia, with a 24.8% share of purchases of made-up garments. The group of autonomous countries saw a decline due to the fall in exports to Russia.

SOURCE: The Just Style

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Favorable Trade Agreements With EU to Create Opportunities for the Textile Manufacturing Market in Serbia

Technavio analysts forecast the textile manufacturing market in Serbia to grow at a CAGR of 3% during the forecast period, according to their latest report. The research study covers the present scenario and growth prospects of the textile manufacturing market in Serbia for 2016-2020. The report also outlines the challenges faced by the manufacturers and the market at large, as well as the key trends emerging in the market.

Textile manufacturing market in Serbia: At a glance

The textile manufacturing market in Serbia is expected to grow at a modest rate, posting a CAGR of 3% during 2015-2020. Textile manufacturing is an integral part of the Serbian economy. It is export oriented and labor intensive, providing the country with huge employment opportunities and, therefore, is an industry that is highly favored by the government. The GDP is expected to accelerate in 2016 following a number of government policies such as relaxation in monetary policies and structural reforms, which are expected to improve the business environment and lead to the inflow of foreign investments. Manufacturers in the market are expected to capitalize the market and boost production. They are also expected to focus on exports, particularly to the EU, the country's most important trading partner.

Technavio consumer and retail analysts highlight the following three factors that are contributing to the growth of the textile manufacturing market in Serbia:

  • Strategic location
  • Favorable trade agreements with EU
  • Low subcontracting costs

Strategic location

“Serbia is located in the Balkan Peninsula, bordered by Croatia and Bosnia-Herzegovina to the west, Hungary to the north, Bulgaria to the east, Montenegro to the southwest, and Albania and Macedonia to the south, which puts the country at the crossroads of Europe and Asia. This strategic location provides the country with a significant advantage from the perspective of trade. This has been a key factor in influencing the inflow of FDI into the country's manufacturing sectors, including the textile manufacturing industry. Moreover, this puts the country in close proximity to leading fashion capitals, such as Italy and France, and enables the manufacturers to keep abreast of changing market trends and respond speedily,” says Brijesh Kumar Choubey, a lead apparel and textile expert at Technavio.

Favorable trade agreements with EU

In 2005, Serbia signed the free trade agreement with the EU. Since the implementation of this agreement, exports of textiles to countries in the EU have more than doubled. Currently, the EU is the country's most important trading partner, and exports account for nearly 70% of the revenue generated by the textile industry in the country. In 2008, Serbia entered into the Stabilization and Association Agreement with the EU, which led to the elimination of import customs on industrial and other products entering the country. Serbia has also entered into trade agreements with Belarus, Turkey, the US, and members of Central European Free Trade Agreement (CEFTA), which also provides manufacturers with potential growth opportunities in foreign markets.

Low subcontracting costs

The textile market in Serbia has a long history of collaboration with foreign partners, and a prime contributing factor for this is the availability of a relatively cheap labor force. Currently, the textile market in Serbia is very competitive in terms of pricing, along with Bulgaria and Belarus. “On a global scale, wages in Serbia are slightly higher than that in China. Moreover, the textile industry also has access to a highly qualified labor force due to the presence of several schools and universities across the country. These factors have contributed to the availability of subcontracting services at a low cost, and this has been a major driver for the inflow FDI in this sector, which in turn has led to a rise in the number of SMEs in the country over the past several years,” adds Brijesh.

SOURCE: The Business Wire

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Large textile production zones proposed in Vietnam

The Industry and Trade Ministry has proposed the development of large textile and garment industrial zones to attract investment in dyeing, and fabric and yarn production. The 500-1,000-hectare zones would attract local and foreign investment for high-end products. The ministry has also proposed that the government provide full support for the building of textile and garment industrial zones located in provinces and cities experiencing socioeconomic difficulties in order to create conditions for the success of small and medium startups. The proposal also targets the development of transport infrastructure connecting the large industrial zones to ports and logistic centres to reduce transportation costs. The Vietnam Textile and Apparel Association (Vitas), which sent to the government a document detailing the difficulties of textile and garment enterprises and proposed solutions, supports the zoning plan. The association also suggested the government provide credit for enterprises to build wastewater treatment centres at those industrial zones. Textile and garment exports grew in the first half of this year, but local firms face difficulties in obtaining production and export contracts for the second half, according to the ministry. The ministry reported a 6-per-cent export increase in the first half of this year to US$12.8 billion (Bt448 billion). The industry also saw growth in exports to its major markets, including the US, increasing by 5.9 per cent to $4.29 billion; Japan with an increase of 2.9 per cent to $1.04 billion; and South Korea with exports 15.6 per cent higher at $764.9 million.

Nguyen Thi Huyen, director of Garment 10 Joint Stock Company, said she was not optimistic about production by the end of the year, while Brexit is expected to harm the price competition for garment exports. According to Tran Van Khang, director of Dong Binh JSC, there has been a lack of export orders since the beginning of the year, triggering stiff competition among domestic manufacturers for customers.  Khang said his firm experienced a 30-per-cent drop in orders in the first five months, for which he blamed overstocking and falling demand in import markets. Export prices have also plunged by 10-15 per cent, while the firm still has to pay wages, insurance and transportation costs, which are on the rise, he added. Phi Viet Trinh, deputy director of Ho Guom Garment SJC, said the company's overseas orders fell significantly in March and April, and only started to rebound last month.

Several trade deals, including the Trans-Pacific Partnership and the Vietnam-EU Free Trade Agreement, have not yet come into effect, so Vietnam's garment customers could not benefit from a preferential tax regime and turned to other foreign manufacturers with more tariff advantages. Many of Vietnam's traditional customers shifted their orders to Myanmar, Laos and Cambodia, which enjoy reduced import duties in the US and the EU, the two largest buyers of Vietnamese garments, said the chairman of Vitas, Vu Duc Giang. Vietnam's textile and garment exports are expected to reach $31 billion this year.

SOURCE: The Nation Multimedia

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Intex South Asia 2016 – Your Gateway to South Asia & International Textile Markets

Intex South Asia, the only international textile sourcing show in South Asia region, invites international buyers and suppliers to take advantage of the only platform which would give in depth, on ground insights to help you penetrate and develop the vast South Asian market. The dynamics of the global garment and apparel industry have changed considerably in the last decade. The industry is shifting from China, the world's largest clothing exporter, towards developing regions like South Asia and other emerging markets. Increasing wages in China have led international brands to focus their energies on, and seek alternatives in countries like Bangladesh, India, Pakistan and Sri Lanka. South Asia’s position as the premier garment export hub in the world has been further cemented with the World Bank stating that South Asia is best placed to lure garment and textile businesses with its lower wages and its demographic advantage of having the largest youth population (487 million) in the world. The World Bank report further states that a 10% increase in Chinese apparel prices will result in a 13–25% rise in SAR countries’ (Bangladesh, India, Pakistan and Sri Lanka) apparel exports to the United States, not to mention a corresponding increase in apparel exports to the Eurozone.

Understanding the growing importance and potential of this region Intex South Asia was created to help manufacturers and buyers take advantage of these opportunities. It is the only international sourcing textile show in South Asia region connecting global exhibitors from India, Pakistan, Bangladesh, Sri Lanka, China, Korea, Taiwan, Hong Kong, and more to buyers from across the South Asia region and other international markets. The potential for intra-regional trade is tremendous and is a critical gap that needed to be filled. Currently, Intex is the only platform in South Asia promoting intra-regional trade, thus positioning itself as the gateway to South Asian markets. The inaugural edition of Intex South Asia in 2015 saw a grand opening ceremony, inaugurated by Hon'ble Sujeewa Senasinghe, State Minister of Development Strategies & International Trade in the presence of Mr. Arindam Bagchi, Deputy High Commissioner of India and Ms. Indira Malwatte, Chairperson & CEO, Export Development Board (EDB) along with Presidents and Chairpersons of leading trade bodies from Sri Lanka and other countries. The specialised zones at Intex like Denim World (showcasing denim yarns, fabrics, accessories and washes); Trends Zone (forecasting latest trends and designs) and Innovation Zone (exhibiting latest innovations in textiles as well as services) provide a focused approach, assisting buyer and exhibitor interaction.

Why is the world interested in South Asia? South Asia is the fastest growing region in the world – its economy expanding by 6% in 2015 & 6.4% in 2016 with the largest youth population in the world. At the same time, South Asia manufactures 80% of the world’s brands, is considered the next garmenting hub of the world and is recognized as one of the best manufacturing, sourcing and distribution destinations for garments, textiles, accessories and finished products. India, Bangladesh, Sri Lanka & Pakistan together exported garments worth US$ 49 billion in 2014-15 and are expected to reach US$ 84 billion by 2020. The world is taking notice but the connections and networking are missing links which need to be connected right away. Intex South Asia bridges the gap and converges buyers and suppliers under one networking platform. It is the only fair in South Asia specifically designed to synergise the garmenting needs of international brands with the manufacturing strength of South Asia satisfying both exports and large domestic markets. For Intex South Asia 2015, Ms. Indira Malwatte, Chairperson & Chief Executive, Sri Lanka Export Development Board (EDB) said, “Intex South Asia will create a unique opportunity to connect and source. The event will facilitate Sri Lankan apparel manufacturers to source their fabric and accessory requirement under one platform.” Similarly, Mr. Azeem Ismail, Chairman, Joint Apparel Association Forum (JAAF) stated, “Sri Lankan exhibitors will get direct benefits of being able to access and interact with buyers from other countries on one single platform.” While Mr. Saif Jafferjee, Chairman, Sri Lanka Apparel Exporters Association (SLAEA) said, “Intex will surely be an ideal chance for large and small scale companies to gain exposure. Intex will facilitate and strengthen business partnerships and create a positive platform for future business.”

SOURCE: Yarns&Fibers

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A new playbook for China and ASEAN

The ruling by the Permanent Court of Arbitration in The Hague against China's territorial claims in the South China Sea is a watershed moment for international law and an unmistakable warning to China about its strategic assertiveness in Southeast Asia. China says that it does not recognize the PCA ruling; but that doesn't mean it is undisturbed by it. The question now is how China will respond. Will it change its often-aggressive behavior in the region, or will it continue to view the South China Sea mainly in terms of US-China competition? If China assumes that a war-weary and risk-averse US will avoid conflict, it could simply assert its South China Sea claims by force. But belligerence could backfire in several ways. First, it would force the members of the Association of Southeast Asian Nations (ASEAN) to choose between China and the US, a decision that all of them would prefer to avoid. Whereas ASEAN member states - particularly the Philippines, Singapore, Thailand, and Indonesia - generally have deep military ties with the US, they also value their economic ties with China. The reality is that ASEAN states could choose to become independent players, rather than pawns in the US-China competition, implying that it is in China's interest to maintain ambiguity in US-ASEAN relations.

Second, by militarizing outcroppings and artificial islands in the South China Sea, China is unwittingly strengthening ultra-nationalist groups in the ASEAN states. This development forces moderate leaders in these countries to adopt a tougher stance toward China than they otherwise would, in order to preempt attacks from the ultra-right and assuage their generals. A case in point is Indonesian President Joko Widodo's recent visit to the Natuna Islands on a warship, a show of force in response to incursions there by Chinese fishermen and navy vessels.

China must know that the material advantages from closer ASEAN-China economic relations will not be enough to guarantee smooth diplomatic relations. Most ASEAN member states are middle-income countries with educated elites who hold diverse views. And even extremely poor and politically illiberal Myanmar has reduced its dependence on China in response to active wooing by the US.

China should rethink its insistence that negotiations over its territorial claims could be conducted only with individual ASEAN states, and not with ASEAN as a bloc - a stance that creates the impression that China is committed to bringing about the group's breakup. But China should not encourage ASEAN's demise, because that would drive several now-neutral ASEAN states further toward the US. Moreover, because ASEAN must represent ten countries with one voice, and must reach a consensus before it speaks, China has little reason to fear that a common ASEAN negotiating position would be totally unacceptable - particularly given recent history. For example, a 2012 meeting of ASEAN foreign ministers failed to produce a joint statement, because Cambodia, a Chinese ally, would not agree to mentioning the South China Sea. And in a meeting of the same group in Kunming, China, in June 2016, ASEAN had to withdraw a joint statement critical of China's actions in the South China Sea when China, again, pressured Cambodia, as well as Laos, to object. What this shows is that, in dealing with ASEAN, China gets to negotiate twice - first, through its closest allies within ASEAN in the formulation of common ASEAN positions, and then directly with an ASEAN team that could include one of its allies. Certain ASEAN countries clearly value their relationships with China more than their relationships with other ASEAN countries; so, unless China has already ruled out any negotiation on the South China Sea, it should not rule out meeting ASEAN as a bloc.

The irony in China's South China Sea claim is that the Communist Party has fallen into a trap set unintentionally by the Kuomintang, which it defeated in 1949. It was the crumbling Kuomintang that in 1947 drew and promulgated the original "11-dash line" map - subsequently reduced to nine dashes by Mao Zedong, in a fraternal gesture to Vietnam - in a futile effort to rally the population to its side via imperial ambition. There is no need for the winner of China's civil war to follow the path of the loser. And if China has to press this claim in order to appease ultra-nationalist elements, it should do so by deploying diplomats, rather than its military. Of course, a win-win outcome from The Hague decision will also depend on ASEAN and US actions. ASEAN and the US are highly skeptical of China's repeated public promises of a non-hegemonic mode of international relations; but they should not be blind to China's legitimate security concerns, which it will never neglect. Both ASEAN and China must now exercise self-restraint and start negotiating in good faith to resolve the territorial disputes in the South China Sea in a way that addresses these concerns.

SOURCE: The Asian Review

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