|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1012.17 |
USD/Ton |
0% |
8/29/2016 |
|
VSF |
2458.57 |
USD/Ton |
0.74% |
8/29/2016 |
|
ASF |
1886.60 |
USD/Ton |
0% |
8/29/2016 |
|
Polyester POY |
1041.37 |
USD/Ton |
-0.29% |
8/29/2016 |
|
Nylon FDY |
2365.73 |
USD/Ton |
0.64% |
8/29/2016 |
|
40D Spandex |
4372.12 |
USD/Ton |
0% |
8/29/2016 |
|
Nylon DTY |
2021.36 |
USD/Ton |
0.75% |
8/29/2016 |
|
Viscose Long Filament |
2058.79 |
USD/Ton |
0% |
8/29/2016 |
|
Polyester DTY |
1152.92 |
USD/Ton |
0% |
8/29/2016 |
|
Nylon POY |
2560.38 |
USD/Ton |
0.29% |
8/29/2016 |
|
Acrylic Top 3D |
5596.91 |
USD/Ton |
0% |
8/29/2016 |
|
Polyester FDY |
1286.18 |
USD/Ton |
0% |
8/29/2016 |
|
30S Spun Rayon Yarn |
3024.55 |
USD/Ton |
0% |
8/29/2016 |
|
32S Polyester Yarn |
1721.90 |
USD/Ton |
0% |
8/29/2016 |
|
45S T/C Yarn |
2403.17 |
USD/Ton |
0% |
8/29/2016 |
|
45S Polyester Yarn |
3174.28 |
USD/Ton |
0% |
8/29/2016 |
|
T/C Yarn 65/35 32S |
2380.71 |
USD/Ton |
0% |
8/29/2016 |
|
40S Rayon Yarn |
1901.57 |
USD/Ton |
0% |
8/29/2016 |
|
T/R Yarn 65/35 32S |
2260.92 |
USD/Ton |
0% |
8/29/2016 |
|
10S Denim Fabric |
1.37 |
USD/Meter |
0% |
8/29/2016 |
|
32S Twill Fabric |
0.84 |
USD/Meter |
0% |
8/29/2016 |
|
40S Combed Poplin |
1.19 |
USD/Meter |
0% |
8/29/2016 |
|
30S Rayon Fabric |
0.70 |
USD/Meter |
0% |
8/29/2016 |
|
45S T/C Fabric |
0.67 |
USD/Meter |
0% |
8/29/2016 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14973 USD dtd 29/08/2016)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
In order to boost garment exports, the revenue department has started the process to operationalise the Rs 5,500-crore ROSL scheme from September 20, under which exporters will be compensated for state levies. Presently, exporters get only duty drawback on the central levies imposed during the process of manufacturing of goods for exports. In a first of its kind move, the Cabinet had cleared Rebate of State Levies (ROSL) on export of garments to refund the state levies which were not refunded so far. “The main objective of the scheme is to provide for remission of state levies in addition to the duty drawback scheme, through the scheme for ROSL on export of garments on an average basis only,” the Central Board of Excise and Customs (CBEC) said in a notification. In order to operationalise the above mentioned scheme, CBEC said the officers who are designated as Drawback DDOs at the respective Customs locations are to be designated as the DDOs for this scheme. As per a notification of the Textiles Ministry, ROSL scheme will come into operation from September 20, 2016 and will remain in force for three years. The scheme is in line with the recognised economic principle of “zero rating” of export products and in recognition of the fact that at present only central levies are rebated by way of the drawback scheme, the Ministry said. The ROSL will provide for remission of state levies in addition to the Duty Drawback Scheme on export of garments on an average basis only. “The scheme aims to boost India’s garment exports thereby facilitating augmenting of investment and creation of more employment in the garment sector,” it said. The rebate will be disbursed from budgetary allocation of Ministry of Textiles using the Customs EDI System. Garment exports totalled USD 1.45 billion in July, down about 6 per cent, year-on-year.
SOURCE: The Financial Express
Five unauthorised textile dyeing units were demolished in and around Anthiyur town by Pollution Control Board officials. The officials acted on a directive by District Collector to demolish all such units in the town immediately. They were assisted in their task on Monday by the Revenue Department and police. The units were located at Chinnathambipalayam, Thavittupalayam and another area found five textile dyeing factories. The electricity connections were also cut. Pollution Control Board personnel also registered cases against the five units.
SOURCE: The Hindu
With countries no longer bound by ideological considerations, but by economic priorities, commerce will have to lead diplomacy said Nirmala Sitaraman, Minister of State for Commerce and Industry. Trade between nations, which leads to greater integration, lowers potential for conflict, she added. Sitaraman was speaking at the launch of a new book titled "India and the World - Essays on Geoeconomics and Foreign Policy", by Sanjaya Baru, an economic and political analyst. Baru, who was also media advisor to former Prime Minister Manmohan Singh, contested the notion held by many that the 21st century belongs to China, whose rise shall challenge the existing unipolar world order dominated by the US. "The 21st century will not be dominated by one country but rather by many like India, Brazil, Turkey. The challenge before India is how to manage this multi- polar world," he said. How the world shapes up is extremely critical for India as it looks to negotiate Free Trade Agreements (FTAs) in order to gain access to world markets to boost its exports.
Shedding light on the complexity in trade negotiations in a multi-polar world, Sitaraman said, "In international negotiations it is likely that groups of countries may agree with you on some issues but on others they will differ. When negotiating on trade you may have agreements, but beyond that there are issues". Shyam Saran, former foreign secretary of India, who was also a panelist at the launch, cautioned that today's economic environment had changed. The rapid rise of China he noted coincided with a positive economic environment. India too benefitted from a positive environment when global trade was soaring. "But today the situation has changed with protectionism gaining traction across major markets and with world trade growing at a slower pace than world GDP" he said. In such a scenario, it is difficult to see how an export oriented strategy will propel growth to the extent that has been observed in the case of other Asian economies. In such a scenario, as Saran noted, one needs other drivers of growth.
SOURCE: The Business Standard
The empowered committee of state finance ministers for goods and services tax (GST), headed by West Bengal finance minister Amit Mitra, will meet industry bodies on Tuesday to deliberate on the concerns regarding the proposed unified indirect tax regime, expected to be rolled out during the next financial year. The industry bodies and chambers — including the Confederation of Indian Industry (CII), Assocham, Ficci, Nasscom and the Confederation of All India Traders (CAIT) — are expected to raise a slew of concerns, including clarity in definition of supply rules, registration of entities and intra-company services. The industry is also likely to pitch for a lower GST rate of about 18 per cent and simultaneous implementation by all states.
The government is targeting a GST roll-out from April 1, 2017. Since the passage of the Constitution amendment Bill for GST by both the Rajya Sabha and Lok Sabha earlier this month, eight states have ratified it in their respective Assemblies. The central GST and integrated GST Bills will need to be passed in the winter session of Parliament for the planned April 1 roll-out. CII is likely to recommend that in case of freebies given along with main product or combo packs, no separate GST should be levied on the free item and its price should be deemed to be included in the price of the main product. There appears to be an ambiguity on the matter, with the GST draft laws indicating that the tax will be imposed on the free items as well. It might also ask for early clarity to stakeholders on treatment of area-based exemptions or refunds under excise, for instance hilly states like Uttarakhand and Himachal Pradesh and the Northeastern states. The government has received 40,000 representations on the GST draft laws that it made public on June 14. Assocham will pitch for inclusion of electricity in the GST right from the beginning to avoid distortions. “…the central government’s view before the Rajya Sabha Select Committee on GST indicates that inclusion of electricity is not envisaged in GST. Non-inclusion of electricity will lead to significant economic distortions,” the industry chamber said. It is also likely to seek a clear definition of location of supplier/recipient of goods and location of supplier/recipient of service, in the context of practical difficulties that may arise. Besides, intra-state and inter-state have not been defied in the CGST draft law. There are no provisions to deal with supplies made to a special economic zone. CAIT is likely to seek seamless input tax credit system, a uniform tax rate and clarity on definition of supply rules. “There are many points that we have concerns on. We want the definition of supply to be very clear so that nothing is left discretionary,” said Praveen Khandelwal, national secretary- general of CAIT. He added that the trading community would benefit from the early implementation of GST as it will allow the benefit of input tax credit, which it does not get in case of service tax and excise duty. “We want it to be implemented as early as possible. However, we expect all our concerns to be addressed in a proper way.”
SOURCE: The Business Standard
Top honchos of India Inc met Commerce Minister Nirmala Sitharaman on Monday, a day before they are set to sit down with industry leaders from the United States (US) as part of the 2nd Strategic and Commercial Dialogue (S&CD) between the two countries. Ten industry leaders including Tata Group Chairman Cyrus Mistry, HDFC Chaiman Deepak Parekh and ICICI Bank Managing Director Chanda Kochhar met Sitharaman to discuss issues expected to be taken up at the Joint CEOs Forum on Tuesday. "Lot of areas have been specifically looked into for greater cooperation between India and the US commercial matters whether you talk about energy and manufacturing of certain items," Sitharaman told reporters after the meeting. The other issues which come up for deliberations include the US participation in smart cities, medical devices manufacturing and its technology and setting up of civil nuclear power generation centres, she added. Also present from the group of about 10 CEOs, were Bharti Airtel Chairman Sunil Bharti Mittal and Mahindra Group Chairman Anand Mahindra, among others.
Set up last year, the Forum had recommended key policy enablers including greater partnership in the renewable energy sector, more business engagements and promoting ease of doing business in India. On these, both the sides are working on the US-India Energy Finance Initiatives, which is expected to mobilize upto $400 million by 2020. It will review the status of action taken on the previously submitted recommendations as well as make fresh recommendations for further expanding trade and investment between both the countries. The commercial track of S&CD will be led by Commerce Minister Nirmala Sitharaman and her US counterpart Penny Pritzker and the two ministers will also preside over the CEO Forum meeting. Also on Monday, Sitharaman met British Secretary of State for International Trade Liam Fox and deliberated upon ways to boost the two-way trade besides possibility of negotiating a free trade agreement (FTA). Although eager to deepen economic relations with India, Britain can only go forward on FTA talks once it is officially out of the European Union. India is already negotiating a comprehensive free trade agreement with the EU, and after the Brexit, it will have to rework its strategy of negotiations. The bilateral trade between India and the UK stood at $14 billion in 2015-16 as against $14.33 billion in 2014-15. India also received $23.10 billion FDI from Britain between April 2000 to March 2016. There is a Joint Economic and Trade Committee (JETCO) meeting, which is also expected to happen at the end of this year, Sitharaman said.
SOURCE: The Business Standard
Reserve Bank of India (RBI) governor Raghuram Rajan on Monday in the central bank’s FY16 annual report that although the economy is showing signs of picking up, it is still below levels that the country is capable of. The key weakness is in investment, with private corporate investment being subdued because of low capacity utilisation, and public investment slow in rolling out in some sectors, he said. “Inflation projections are still at the upper limits of RBI’s inflation objective,” Rajan said, adding that with the RBI needing to balance savers’ desire for positive real interest rates with corporate investors’ and retail borrowers’ need for low nominal borrowing rates, the room to cut policy rates can emerge only if inflation is projected to fall further. He explained that the willingness of banks to cut lending rates is muted and not only does weak corporate investment reduce the volume of new profitable loans, their stressed assets have tightened capital positions, which may prevent them from lending freely. “Certainly, the reluctance to lend to industry and small businesses is more visible among the more stressed public sector banks compared to the private sector banks,” Rajan said. The governor said both the government and RBI were engaged in the last few years in restoring macroeconomic stability to the economy and while policy actions have had positive effects, these are a number of areas which should be considered “work in progress”.
However, he said expectations of a good monsoon, coupled with more money in the hands of government servants (as a result of the implementation of the 7th Pay Commission recommendations), should boost the consumer demand. “With final demand picking up, capacity utilisation is likely to increase, and so will investment. A virtuous cycle of growth is possible, reinforced by anticipation of the coming benefits from reforms such as the recently-passed Goods and Services Tax legislation in Parliament,” he added. Rajan reiterated that short-term macroeconomic priorities of the central bank continue to be to focus on reducing inflation toward the target of 4% – thus far the RBI has followed a gentle glide path, aiming at 5% by March 2017 after it came below 6% in January 2016. He stressed the need for more participation in the financial markets to increase their size, depth, and liquidity. According to the governor, participation is best enhanced not through subventions and subsidies but by creating supporting frameworks and new institutions that improve transparency, contract enforcement, and protections for market participants against abusive practices.
SOURCE: The Financial Express
US secretary of state John Kerry will hold talks in New Delhi on Tuesday to cement strategic and commercial relations before the Obama administration demits office. During their seven meetings in the past, US President Barack Obama and Prime Minister Narendra Modi have built close ties, especially in the areas of technology and investment. Briefing media persons ahead of the Strategic & Commercial Dialogue (S&CD), spokesperson of the external affairs ministry, Vikas Swarup, said, “The 2nd India-US Strategic and Commercial Dialogue (S&CD) will be held in New Delhi on Aug 30. Minister of external affairs Sushma Swaraj and minister of state (independent charge) for commerce & industry Nirmala Sitharaman will co-chair the dialogue on the Indian side along with US secretary of state John Kerry and US secretary of commerce Penny Pritzker. The co-chairs will be accompanied by a high-level inter-agency delegation on both sides.” The S&CD is the most comprehensive mechanism to discuss and deliberate the entire gamut of cooperation between the two countries. The decision to elevate the India-US strategic dialogue into a strategic and commercial dialogue was taken during the visit of US President Obama to India in January 2015. The inaugural S&CD was held on September 22, 2015 in Washington DC. The coming S&CD will also review the progress made in the implementation of the various decisions taken in the recent summit held in June 2016 in Washington DC and identify possible areas for future cooperation. “This dialogue is called Strategic and Commercial Dialogue so anything which has strategic importance for both the countries, obviously, will figure. We expect a very substantive discussion on all aspects of bilateral relations, on important regional issues and of course important global developments,” Swarup added.
All major issues on the strategic side, on the bilateral side and definitely on the commercial side will figure because the two principals from both sides include the commerce ministers, who have a full view of what are the impediments to further trade and commerce between Indian and the US. Simultaneously, with the visit of the two officials from the US, the India-US CEO’s Forum will also be meeting which again will provide a substantive impetus to further trade and investment between the two countries. “The US India partnership has been consistently affirmed, sustained and broadened by overwhelming bipartisan majority in Congress. The progress achieved so far would have been inconceivable without the strategic vision and political courage of Indian leaders,” observed an expert while sharing his views on the Indo-US relations on condition of anonymity.
SOURCE: The Financial Express
India and the UK can work on a Free Trade Agreement (FTA) only after the latter is officially out of the European Union (EU), but the two countries have set up a joint working group to deliberate upon ways to strengthen commercial relationship. The decision to set up the working group was taken at a meeting between UK Secretary of State for International Trade Liam Fox and Commerce & Industry Minister Nirmala Sitharaman on Monday. “We have decided to set up a working group which can go into the details of the kind of commercial relationship that can be built and how it could be strengthened. However, we cannot work on an FTA till the UK is still part of the EU. Only when it (the UK) comes out, would a trade pact be possible,” Sitharaman told reporters after the meeting. India is already negotiating an FTA with the EU, although talks are not going on smoothly. With the UK deciding to exit the EU, a separate FTA has to be forged with the country. Finance Minister Arun Jailtey, in his meeting with Fox on Monday, talked about officials from both countries jointly exploring creation of an India-UK sub-fund under the National Investment and Infrastructure Fund (NIIF) umbrella. Fox also announced his participation and the UK’s commitment to the Joint Economic and Trade Committee (JETCO) to be held on November 7 alongside the ‘India-UK TECH Summit’. Bilateral trade between India and the UK was $14 billion in 2015-16 which was slightly lower than the previous year’s total trade of $14.33 billion. The UK Secretary of State for International Trade is currently on a three-day visit to New Delhi and Mumbai. “This is the first visit by the new Secretary of State in his current role and his visit will boost UK-India bilateral commercial ties and mark India as a key strategic partner across trade, investment and defence,” according to an official statement from the Finance Ministry.
SOURCE: The Hindu Business Line
Seeking US investment in the Rs 40,000-crore NIIF, Finance Minister Arun Jaitley today said there is need to further increase bilateral trade between the two countries. US Secretary of Commerce Penny Pritzker, in her meeting with Jaitley, too said the US wants to institutionalise the trade relations between the two countries to give it an impetus. There is "a great potential to increase the bilateral trade among the two nations", she said. During the meeting, Jaitley drove home the point that many Indian states are growing at 10-11 per cent and offer opportunity for US investment. "Both the leaders discussed issues relating to bilateral trade and measures to increase the trade," said a finance ministry statement.
Appreciating the passage of the Goods and Services Tax (GST) Bill by Parliament, Pritzker hoped that it will boost economic activities in India. "The trade dialogue by the state chief ministers with different US authorities can be given a structured shape in order to give impetus to the bilateral trade," Pritzker noted. Jaitley, on his part, expressed India's interest in increasing the bilateral trade and said most concerns between the two countries have been either resolved or narrowed down to a large extent. CEOs of various Indian companies are in constant dialogue with their US counterparts for increased trade and investment among the two, he said. The Indo-US trade stood at USD 109 billion last year.
Going further, Jaitley said the GST Bill was passed by both Houses of Parliament unanimously earlier this month. He said eight states have already approved the Bill and hoped that the remaining will follow suit and the desired number of state ratifications can come in early next month. Jaitley also spoke of the creation of the National Investment and Infrastructure Fund (NIIF) in which various US-based insurance, pension and endowment funds can invest, especially in the infrastructure sector that has great potential in India. The government had set up the Rs 40,000-crore NIIF in December as an investment vehicle for funding commercially viable greenfield, brownfield and stalled projects. It was envisioned as a mother fund with several sectoral feeder funds. The government is to contribute Rs 20,000 crore to the fund and the remaining Rs 20,000 crore is expected to be raised through sovereign wealth funds. Pritzker is on a 3-day visit to India to preside over the Indo-US Strategic and Commercial Dialogue.
SOURCE: The Economic Times
India and the US will review tomorrow at the CEO Forum the progress made so far on deliberations such as boosting renewable energy and defence ties and smart city project, and also discuss the roadmap to achieve the objectives. Besides, the two sides are likely to discuss innovation and entrepreneurship, various other policies and measures to further trade ties between both the countries. The forum's meeting will take place as part of the second Strategic and Commercial Dialogue (S&CD) here. It will review the status on the action taken on the recommendations submitted by the forum in its two meetings held in 2015 and make fresh recommendations for strengthening investment opportunities between India and the US. Cyrus Mistry, Chairman of Tata Group, will co-chair the meeting from Indian side, and Dave Cote, Chairman and CEO of HoneywellBSE 0.72 % International from the US side. "The discussions are expected to take place regarding smart city master planning activities for three cities Ajmer, Allahabad and Vizag -- for which an MoU has been signed between India and the US," the Commerce Ministry said in a statement.
In line with the CEO Forum recommendations to boost the renewable energy sector, the both sides are working on the US-India Energy Finance Initiatives, which is expected to mobilise upto USD 400 million by 2020. "Similarly both sides are expected to discuss the possibilities for collaboration in the areas of innovation and entrepreneurship and also exchange information and best practices relating to improving ease of doing business," the statement added. To ease the defence production procedures, the India has introduced a new 'Defence Procurement Procedure' which has made it much simpler to take advantage of the immense opportunity for defence production in India. Both countries will also discuss possibilities regarding collaboration between India's National Physical Laboratory and BIS and National Institute of Standards and Technology (NIST) of the US -- relating to reference material production (RMP), metrological standards, physical and mechanical standards. These efforts are aimed at ensuring adherence to international quality requirements for a range of products. In their deliberation last year, the two sides had agreed on four work streams to facilitate economic development initiatives -- infrastructure collaboration and smart cities, ease of doing business, innovation and entrepreneurship and standards.
SOURCE: The Economic Times
India and the US on Monday discussed the rollout of the Goods and Services Tax (GST) regime (expected from April 2017) on the eve of the second Strategic and Commercial Dialogue (S&CD). Jailtey also urged American companies to invest in the National Infrastructure Invest Fund (NIIF) in which various US based insurance and pension funds, endowment funds can invest especially in infrastructure sector, which has great potential in India. During a meeting between US Commerce Secretary Penny Pritzker with Finance Minister Arun Jaitley here on Monday Jaitley apprised Pritzker of the Constitution Amendment Bill relating to GST that has been approved by both the Houses of Parliament in the Monsoon Session. He said eight States have already ratified the Constitution Amendment Bill for enabling GST regime and hoped that the remaining States will follow suit. The government is hopeful of getting the required number of ratifications by early next month. The US Secretary of Commerce welcomed this development and hoped that this will boost the country’s economy. She suggested that the trade dialogue by the State Chief Ministers with different US authorities can be given a structured shape in order to give impetus to the bilateral trade. “She expressed hope that there is great potential to increase the bilateral trade among the two nations. She said that US wants to institutionalise the trade relations between the two countries to give it impetus,” stated a release by the Ministry of Finance. Bilateral trade between both sides have reached $110 billion in goods and services in 2015. The target is to achieve $500 billion bilateral trade.
SOURCE: The Hindu Business Line
Startups may be set to debut in India's free trade agreements. In trade pact talks with Israel, India has expressed interest in the transfer of knowhow from that country's defence and security startups. "Israel is very keen to have a trading arrangement with us," said a commerce department official with knowledge of the matter. "Startups are Israel's strength. They've advanced technology in defence. If some kind of transfer happens, it can be a seeding input for our startups." The arrangement would be strategic in nature as India imports critical defence technologies from Israel and there are regular exchanges between the militaries. Technology is at the core of the proposed arrangement as 98% of products traded between the two countries already get duty benefits on most favoured nation basis. India doesn't have much to gain on the services front as language barriers will restrict domestic IT firms from generating big business in Israel. "We can have a preferential trade agreement on select tariff lines," said the official cited above. "The process is on. We're working on a priority list with line ministries. The exchange of lists will happen by October." Besides defence and security, India will emphasise cooperation in innovation, health, education and research.
SOURCE: The Economic Times
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 47.14 per barrel (bbl) on 26.08.2016. This was higher than the price of US$ 46.66 per bbl on previous publishing day of 25.08.2016.
In rupee terms, the price of Indian Basket increased to Rs. 3159.50 per bbl on 26.08.2016 as compared to Rs. 3130.32 per bbl on 25.08.2016. Rupee closed stronger at Rs. 67.03 per US$ on 26.08.2016 as against Rs. 67.09 per US$ on 25.08.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on August 26, 2016 (Previous trading day i.e. 25.08.2016) |
Pricing Fortnight for 16.08.2016 (July 28, 2016 to Aug 10, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
47.14 (46.66) |
40.73 |
|
(Rs/bbl |
3159.50 (3130.32) |
2723.62 |
|
|
Exchange Rate |
(Rs/$) |
67.03 (67.09) |
66.87 |
SOURCE: PIB
Subsidies to the cotton sector, including direct support to production, border protection, crop insurance subsidies, and minimum support price mechanisms are estimated at $7.2 billion in 2015/16, down 30% from a record of $10.7 billion in 2014/15. Eleven countries provided subsidies in 2015/16, and the subsidies averaged 18 cts/lb, down from 21 cts/lb in 2014/15, informs a report on ‘Government support to the cotton industry’ released by Washington-based International Cotton Advisory Committee (ICAC). Since 1997/98, when the Secretariat first began reporting on government support measures in cotton, there has been a strong negative correlation between subsidies and cotton prices: in years when prices are high, subsidies tend to decline and in years when prices are low, subsidies tend to rise. This relationship was maintained during the past several seasons. The Cotlook A Index declined from an average of 91 cts/lb in 2013/14 to an average close to 70 cts/lb in 2014/15 and 2015/16, and subsidies provided to cotton growers were at record levels.
In some countries, including Brazil, Pakistan and India, minimum support price programs were not triggered, or were only partially active (India) during 2015/16 because market prices were above the government intervention prices during most of the season. A number of countries implement border protection measures during some seasons and the Secretariat makes every effort to report on the effect of these measures when they are quantifiable. Some countries continued to provide subsidies for cotton inputs in 2015/16, especially for fertilizers, storage, transportation, classing services and other marketing costs. At the same time, the use of crop insurance subsidies is increasing, although still not widespread. The share of world cotton production receiving direct government assistance, including direct payments and border protection, increased from an average of 55% between 1997/ 98 and 2007/08, to an estimated 83% in 2008/09. During 2009/10 through 2013/14, this share declined and averaged 48%. In 2014/ 15 the proportion of production receiving direct assistance increased to 76%. The share declined to 71% in 2015/16.
CHINA
The Government of China supports cotton production by controlling cotton import volumes and values and by applying border protection measures based on quotas and sliding scale duties, with an effective tariff of 40% on cotton imported without a quota. In addition, China maintains a strategic reserve of cotton, serving as a national buffer stock, which is managed by the China National Cotton Reserve Corporation (CNCRC). China releases cotton to the market from the reserve through a system of auctions when there is a shortage, and replenishes the reserve in times of abundance, thus supporting prices. There were no purchases for the government reserves during 2014/15 and 2015/16. Instead, the government paid direct subsidies to cotton growers, in addition to the border protection benefits enjoyed by producers in China.
Under the terms of its accession agreement to the WTO, China is obliged to establish a calendar year tariff-rate-quota (TRQ). The in-quota tariff is 1% for the first 894,000 tons of imports each calendar year. Additional import quotas are released by China based on requirements. The additional quotas can carry a tariff of 1%, or quotas can be based on a sliding scale of between 5% and 40%. The purpose of the sliding scale is to ensure that the effective cost of imported cotton exceeds international market prices and thus boosts domestic prices paid to farmers in China. During 2014/ 15 and 2015/16, China restricted imports by issuing only the TRQ import quotas, with the objective of reducing government socks. As a result of government interventions and quotas, domestic cotton prices in China have exceeded international prices during these two seasons. The Secretariat uses the difference between domestic and imported cotton prices as an estimate of the border protection support to Chinese cotton resulting from government interventions. The price differential between the CC index (an index of mill delivered cotton in China) and the FC Index L (an index of imported cotton arriving in Chinese main ports), adjusted to include value added tax, port charges and transportation to mills, is used in calculations. The benefit (subsidy) received by producers in China as a result of the government border protection is estimated at $1.1 billion in 2015/16, or 10 cts/lb, down sharply from $3.2 billion, or 22 cts/lb, in 2014/15. In addition, during 2014/15 and 2015/16 the Chinese government provided direct subsidy payments to cotton producers in Xinjiang based on the difference between a set season target price and an average market price. For 2014/15, the target price was set at 19,800 yuan/ton (about 147 cts/lb at the average seasonal exchange rate).
The target price was reduced to 19,100 yuan/ton (about 134 cts/lb at the average seasonal exchange rate) for 2015/16. Using the difference between the target price and the average CC index (domestic cotton price), it is estimated that direct subsidies paid to producers in Xinjiang totaled $3.5 billion, or 45 cts/lb in 2015/16, down from $4.1 billion, or 41 cts/lb in 2014/15. In other provinces a direct subsidy of 2000 yuan/ton was provided to producers during both seasons. It is estimated that these direct subsidies totaled $410 million, or 14 cts/lb in 2015/16 down from $670 million or 15 cts/ lb in 2014/15. Total direct subsidy payments provided to producers in China in addition to border protection support are estimated at $3.9 billion in 2015/16, down from $4.7 billion in 2014/15. The decline is attributed to a reduction in cotton production during 2015/16. In addition, the government of China pays growers a subsidy for using high-quality planting seeds, amounting to about $150 million a year, although smallholder farmers do not benefit significantly from this policy. During the past several seasons, China provided subsidies for transportation of cotton from Xinjiang to mills in eastern and southern China, which are estimated at about $160 million per year. All types of subsidies provided by the Chinese government are estimated at $5.3 billion in 2015/16 or 50 cts/lb, down from $8.2 billion in 2014/15 (57 cts/lb).
UNITED STATES
On February 7, 2014, President Obama signed the 2014 U.S. Farm Bill into law. The new five-year farm bill marks a significant change in farm policies, to an environment in which guaranteed payments no longer exist and eligibility for payments will be based on declining prices, crop failures or reductions in revenue. The new Farm Bill marks an evolution from traditional farm income support programs to a focus on production and price risk management, with government-subsidized crop insurance as the primary instrument. Direct Payments, Countercyclical Payments and Average Crop Revenue Election (ACRE) programs have been repealed for all commodities. Upland cotton is not eligible for other commodity risk management programs established under the bill but becomes eligible for a new and unique “safety net” program, the Stacked Income Protection Plan (STAX). STAX provides upland cotton producers with premium subsidies on the purchase of insurance policies that cover “shallow” revenue losses—those below the level generally covered by standard crop insurance policies. Producers may use this program alone or in combination with existing underlying crop insurance. Under STAX, a payment is triggered if the actual income in a county falls below 90% of the expected income. STAX provides coverage for revenue shortfalls between 10 and 30% of expected income and producers may select coverage in 5% increments. The federal government subsidizes about 80% of the premium. In addition, the federal government partially subsidizes the administrative and operational costs of the insurance companies offering STAX. STAX came into effect during the 2015 growing season (starting in August 2015).
During 2014/15 a cotton transition assistance payment was provided through the Farm Service Agency, which was calculated using a formula involving marketing year average prices for upland cotton, the national program yield of 597 pounds per acre and 60% of the cotton base acres for the farm in 2014 and 36.5% of the base acres in 2015. It is estimated that transitional payments during 2014/15 totaled $484 million. Total subsidies provided under STAX in 2015/16 are estimated at $76 million. It is estimated that 950,000 hectares were insured with STAX, or about 29% of harvested area in 2015/16. A significant share of STAX policies was purchased in combination with an underlying standard crop insurance. The Marketing Loan Program (MLP) continues with a marketing loan rate based on the world cotton price, calculated as the simple average of the adjusted prevailing world price (AWP) for the two immediately preceding marketing years (announced October 1 preceding the next domestic plantings), but in no case lower than 45 cts/lb or higher than 52 cts/lb. The loan rate for extra-long staple (ELS) cotton is set at 79.77 cts/lb. Under the program, producers are eligible for a loan deficiency payment (LDP), certificate exchange gains or marketing loan gains (MLG). The LDP is paid when market prices (AWP) are below the loan rate. Commodity certificate exchange gains and marketing loan gains provide the same gains as the LDP by redeeming a loan at a reduced rate. Only one of these options is available to the producer. LDPs were estimated at $139 million in 2015/16, down from $173 million in 2014/15. Marketing Loan Gains were estimated at $188 million in 2015/16, up from $198 million in 2014/15. In addition, the U.S. government provides support to cotton production through subsidized crop insurance to protect producers against losses to crop yields caused by natural disasters. This multiperil crop insurance covers nearly every cause of declines in crop yields, such as weather, pests, and fire, with the exception of producer negligence. The insurance is largely sold to farmers through private insurance providers, although the Risk Management Agency (RMA) of the U.S. Department of Agriculture pays more than half of the premiums. On average, more than 90% of planted cotton acreage is enrolled in this program. The crop insurance program is statutorily mandated to be actuarially sound, meaning that total premiums are supposed to cover total indemnities over time. Underwriting gains and losses are allocated between the companies and government according to formulas contained in the reinsurance agreement between the parties. During 2015/16, cotton insurance subsidies are estimated at $400 million, or 6.5 cts/lb, compared with $490 million, or 6 cts/lb in 2014/15. In addition to described support, the USDA announced on June 6, 2015, that the USDA Farm Service Agency (FSA) will provide an authorized maximum $300 million in cost-share assistance payments to cotton producers through the new Cotton Ginning Cost-Share program in order to expand and maintain the domestic marketing of cotton. Through this program, eligible producers can receive a one-time cost-share payment, which is based on a producer’s 2015 acres reported to FSA, multiplied by 40% of the average ginning cost for each production region. Sign-up for the program began on June 20, 2016 through August 5, 2016, and payments were set to begin in July 2016. The program has the same eligibility requirements as were used for the 2014/15 Cotton Transition Assistance Program, including $40,000 per producer payment limit, requirement to be actively engaged in farming, compliance with conservation standards and a $900,000 adjusted gross income limit. The sum of all types of support provided to U.S. cotton producers, including crop insurance, STAX, LDP, MLG and the Cotton Ginning Cost-Share program, is estimated at $1.1 billion or 18 cts/lb in 2015/16, compared with $860,000, or 11 cts/lb provided in 2014/15.
INDIA
India has a Minimum Support Price (MSP) system which was operational during 2014/15 and 2015/16 through direct cotton purchases by the government because market prices were below the MSP during at least part of those seasons. For 2014/15 the MSP for medium staple cotton (J-34) was set at Rs3,950 per 100 kg of seed cotton, equivalent to 85 cts/ lb of lint at the season average exchange rate. Domestic prices in India stayed below the MSP during most of 2014/15. As a result, the Cotton Corporation of India (CCI), an agency of the central government, and state cotton organizations directly purchased an estimated 1.6 million tons of cotton, or a quarter of production, at MSP prices at an estimated cost of $2.9 billion. Average domestic spot prices in India for a representative variety were estimated at 66 cts/lb. Based on the difference between the procurement price and the value of the government stock at market prices, it is estimated that the cost of MSP operations to the Indian government reached $631 million, if cotton was sold at the average prices. This would represent a subsidy of 4 cts/lb if applied to total production. The MSP for 2015/16 was increased to Rs4,000 per 100kg of exchange rate. Domestic prices in India stayed below the MSP for a short period during the first half of the season and were estimated at 64 cts/lb, As a result, the CCI procured 144,000 tons at MSP prices at an estimated cost of $250 million. Based on the difference between the procurement price and the value of the government stock at market prices, it is estimated that the cost of MSP operations to the Indian government could reach $51 million.
Cotton farmers in India benefit from debt forgiveness and fertilizer subsidies from their government. India also provides some backing in the form of subsidies for crop insurance, although the value of this support is unknown. In addition, the Government of India provides support to cotton production through several programs, such as the development of infrastructure facilities for production and distribution of quality seeds. Under the government’s Technology Mission, support was provided for the modernization of ginning and pressing units and the improvement of cotton marketing in recent years. These benefits are difficult to quantify, and some are not specific to cotton. In addition, the government supports the textile sector with a number of programs that provide direct support and soft loans. In 2015/16 the amount of direct subsidy to production in India was estimated at $50 million or 0.4 cts/lb of lint production, compared with $631 million, or 4 cts/lb provided in 2014/15.
EUROPEAN UNION
Changes were introduced in the EU Common Agricultural Policy starting in 2009/10. As before, cotton producers receive 65% of EU support in the form of a single decoupled payment (income aid) and the remaining 35% in the form of an area payment (coupled, or production aid). Greece and Spain are the major cotton producers in the EU. For production aid, the maximum base eligible areas are set at 250,000 hectares for Greece and 48,000 hectares for Spain. To be eligible for aid, the area must be located on agricultural land authorized by the EU member states for cotton production, sown under authorized varieties and actually harvested under normal growing conditions. The aid is paid for cotton of sound, fair and merchantable quality. The aid is paid per hectare of eligible area by multiplying fixed reference yields by the reference amounts fixed for each country. For the purpose of calculation of aid, the seed cotton yield per hectare is fixed at 3.2 tons/hectare for Greece and at 3.5 tons/hectare for Spain. The amounts per hectare are fixed at 251.75 euros for Greece and 400 euros for Spain. If the eligible area exceeds the maximum base area, the aid per hectare is reduced proportionally. In 2015/16 the amount of direct subsidy to production in Greece was estimated at $224 million ($238 million in 2014/15), equivalent to 47 cts/lb of lint production (39 cts/lb in 2014/15). Amount of direct subsidy to cotton production in India estimated at $50 million in 2015-16. The subsidy in Spain is estimated at $68 million in 2015/16 ($72 million in 2014/15), or 55 cts/lb of lint (44 cts/lb in 2014/15). The decline is a result of budgetary cuts and a stronger U.S. dollar in relation to the euro.
TURKEY
The government of Turkey pays a premium per kilogram of seed cotton to producers. In the past the premium for seed cotton produced from certified seeds was higher than that from noncertified seeds. No premium has been paid for noncertified seed since 2012/13. The premium for 2015/16 was increased to 0.75 TRL/kg, from 0.65 TRL/kg in 2014/15, for seed cotton produced from certified seeds. Assuming that 90% of Turkish cotton production is produced from certified seeds, and that all cotton producers applied for the premium, the Secretariat estimates that total payments to cotton producers in Turkey declined from $452 million in 2014/15, equivalent to 27 cts/lb of lint production, to $381 million in 2015/ 16 (26 cts/lb).
BRAZIL
Brazil operates a marketing program that provides direct subsidies to producers based on guaranteed prices, but without direct acquisition of cotton by the government. The program is called the Equalization Premium Paid to Producers (PEPRO – Prêmio Equalizador Pago ao Produtor). There were no PEPRO auctions in 2015/16. The government of Brazil also provides support to cotton production through subsidized credit for production, marketing and investments. It is estimated that subsidized annual credit to cotton producers averaged around $500 million during the past decade. Low-income cotton growers receive a subsidized interest rate of 5%, compared with market rates of 20-25%. Based on this difference, it is estimated that the maximum annual subsidy received by cotton growers in the form of subsidized interest averaged $75 million over the past decade.
COLOMBIA
In Colombia, direct government payments to producers declined during the past two seasons. In 2014/15, direct assistance to cotton producers in Colombia was estimated at $5 million, averaging 9 cts/lb (down from 40 cts/lb in 2013/14). In 2015/16, direct government payments declined further to $3 million, averaging 5 cts/lb. Actual payments in Colombian pesos declined by 42% during 2015/16, but payments in U.S. dollar equivalent declined by 47% due to the depreciation of the domestic currency.
WEST AFRICA
Several countries in West Africa provided subsidies for cotton inputs in 2015/16 and 2014/15, especially for fertilizers and planting seeds. In 2015/16, Mali provided an estimated $26 million (5 cts/ lb); Burkina Faso $30 million (5 cts/lb); Côte d’Ivoire $14 million (4 cts/lb); and Senegal $2 million (11 cts/lb).
SOURCE: The Tecoya Trend
Heavy custom duties are hampering the Made-in-Rwanda campaign as the Government moves to phase out used clothes, textiles manufacturers have said. According to industrialists, the campaign, launched in 2014, might be slowed down if more incentives are not introduced to promote locally manufactured clothes. They single out the 25 per cent levy charged on imported raw materials on top of the 18 per cent Value Added Tax (VAT). This, according to the textiles players, is one of the biggest challenge coupled with lengthy checks and bureaucracies, and high transport and transaction costs of both imported and exported materials. Saidi Hitimana, assistant general manager of C&H Made in Rwanda, a garment and textile factory in Kigali Special Economic Zone, said if the government could scrap taxes on raw materials, their company would be able to produce more than the current 7,000 vests and underwears it rolls out daily. “We are trying to increase our production capacity in a bid to best serve the vast market out there. But the cost at which we import raw materials, mostly from China, to make final fabrics continues to put a heavy toll on the business,” he said. “There are only two textile industries in the country and demand is high, especially now that the Government is phasing out used clothes. We believe we can bridge the gap if we were exempted from those taxes.”
Operationalised in 2015, the C&H Made-in-Rwanda employs about 1,000 workers having increased from 200 in 2015. It targets to have about 5,000 workers by the end of 2017. The company exports 80 per cent of its products. Alex Ruzibukira, director-general of Industry at the Ministry of Trade and Industry, said the Government was in talks with East African Community (EAC) member states to enforce policies that will see exemptions on some imported items and raw material. “A few months ago, we adopted a plan of action that exempts taxes on some of clothing materials such as buttons and zippers because they cannot be sourced locally. However, this will require adoption at the regional level,” he said, adding that technocrats in the EAC have been working on proposals which will be tabled before the upcoming Heads of State Summit. C&H Made-in-Rwanda and Utexrwa are the two major textile factories in the country, but there are many upcoming small and medium enterprises in the garment industry that are yet to contribute significantly to the reduction of imported clothes.
SOURCE: The NewTimes
Indonesia wants to enter the top five ranking of the world's largest textile (and textile products) exporters in the next couple of years. Currently, Indonesia is ranked tenth (controlling a global market share of 1.8 percent) far behind China that remains the clear world leader in terms of textile and garment production as well as export. Indonesia's Industry Ministry is in the middle of preparing several incentives that should bring Indonesia in the top five, including tax incentives and lower gas prices for export-oriented textile companies. Airlangga Hartarto, Indonesian Industry Minister, said Indonesia needs to become the dominant player at home first (currently the domestic market is dominated by cheap textile imports from China, a trend that worsened after the implementation of the ASEAN China Free Trade Agreement [ACFTA] in January 2010), followed by expansion on an international scale by raising Indonesia's textile exports. The world's major textile consumers are the European Union, United States, China and Japan.
In 2015 the value of Indonesia's textile exports reached USD $12.3 billion, contributing 1.21 percent to the nation's gross domestic product (GDP). This labor-intensive industry provides employment to some three million Indonesians. Hartarto added that the Industry Ministry is making efforts to develop vocational schools to create adequate human resources (equipped with international standards). Considering that the ministry aims to see a 5 - 6 percent (y/y) growth pace in the textile industry in the years ahead, it will require an additional 600,000 workers, each year.
Incentives to Boost the Textile Industry of Indonesia
Key to grow into the ranks of global textile leaders is efficiency, Hartarto said. Raw materials used in the textile manufacturing process are currently imported from abroad, implying higher production costs, especially in times of rupiah depreciation. By scrapping the value-added tax (VAT) on raw materials, Hartarto wants local textile manufacturers to start sourcing raw materials at home instead of looking beyond borders. Meanwhile, lower gas prices will also ease production costs in the textile industry. In one of the economic policy packages that have been released by the Indonesian government, lower gas prices were promised to several labor-intensive industries. However, these industries are still waiting for the government to take action. Recently an official at the Industry Ministry said these industries will be able to enjoy lower gas prices starting from the second half of August 2016. Indonesian Textile Association (API) Chairman Ade Sudrajat says it is important that the government will lower gas prices immediately in order to make the nation's textile industry more competitive.
Indonesia-European Union Comprehensive Economic Partnership Agreement
Another important decision that would boost Indonesia's textile exports is the signing of a free trade agreement with the European Union (Indonesia-EU comprehensive economic partnership agreement, or CEPA). Currently, it is difficult for Indonesia to compete with Vietnam on markets in Europe and in the USA because Indonesia is not engaged in free trade partnerships with these regions. Therefore, Indonesian textile exports to Europe are subject to import duties in the range of 11- 30 percent, while Vietnam can export its textile products to the European Union without import duties. This makes Vietnam's products much more competitive. However, the signing of free trade deals between Indonesia and other regions in the world still require time, particularly as there exists opposition both in parliament and society against participating in such agreements (on claims that Indonesian industries are not competitive enough to compete with foreign counterparts and therefore the nation merely becomes an importer after a deal, particularly considering that Indonesia has a huge market, with some 255 million inhabitants).
SOURCE: The Indonesia Investments
Vietnamese textile and garment export has just managed to touch US$13.15 billion, an increase of 4.7 percent. The figure is much lower compared to the same period previous year. The three major markets of Vietnam include the US, Japan and South Korea, according to the Ministry of Industry and Trade report. The US topped US$6.52 billion, up 3.48 percent compared to the same period last year and accounting for 49.6 percent of the country’s total textile export turnover. The second biggest market is Japan with nearly US$1.55 billion, up 4.4 percent and the third biggest market is South Korea with US$1.07 billion, a rise of 13.7 percent. However, a representative from the Ministry said that US importers just expected to clear out inventories rather than laying new orders due to which domestic businesses are facing difficulties in finding new orders. Vietnamese textile and garment will face more difficulties because the world demand shrinks. Vietnam expects to benefit from the Trans-Pacific Partnership (TPP) however its effects may cause difficulties because countries that are not TPP members have adopted many policies to increase its competitiveness capability. With these barriers, it will hardly be able to reach the export target of textile and garment forcasted by Economists of US$ 39 billion in 2017.
SOURCE: Yarns&Fibers
The trade show for home textiles and floor coverings, Heimtextil Russia will be held over 17,200 sq. metres of exhibition space in Halls 3 and 4, Pavillion 1 at IEC Crocus Expo, Moscow from September 20-23, 2016. The show will present products of more than 300 companies from around the world and expects to receive more than 16,000 visitors. There will be country pavilions from Germany, Egypt, China, Pakistan and Turkey, while international companies like Hefel from Austria, Bovi from Portugal, KT Exclusive from Germany, Verbeek Designs from Netherlands, Ocean Exim from India, Kozman Group from Egypt, etc will also be seen. A major part of the exhibition has been taken up by the domestic textile industry, where companies like Daylight, Gallery Arben, Casablanca, Kariguz, Fuggerhaus, Protos and K, DM Textile Management, Vologda Textile Factory among many will be seen exhibiting their products. Additionally, the show offers a 'Match Making' online platform on the official Heimtextil Russia website, which lets visitors plan and schedule meetings with exhibitors they may be interested in meeting. Secondly, there will also be several B2B events, where buyers will be able to meet representatives of companies. One such B2B event will have exhibitors from Egypt and Pakistan meeting buyers at the Business Lounge.
SOURCE: Fibre2fashion
