INTERNATIONAL
Textile Raw Material Price 2016-07-24
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PC |
927.46 |
USD/Ton |
0% |
7/24/2016 |
|
Conventional Spinning PA |
1705.33 |
USD/Ton |
0% |
7/24/2016 |
|
High-speed Spinning PA |
1780.12 |
USD/Ton |
0% |
7/24/2016 |
|
ACN |
1331.35 |
USD/Ton |
0% |
7/24/2016 |
|
Bottle Grade Chip |
1032.17 |
USD/Ton |
0.15% |
7/24/2016 |
|
PSF |
1035.16 |
USD/Ton |
0% |
7/24/2016 |
|
VSF |
2281.25 |
USD/Ton |
0.99% |
7/24/2016 |
|
ASF |
1884.83 |
USD/Ton |
0% |
7/24/2016 |
|
Polyester POY |
1059.85 |
USD/Ton |
0.71% |
7/24/2016 |
|
Nylon FDY |
2228.89 |
USD/Ton |
0% |
7/24/2016 |
|
40D Spandex |
4263.32 |
USD/Ton |
0% |
7/24/2016 |
|
Nylon DTY |
2056.86 |
USD/Ton |
0% |
7/24/2016 |
|
Viscose Long Filament |
2056.86 |
USD/Ton |
0% |
7/24/2016 |
|
Polyester DTY |
1181.76 |
USD/Ton |
0.64% |
7/24/2016 |
|
Nylon POY |
2445.80 |
USD/Ton |
0% |
7/24/2016 |
|
Acrylic Top 3D |
5578.21 |
USD/Ton |
0% |
7/24/2016 |
|
Polyester FDY |
1293.95 |
USD/Ton |
0% |
7/24/2016 |
|
30S Spun Rayon Yarn |
2812.29 |
USD/Ton |
0% |
7/24/2016 |
|
32S Polyester Yarn |
1780.12 |
USD/Ton |
0.85% |
7/24/2016 |
|
45S T/C Yarn |
2400.92 |
USD/Ton |
0% |
7/24/2016 |
|
45S Polyester Yarn |
2931.96 |
USD/Ton |
0% |
7/24/2016 |
|
T/C Yarn 65/35 32S |
2213.93 |
USD/Ton |
0% |
7/24/2016 |
|
40S Rayon Yarn |
1825.00 |
USD/Ton |
0% |
7/24/2016 |
|
T/R Yarn 65/35 32S |
2198.97 |
USD/Ton |
0% |
7/24/2016 |
|
10S Denim Fabric |
1.35 |
USD/Meter |
0.56% |
7/24/2016 |
|
32S Twill Fabric |
0.83 |
USD/Meter |
0.55% |
7/24/2016 |
|
40S Combed Poplin |
1.17 |
USD/Meter |
0.64% |
7/24/2016 |
|
30S Rayon Fabric |
0.68 |
USD/Meter |
0.67% |
7/24/2016 |
|
45S T/C Fabric |
0.67 |
USD/Meter |
0.67% |
7/24/2016 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14959 USD dtd. 25/07/2016)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The Madras High Court’s order to hike wages of garment workers in Tamil Nadu by 64 per cent has done little to quell their protests, even as garment unit owners say paying higher wages is going to be a tough ask, given that they are already “reeling under financial troubles”. On July 15, the court dismissed petitions challenging the October 10, 2014, order of the Tamil Nadu labour department revising minimum wages for tailoring workers in garment and hosiery manufacturing industries, and directed the managements of these industries to comply with it. The wages were last revised in 2004. The court order was meant to provide relief to thousands of garment workers in the state, especially those who work in the 2,500 units in Tirupur and draw a monthly salary of Rs 4,500-7,000. While garment unit owners maintain that the industry is struggling, trade union leaders have long argued that several units where trade unions exist already pay a minimum wage of Rs 10,000 or above, and still manage to make a profit. “This is an argument they (garment unit owners) have been raising for a long time to make us work for a pittance. What about the units that pay a minimum wage of Rs 10,000? What about units that pay Rs 500-600 for workers (under the piece rate system) a day?” said G Sampath, a senior Centre of Indian Trade Unions (CITU) leader in Tirupur.
India’s textile and garment industry is considered the largest in the world, employing over 45 million workers. In April last year, over 10,000 garment workers took to the streets in Bengaluru to protest against the amendment to the Employees Provident Funds and Miscellaneous Provisions Act, 1952. Sampath said workers wanted the implementation of the Minimum Wages Act, 1948, to ensure that the basic minimum wage is increased every five years. “But using influence and powerful industry lobbies, owners of the garment and textile units have delayed this for years. Even this court order has come after 12 years. We want the minimum wage hiked to Rs 18,000, when central government employees are demanding Rs 26,000,” he said. According to employees in Tirupur, those who work under piece rate contracts — a way to remunerate workers according to the number of units produced — get paid a “decent salary” as compared to the “underpaid” time rate labourers. “The work we do is the same, but the company, the presence of trade unions and the nature of the contract play a major role in determining one’s wage. A majority of the workers under time rate contract are underpaid. I used to get less than Rs 5,000 in my earlier job, now I get Rs 11,500,” said B Chandrakumar, who hails from a traditional weavers’ family in Tiruvannamalai. “The industry’s claims of financial troubles are a lie because the company where I work does good business and makes a profit despite paying us more than what a majority of the companies pay,” he added.
In Tirupur units, many piece rate workers are paid up to Rs 600 per day, while those who have time rate contracts get a monthly salary of less than Rs 7,000 despite having nine-hour shifts, usually from 8.30 am to 5.30 pm. Trade unions say they will continue to push for a Rs 18,000 minimum wage. All trade unions, barring the BJP’s BMS, have announced a statewide strike on September 2. One question that lingers is exactly how many workers the court order would benefit. “Units employ anywhere between 10 and 1,000 workers. This order may technically be applicable to only those who enjoy formal contracts, mostly workers in larger units. Decline of trade union forces over the years has hurt their cause,” said a garment unit owner, who pays Rs 8,500 a month. Besides the state’s 2014 wage revision proposal, industries had earlier opposed a draft notification issued to amend the Contract Labour (Regulation and Abolition) Central Rules, 1971, by the Centre, meant to fix the minimum monthly income of contract workers at Rs 10,000. At the time, garment unit owners had said the increase in minimum wage should be done in a phased manner and overseen by the state, not the Centre. Asking garment companies in the state to comply with a government order that revised minimum wages for the industry two years ago, the division bench of Justice Huluvadi G Ramesh and Justice M V Muralidaran had also dismissed hundreds of petitions filed by private garment companies seeking to quash the 2014 order of the Tamil Nadu government.
SOURCE: The Indian Express
Telangana government is working on a new policy for the textile industry and has assured that inputs received from stakeholders will be taken into account before finalising it. As part of policy formulation exercise, Minister for Industries K T Rama Rao held a meeting with textile sector representatives and others concerned. “The Minister held a meeting with representatives of textile industry, weavers associations, and officials of the Government and assured them the suggestions made by them would be considered positively while preparing the policy,” said an official release issued by the Department of Industries. Telangana cotton farmers produce 60 lakh bales annually, while the consumption of the State is just 10 lakh bales, it said quoting the Minister. Rao assured the government would protect the interests of the handloom industry, it added.
SOURCE: The Tecoya Trend
The Cotton Corporation of India (CCI) will sell its remaining stock of about 24,000 bales to small and medium scale mills following directions by the textile ministry. BK Mishra, CMD, CCI, told FE that these mills were finding it difficult to purchase cotton as prices had shot up. They were moving towards closure. Accordingly, the mills approached the ministry and following directions from the ministry, CCI would now sell only to these mills, Mishra said. Significantly, the spot price of the benchmark cotton variety, Sankar-6, was around Rs 33,000 per candy of 355 kg during first week of April 2016 and it increased to Rs 42,700 by the end of June and now ruling at Rs 48,000 per candy. Thus, the price has increased by 45% resulting in an increase of Rs 60 per kg of clean cotton cost used for combed count yarns.
The sudden spurt in cotton prices could not be absorbed by the textile industry and spinning mills, suffering due to surplus spinning capacity due to the reduced demand for yarn exports started facing acute crisis. High fixed costs make production cuts difficult. As a result NPAs are increasing and mills are partially or fully closing down. Old and new mills have a cost differential of 10% in an industry, which doesn’t even have a consistent net profit margin of 5%. Interestingly, CCI had purchased 8.4 lakh bales of cotton at minimum support price this year.The corporation has supplied nearly two lakh bales to National Textile Corporation and state co-operative mills. It had also sold about 1.5 lakh bales a month over the last four months through e-auction. It now has some 24,000 bales, which will be sold to small and medium scale mills.
The textile mills have welcomed the direction from the ministry. “This will bring stability to prices and meet the raw material requirement of the smaller mills,” said M Senthil Kumar, chairman, Southern India Mills’ Association. Kumar has advised all the mills to avoid panic buying as the prices would soften with the availability of 43 lakh bales of closing stock estimated by the Cotton Advisory Board (CAB), once the imported cotton arrives. He has added that the import during the next three months might exceed 15 lakh bales as large number of mills have already contracted for imports with African countries and Australia.
According to Mishra, the coming 15 days will be important as far as sowing operations of cotton are concerned. The acreage for the season of 2016-17 is likely to touch 115 lakh hectares to 118 lakh hectares. There are cases of farmers switching to other crops in parts of Maharashtra, Gujarat and Andhra Pradesh. Advisories have been issued in the case of AP to switch to other crops and thus the high area may reduce to some extent, he said. CCI expects the output to cross some 35 lakh bales for the 2016-17 season and prices should go down by October-December when the crop arrivals commence, Mishra said. In the current situation, understandably no exports are expected. However, some imports are happening with mills contracting cotton from South Africa and Australia.
SOURCE: The Financial Express
Maintaining its upbeat momentum, the rupee on Friday firmed up by another 9 paise to end at a fresh one-week high of 67.08 against the US dollar amid sustained selling of the American currency by banks and exporters. Robust capital inflows along with a smart rebound in domestic equities and unwinding of some dollar positions by speculators further supported the sentiment. The domestic unit gained 9 paise, or 0.13 per cent, at the close. The rupee resumed almost flat with a negative bias at 67.18 from Thursday's closing level of 67.17 at the Interbank Foreign Exchange (Forex) market and weakened further to hit an intra-day low of 67.21 on initial dollar demand from importers and corporates. However, the local currency swung completely in the opposite direction in mid-afternoon trade on the back of adequate dollar supply and accelerated gains to end firmly higher at 67.08, showing a smart rise of 9 paise, or 0.13 per cent.
The US dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.23 per cent at 97.16 in early trade. The RBI fixed the reference rate for the dollar at 67.1355 and euro at 74.0303. In cross-currency trades, the rupee staged a rebound against the pound sterling to close at 87.90 as against 88.51 on Thursday and edged higher against the euro to settle at 73.91 compared to 73.98 previously. But, the rupee held virtually steady against the Japanese yen at 63.22 per 100 yens.
SOURCE: The Times of India
Many exporters have a new, not wholly unexpected, problem. Their claims under the Merchandise Exports from India Scheme (MEIS) are being held on the ground that the description of the product in the shipping bill does not exactly match the description given in the MEIS rate schedule. However, it is well known that these cannot always match. Under MEIS, exporters get duty credits at a notified percentage of the free on board value for exports to notified countries. Appendix-3B of the Handbook of Procedures, Vol 1, gives the list of eligible items and the entitlement rates. The list gives the description and classification code under the Harmonised System. Broadly these are aligned with the Customs Tariff. Many exporters, however, cannot use the same description in invoices to their customers. For example, an exporter of a chemical under the classification 29343000 can give the name of his product in the invoice but not describe it as 'compounds containing a phenothiazine ring-system (whether or not hydrogenated) not further fused', which is what is given in the Customs Tariff or MEIS rate schedule. Many a time, the exporter might prefer to give a description that tallies with the description of the export product given in the advance authorisation. Usually, the description in the invoice gets carried over in the shipping bill.
Similarly, the descriptions 'Other Excl. Cod, Haddock, Coalfish, Hake, Alaska Pollack, Blue Whitings', 'Other Incl Druggets', 'Other Parts And Accessories Of Goods Of SubHeading 844331, 844332' are some examples of descriptions given in the MEIS rate schedule that cannot find their way into invoices or shipping bills. Such instances abound. The exporters give the descriptions in line with their contracts or as required in their authorisations, along with the classification. It is for the Customs to examine whether the item falls under the given classification. Once they accept this and the declaration of the exporter that they are claiming rewards under MEIS, the latter should not face any problems in getting the duty credit entitlements under that classification.
This issue was flagged in this column on April 27, 2015, as follows: "Mostly, the description of items in the MEIS table are aligned with the descriptions in the Customs Tariff. However, the description of the same item may be different in the duty drawback All Industry Rate (AIR) schedule or the Standard Input Output Norms. When exports are made under the drawback or duty exemption scheme, exporters have to give the description in the shipping bill as per the description in the AIR schedule or the advance authorisation. Exporters are apprehensive that in such cases, their MEIS entitlements may be denied on the grounds that the description in the shipping bill does not tally with the description given in the MEIS table. They need to be assured that the MEIS entitlement will be based on the classification code declared on the shipping bill."
Many exporters have taken up this issue with the Directorate General of Foreign Trade (DGFT). However, nothing has been done. So, many now find themselves at the mercy of the dealing officials who can hold up the claims unless their demands are met, although this practice is not uniform at all offices of the DGFT. Many do grant the entitlements on the basis of classification. The DGFT must immediately clarify and issue suitable instructions.
SOURCE: The Business Standard
The free trade agreement being negotiated by the seven-nation BIMSTEC — Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal — will help in elimination of non-tariff measures and give a big push to trade in the region, a recent study by an industry body has highlighted. “BIMSTEC FTA may help activate production links among member countries and help in rationalising various non-tariff measures which would give a big push to regional trade and generate regional value chains. India should work closely with all members for its conclusion,” a study by Assocham on the opportunities and challenges of economic integration of BIMSTEC said. Other recommendations to boost economic engagement include elimination of non-tariff barriers within a mutually agreed timeframe, reduction in negative list (prohibited imports) to unlock trade potential, introduction of transit facilities to promote effective intra-BIMSTEC trade, improvement in regional connectivity and introduction of a BIMSTEC visa to facilitate movement of people particularly for investors and businessmen.
SOURCE: The Hindu Business Line
Malaysian Prime Minister Najib Razak has vowed to strengthen trade ties with India and pay "great attention" to helping the Indian diaspora in the multi-ethnic nation. "I believe in developing this country on an inclusive basis. I will pay great attention to helping the Indian community," Najib said at the launch of the 1st World Kongu Tamilar Conference here last evening. Ethnic Indians form eight per cent of Malaysia's 28 million people. He said the government's continuous efforts had helped preserve and safeguard the Tamil community's language and culture in Malaysia. Students in Malaysia have the opportunity to learn Tamil right from pre-school level to tertiary level. Najib said the government had approved the establishment of six new Tamil primary schools, in addition to the 524 such existing schools in the country. "Tamil language and Tamil literature are also taught at secondary schools. Our national Tamil radio, Minnal FM has 24-hour broadcast in Tamil and there are at least six Tamil dailies," he noted. The event was organised by the Malaysia Kongu Tamilar Association, which represents 80,000 of the 200,000 Kongu Tamilar in the country. Some 10,000 participants, as well as 2,000 delegates from 12 countries, attended the inauguration gathering. The Kongu Tamilar community originated from the Kongu Nadu region in India, comprising the western part of Tamil Nadu and included parts of Karnataka and Kerala.
Addressing the foreign delegates, Najib reaffirmed his commitment to further strengthening bilateral trade between Malaysia and India. "I believe there are many, many more opportunities for our two countries to work together, and I encourage all our visitors to think of Malaysia as a gateway to ASEAN," he said. Najib said the two countries share close cultural affinity that has allowed trade, tourism and education to flourish in both nations. "Thousands of our children are studying in each others countries, and in 2014 and 2015, we welcomed three quarters of a million Indian tourists both years," he said. India's High Commissioner T S Tirumurti, Kongu Nadu Malaysia Chapter president K Subramaniam and former MIC president G Palanivel were also present at the function.
SOURCE: The Economic Times
India will be among priority countries that Argentina is trying to woo for their first ever investment forum that is being organized by the government of Mauricio Macri in Buenos Aires between Sep 12-13 with focus on oil & gas, renewables, mining and agriculture among other sectors. After extending support to India's proposed NSG membership the Macri government is hoping for Indian investments across sectors that have been identified as the priority areas by the Argentina Business and Investment Forum, first mega show under the new Presidency. Interestingly the Forum will be held within days of G-20 Summit in China where both Indian and Argentinian leaders will participate. During the forum Buenos Aires will host over 1500 global businessmen, investors and political leaders. Several sessions are being planned including thematic conferences and a dedicated day for Innovation and Entrepreneurship where proceedings will also be conducted in English for convenience of investors from India. Sources in the Argentinian government told ET that the Macri government has identified India as a priority country for sourcing foreign investments. A lesser known fact in Indo-Argentinian economic partnership is that fact that India imports petroleum from this South American country. A MOU on Cooperation in the Petroleum Sector between ONGC Videsh Ltd (OVL) and ENARSA of Argentina was signed in 2009.
Nearly thirteen Indian Companies have established operations in Argentina with investment totaling to USD 930 million. Indian companies include TCS, CRISILBSE -0.17 %, Bajaj, Cellent, Cognizant Technologies, United Phosphorus Ltd(UPL), Sintesis Quimica, Glenmark, Godrej etc. Argentinian investment in India stands at $ 120 million. TECHINT, which is one of the largest seamless steel tubesmanufacturers in the world, has offices in Delhi employing about 200 people. A unique Regional Action Plan was started in August 2012, to promote India's commercial and economic interests in Argentina. Governors and business delegations from various Argentinian provinces have visited India since the initiation of the Plan. According to Juan Procaccini, President of the Argentina Investment & Trade Promotion Agency, since the assumption of President Macri in December 2015, foreign companies have already announced investments of over $ 16bn, three times as many as in the same period last year. Key to attracting these investments are the ongoing macroeconomic and institutional reforms that will underpin national growth and stability in the coming years.
SOURCE: The Economic Times
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$ 42.69 per barrel (bbl) on 22.07.2016. This was lower than the price of US$ 43.96 per bbl on previous publishing day of 21.07.2016.
In rupee terms, the price of Indian Basket decreased to Rs. 2866.08 per bbl on 22.07.2016 as compared to Rs. 2954.40 per bbl on 21.07.2016. Rupee closed stronger at Rs. 67.14 per US$ on 22.07.2016 as against Rs. 67.20 per US$ on 21.07.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on July 22, 2016 (Previous trading day i.e. 21.07.2016) |
Pricing Fortnight for 16.07.2016 (June 29, 2016 to July 13, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
42.69 (43.96) |
45.17 |
|
(Rs/bbl |
2866.08 (2954.40) |
3043.55 |
|
|
Exchange Rate |
(Rs/$) |
67.14 (67.20) |
67.38 |
SOURCE: PIB
There is a disconcerting trend in exports as from a peak of $25.3 billion in 2011 the value of exports from Pakistan has fallen to $22 billion in 2015. According to the world development indicators, exports as a percentage of GDP for Pakistan have fallen from 14% in 2011 to 11% in 2015. Although the global trade has decreased in 2015, the looming external debt position of Pakistan makes the impact of the decline ever more daunting. The total debt service as a percentage of exports of goods, services and primary income has risen from 11.3% in 2008 to 19.1% in 2014. Over the previous decade, the inflow of remittances into Pakistan has taken an unprecedented importance in the balance of payments. Although remittances and capital inflows are important sources of foreign exchange, the policymakers need to address the falling trend in exports. With increasing debt payments to the IMF and other creditors, Pakistan must ensure continuous inflow of foreign exchange in order to meet the obligations. Exports are a crucial component of foreign exchange inflow. An investigation into the export pattern is necessary as policy measures to promote trade including currency valuations, tax reliefs and exemptions, free trade agreements are implemented. Ministry that set up $35b export target says it is no longer possible. Analysing trade data from the UN Comtrade, approximately half of the exports from Pakistan are destined to the US, China, Germany, Spain, Italy, the UK and the UAE. They account for approximately 45% of global trade. Even though economic conditions are relatively weak in these markets, they are the most important destinations for exporters around the world.
Exported products
On the other hand, the products exported by Pakistan are not the most popular in global trade. The top 10 six-digit HS codes exported from Pakistan in 2015 include textile products and cereals (semi-milled or whole-milled rice has been the top exported product from 2005 to 2015). The top 10 products cumulatively account for approximately one-third of the exports from Pakistan but only 0.5% of the global trade flow. Therefore, exports from Pakistan are not only heavily concentrated in primary products and low value-added goods but are also limited to products that contribute negligibly to the global trade. Further analysis suggests that exports are highly sensitive to fluctuations in global commodity prices, particularly of wheat, cotton and rice. There was an upward trend in the global prices of commodities from 2007 to 2011, consequently increasing the export value of several commodities, followed by a decrease in prices. For instance, exports of raw cotton increased from $47 million in 2007 to $370 million in 2011 but decreased to $100 million in 2015. Similarly, exports of cotton yarn increased from $1.21 billion in 2008 to $2.23 billion in 2013 but decreased to $1.55 billion in 2015. Exports of semi-milled or whole-milled rice increased from $1.1 billion in 2007 to $2.3 billion in 2008 and decreased to $1.4 billion in 2015. Although exports of primary products may bring a windfall during certain periods, they increase the exposure of the domestic agricultural sector to global price shocks.
Trade composition
Although most of the global trade is destined for the aforementioned markets, the composition of trade is likely to differ across destinations. Pakistan mainly exports intermediate goods to China and consumer goods to the US and European Union. Pakistan exported $4.35 billion worth of intermediate goods in the textile industry such as yarn and fabric in 2015 but also exported $8.35 billion worth of consumer goods in textile that require yarn and fabric as inputs. This has increased the dependency of the value-added consumer goods on imported inputs. Further, it has increased the vulnerability of local producers of raw cotton, cotton yarn and fabric to fluctuations in the global commodity prices. Therefore, establishment of long-term production linkages between domestic and foreign entities in various industries is essential. It is imperative that exporters determine their potential in the global value chains and trade accordingly.
Considering that the most important trading partners are developed and advanced countries, they are more likely to churn out products through innovation. The exporters must adapt and realise the gains from the introduction of newer products and their varieties, even within traditional industries such as the textile industry. Free trade agreements should be negotiated to promote export of newer products that are likely to generate greater export revenue and provide easier access for those exporters that would otherwise fail to export. The GSP Plus status awarded by the EU needs to be better utilised to help reverse the current trend of exports. It is imperative that appropriate trade policies are adopted which support the conversion of primary products into processed products domestically through further investments in the food, textile and other industries. Further, the exporters must be able to adapt to the changes in tastes and preferences in their destination markets. With the help of adequate production linkages across different industries and based on the needs of the destination markets, products with varying input mix need to be produced. Similarly, integration into global production networks is necessary to generate export revenue rather than the reliance on irregular exchanges in the global market based on price fluctuations. Although manufactured products themselves may face volatility in their output prices, the ability to produce different varieties may help reduce the adverse impact on the domestic economy from price fluctuations in the global commodity market.
SOURCE: The Tribune
Bangladesh has emerged as a strong player in the denim market worldwide. As the demand for denim products is rising globally, local entrepreneurs have also started investing more in this sector. In the last five years five denim factories came into operation in Bangladesh of which four have already gone into production – Square, Nice, Thermax and Badsha. Bangladesh, now in total has thirty denim factories. Mostafiz Uddin, managing director of Chittagong-based Denim Expert and organiser of Bangladesh Denim Expo that takes place in Dhaka twice a year said that another five companies plan to set up denim factories as the demand is on the rise, especially in the West, the major market of denim. Earlier, Bangladeshi manufacturers used to produce mainly basic denim products such as trousers, but now they also make shirts, bed sheets, pillow covers, home textiles, aprons and tablecloths. Production capacity of the denim mills in Bangladesh is more than 40 million yards a month against the demand for nearly 70 million yards. The rest of the demand is met through imports from countries like China, India, Pakistan and Turkey. Bangladeshi entrepreneurs supply denim products to major global retailers and brands, including H&M, Uniqlo, Levis, Nike, Tesco, Wrangler, s.Oliver, Hugo Boss, Walmart and Gap. Square Denim, which was established at an investment of Tk 400 crore, went into production a few months ago in its Habiganj factory, said Syed Ahmed Chowdhury, general manager (operations) of the company. Currently they are producing 1.5 million yards of denim a month although they have the capacity to produce 3 million yards. They will increase production gradually, said Chowdhury. The industry insiders, said that about Tk 8,000 crore has already been invested in denim business in Bangladesh. In a few years, exports of denim products will rise to $5 billion, from more than $2 billion a year now. According to US Department of Commerce, global denim sales amount to more than $56 billion a year now; the number is expected to reach $64 billion by the end of 2020. In 2015, Bangladeshi denim products had a 22.88 percent market share in the EU and 11.35 percent in the US.
SOURCE: Yarns&Fibers
Political changes after Brexit poll will by no means impact the United Kingdom-Pakistan trade relations and signing of free trade agreement (FTA) for enhancing bilateral trade is their priority, said Deputy High Commissioner of the Great Britain Belinda Lewis during a meeting with regional chairman and vice president Mian Rehman Aziz of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Saturday. Lewis said that they are still member of the European Union (EU) and there is a space for negotiations while the UK has strong trade and investment links with Pakistan long before the EU. Aziz said that the UK is the third largest importer of Pakistani goods other than the United States and China. Pakistan’s exports are helped by the GSP plus arrangement with the EU. The renegotiation of tax especially for Generalised scheme of preference (GSP) plus status is very important for the business community of Pakistan. Aziz discussed various matters of concerns, such as pound sterling’s stability and credit rating, trade under GSP plus and cost of doing business. Federation of Pakistan Chambers of Commerce and Industry Vice President Syed Aasim Shah said that the UK is amongst the largest exporters to Pakistan with over 100 British companies operating in Pakistan. Pakistani exports to the EU are dominated by textile clothing and leather products. British Business Centre Chief Executive Officer Malahat Awan said that they will soon sign a memorandum of understanding with the FPCCI for enhancing the trade relation. The opening of the British Business Centre in Lahore will significantly increase the support available to UK and Pakistani companies. In addition to providing a base for visiting UK companies, the centre will also offer the UK’s and Pakistani member companies to have an access to a growing number of services, including market research, business opportunity, promotion, event management, networking opportunities and bespoke professional and sector specific services.
SOURCE: Yarns&Fibers
June 23, 2016, will forever be a sad day in the history of the EU. Nearly 52% of the British population decided to leave the EU, reversing the decision taken in 1975 to join the common market. The ‘leave’ campaigners are exulting; they called the referendum a sort of reform to save the UK from an unstable EU grappling with migration, security and financial stability issues. The repercussions of Brexit are serious. One wonders if the British voter even understood the consequences of exiting before voting. A country that believed in divide-and-rule has just had one stuck on its backside. Whether they like it or not, the fact is that it is a lot of East Europeans and Asians who work hard to keep the British economy growing. The local guys, instead of upping their game and remaining competitive, have decided to keep the EU guys away who actually work to make a living.
Triggering Article 50, formally notifying the intention to withdraw, sets a two-year clock running. After that, the treaties which govern membership would no longer apply to UK. The terms of exit will be negotiated between the UK’s 27 counterparts, and each will have a veto over the conditions. Two vast negotiating teams could be created, far larger than those seen in British renegotiation. The EU side is likely to be headed by one of the current Commissioners. The negotiations would be tedious, as it would be hard agreeing to a new trading partnership, establishing what tariffs and other barriers to entry would come into play, and agreeing to other important issues such as restrictions on free movement of persons between the EU and the UK. According to the EU, the complete exit would take about five years or more, because the EU wants to make the conditions for exit really difficult to discourage others from following suit.
Against this backdrop, discussions are on in the academic community on the fate of the Transatlantic Trade and Investment Partnership (TTIP). TTIP is an ambitious trade and investment agreement being negotiated between the US and EU. According to the United States Trade Representative (USTR), TTIP aims to bolster an already strong relationship to help boost economic growth and add to the over 13 million American and EU jobs already supported by the existing trans-Atlantic relations. TTIP is expected to provide greater compatibility and transparency in trade and investment regulation and, at the same time, maintain high levels of health, safety and environmental protection. The UK and US are important trading partners and there is scepticism that TTIP negotiations would get affected with Brexit. It is obvious that given the UK’s economic importance, the EU’s market for US products has potentially shrunk, making the EU a less attractive trading partner post Brexit. The first intervention came from USTR Mike Froman, who the day after the referendum emphasised that the “economic and strategic rationale for TTIP remains strong.” Much would also depend on the next US administration.
The EU is extremely keen to complete TTIP negotiations. The ‘Euro-realists’ associated with the European Conservatives and Reformists (ECR) Group in the European Parliament, whose vision is to reform the EU by further liberalising the single market, may push for the finishing line. The Euro-realists are against the hidden protectionism that is to be found in national labour laws or trade union practices, which, they argue, weakens Europe’s ability to compete in the global market. Hence, if Euro-realism gathers momentum, the conclusion of TTIP could be a reality soon.
However, it is hard to predict the future course of TTIP negotiations. With three years into the negotiations already, with 30 chapters being discussed and 14 rounds of negotiations complete, the deal is nowhere near completion and there are several differences on both the sides.
TTIP comprises three main blocks: market access for EU and US companies, cooperation on regulatory issues, and global rules of trade such as sustainable development or competition policy. There has been considerable progress on all three. For instance, in market access, especially on tariffs, the two sides have exchanged offers twice.
TTIP has good offers from both the sides, which include 97% of all tariff lines, leaving the remaining 3% for the so-called end-game. Both the sides are working on improvements within the 97% tariff lines for speedy removal of tariffs. On regulatory issues,there have been proposals for cooperation in chemicals, cosmetics, engineering, medical devices, pharmaceuticals, textiles and cars. The EU has initiated discussions on trade and sustainable development, including on labour and environment. It has also proposed a text for a chapter on energy and raw materials, including promoting green innovations and trade of green technologies. It has suggested removing the existing export licences in the US on exports of gas. This could help diversify the energy mix and contribute to energy security in the EU.
During July 11-15, another round of TTIP negotiations took place in Brussels, with an attempt to consolidate as many texts as possible by the summer break. The President of the European Council has urged member countries to continue with TTIP negotiations and reiterated that the Commission has received the mandate to conclude the negotiations by the end of the year. On the contrary, it could happen that once Britain triggers Article 50 to quit the EU, both London’s and Brussels’ resources will be diverted on thrashing out a deal on what access the UK has to the single market, at the expense of working on TTIP. Another factor which could slow down negotiations is that elections are due in both Germany and France in 2017, where a majority are opposed to TTIP. So, a clear picture will emerge only by the beginning of 2018. Though the timeline of end 2016 for TTIP is unlikely to be met, in the long run TTIP will be concluded and survive Brexit. After all, trade between the EU and US is already worth $4.7 trillion and TTIP provides a chance to the EU to increase it. The author is visiting fellow, Bruegel, Brussels, and ORF, New Delhi
SOURCE: The Financial Express
Pakistan’s Ambassador to the Netherlands, Iffat Imran Gardezi is focusing on devising an effective “trade plan” with a view to promote Pakistani products and services which would improve the existing trade and investment ties between the two countries Pakistan and Dutch. The Ambassador during her visit to Karachi Chamber asked Karachi Chamber to give its recommendations on how to improve trade and investment ties between Pakistan and the Netherlands, besides highlighting the available opportunities in some of the most promising sectors of Pakistan’s economy including the agrarian and textile sectors. Iffat Gardezi is looking forward to work really hard towards furthering relations between the Pakistani and Dutch business communities. She extended full support and assistance to the business and industrial community of Karachi Chamber by Pakistan’s Embassy in Netherlands so that they could efficiently penetrate into the Dutch market. She stressed and assured to extensively examine the Dutch market during her stay and share details of the same with the business and industrial community of Karachi Chamber so that they could benefit by exporting numerous Pakistani products to the Netherlands which, besides strengthening trade relations, would also bring the business communities of the two countries more close to each other for which they must work as a team for promotion of Pakistani goods and services. She was of the opinion that collective efforts were required to deal with the economic crisis, particularly the descending exports being suffered by the country. Iffat Gardezi said that it is not a difficult task as it can easily be resolved with some structural changes and dedication.
Earlier President KCCI Younus Muhammad Bashir, while welcoming Pakistan’s Ambassador to the Netherlands, said that both countries have been enjoying good trade relations but plenty of room and lots of opportunities exist to further enhance the current trade volume. Exporters must not just remain limited to traditional products only but it was high time to go for diversification otherwise the exports will keep on descending. President KCCI, referring to GSP Plus scheme granted by European Union, said that although it was an encouraging announcement and the business community was so excited as they were expecting a sharp appreciation in exports to European Union but unfortunately, it has not been witnessed so far mainly due to rising cost of doing business particularly the high tariffs of utilities services.
Pakistan’s exports are descending whereas Bangladesh’s exports are ascending because of the fact that the cost of doing business in Bangladesh and other neighboring countries is much lower as compared to Pakistan which is the basic reason their exporters have not been able to fully reap the benefits of GSP Plus Scheme. Netherlands, being an advanced economy with high technology and expertise, can help Pakistan in building solar, wind, coal and bio-mass power generation infrastructure which would result in dealing with the current energy woes being faced by Pakistan. Younus Bashir, advised the Ambassador to look for the possibility of setting up Display Centers of Pakistani products at suitable locations, preferably at any Chamber of Commerce in Netherlands so that the Dutch business community could closely take a glimpse of the high-quality goods and services being offered by Pakistan. He stressing the need for a more proactive role by Pakistan’s Ambassadors and Commercial Counselors, opined that Pakistan can reap rich economic benefits by improving collaboration with Netherlands in the field of software exports and high tech value added products. President KCCI Younus Muhammad Bashir, Senior Vice President KCCI Zia Ahmed Khan, Vice President KCCI Muhammad Naeem Sharif, Former SVP KCCI Shamim Ahmed Firpo and KCCI Managing Committee members were also present at the meeting.
SOURCE: Yarns&Fibers
World Bank President Jim Yong Kim said continued uncertainty following the U.K.’s vote to leave the European Union could hurt global growth. “We actually thought the U.S. was solid, the euro zone seemed to be getting better, even Japan seemed to be doing a little bit better,” Kim told Bloomberg Television Sunday on the sidelines of the Group of 20 finance ministers and central bankers meeting in Chengdu, China. “Brexit was a big hit, and we’re still trying to understand exactly what the implications are, but it looks like global growth will be disappointing again.” Even before the so-called Brexit, the World Bank in June cut its outlook for global growth to 2.4 percent from 2.9 percent seen in January as business spending sags in advanced economies and commodity exporters in emerging markets struggle to adjust to low prices. In April, Kim cautioned that the global economy can’t cope well with more uncertainty. Before heading to Chengdu for the summit, Kim met with Chinese Premier Li Keqiang and the heads of global organizations in Beijing to discuss economic growth, trade and finance. In a joint study released Friday with the Chinese government and World Health Organization, the lender urged a series of structural changes to China’s current health-care system to save as much as 3 percent of gross domestic product.
Loud Rejection
At the Beijing gathering, Kim fretted about a very loud rejection of globalization in the West. While more and freer trade has raised many people out of poverty, the middle class in high income countries has seen incomes decline, he told Bloomberg TV. “People who went through their lives, did the right thing, worked in factories, were making a good income, now find themselves out of a job and unable to compete for the high-tech jobs that in fact are available,” Kim said. Governments should do more to improve the health, education and skills of their people, Kim said, adding that the bank’s job is to convince global leaders to “create a world that’s growing, but growing in a way that’s inclusive of everyone.” International Monetary Fund Managing Director Christine Lagarde also said more must be done to share the benefits of growth and economic openness broadly among countries, and cited the impact of the U.K. vote. “We met at a time of political uncertainty from the Brexit vote, and continued financial market volatility,” Lagarde said in a statement after the two-day meeting. “Lackluster growth of the post-crisis era continues, with weak demand in advanced economies and difficult transitions to a self-sustained growth model in many emerging markets.”
SOURCE: The Bloomberg
