The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 28 JULY, 2016

NATIONAL

 

INTERNATIONAL

 

India plans to launch its own cotton price Index

India, in its attempts to curb speculations across various markets and trading platforms, and bring about further transparency in the price discovery mechanism is planning to launch a cotton price index of its own for which it will be taking into account benchmark rates from four different sources. A sub-committee of the state-backed Cotton Advisory Board (CAB) has suggested that the index be made up of prices of cotton on the Multi-Commodity Exchange of India (MCX) and those of the Cotton Association Of India (CAI), the Indian Cotton Federation (ICF) and the Cotlook Index. The prices can be used as a benchmark by all stakeholders, including ginners, traders and even international trading agencies. While the CAI and the ICF provide data on daily cotton prices across various physical markets in the country, MCX offers futures prices of cotton. The Cotlook Index, which tracks the delivered price of American cotton in China, will be included in the index to factor in the movement of prices in the world’s largest exporter (the US) and the biggest consumer (China). Cotlook is already widely tracked across the globe by various stakeholders in the cotton and textile sector. The exact composition of the index and the weight attached to prices of different sources would be finalised soon.

Mrugank Paranjape, managing director and chief executive of MCX, said that the cotton index would serve as a barometer for cotton prices movement in India, and it would prove to be a valuable, and ready reference tool, giving the cotton stakeholders a composite index. He added that the MCX cotton contract with almost 100% market share (in futures) has been seamlessly providing an effective risk-management tool to the cotton value chain participants. Sapna Ghanekar, head of commodity and forex risk management at Arvind Ltd, said that with increased volatility in cotton during the recent times, proper risk management has become extremely vital for the textile industry. So they have been actively hedging their cotton price exposure. Cotton prices have seen a spurt in the current marketing year through September, thanks to dry spells and erratic weather in key producing regions of Maharashtra and Gujarat. Consequently, the country’s cotton production was estimated to have dropped 7.4% to 35.2 million bales in 2015-16 from a year before. Cotton futures on MCX have risen over 37% in the current marketing year. Industry executives say the country’s exports of cotton were hit due to the rise in domestic prices. While cotton exports are estimated to fall around 10% to 6 million bales in 2015-16, cotton imports have risen. In fact, the government’s plan to start transferring subsidy directly to cotton farmers without having to procure the fibre through state-run agencies this year has been dashed, ostensibly due to a rise in cotton prices above the state-fixed benchmark prices. According to source, the basic idea is to develop an index, taking into accounts the price trends across markets — spot, futures, domestic and international.

SOURCE: Yarns&Fibers

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Yarn, Fabric & Accessories Trade Show (YFA) 2016 to have Chinese Pavilion

A clutch of several Chinese exhibitors will set up stalls showcasing yarns, fabrics and garment accessories at a special Chinese Pavilion at the upcoming second edition of the Yarn, Fabric & Accessories Trade Show (YFA) Show which will run from November 23 (Wednesday) to 26 (Saturday), 2016. To add an icing to the cake, Prime Minister Shri Narendra Modi in a letter to the organizers expressed his happiness on the organization of the YFA 2016 show and sent his best wishes to the organizers and participants. YFA 2016 aims to redefine the way fibres, yarns, fabrics and apparel accessories are sourced and bring renowned suppliers from these four segments closer to buyers and also offer buyers a one-stop place to source all their requirements. YFA 2016 which will feature products beginning right from fibres to yarns to fabrics and finally accessories will see exhibition space doubling from one hall to two halls. Additionally, WGSN, the global authority on fashion trends will be the Trend Partner and will also be putting up a Pavilion. There were more than 100 exhibitors in the 2015 edition, which was visited by more than 7,477 visitors. For the 2016 show, the organizers expect over 250 brands from several countries and more than 15,000 visitors, who too are expected from 15 countries. Their optimism stems from the fact that with still four months to go, 75 percent of the space has already been booked and at the same time several exhibitors who exhibited at the 2015 show like Indorama Synthetics Limited from Gurgaon, TT Ltd. from Delhi, Asahi kasei Fibers from Japan, Soundararaja Mills Limited from Dindigul, Nahar Industrial Enterprises Limited from Ludhiana, Sanathan Textiles Pvt. Ltd. From Mumbai, Nimbark Fashions Limited from Mumbai, Madeira India Pvt. Ltd. from Gurgaon, Uflex Limited from Noida, Mahamantra Impex from Surat, Crystal Collections from Delhi, Nilesh Ribbon Industries Pvt. Ltd from Surat, B K Jari Manufacture from Surat etc are returning for the 2016 show. New exhibitors who have confirmed their participation include Bhilosa Industries Pvt. Ltd from Mumbai, National Textile Corporation (NTC) from Delhi, Vardhman Textiles from Ludhiana, RSWM Limited from Noida, King Lace from Surat, and Kiona Fashion from Surat etc. Vision Communications has also planned fashion shows during the days of the show and additionally there will be a high-level conference which will see ministers, top government officials and industry leaders offering their views at the conference.

Speaking about his experience at YFA 2015, Mr. Pankaj Bhardwaj, AVP (Yarn Marketing), Nahar Industrial Enterprises had said, “Our experience has been fantastic at this show, as we have met all types of customers like buying houses, exporters, domestic buyers, knitters, etc, which includes existing as well as new buyers.” “We are sitting at the top of recession, but this show which has all three categories like yarns, fabrics and accessories will surely give a boost to the industry. Though this is the first edition, the organizers have worked hard to make it successful,” he added. Mr. Mahesh Maheshwari, Director, Nimbark Fashions Ltd had remarked, “The YFA show has been very good for us and although the show is being held for the first time, we are satisfied with quality and number of buyers and also the way the show has been organized. We have already booked space for the next year's edition.” German embroidery threads maker Madeira India’s Sales Director, Mr. Akshay Kumar had stated “The response to our products has been unexpected and has exceeded my expectations. We have had quality buyers visiting our stall. Going by the response at this edition, we would definitely like to return next year.” The fair is organized by Vision Communications, supporting partner Northern India Textile Mills Association (NITMA) with AEPC (Apparel Export Promotion Council), TA(I) (Textile Association of India), PDEXCIL (Power loom Development Export Promotion Council), CMAI (Clothing Manufacturers Association of India), FOHMA (Federation of Hosiery Manufacturers Association), NAEC (Noida Apparel Export Cluster), NITRA (Northern India Textile Research Institute), U.P. Apparel Exporters Association and PTA Users Association as Supporting Associations.

SOURCE: Yarns&Fibers

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Cabinet green light clears tracks for GST

The Union Cabinet on Wednesday paved the way for the goods and services tax (GST) Constitution amendment Bill to be passed in the Rajya Sabha by clearing key changes.  The Cabinet gave the green light to scrapping the one per cent addition tax on the interstate supply of goods. The Rajya Sabha is most likely to vote on the Bill next week. On Tuesday, Union Finance Minister Arun Jaitley and his counterparts from the states reached consensus on the issue of the one per cent tax, intended to benefit manufacturing states such as Maharashtra, Gujarat and Tamil Nadu.  After the consensus was reached to scrap the additional tax, the Centre pledged full compensation to states for the revenue loss over the next five years of the unified indirect regime rollout. This, too, was cleared by the Cabinet.

In the earlier version of the GST Constitution amendment Bill, passed by the Lok Sabha in May 2014, the Centre had provided for full compensation for the first three year and 75 per cent and 50 per cent in the fourth and fifth years, respectively. “Amendments to the Constitution amendment Bill have been approved by the Cabinet. The changes include dropping one per cent tax on interstate supply of goods and categorical wording on the guarantee to compensate states for any revenue loss in the first five years,” said a government official on the condition of anonymity. Cabinet green light clears tracks for GST The development was quick since the Constitution amendment Bill was not part of the Cabinet agenda earlier in the day. It was added at the last moment, sources said.  The additional levy had sparked fears that it would lead to a cascading, tax on tax, since it would not be a part of the GST chain. The development raises hopes of the Bill getting passed by the Rajya Sabha in the current monsoon session that ends on August 12. The Bill, with the changes approved by the Cabinet, may be tabled as early as next week. By doing away with the one per cent tax, the government has met one of the three key demands over which the chief Opposition party, Congress, has been blocking the Bill in the upper House.

A select panel of the Rajya Sabha had recommended diluting the provision of the one per cent tax on interstate supply of goods, by proposing to limit it to inter-state trade of goods. This means that the tax would not be imposed on company-to-company transfer between states. However, the Congress wanted complete elimination of this tax as it creates distortions in the GST chain. Experts greeted the new development. M S Mani, senior director, indirect tax, Deloitte Haskins & Sells LLP, said, “It is indeed commendable that the Cabinet has taken up the GST matter within a day of the meeting of the empowered committee of state finance ministers. This depicts the resolve and commitment of the government to move ahead on GST.”  He added that the decision to do away with the one per cent tax will remove a major aberration in the GST value chain. Harishankar Subramanian, national leader, indirect tax, EY, said, “The Cabinet's clearance of crucial amendments in the Constitution amendment Bill in response to empowered committee discussions is indeed very welcome and will pave the way for political consensus and early passage of the Bill.” The government, with the full support of the states, however, did not relent to the Congress demand of capping the GST rate in the Constitution amendment Bill. In fact, the Congress has been giving indication of diluting that demand.

Besides, the earlier provision on dispute between states and the Centre also remained unchanged. The dispute will be adjudicated by the GST Council, which will have representation from both the Centre and states. The Congress wanted an independent dispute resolution authority.  Once the Rajya Sabha approves the legislation, the amended Bill will have to go back to the Lok Sabha for approval. The government plans to roll out GST by April 1, 2017. According to the amendments, the Centre will now constitutionally guarantee states for any loss of revenue from the GST subsuming all indirect taxes, including value added tax, in the first five years of introduction. GST being a constitutional amendment requires to be passed by Parliament with two-thirds majority and after that, at least 50 per cent of state Assemblies will have to approve the legislation. After that, the Lok Sabha and the Rajya Sabha will have to pass the central GST Bill and the states have to pass their own GST Bills. After the legislative procedure gets over, the GST Council, which will be the decision-making body on all issues, including rates of the new tax, will be set up.

SOURCE: The Business Standard

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India's quality of growth improving, says CRISIL

CRISIL has pegged India’s economic growth at 7.9 per cent in 2016-17, assuming a normal monsoon. Unlike the “rubber-band” recovery that India witnessed after the global financial crisis of 2008, aided largely by fiscal and monetary stimulus, this time  the quality of growth has improved, says CRISIL in a new report. With the global economy struggling, India had embarked on a massive fiscal and monetary stimulus. As a result, growth perked up initially only to collapse when the stimulus was withdrawn. CRISIL notes that the “policy focus hasn’t been based on populism or on boosting cyclical growth through fiscal and monetary stimuli, but rather on improving the ‘trend’ growth by repairing the system and initiating structural reforms wherever possible.” While these policy initiatives are likely to improve the trend growth in the short term, the critical factor will be how the monsoon plays out. Assuming a normal monsoon, CRISIL estimates that growth could touch 7.9 per cent in 2016-17, just shy of the 8 per cent mark. The National Democratic Alliance government, under Narendra Modi, has worked to ensure macro-economic stability. It has resisted calls for relaxing its fiscal deficit limit and has opted for improving the quality of its expenditure. It has ramped up spending on infrastructure, roads and railways in particular, increased taxes on petrol and kept the fiscal deficit in check. It has also formalised an interest rate targeting regime with the Reserve Bank of India to keep inflation under control.

Steps to improve macro-economic stability have been accompanied by reforms to improve growth. As CRISIL notes, “structurally positive steps have also been taken such as to mend the electricity and banking sectors, but these remain work in progress.” Further, “the government has also managed to pass two key Bills — the Insolvency and Bankruptcy Code Bill, 2016 —  which strive to create an enabling environment for expeditious resolution of bankruptcies with least pain to stakeholders, and the Aadhaar Bill to distribute subsidies, rural wages and pensions through an electronic platform,”  it said.

Reflecting on these moves,  Dharmakirti Joshi, chief economist, CRISIL said, “The focus on quality of growth and repair and reform initiatives means there will not be significant upsides immediately. But if relentlessly implemented, they will do more to raise India’s trend — rather than cyclical — growth that we are seeing now. We believe this will remain work in progress for some time and the momentum needs to continue through the political cycle, which will restart next year, to get maximum bang for the buck.”

SOURCE: The Business Standard

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Child labour bill passed, Unicef voices concern

Unicef , along with various other childright activists, has raised concerns about the provision in the Child Labour Amendment Bill , 2016 — passed in Parliament on Tuesday — allowing a child to help out in family enterprises after school hours. The UN agency said the provision will impact children from poorer families and legitimize family work, thus causing further disadvantage to them as there is a lot of outsourced work carried out from home. The bill makes employing a child below 14 years of age in any occupation or process, except where the child helps his or her family, punishable by a jail term of up to two years and even provides for a penalty for parents.

"Under the new Child Labour Act, the more invisible forms of child labour+ and exploitation may go unseen and the most vulnerable and marginalized children may end up with irregular school attendance, lower levels of learning," said Euphrates Gobina, UNICEF chief of education in India. Bachpan Bachao Andolan (BBA) founder and Nobel Peace prize winner Kailash Satyarthi had earlier told TOI that the changes would lead to further "victimisation of children" in their poverty.

SOURCE: The Times of India

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Rupee firms up by 13 paise to 67.14 versus US dollar

Extending gains for the second straight session, the rupee on Wednesday ended higher by 13 paise to 67.14 a dollar on sustained selling of the American currency by banks and exporters in view of persistent foreign capital inflows despite firm dollar overseas. Firm equity market also boosted the rupee value against the dollar, a forex dealer said. Foreign Portfolio Investors and Foreign Institutional Investors bought shares worth a net Rs 404.69 crore on Wednesday as per the provisional data issued by stock exchanges. The Sensex gained by 47.81 points or 0.17 per cent on Wednesday. The rupee opened lower at 67.33 as against Tuesday's closing level of 67.27 per dollar at the Interbank Foreign Exchange (Forex) market and moved down further to 67.34 on initial dollar demand from importers. However, it recovered afterwards to close at 67.14 per dollar on fag-end selling of dollars by banks, showing a gain of 13 paise or 0.19 per cent. The rupee has gained by 21 paise or 0.31 per cent in last two days. The domestic unit hovered in a range of 67.14 and 67.34 during the day. The dollar index was trading up 0.10 per cent against a basket of six currencies in the late trade. Meanwhile, the RBI fixed the reference rate for the dollar at 67.2362 and euro at 73.8859. In cross-currency trades, the rupee firmed up further against the pound sterling to close at 87.97 from 88.26 previously and recovered against the euro to settle at 73.83 from 74.01 previously.

SOURCE: The Times of India

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RCEP meet: India says ‘no early harvest’, differences widen split

The next ministerial meet for the 16-nation Regional Comprehensive Economic Partnership (RCEP), scheduled for August 5 in Laos, will have to address stark differences among members on not just services but also investments, commerce ministry sources pointed out. Several countries were unwilling to commit to too much liberalisation of their investment space despite detailed talks during the preliminary meeting on the concluding day (July 19) in Jakarta, an official source told FE. While India has made “one of the best offers” in the investment space, many countries — who are otherwise seeking substantial concessions from India in goods — are simply reluctant to offer anything meaningful in return in either investment or services, he said. Worse, some are not even willing to bind themselves to their current position of liberalisation in investment and services for future, said another source.

India has already made it clear that it doesn’t favour an “early harvest”, which means agreements on all the three pillars of negotiations — goods, services and investment — can be implemented only as a package, not one at a time. A meeting of the trade negotiating committee, held during July 18-19 in Jakarta to address differences among members and also set the stage for the Laos ministerial, doesn’t seem to have attained much success.

Members split over ISDS

Potential RCEP members are still divided over whether to have an investor-state dispute settlement (ISDS) mechanism. While some countries feel the ISDS should be in place to bolster confidence of the private investor, some others are seeking to discourage such a mechanism within the RCEP framework, said one of the sources cited earlier. According to these countries, past experiences suggest some investors have “misused” the spirit of investment agreements and successfully dragged governments to international arbitration. Also, the arbitrators are often the same ones who fight cases for private investors in some other cases, so chances of some sort of a conflict of interest can’t always be ruled out. The critics of the ISDS also contend that the investors, in any case, enjoy adequate protection under the domestic laws of a country. Data suggest that the countries (China, for example) that have given the best returns on investments or, at least, promise best returns, have witnessed the highest inflows of foreign investments, so having an ISDS doesn’t guarantee that investments from abroad will flow in. For its part, India may settle for a middle path by supporting the idea of giving some protection to investors under the RCEP framework if it ensures that governments won’t be put to undue disadvantage due to a such a mechanism, said the source.

Definition of ‘investment’ yet to take shape

The potential partners will also have to firm up concrete definitions of “investment” within the framework. A consensus is yet to evolve whether any asset-based foreign investment will qualify for protection or the safeguards should be restricted to investments made though a locally-established enterprise (India seems to favour the latter). The enterprise-based investment emphasises that only a contribution based on a transfer of finance and managerial control over the investment will be sufficient to warrant protection, given the greater commitment of resources and risk that this entails on the part of the investor. According to an earlier UNCTAD report, the dominance of the traditional broad asset-based definition “risks the possibility that transactions that were not thought to be investments at the time the agreement was entered into might nonetheless become covered as a result of an open-ended nature of the definition”.

SOURCE: The Financial Express

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BRICS meet in Agra today to discuss pacts on MSME, services

BRICS countries – Brazil, Russia, India, China and South Africa – will try to thrash out an agreement on cooperation amongst micro, small, and medium enterprises (MSMEs) and a pact on services, including facilitation of business visas, in a meeting of senior officials in Agra this week. “Officials would try to finalise policy frameworks in the two areas for trade ministers to officially agree to when they meet in October,” a government official told BusinessLine. The two-day meeting, which begins on Thursday, will also have discussions on e-commerce, being pushed by Russia, and intellectual property championed by China. The BRICS Summit, to be attended by heads of States of all five nations, will be held in Goa on October 15-16, which will be preceded by the trade ministers meeting. “Since India is the chair this year, we are keen to have at least two agreements, one on MSMEs and the other on services, to be formalised. How ambitious the two agreements would be will depend on what happens at the Agra meeting this week,” the official said. The BRICS economies comprise 43 per cent of the world population and account for more than a third of the world gross domestic product. The five countries contribute about 17 per cent to global trade. For MSMEs, New Delhi has proposed a framework of cooperation to regulate tariffs, check non-tariff measures (NTMs), ensure transparency in sanitary and phytosanitary measures and exchange information on regulatory mechanisms.

MSME round table

“On the first day there will be a round table on MSMEs where all issues will be discussed. The feasibility of setting up a portal on NTMs that affect trade between BRICS nations will also be taken up,” the official said. In services, India wants a special dispensation for business visas from member countries that would be cheaper and of longer duration. Russia, on the other hand, is likely to make a case for an agreement on cooperation in e-commerce that would include development of a trans-boundary trust space (by setting up common trust infrastructure such as servers) for acceptance of e-documents between member countries. “While members would be ready for a loose agreement on cooperating in developing e-commerce, it might be difficult for countries, including India, to agree on a trans-boundary trust space at the moment,” the official said. China wants an agreement on working together on common interests in IPR, including Convention on Biological Diversity (CBD), which, too, would be discussed by members.

SOURCE: The Hindu Business Line

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Govt looking at extending India-Myanmar-Thailand highway

The Ministry of External Affairs (MEA) is planning to extend the proposed India-Myanmar-Thailand highway to the CLMV (Cambodia, Lao PDR and Vietnam) countries in the second phase, despite the first phase being stuck on procedural issues. The India-Myanmar-Thailand (IMT) trilateral highway is facing inordinate delays, and has already missed a couple of deadlines. According to the MEA, the IMT may now become operational by 2018-19. However, a lot of work needs to be done. Firstly, on the Indian side there are as many as 69 bridges that are in a dilapidated state, which have to be rebuilt. Although work is on to modernise these bridges, the progress is slow, a top official, involved in the project told BusinessLine . During the visit of Prime Minister of Thailand General Prayut Chan-o-cha to India in June, both countries agreed to “expedite” the completion of the highway. Both sides also agreed to speed up the negotiations on the India-Myanmar-Thailand Motor Vehicles Agreement (MVA). However, according to the official, India is not keen on signing the MVA now unless the work on the highway progresses. Meanwhile, the new government in Myanmar is now creating hurdles to the project. It has demanded a renegotiation of the MVA and its applicability on the trilateral highway as the agreement was negotiated under the previous military government. “The implementation of the trilateral highway got delayed for reasons that are beyond India’s control. It should be operationalised by 2018. Thereafter, it can be extended to the CLMV countries. This will then give India direct access to the South-East and East Asian markets,” said Prabir De, professor and coordinator (Asean-India Centre), Research and Information System for Developing Countries (RIS). Meanwhile, the Minister of State for External Affairs VK Singh has said the government is planning to extend it to the CLMV countries. “Even as we work assiduously to enhance our physical connectivity and explore the extension of the India-Myanmar-Thailand Trilateral Highway into Lao PDR, Cambodia and Vietnam, I urge Thailand and Myanmar to join hands and find creative solutions for the early conclusion of the Motor Vehicles Agreement and I would also like to invite ASEAN countries to participate in the Sittwe Economic Zone,” Singh said at the 14th ASEAN-India Foreign Ministers’ Meeting in Vientiane on July 25. The trilateral highway is crucial for the success of the Modi government’s ‘Look East’ policy.

Market access

India is keen on extending the highway as it will give access to Vietnam which is a member of the Transpacific Partnership (TPP) Agreement with the US. “So Indian exporters are now keen to gain access in that market as sending goods over roads will be much easier than through the waterways,” the official said. The idea is to connect the trilateral highway with a free trade zone that will be developed at the Sittwe Port in Myanmar. The distance from the Sittwe economic zone to the trilateral highway is about 100-120 km. “Trade is expected to increase many folds once the Trilateral Highway starts running in the next three years and it will open up the larger ASEAN market to our nations,” said Harshavardhan Neotia, President, FICCI.

SOURCE: The Hindu Business Line

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Global Crude oil price of Indian Basket was US$ 41.63 per bbl on 27.07.2016 

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$ 41.63 per barrel (bbl) on 27.07.2016. This was lower than the price of US$ 41.69 per bbl on previous publishing day of 26.07.2016.

In rupee terms, the price of Indian Basket decreased to Rs. 2798.93 per bbl on 27.07.2016 as compared to Rs. 2808.63 per bbl on 26.07.2016. Rupee closed stronger at Rs. 67.24 per US$ on 27.07.2016 as against Rs.67.37 per US$ on 26.07.2016. The table below gives details in this regard: 

Particulars

Unit

Price on July 27, 2016 (Previous trading day i.e. 26.07.2016)

Pricing Fortnight for 16.07.2016

(June 29, 2016 to July 13, 2016)

Crude Oil (Indian Basket)

($/bbl)

41.63             (41.69)

45.17

(Rs/bbl

2798.93       (2808.63)

3043.55

Exchange Rate

(Rs/$)

67.24             (67.37)

67.38

 

SOURCE: PIB

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Taiwan investors to explore investment in massive textile manufacturing

The head of the industrial promotion agency (PROINDUSTRIA) Alexandra Izquierdo on Monday met delegation of businessmen from Taiwan, who is in the country to explore investment possibilities in manufacturing and the massive transformation of textile products. During the meeting, which took effect in the conference room PROINDUSTRIA, the executives were presented some slides showing the PROINDUSTRIA, facilities and land available in the parks of San Pedro de Macoris, San Francisco and La Vega, respectively. Alexandra Lzquierdo met the delegation which composed by Taiwanese company executives Everest Textile Co. Ltd, Liang Ching-Hai, vice president of the company, David Blondino, Consultant, Arun Kumar Barua, Manager of Technology and Yeh Sheng hung, Coordinator. In the meeting was present also the ambassador of Taiwan in the country Tang Ji Zen (Valentino), the executive director of the National Council of Export Processing Zones, Luisa Fernández, Silvia Cochón, in charge of promoting the institution. Izquierdo thanked the executives for the visit and stressed the attractions for investors in the country’s manufacturing industry.

The Taiwan executives evaluate the various PROINDUSTRIA facilities available in for possible investment to develop a new niche in the manufacture of yarns, textured polyester fabrics, suede, materials Lycra stretch fabrics, fibers, pre-dyed fabric and nylon threads, among others. The company Everest Textile Co. Ltd, established in 1988 is headquartered in Tainan County, Taiwan. It is basically dedicated to the dyeing of various types of chemical fibers, fabrics and yarns used in the industries of clothing and home textiles. They sell their products to global customers brand, like Nike, Adidas, Puma, among others. The company has three production plants in Taiwan, Shanghai and Thailand and exports its products to some Asian countries, the United States and Europe.

SOURCE: Yarns&Fibers

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Brexit dents Mauritius’ textile sales

The UK’s decision to exit Europe’s common market could hurt Mauritius’ apparel export earnings by about a 10th, in line with the rupee’s appreciation against the pound. The Indian Ocean island nation’s central bank cut its benchmark rate by 40 basis points last week, saying Brexit had damaged its growth outlook for the $11.5-billion economy. The European country accounts for 12 percent of Mauritius’ tourists, Governor Rameswurlall Basant Roi said. Mauritius made shipments to the UK worth 10.9 billion rupees ($305.6 million) in 2015, 58 percent of which were clothing such as T-shirts and trousers, according to Yogesh Singh, chairman of the Mauritius Exports Association. The nation also supplies seafood and sugar. “Since clothing is not a basic necessity, the textile and clothing sector will be the most hit by the Brexit,” Singh said in an interview in the capital, Port Louis. “It will definitely have a significant impact on the Mauritian economy as it is the largest export sector of the country.” The Mauritian currency has strengthened to 46.6 rupees per pound from 51.92 rupees when the electorate voted to leave the EU. The bloc takes up more than half of Mauritius’ exports, providing 25.6 billion rupees worth of sales, excluding sugar. Meanwhile, the dollar’s appreciation since the referendum has inflated manufacturers’ import costs, causing a “double whammy.”

Mauritius exported clothing worth 6.5 billion rupees to the U.K. in 2015, about 90 percent of which were denominated in pounds, Singh said. Medium-sized companies will be hardest-hit, he said. “For future orders, prices may be readjusted upwards,” Singh said. “By how much is uncertain.” Mauritian companies started diversifying their export markets after the global financial crisis in 2008, shifting away from traditional destinations including France and toward new markets such as South Africa, Germany and Italy. While it is still the largest destination, the UK’s share of the total exports is down to 18 percent, Singh said. Possible substitute markets could be additional sales to the US and South Africa. There is potential to grow shipments to other African nations, but that market will take longer to develop. “It’s only South Africa that’s a real potential market in Africa for Mauritian textiles and garments operators,” Singh said.

SOURCE: The IOL

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Pakistan Textile industry needs more than funds to survive – Expert

Mr Hamma Kwajaffa, President, Nigerian Textile Manufacturers’ Association (NTMA), on Wednesday in Lagos said that the textile industry needed stringent policies and not just funds to be revived. Kwajaffa told the newsmen that Nigeria must stop importing textile materials it could produce locally. According to him, the high rate of importation of textile materials would not allow the revival of the country’s ailing textile sector. He disclosed that only 11 out of the 40 textile manufacturers, who applied for the last N100 billion textile fund, launched few years ago, were given the loan. He stressed that in spite of the bailout, some of the manufacturers are still fighting to survive. “The textile industry needs more than funds to survive. “The issue of high importation of fabrics and textile materials that could be locally produced have continued to eat deep into the industry. “As it stands, the nation imports up to 80 per cent of the textile materials we use. “There is a lot to be done in respect to policies and its implementation, recently, there was an approval for the manufacturing of GMO cotton products and we really support it,”he said.

The Nigeria National Bio-safety Management Agency in June issued two permits for the commercial release and placing on market of genetically modified cotton. The Federal government also announced that the sum of N50 billion would soon be made available to entrepreneurs in the textile sector through the Bank of Industry. Kwajaffa also highlighted the opportunity cost of cotton farming in the country. “Cotton farming in Nigeria over the years has suffered because the opportunity cost of planting cotton has remained high. “Cotton does not compete favourably against other lower risk crops and this has led to a dwindling of farmers involved in cultivating the crop over time,” he said. The NTMA president challenged relevant regulatory agencies to support the government in fighting the smuggling of illegal textile materials, to encourage local production.

SOURCE: The Nation Online

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Vietnamese textile firms propose wage freeze

The Vietnam Textile and Apparel Association (VITAS) has proposed that the Government freeze minimum wage in 2017 and only increase it once every two or three years to create favourable conditions so that textile and garment companies remain competitive. The suggestion by VITAS was made a conference in Hanoi where speakers underlined that Vietnamese textile and garment enterprises are at risk of missing their export target for 2016 due to reduced competitive ability and lack of export orders. The minimum wage, which has risen an average 26.4 per cent per year for local enterprises and 18.1 per cent each year for enterprises with foreign investment in the period of 2008-16, is a major factor that is eroding Vietnam's competitiveness, according to Vitas. The increases in minimum wage also entail increased payments of insurance and union dues, further burdening enterprises, it said. Truong Van, Deputy Chairman of VITAS also pointed out that Vietnam's currency has remained stable against the dollar while competitors in textile and garment sector such as India, Bangladesh, ASEAN countries and China, have devalued their currencies, increasing their export competitiveness. High interest rates on bank loans ranging between 8 to 10 per cent, also make capital more expensive for local enterprises, he said.

VITAS reported that Vietnam's garment and textile export value in the first half of this year reached $12.6 billion, an increase of 4.72 per cent over the same period last year, accounting for 41 per cent of the sector's annual target for 2016. The growth in the industry's export value was largely attributed to foreign direct investment (FDI) firms, while local firms had difficulties getting new export contracts, especially orders for shirts, trousers and jackets, VITAS said. It warned that the lack of export orders could worsen and many small- and medium-sized firms may have to shut down. VITAS predicted the industry might earn only $29 billion from exports this year, $2 billion less that the target, if the situation does not improve. Other experts at the conference also urged local textile and garment firms to invest in modern technology for the production of yarn and fabric. Local textile and garment enterprises also proposed reducing the frequency and time it takes to check garment materials for customs clearance as a means to increase production and competitiveness.

SOURCE: Fibre2fashion

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Italian cos keen to invest in Pakistan, finding it a lucrative destination

Pakistan and Italy making efforts for revival of economic relations between them with special emphasis on frequent exchange of trade delegations, said Italian Embassy First Secretary Elena De Vito addressing the Faisalabad Chamber of Commerce and Industry (FCCI) on Tuesday, said that an Italian delegation headed by Mrs Deniela Cannizzo of the Confederation of Italian Industries, Rome, was now visiting Faisalabad, which would be followed by another delegation for B-to-B meetings with local entrepreneurs. Deniela Cannizzo said that Confederation of Italian Industries was a private and it is making efforts to globalize their activities. It has 6,000 companies as its members that were keen to enhance cooperation with Pakistani businessmen and in this connection, direct meetings with local entrepreneurs were necessary. The Italian government is making serious efforts to increase bilateral trade with Pakistan. During April last year, a Pakistani trade delegation had visited Italy and had very fruitful business-to-business meetings, said Bruno from the ICE Dubai office and a member of the Italian Association of Bank (IBA). He further added that they were arranging a delegation from Italy that would visit Pakistan and had direct talks for marketing of their products. The Italian Development Committee (IDC) has opened its office in Karachi which would become operational from September. They are making efforts to attract more Italian companies to come and invest in Pakistan which has become a lucrative destination after Chinese investment in the CPEC and its related projects. The Pakistani entrepreneurs can contact and get any type of information from the IDC. The both countries are already doing business but the volume of bilateral trade was just a peanut of their existing potential.

While, FCCI senior vice-president Syed Zia Alamdar Hussain welcoming the Italian delegation said that the FCCI was the third largest chamber of the country having more than 5,000 members that represent all segments of economy, including textile, agriculture, foundry, food industry, dairy, flour and sugar etc. He said that Faisalabad was known as a textile capital of Pakistan, contributing almost 50 per cent to the total national textile exports of the country. Currently the trade volume between the two countries is $1.06 billion. Pakistani exports to Italy stands at $618 million whereas Italian exports to Pakistan at $443 million. Hence, the balance of trade was in favour of Pakistan. He further said that no doubt Faisalabad was known as the textile capital but its textile sector was underutilized and is working with only 50 to 55 percent of its installed capacity. The Italian technology could help them to upgrade their textile sector and utilize its untapped capacity. As Italy has special expertise in the fields of engineering, alternate energy, agri products, livestock, dairy, processed food, leather, textile, marble etc. There is a need for technology transfer to Pakistan.

SOURCE: Yarns&Fibers

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