INTERNATIONAL
Textile Raw Material Price 2017-01-03
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1205.75 |
USD/Ton |
1% |
1/3/2017 |
|
VSF |
2375.51 |
USD/Ton |
0% |
1/3/2017 |
|
ASF |
1842.82 |
USD/Ton |
0% |
1/3/2017 |
|
Polyester POY |
1260.46 |
USD/Ton |
0% |
1/3/2017 |
|
Nylon FDY |
3138.55 |
USD/Ton |
0% |
1/3/2017 |
|
40D Spandex |
4391.09 |
USD/Ton |
0% |
1/3/2017 |
|
Polyester DTY |
1626.86 |
USD/Ton |
0% |
1/3/2017 |
|
Nylon POY |
3340.10 |
USD/Ton |
0% |
1/3/2017 |
|
Acrylic Top 3D |
5462.22 |
USD/Ton |
0% |
1/3/2017 |
|
Polyester FDY |
1500.89 |
USD/Ton |
0% |
1/3/2017 |
|
Nylon DTY |
2965.78 |
USD/Ton |
0% |
1/3/2017 |
|
Viscose Long Filament |
2015.58 |
USD/Ton |
0% |
1/3/2017 |
|
30S Spun Rayon Yarn |
3037.77 |
USD/Ton |
1% |
1/3/2017 |
|
32S Polyester Yarn |
1828.42 |
USD/Ton |
0% |
1/3/2017 |
|
45S T/C Yarn |
2649.05 |
USD/Ton |
0% |
1/3/2017 |
|
40S Rayon Yarn |
1972.39 |
USD/Ton |
0% |
1/3/2017 |
|
T/R Yarn 65/35 32S |
2217.14 |
USD/Ton |
0% |
1/3/2017 |
|
45S Polyester Yarn |
3167.34 |
USD/Ton |
0% |
1/3/2017 |
|
T/C Yarn 65/35 32S |
2274.73 |
USD/Ton |
0% |
1/3/2017 |
|
10S Denim Fabric |
1.32 |
USD/Meter |
0% |
1/3/2017 |
|
32S Twill Fabric |
0.81 |
USD/Meter |
0% |
1/3/2017 |
|
40S Combed Poplin |
1.15 |
USD/Meter |
0% |
1/3/2017 |
|
30S Rayon Fabric |
0.66 |
USD/Meter |
0% |
1/3/2017 |
|
45S T/C Fabric |
0.65 |
USD/Meter |
0% |
1/3/2017 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14397 USD dtd. 2/1/2017)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Telangana state government to get associated with the National Institute of Fashion Technology (NIFT) to bring out new designs to appeal to a wider range of people, a step towards protecting the handloom industry, said Collector Prashanth Jeevan Patil at the inaugural function of textile exhibiton on Monday. Mr. Patil urged people to patronise handloom products and promote weavers as handloom formed a part of their culture. Government employees and public representatives were asked to sport handloom clothes once a week to promote such products. Also, scores of weavers are dependent on this age-old industry which is slowly losing patronage. People should protect and preserve the handloom industry by buying products from weavers, he added.
With an aim to promote the use of handloom fabrics, several handloom stalls were set up at the Collectorates at Medak and Sangareddy on Monday. At Sangareddy, Collector Manickaraj Kanan and Joint-Collector V. Venkateswarlu bought a few items and even wore them. It was also decided that officers should wear handloom fabric every Monday without fail. This was the initiative suggested by IT and Municipal Administration Minister K. Taraka Rama Rao. The products at the stalls were brought from handloom cooperative societies of Jogipet, Narayankhed, and Sangareddy. While, Collector Yogitha Rana urged government officers and employees to attend the Prajavani (grievance cell) meeting by wearing handloom clothes every Monday.
Addressing the gathering after opening a handloom outlet set up by the Telangana Chenetha Society at Pragathi Bhavan here on Monday, she said that orders were also issued to the employees at the division and mandal level to wear cotton and handloom clothes at least once a week. Chief Minister K. Chandrasekhar Rao had taken a decision to make it mandatory to ensure financial support to weavers, Ms. Rana said, appealing to the people to use handloom products at home. The Collector also suggested the people to purchase clothes worth Rs. 500 every month by joining the Chenetha Lakshmi scheme. Members of the scheme would get a rebate on the same. With people buying handloom products they would help the weavers come out of their financial woes.
SOURCE: Yarns&Fibers
Come Sankranti! Every one purchases Ponduru Khadi to celebrate the festival of harvest. But this year the demonetisation played spoil sport for weavers. The popular Ponduru Khadi received a blow from an unexpected quarter. Demonetisation adversely affected the purchase of cotton and sale of finished products of khadi leaving the khadi handloom workers in the lurch. Generally, Sankranti is the season for Ponduru Khadi sales which touches a high during the season. However, due to the non-availability of currency notes, there are no purchases and sales so far. Though the cash is in their accounts, there is no way to pay the workers in hard currency. There are at least 800 khadi weavers working for the Andhra Fine Khadi Karmikabhivrudhi Sangham (AFKKS) in Ponduru, G Singadam and Santakaviti mandals in the district. These workers needed to be paid Rs 3 lakh by the society every week for purchasing the cotton yarn from them. The weavers needed to be paid wages once a month. The Society could not purchase full stock of cotton yarn during the last one month. The society could procure only half of the cotton yarn from the workers but could not pay the amount to them.
Following high demand for yarn, a number of workers started making yarn almost doubling the production. But due to the demonetisation they could not be paid the wages though they are supplying yarn. The society used to sell khadi worth Rs 1 lakh every day during the festive season of Sankranti. But people could not purchase as hard cash is not available with them this year. Though the AFKKS is using PoS machines they could sell khadi cloth worth only Rs 50,000. Pattam Srinivasa Rao, manager of Saibaba Weavers’ Society, Ponduru, said that they could withdraw only Rs 24,000 per week from the bank affecting the purchase of yarn from the workers. Basva Ramana, secretary of AFKKS, said that due to demonetisation the business worth several crores of rupees has come down to lakhs. The workers and people feel that Sankranti has lost its luster this year.
SOURCE: The HansIndia
The price of cotton touched a record level of Rs.5,330 a quintal on Tuesday -- the highest in the season so far. Naturally, farmers are happy. The same price prevailed in Boath and Indervelli market yards. As for the five cotton markets in the district, the price at Icchoda was Rs.5,300; while in other markets, like Boath and Jainath, it rose, thanks to diversion of huge stocks by farmers. The price offered by the Centre at CCI outlets is Rs.4,160 (with eight to 12 per cent moisture). It was Rs.5,200 till Monday, even as 10,000 quintals of cotton was purchased on Tuesday in the market yard here by ginning traders.
As the international rates are rising, many of the traders are not bothering about the moisture content. Earlier, they used to cut the rate depending on the moisture content. Till date, the Adilabad market yard had sold 723,762 quintals, Boath 207,979, Indervelli 31,083, Ichoda 83,215 and Jainath 69,057, Marketing Officer Santosh Kumar said on Tuesday. While adding up to around 11 lakh quintals, the total sales figure this year was three lakh quintals less than that of the previous year in the same month.
Officials of the department estimate that with the increase in price, farmers would bring their piled-up stocks for disposal. Farmers’ leader Karunakar Reddy, however, said that the current rise in price would not be beneficial to most of small and marginal ryots as they had already sold their stocks to traders. As such, even if the price went up by Rs.1,200 more than that fixed by the CCI, the benefit to farmers would be nil, he told The Hans India. Reddy pointed out that some of the ginning traders would benefit as the stocks lying with them would now fetch more. Even farmers themselves had expressed anxiety over the price. Cotton production in 2016 was lower than that of the previous year. Hence, farmers claim, the traders have increased the price. They anticipate that the rate would go up further. With this, they hope that good days for them would be back, as the price in the past was Rs.8,000 a quintal. As such some ryots are holding back stocks. The cotton farmers had been incurring losses for the past few years in the absence of remunerative price. At least some of them can hope to get somewhat remunerative price for their produce.
SOURCE: The HansIndia
The three-day extravaganza is going to be held between January 5 & 7, 2017. “We have got 102 participants which make for more than 300 brands in totality. The fair will witness the presence of kidswear players mainly owing to the fact Kolkata is known as the hub for the garment industry. Over 500 wholesalers from different parts of the country have confirmed their presence in the fair. The event is core B2B fair wherein we are expecting big retailers, prominent wholesalers, distributors and agents on a pan-India basis. In three days, we are anticipating about 1500 visitors. We are expecting people from Delhi, Mumbai, Lakhnow, Amravati, Indore, Patna, Assam, etc.,” elaborated Vijay kariwala, VP, West Bengal Garment Manufacturers and Dealers Association.
Performance of the previous editions
Talking about the performance of previous editions, Kariwala, highlighted, “We are conducting this fair for over 40 years. This is the 43rd edition of this fair. We organise this event every year. This time the fair is little delayed due to demonetisation. The response for the previous editions has been phenomenal. People want to be with us, we have 80 per cent repeated participants for the upcoming event. The last fair had 92 participants with us. This time numbers have certainly gone up. A majority of players are based out of Kolkata. This fair is kind of buyer-seller meet in which they choose collection for spring/summer 2017.”
This is one of the best platforms for buyers, retailers and wholesalers in the region. It is organised on a pan-India level to offer many opportunities to stakeholders. The graph of popularity is increasing. A good deal of business is expected this time. The venue is centrally located as it is in the heart of the city.
Highlighting reasons for selecting a hotel over an exhibition ground, he said, “We have tried both the platforms. Some of previous editions have been organised in exhibition grounds too, but our participants find it more appealing to have a hotel as a value, the reason being, you can run your stall to any time of the day or night. There are no certain hours or time during which participants and visitors can run their show. So, for us the venue is a matter of choice for us. Earlier we conducted the fair in Netaji indoor stadium spanning 20,000 sq feet area. For the last couple of years, our participants are preferring to put their stalls in hotel. We take suggestions first and take steps accordingly.” The future is very bright for the garment industry in Kolkata, especially for the kidswear segment.
The demonetisation impact
According to Kariwala, the fair was planned earlier between December 2 and 4, 2016, but taking demonetisation into account, it was postponed to newer dates. “Everybody is facing issues but normalcy has also come over the time. We hope that retailers and visitors will overcome it somehow and they are already doing it. Our optimism has not come down. Moreover, we believe, visitors and participants are fully aware of future growth prospects and the benefits they can reap by associating with this fair,” he remarked.
SOURCE: The Fashion United
The Micro, Small and Medium Enterprises (MSME) across the country are feeling a little relieved after Prime Minister Narendra Modi announced to increase credit limit and working capital for them. The sector was facing slowdown due to cash crunch and low demand. Talking to KNN, Chairman of Federation of Industry & Commerce of North Eastern Region (FINER), RS Joshi said that the increase in limit will go in the betterment of the MSMEs. “This measure of increasing the working capital limit will go well. MSMEs needs to be in consideration and without any hassle the announcement needs to be implemented at right speed which is good,” said Joshi. The credit guarantee for micro, small and medium enterprises (MSME) has been increased from rupees one crore to rupees two crores.
The Non-Banking Financial Company (NBFC) loans will also be covered under this scheme now. There is also an increase in the Maximum permissible Bank Finance for working capital (MPBF) from 20% at present to 25%. While Arvind Sinha, President of Textile Association told KNN that the extra money is very much the need of MSMEs right now and the move will play crucial role to help industries buying the raw material. “It will be good for everybody if you will get extra money in hand. It will definitely become easy to buy raw material and share money,” said Sinha. Meanwhile, Joshi raised concerns over high lending rates for the MSMEs. “The cost of finance for MSMEs is very high so that should be considered seriously by the government and RBI. Banks go to big corporate houses and they offer a competitive rate and in case of MSMEs they charge much more,” said RS Joshi.
Arvind Sinha also made similar demand on behalf of textile sector. “They should decrease the interest rate, as it is not in favor of MSMEs,” he said. The associations also shared some valuable points regarding the announcements made by PM. “Another major announcement that the MSMEs are happy about is increase in credit limit under CGTMSE scheme from rupees one crore to rupees two crores. So that means without any collateral security bank should lend to MSMEs. We have been demanding this for a long time,” said RS Joshi (FINER).
SOURCE: The KNN India
Wadia Group-owned Bombay Dyeing & Manufacturing Company expects its retail business to turn profitable in 2017-18. “At an operating level, we expect (the retail division) to turn cash positive this fiscal. And we believe the retail business will turn profitable in 2017-18,” said CEO (Retail) Nagesh Rajanna. For the first six months of the fiscal (April to September 2016), the retail/textile business reported a turnover of Rs. 191 crore and a profit before tax of Rs. 4 crore. (The company’s other two segments are polyester and real estate.)
Rajanna expects an organisational restructuring — with young blood from a variety of other sectors coming in — coupled with Rs. 100-crore spends on a “brand-refreshment” (and re-branding) exercise to help the division get back on track. Bombay Dyeing has already decided to exit textile manufacturing, which will now be outsourced.
Targeting the millennials and youth, the company is also setting up an in-house design studio for its range of bed, bath and other offerings surrounding these two categories. Designers, exclusive to Bombay Dyeing, have been taken on board. Apart from the brand refreshment exercise, plans are afoot to shore up its retail presence. The plan is to increase the number of franchise stores to 500 (from 200-odd) and double the number of traditional multi-brand outlets to 10,000. Nearly Rs. 50 lakh will be spent towards setting up each of the 300 new franchisee stores. Bombay Dyeing also plans to rev up the 30-odd company-owned stores across the country as “experience centres”. This apart, it has a substantial presence in the modern multi-brand retail outlets. Currently, nearly 50 per cent of the company’s retail sales are from these outlets.
E-commerce thrust
The other major thrust area that Rajanna foresees is e-commerce. By March, the company is planning to put in place its own online portal. This portal will compliment the tie-ups that Bombay Dyeing has with marketplace e-tailers such as Flipkart, Amazon and Snapdeal. Currently 2-3 per cent of the company’s sales are from e-commerce. This is projected to reach around 10 per cent in four years. “In the coming days modern retail outlets and e-commerce will lead the growth story,” maintained Rajanna.
Cash ban gains
Interestingly, he claims demonetisation may benefit the segment. The cost of Chinese imports that have been eating into the market (bed, bath and allied segment) should go up. And, this will benefit domestic players in the Rs. 1,000-crore organised market in India. “With a strong control by the government (over the unorganised sector) Chinese imports will either become expensive or Indian players will have a level playing field,” he said. While November sales for Bombay Dyeing dipped 50 per cent YoY, December saw a 30 per cent YoY growth in revenues. “Between November and December we saw 80 per cent growth in sales. This shows demonetisation is fading out. A recovery in consumer sentiment is visible,” the CEO said.
SOURCE: The Hindu Business Line
Going digital and 'swiping' your card is touted as the solution to the woes of demonetisation. The country may be turning digital going by the steep increase in usage of cards and other modes of cashless payments. But if you think you can manage with your card and prefer to shop without much cash in hand, be warned. There are bottlenecks ahead. The Point of Sale (PoS) machine might decline the transaction and the shop keeper might either keep you waiting or request for settlement in cash. The new year weekend saw large crowds at shopping centres, as people rushed to grab new goods at discount sales in this textile hub of Coimbatore. Even on normal days, the numbers flocking at cash counters is a sight to see at a good number of business establishments. This time, with most establishments permitting customers the use of card for settlement of dues amounting to just Rs. 100, the traffic, shop keepers say “has become unmanageable in recent days.” The load on the machines has increased. But when they break down or there is some delay in the processing the transaction due to connectivity issues, shoppers were caught unawares. They were either forced to wait or settle in cash and move on.
One shop keeper told this correspondent that at times it took more than 20 to 30 minutes to complete one transaction. “We started to caution people to be prepared to wait to settle their dues or come back with cash, even as they entered our store to make the purchase. What a way to welcome the customer on New Year,” he said ruefully, wishing every customer “a Happy New Year”. An individual, who had taken his family for lunch to a renowned restaurant in the city voiced his embarrassment and regretted not having asked his wife to prepare the lunch at home. "We are now ready for a cup of hot coffee. But we would rather not indulge, as the card swiping machine would probably make us wait until dinner time,” he summed up with a tone of disappointment.
SOURCE: The Hindu Business Line
The Government of India is overhauling the budget process and has decided to present the Union Budget 2017-18 on February 1, instead of the last day of the month. The Budget Session will be convened in the last week of January in order to facilitate early allocation of funds to start various schemes from the beginning of the next financial year. The Cabinet Committee on Parliamentary Affairs (CCPA) recommended holding the session from January 31. The Economy Survey will also be tabled on the last day of January. These recommendations were made to President Pranab Mukherjee by the CCPA headed by home minister Rajnath Singh in a meeting held in New Delhi, according to media reports. The Budget Session’s first part will run till February 9.
SOURCE: Fibre2fashion
Special economic zone (SEZ) units and developers are unlikely to get relief from the minimum alternate tax (MAT) in the coming Budget despite a strong pitch for their removal by the commerce ministry, according to sources. The revival of SEZs — once a growth engine for the country’s exports — was among the key steps proposed by the Board of Trade (BoT), headed by commerce and industry minister Nirmala Sitharaman, last year to help reverse a slowdown in the country’s exports. The BoT could again suggest steps to boost SEZs when it meets later this month, said an official. Currently MAT is levied at 18.5% on the book profit of firms, with the effective rate over 21%, factoring in surcharges and cess.
In fact, the commerce ministry has been consistent in its demand for the removal of MAT and the dividend distribution tax (on SEZ developers) in recent years on grounds that the tax exemption will improve export competitiveness in times of a slowdown in the international markets they cater for. However, the finance ministry is again reluctant to offer any breather, fearing revenue losses. “The proposal (to scrap MAT, DDT) is very much there (this year), but you have to take a hard look at the revenue implications before anything of this sort is done,” an official source told FE. In the last Budget, international financial services centre were exempt from the DDT, but retained the same (at 20.4%) on SEZs.
Before the MAT and DDT were imposed in 2011-12, growth in exports from SEZs was as high as 121% (2009-10) and 43% (2010-11), far exceeding the increase in the country’s overall goods exports for these years. After a near 11% drop in 2014-15, exports from SEZs dropped 3.3% in the last fiscal. Although they paid a few thousand crores as MAT in the last fiscal and another hundreds of crore as the dividend distribution tax, SEZs availed of direct tax breaks of R18,400 crore in 2014-15, a finance ministry official had earlier said, arguing that SEZs were still benefitting.
SOURCE: The Financial Express
The Centre on Monday flagged the idea of expanding the list of items to be brought under a specific cess to finance the states’ constitutionally provided five-year, 100% compensation for any revenue losses in the goods and services tax (GST) regime. The proposal, however, met with stiff resistance from states at the GST Council here, as they feared that it would necessitate the GST rates to be lower on a number of goods, including consumer durables which suffer tax incidence higher than 26% now. While the compensation was earlier pegged at about R55,000 crore a year, it is now felt that the figure could be far higher — up to R90,000 crore in the first year after GST is brought in — given that states’ revenues have taken a hit due to demonetisation. The council had earlier computed the compensation based on states’ relevant revenue base of R4.42 lakh crore in 2015-16 and assuming 14% annual growth.
An earlier understanding at the council was that a cess will be imposed on three items — pan masala, aerated drinks and luxury cars — and the cesses on tobacco and fossil fuels be retained to raise the compensation funds. After much persuasion by the Centre, the states had then agreed to the idea of a new cess, as they thought the Centre should fund the compensation from its own revenue sources other than cesses. The Centre had said that raising the GST rates for the compensation could be more burdensome on taxpayers than the cess because raising Rs 100 for the Centre via GST would require tax worth Rs 172 given the Finance Commission’s devolution formula.
Monday’s GST Council meeting also discussed the issue of taxing high-sea transactions in the GST regime — an issue has come up after the definition of “state” in the draft integrated GST (IGST) law threatened to deprive the states’ of their existing right to tax transactions within 12 nautical miles from the coast. West Bengal finance minister Amit Mitra said the Union finance minister Arun Jaitley has agreed to refer the matter to the law ministry for appraising the constitutional position. All coastal states are concerned about the new definition as many of them are generating revenues to the tune of R600-1,200 crore annually from high-sea sales, Mitra noted.
The vexed issue of dual control — division of the assessee base and administrative powers between the Centre and states — which was sidestepped in many previous sessions of the council was not discussed even on Monday. Kerala finance minister TM Thomas Isaac said that the at least a dozen states including Kerala remained firm on their stand that all dealers and service providers with an annual turnover below R1.5 crore should be under the states’ exclusive control. The Centre has been advocating a vertical split of the assessee base and insisted that service providers should remain under its control till the states are trained in assessing them.
The cross-empowerment issue is about how to divide the 10-million indirect tax assessee base between the Centre and states for administrative and audit purposes. An agreement had earlier been reached that there won’t be dual control on any taxpayer; that is, each business will either report to the Centre or the respective state. But if IGST administration is to be left with the Centre (as the law ministry recommended), then dual control might become necessary in cases of businesses with interstate presence. The council members hoped that the issue could be resolved by the council on Tuesday, but most of them ruled out the GST roll-out from April 1. With a constitutional compulsion to usher in the comprehensive indirect tax before September 16 this year, it seemed likely it could be implemented in June-July, they added.
Sources said the IGST draft law was discussed in detail on Monday, although the issue over territorial definition remained to be ironed out. Meanwhile, many service industries that have an interstate character like telecom, banking and insurance and railways on Monday made a presentation to the GST Council to apprise it of the desirability of allowing them a single registration (with the Centre). Officials from the commerce and industry industry said there was a need to give upfront GST exemption to exporters to spare them from the current time-consuming process of claiming refunds against the duty paid on imports of raw materials or other items. However, tax experts said this was not in line with the GST principle. Exemptions mar the input tax credit system, the incentive for businesses to be under GST and expand the tax base, they noted.
SOURCE: The Financial Express
Making further progress towards the goods and services tax regime, the Centre and states broadly finalised the contours of the law that will govern this levy. But states raised a few more issues, even as the contentious one on tax administration remained unresolved. A number of states said the April 1 deadline to roll out GST looked difficult to meet and that a realistic target could be June or July. Still, the eighth meeting of the GST Council reached consensus on most of the provisions of integrated-GST, the law for interstate sales, and other issues related to the central GST and state GST previously left undecided.
Parliament will need to pass the I-GST and central GST laws before the tax system can be implemented. States will need to pass state GST rules. The council will meet on Wednesday to deliberate the issue of administration of the tax, the issue of dual control. “April 1 rollout of GST definitely not possible,” said Thomas Isaac, Kerala’s finance minister. Gujarat finance minister said it could even be September.
The West Bengal finance minister said the council did not even “touch” on the issue of dual control, which was fundamental to the GST rollout, and that slabs on 1,500 items were yet to be decided. “We cannot have a GST that is non-sustainable, flawed and states will not give up their rights,” Amit Mitra said, adding that the “demonetisation tsunami” derailed the process. Delhi Deputy Chief Minister Manish Sisodia said there may be a one- or two-month delay from April 1. The finance minister in BJPruled Haryana, Abhimanyu Singh Sidhu, said the draft of the model integrated-GST was “more-or-less finalised”. He was also optimistic that the dual control issue would be resolved on Wednesday. “Realistically speaking, it is a difficult deadline (April 1). But I would still not say it is absolutely unlikely. I still see it as a possibility,” he said. Six sectors including banking and insurance, IT and telecom, and civil aviation made presentations before the GST Council, pressing for a single registration either with Centre or states under the new regime.
COMPENSATION
The largely settled issue of compensation was raised again as some states argued that a Rs 55,000 crore fund proposed via the cess on luxury and sin goods may not be sufficient. States that aren’t ruled by the BJP said post demonetisation, their revenue loss would go up and states could together lose as much as Rs 90,000 crore. Mitra said West Bengal’s tax revenue grew 11% in November 2015, but in November 2016 it fell 2% due to demonetisation. “Every state said its taxes have presenfallen by 30-40% ... Today many states would need compensation. If you need Rs 80,000-Rs 90,000 crore, instead of Rs 55,000 crore, where will it come from? That's a double whammy. States are interested that the Centre should stick to its constitutional commitment,” Mitra said. If a bigger corpus is to be built, the cess will have to be levied on more goods.
COASTAL STATES
States also raised the issue of taxation right over high seas, claiming that in line with the provision for sales tax or VAT they had the right to levy GST up to 12 nautical miles offshore. “All the coastal states, irrespective of parties, combined in saying that we must have 12 nautical miles within the state jurisdiction, whereas the draft I-GST law was looking at having taxation rights with the Centre,” Mitra told reporters. Chairman of the Council and Union Finance Minister Arun Jaitley decided to seek legal opinion on its constitutional validity.
ADMINISTRATION
The GST Council will take up the issue of tax administration on Wednesday. States indicated they are unlikely to give up on their demand of exclusive jurisdiction over assesses with turnover up to Rs 1.5 crore. Kerala Finance Minister Isaac said states will stick to the demand. The Centre is keen on a vertical division of all assesses between it and states.
SOURCE: The Economic Times
Commerce and Industry Ministry today asked the GST Council to grant ab-initio exemption to exporters from the Goods and Services Tax and keep the labour-intensive sectors like leather and plantation completely out of the tax net or put them in lowest slab. Commerce and Industry Minister Nirmala Sitharaman, after attending the meeting of the council, said the ministry officials gave presentation to the members. “For the leather industry, we want complete exemption from the GST or keep them in the lowest slab. We made a strong pitch on that as the sector create jobs,” she told reporters here.
Sitharaman further said the ministry favoured “fair” look under the GST regime for the cement industry, where taxation is “very high currently”. The sector is important as the government is looking at schemes like housing for all, besides modernising road, port and other infrastructure. She said that exporters should be given “ab-initio exemption” from the upcoming GST regime. She asked the council “would you treat exporters in such a way that they do not have to pay upfront. Give them an ab-initio exemption and tax them when you have to tax.” The ministry is not asking for exemptions, “but we raise concerns about the entire procedure” of paying duties first and then seeking refunds.
As regards the plantation sector such as coffee, the minister said: “Ideally, we would like to completely keep it out” from the GST but if at all it comes under the new indirect tax regime “it should be kept in the lowest slab”. When asked whether the commerce ministry has sought a cut in the import duty on gold, she said: “I have been talking about cutting the duty as gold is a critical raw material for gems and jewellery sector.” She said that restriction-free gold import also discourages smuggling. The imported gold is mainly used by gems and jewellery exporters and people usually consider investment in the precious metal as safe haven. India, the world’s second biggest gold consumer after China, imported 650 tonnes in 2015-16. Gems and jewellery sector had in July urged Prime Minister Narendra Modi to reduce gold import duty to 5 per cent from the current 10 per cent to check shift of business to neighbouring countries.
SOURCE: The Financial Express
Levying cess on more items other than demerit and luxury goods to compensate states for revenue loss post GST rollout will not be a prudent move as it will only increase the anomalies in the new indirect tax regime, experts said. Besides, the GST Council hearing out concerns of specific industry representatives is a welcome move, they said, adding suggestions like centralised registration and single assessing authority would be favourably considered by the Council.
“There are several open issues for the services sector and the industry would hope that these are addressed in the final legislation. However, the key issue of ‘dual control’ was not taken up which really is the crux of the contention. Any movement forward would be contingent upon the agreement on this issue,” PwC India Partner and Leader Indirect Tax Pratik Jain said.
Services sectoral presentation before the Council was another welcome move, it’s important the Council recognises the issues specially around centralised registration besides other, EY India National Leader (Indirect Tax) Harishanker Subramaniam said.
Deloitte Haskins & Sells LLP Senior Director (Indirect Tax) M S Mani, however, said, “it will not be a prudent move” to levy cess on any new item, other than the four items that were agreed in the past. “It must be noted that the concept of a cess in the GST framework, is in itself an anomaly, and it is hoped that the anomaly does not get further accentuated in order to collect more revenues to fulfil the compensation obligation,” Mani said. As many as six sectors including IT and telecom, banking and insurance, railways and civil aviation today made representation before the GST Council.
A four-tier GST tax structure of 5 per cent, 12 per cent, 18 per cent and 28 per cent that aims to lower tax incidence on most goods and keep out essential items was decided by the GST council in its meeting on November 3. Luxury items like high-end cars and demerit goods including tobacco, pan masala and aerated drinks, would be taxed at the highest rate and would also attract a cess in a way that the total incidence of tax remains at almost the current level. From that cess a Rs 55,000 crore fund was proposed to be set up, but ever since the demonetisation announcement on November 8, states have been demanding higher compensation to meet revenue shortfall. West Bengal Finance Minister Amit Mitra estimated that the compensation amount could go up to Rs 90,000 crore, while Kerala Finance Minister Thomas Isaac said that more items other than sin goods and luxury goods would be brought under the ambit of cess.
SOURCE: The Financial Express
The Goods and Services Tax (GST) Council faced a new roadblock with state Finance Ministers demanding taxation rights for GST levy on trade of goods within 12 nautical miles of the shore. Chairman of the GST Council and Union Finance Minister Arun Jaitley agreed to seek legal opinion on its Constitutional validity. The states also sought an increase in the number of items on which cess is to be levied to compensate the states, to deal with revenue loss estimated at Rs 90,000 crore post demonetisation, up from Rs 55,000 crore estimated earlier.
Most states have seen revenue decline of up to 40 per cent, the officials representing states claimed. The coastal states pressed for rights to levy GST on trade of goods within 12 nautical miles offshore. This resulted in a stalemate in finalising of the draft law for levy of Integrated-GST (IGST) on inter-state trade. Currently states like Gujarat, Karnataka, Kerala, Maharashtra, West Bengal and Odisha charge a VAT or sales tax within 12 nautical miles.
“All the coastal states, irrespective of parties, combined in saying that we must have 12 nautical miles within the state jurisdiction. Whereas the draft IGST law was looking at having taxation rights with the Centre,” West Bengal Finance Minister Amit Mitra said adding that some states earn as much as Rs 600 crore and Gujarat gets Rs 1,200 crore revenue from taxing sales in high seas. However, the issue on control of assesses will be discussed on Wednesday.
SOURCE: The New Indian Express
The advance estimates of GDP for 2016-17, to be released later this week, might not fully capture the disruption in economic activity due to demonetisation. As these estimates will be based mostly on data till October, before demonetisation kicked in, they might paint a rosier picture of the economy than the ground reality. Further, as the Budget numbers will be based on advance estimates, to be released by the Central Statistics Office, it is possible that those, too, are optimistic in their growth projections. Traditionally, CSO published advance estimates of GDP growth on February 9. To arrive at these estimates, CSO would take actual data for the first three quarters of the financial year and forecast growth for the fourth quarter based on past trends.
With the central government deciding to table the Union Budget in Parliament on February 1, the CSO has also advanced its release calendar. It will now release advance estimates in the first week of January. This means that much of the third quarter (October-December) data will simply not be available for the CSO to factor in its calculation. “Earlier, the advance estimates were based on three quarters of actual data. For the final quarter, past data was looked at to arrive at a trend. But now, data will only be available till the end of the second quarter,” says Pronab Sen, former chairman of National Statistical Commission.
In large measure, the quarterly estimates of growth are based on corporate results. For the third quarter, the results season typically begins in the second week of January (Infosys is scheduled to announce its results on January 13). This means that this time around, the third quarter results will not be available to the CSO for its calculations. It will have only data for the second quarter (July-September) to use in its calculations.
Another indicator the CSO relies on is the index of industrial production (IIP). As of now, IIP data is only available till October. Data for the month of November will only be released in the second week of January. While this indicator will also not be available to the CSO, it could estimate part of it using core sector data, which accounts for 38 per cent of IIP, for November.
A release from the Ministry of Statistics and Programme Implementation confirms the limitations of data. “The sector-wise estimates are obtained by extrapolation using various indicators like (i) index of industrial production of the past seven months of the year, (ii) financial performance of listed companies in the private corporate sector available up to the quarter ending September,” it says. Some data, though, will be available to the CSO. These include first advance estimates of crop production and expenditure of the central and state governments for the past seven to eight months.
To estimate service-sector growth, data on sales tax, deposits and credits, passenger and freight earnings of railways, civil aviation, and number of telephone connections for the last seven to eight months will also be available. However, the data have some limitations. As Aditi Nayar, principal economist at ICRA, points out: “The availability of sales tax data depends on whether states have furnished this information.”
Adding to the uncertainty is the likelihood that the banking sector might show higher growth during this period. “For the banking sector, data up to December may show higher net interest income, pushing overall growth of the sector,” says Nayar. While the CSO will also have access to tax data (excise, customs etc) till November, given the paucity of other high frequency economic data, economists remain sceptical about its estimates. “The impact of demonetisation is still unfolding. Estimating GDP for the full year in this scenario by extrapolating the trends up to October may lead to some errors,” says Nayar. Madan Sabnavis, chief economist at CARE, concurs. “Now that we have pushed it back by a month, there is a lot of room for error. It is possible that these estimates will be scaled down later.” It is possible that an accurate reflection of the ground realities after demonetisation will emerge only when the CSO publishes its third-quarter estimates on February 28, alongside its second advance estimates.
SOURCE: The Business Standard
Piling on Monday's massive loss, the rupee on Tuesday weakened further by 11 paise to end at a fresh one-month low of 68.33 against the American currency on heavy dollar demand from corporates and importers. Resurgent greenback against other currencies overseas alongside uninterrupted capital outflows predominantly kept forex market sentiment shaky for the second straight day. Despite a stellar opening rally, the home currency succumbed to fag-end dollar pressure. The greenback has gained strength broadly on the back of expectations for a faster pace of rate hikes from the Federal Reserve and increased fiscal spending under the incoming Trump administration. The rupee today resumed firmly higher at 68.12 as compared to overnight close of 68.22 at Interbank Foreign Exchange (Forex) Market on bouts of dollar unwinding and gained further ground to hit a high of 68.05. However, the currency suffered a setback in late afternoon deals due to fresh dollar demand and retreated sharply to touch a low of 68.3450 before ending at 68.33, showing a loss of 11 paise, or 0.16 per cent. This is the lowest closing since December 1, 2016 when it had closed at 68.34.
In worldwide trade, the dollar resumed its rally against a basket of the other major currencies after a brief overnight subdued trade bolstered by rate hike expectations with the non-farm payrolls and the FOMC meeting minutes both scheduled for release later in the week. The US dollar index was trading sharply higher at 103.50 in late afternoon deals. The RBI fixed the reference rate for the dollar at 68.0864 and for the euro at 71.3818. In cross-currency trades, the rupee recovered against the pound sterling to finish at 83.81 from 83.91 and hardened further against the euro to settle at 70.97 as compared to 71.50 earlier. It also bounced back against the Japanese Yen to end at 57.73 per 100 yens from 58.11 yesterday.
SOURCE: The Economic Times
The Commerce Ministry on Tuesday said it has convened a meeting of senior Indian officials from Geneva to discuss all World Trade Organization (WTO)-related issues, including the proposed trade facilitation pact in services. “I am having a review this month. Calling all WTO people from Geneva to talk about what is actually happening (in WTO) and where are we post-Nairobi,” Commerce Minister Nirmala Sitharaman said. She said that the proposal floated by India in WTO to start negotiations for a trade facilitation agreement in services will also be deliberated upon in the meeting, which is expected to be held by mid-January.
“Geneva team is called so that it becomes part of the Argentina Ministerial meeting in December this year,” she added. India is pushing for a trade agreement (TFA) on services as members of the global trade body WTO have concluded a similar pact for the goods sector. The proposal aims at easing movement of professionals and cut transaction costs.
SOURCE: The Business Standard
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$ 54.41* per barrel (bbl) on 02.01.2017.
In rupee terms, the price of Indian Basket increased to Rs. 3701.40 per bbl on 02.01.2017 as compared to Rs. 3697.71 per bbl on 30.12.2016. Rupee closed weaker at Rs 68.02 per US$ on 02.01.2017 as against Rs 67.95 per US$ on 30.12.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on January 02, 2017 (Previous trading day i.e. 30.12.2016) |
Pricing Fortnight for 01.01.2017 (Dec 14, 2016 to Dec 28, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
54.41* |
53.05 |
|
(Rs/bbl |
3701.40 (3697.71) |
3599.97 |
|
|
Exchange Rate |
(Rs/$) |
68.02 (67.95) |
67.86 |
* Since Brent, Oman & Dubai prices are not available due to holiday on 02.01.2017, the price of Indian Basket Crude Oil cannot be derived. Therefore, price of Indian Basket as of 30.12.2016 has been considered.
SOURCE: PIB
State Bank of Pakistan (SBP) Governor Ashraf Mahmood Wathra said on Tuesday the central bank will extend all kinds of support to the stakeholders of the textile industry. He said this at a meeting of the Senate Standing Committee on Textiles that took place at the SBP headquarters to discuss the problems faced by the textile industry and seek proposals for its sustainability. Besides members of the committee, representatives of major banks of the country also attended the meeting, according to an official statement. Mr Wathra asked the representatives of the banking sector to play their due role in the rehabilitation of the textile industry by extending soft loans to exporters. It is a moral responsibility of the entire business community to bring back its foreign assets and liquidity into the country to strengthen the textile industry, he said.
Senator Nihal Hashmi drew attention of the committee members to what he called the monopoly of private banks in the advancement of loans. He said the SBP should be tougher in regulating private banks. He said the government alone will not be able to bail out the textile industry, adding that the private sector should extend financial support to the textile industry. Expressing the concerns of the banking sector, Habib Bank CEO Nauman Dar said the textile industry should prove its competiveness if it expects the banking sector to come to its rescue. He said the government should announce subsidies for exporters.
Expressing his optimism about its future and potential, Mr Dar said the textile industry is not dead in Pakistan. To support his stance, he cited the names of leading textile groups that have made their fortunes from the textile industry. Committee Chairman Mohsin Aziz highlighted the significance of the textile industry in ensuring the country’s economic stability. He said sustainability in the textile industry ensures employment and optimum benefits to the agriculture sector. Senators Nasreen Jaleel, Khushbakht Shujaat, Hari Ram and Saleem Mandviwala were also present at the meeting.
SOURCE: The Dawn
Council of Pakistan Textile Associations (CAPTA) said that they were considering Customs Rebate and Cash Subsidies by the government. Customs Rebate and Cash Subsidies lead to non-bonafide, over invoicing and paper shipment, which most unfortunately defeats the very idea of reviving the industry and enhancing genuine exports as fake exporters take advantage of such schemes and paper shipments take place which ultimately creates problems for genuine exporters. The value-added sectors believe that instead of cash incentives, reduction in input cost is a more effective and better way to provide relief to the export sector.
In a letter to Ishaq Dar Federal Minister for Finance, Jawed Bilwani, Chief of CAPTA said this would only help the unscrupulous elements and would not prove to be sustainable and will not have a positive long term effect. History is full of such cases of fraud which can be witnessed in Federal Board of Revenue (FBR). Customs Rebate and any cash subsidy only encourage our foreign buyers for asking for a similar discount. Thus, the value-added sectors believe that instead of cash incentives, reduction in input cost is a more effective and better way to provide relief to the export sector.
Reduction in cost of inputs and manufacturing also curb the menace of smuggling and under invoicing. The vital export sector faces immense problems and hurdles which must be removed to pave the way for and for enhancing and boosting its exports. In suggestions, CAPTA asked for the tariff of gas, power and wages should be brought down at par with regional competitors to make us competitive in the international market and this will benefit the entire manufacturing chain and declare the export sector as a separate head of accounts in the tariff structure of gas and power.
Custom Rebate Claims are settled and paid through State Bank of Pakistan at the time of realization and payment of export proceeds. This should also be done efficiently as impact of Custom Rebate is below 1 percent of total amount. Refunds of sales tax on packing material be decided on a fixed percentage basis and be refunded along with export proceeds through SBP as the entire exercise is now being done electronically.
Currently Withholding Tax (WHT) is charged at various levels and items such as the import of raw materials, cash withdrawal from bank, registration of new vehicles etc. A portion of it is adjusted against Workers Welfare Fund (WWE) while the balance is kept outstanding and refunded after one year. Exporters fall under final tax regime u/s 143(b) and should be exempted from payment of WHT and be given exemption certificates or amount of WHT should be adjusted in input. Currently payment against WWF is collected at a rate of 2 percent of profit. WWF rate should be reduced to 1 percent (from current 2%) for the exporters. 0.25% Export Development Surcharge is deducted from the export proceeds of exporters. The government already has Rs 26 billion funds in its kitty for Export Development while it annually spends only Rs 1.5 billion approx in disbursement of funds for export development. We propose EDF on exports must be abolished and a Trade Development Surcharge be levied on imported luxury items such as cars, soap, shampoo, cosmetic and finished goods. This would also help our exporters in using the cash liquidity for enhancement of the exports of our nation.
SOURCE: The Daily Times
Foreign buyers expect all types of printing solutions at the same place and in a short span of time and they are likely to avail one-stop printing solutions from DCC Print Vision LLP Textile, said a top official of Garment Manufacturers and Exporters Association (BGMEA). Organisations like DCC can help the country’s textile sector to produce fabrics by 2021. Senior vice president of BGMEA Faruque Hassan visited DCC in Banani, Dhaka to inspect its printing machine and technology, according to Bangladeshi media reports. He said that there are multiple possibilities in the textile printing industry of the country, but the industry lacks one stop solutions. DCC started its operations in Bangladesh after the customers of the country’s textile sector requested the company to do so. The company is working towards setting up a world class printing studio in Bangladesh, said HN Ashikur Rahman, country manager of DCC. DCC will be organising workshops in Bangladesh to create skilled manpower. One-stop solutions are important for establishing digital textile printing industry. These solutions will also help increase the country’s revenue from the textile sector.
SOURCE: Fibre2fashion
The All Pakistan Textile Mills Association (Aptma) Sindh-Balochistan Zone has asked the government to withdraw 4 per cent import duty imposed on raw cotton as cotton production in the country is not likely to fulfill requirements of 14.5 million bales. The local crop production in the country is likely to touch 11.25 million bales in the current season. Aptma had also urged the government to withdraw the import duty on cotton about two months ago, the association’s spokesperson said in a statement. The government had denied withdrawing it around that time as it wanted to wait until a major portion of the crop was sold.
The spokesperson added that the local crop will not be meeting the textile industry’s requirements and action needs to be taken in time so that exports are not affected. The industry cannot bear the additional burden of import duty and compete against countries in the export market. The textile exports in the country have been declining and 80 to 82 per cent of the crop produced in the country has already been used by the industry. It is misleading to say that ginners have sufficient cotton stocks to fulfill the industry’s needs, stated the spokesperson.
SOURCE: Fibre2fashion
The textile sector is expected to get subsidized power rates as per unit prices are expected to fell soon. The government had already announced the decrease in price of gas by Rs 200 for the gas stations as per unit price has decreased from Rs 600 to Rs 400 per BTU. With this decision of the government, it is expected that the per unit price of electricity may also fall by Rs 3 per unit. Experts are the opinion that with the expected decrease in price of electricity, the cost of production will decrease hence decreasing the prices of Pakistani products in the international market and exports may also enhance as a result.
SOURCE: The Dunya News
The Alliance for Bangladesh Worker Safety has expressed concern about the treatment of garment sector labour rights leaders in Bangladesh amid continued unrest in the manufacturing hub of Ashulia. As reported by Ecotextile News just prior to Christmas, 55 RMG factory owners have recently closed their facilities after a series of strikes over wages, using the country's draconian labour laws to shutdown production and not pay their workers for the duration of the strike. Reports suggest garment manufacturers have sacked at least 1,500 workers since the unrest started, however, the Bangladesh Garment and Industrial Workers Federation has put the number sacked at 3,500 and said dozens of protest organisers had been forced into hiding.
Said a statement from The Alliance for Bangladesh Worker Safety: "We are deeply troubled by reports of the detention and interrogation of nearly a dozen labour rights leaders by the Bangladesh government. The Alliance for Bangladesh Worker Safety strongly supports the rights of workers to organize in accordance with the laws of Bangladesh. Our Member Agreement formally asserts the right of workers to refuse to work in dangerous conditions, and we support and encourage the right of workers to unionize in Alliance-affiliated factories. "We consult closely with our Board Labour Committee—comprised of five trade union leaders—on all matters related directly to workers. And by July 2018, we will have established Worker Safety Committees—groups of workers trained and empowered to monitor on-site occupational safety and health issues—in all 600+ Alliance factories. "To the Alliance, empowering workers is nothing short of fundamental to ensuring factory safety. "While progress has been made, dedicated efforts to support worker's rights in Bangladesh must continue, and any unwarranted detention or interrogation of labor advocates should not be undertaken or tolerated. We call for workers and management to settle any differences at the negotiating table, peacefully and in accordance with Bangladesh law."
SOURCE: The EcoTextile
Textile companies have started adopting water saving technologies as Bangladesh is one of the highest water consuming countries for washing and dyeing fabrics. Garment factories use more than 250 litres of water for washing and dyeing one kilogram of fabrics while the global best practice is 70 litres. Bangladesh's textile mills consume 1,500 billion litres of groundwater a year for washing and dyeing fabrics, according to a report -- Bangladesh-The Netherlands: 50 years of water cooperation. The report was published recently by Partners for Water Programme of the Netherlands in cooperation with the Bangladesh government. The surface water is also contaminated for inefficient use of water, the report said, adding that international fashion brands are increasingly aware of their social responsibility concerning the sustainability of their supply chain to achieve a cleaner textile production process. “We were able to save more than 70 percent of water by adopting the water saving technologies,” said Bakhtiar Uddin Ahmed, general manager at Fakir Apparels, a garment maker based in Narayanganj.
Previously, his company used 24.96 crore litres of water for washing and dyeing 1,200 tonnes of fabrics in a month, but the amount of water has now declined to 6.96 crore litres. “We are also saving electricity by adopting similar kind of technologies,” Ahmed said. The International Finance Corporation, a member of the World Bank Group, now provides water saving technologies to Bangladeshi garment factories under its Partnership for Cleaner Textile (PaCT) programme. Along with adopting new technologies, IFC suggests factories should use industry friendly machinery and change their water use habits. Mondol Fabrics, a concern of Mondol Group, also adopted the water saving technologies of IFC. “We have already implemented the first phase of adopting the technologies and the second phase is going on. After the implementation of the first phase, we were able to save 27 percent of water in washing and dyeing fabrics,” said Momin Mondol, managing director of Mondol Group.
Before adopting the water saving technologies, his company used more than 120 litres of water for washing a kilogram of fabrics, but now the quantity declined between 80 litres and 85 litres, Mondol said. The company washes and dyes 500 tonnes of fabrics a month, Mondol said. Once the second phase is implemented, water consumption will fall further, he said. The implementation of the first phase took 14 months, he added. The PaCT of IFC supports textile wet processing factories in adopting cleaner production, said Yasin Ahmed, resource efficiency consultant of the Bangladesh PaCT. “To date, PaCT has provided advisory services to around 200 textile factories (washing, dyeing and finishing units) on resource efficiency measures,” Ahmed said in an email to The Daily Star.
Before joining the programme, factories saw their average water consumption for processing each kilogram of fabrics at 201 litres, which declined to 147 litres after the implementation, with a 27 percent fall, he said. “We do not have country-specific data. However, the global industry best practice is 70 litres of water for per kg of fabric,” he said. The PaCT programme was initiated in 2014 with 95 textile factories; the number rose to 192 in 2016. The partnership is based on both brand and factory contributions. Once the PaCT partner brands nominate their supply chain members, factories pay a participation fee of $2,000-$6,000 as per the production capacity of the plant, Ahmed said.
SOURCE: The Daily Star
Apparel exports from Turkey remained nearly stable in the first eleven months of 2016, according to the data from the Turkish Statistical Institute. From January to November 2016, Turkey exported apparel worth $13.625 billion, almost the same as $13.633 billion exports clocked during the corresponding period of the previous year, the data showed. Category-wise, exports of knitted and crocheted clothing and accessories (HS chapter 61) earned $8.166 billion during the eleven-month period, showing a decline of 0.4 per cent, as against exports of $8.198 billion during the same period of 2015.
Exports of non-knitted apparel and accessories (HS chapter 62) were valued at $5.458 billion, up 0.4 per cent over $5.434 billion exports made in the comparable period of 2015. Meanwhile, exports of carpets, mats and tapestries fell 5 per cent to $1.746 billion during the period under review from $1.837 billion in the same period of the previous year. However, exports of cotton, cotton yarn and cotton textiles, increased by 0.5 per cent year-on-year to $1.589 billion. On the other hand, imports of cotton, cotton yarn and cotton textiles grew 5.7 per cent to $2.165 billion, whereas man-made filament and man-made fibre imports rose 3 per cent and 1.7 per cent, respectively.
SOURCE: Fibre2fashion
Fast-fashion apparel companies, discount chains and mass brands have outperformed luxury players in 2016 due to slowing growth in china, which represents nearly 30 per cent of luxury consumption worldwide, says a recent report. Majority of the companies in 2016 top ten list are based in the US, reflecting the relative strength of the US economy. Consumer Value Creators Series 2016 report by The Boston Consulting Group (BCG) says that the mass fashion market has always been highly fragmented, with many players and new entrants enjoying strong growth and gaining share and other companies declining or exiting the market. However, this market is starting to see consolidation, with larger brands gaining share over smaller and local brands. Unlike previous years’ assessments, there are no emerging-market companies among the top ten. The notable absence of Chinese companies reflects Asian markets’ relatively disappointing performance over the past few years, adds the report.
A number of US companies have appeared on the list for several years. Ross Stores finished eighth this year and tenth in the 2015 analysis. And Under Armour, the top performer, has finished in the top ten for three consecutive years and outperformed the market in seven of the last ten. The BCG report also says that rather than selling through wholesalers, most of the top ten have their own retail distribution systems and branded stores, a model that is favoured by younger consumers, including millennials, who are less likely to shop at department stores than their counterparts in previous generations. Some of the companies, however, have a hybrid model.
Footwear and sportswear companies dominate the rankings as consumers, particularly men and young shoppers, are moving towards more casual wear. Given the size of the millennial population relative to older demographic segments such as Generation X, such shifts will likely continue over the next several years at least, to the benefit of companies that sell casual clothes and athletic footwear. Three trends in the fashion and luxury industry that will continue to spur value creation for the foreseeable future are the growing importance of digital platforms, consolidation of the apparel industry and the continuing dominance of casual clothes, according to BCG. “In the wake of the recent financial crisis, the global fashion and luxury industry established a solid record of extremely strong value creation. More recently, however, the industry’s performance declined somewhat, a trend that has continued into 2016. The exceptions have been companies that have turned to digitisation, consolidation, and ‘casualisation’, trends that will remain relevant to many companies for the near term,” notes the report.
SOURCE:Fibre2fashion
The Textile, Clothing and Footwear Council of Fiji having received some interest, hopes to see some new players in the garment industry this year, said TCF president Kaushik Kumar. Presently, there are more than 40 garment factories in the country. On the council's expectations for this year, Mr Kumar said that they also expect exports to remain stable and have plans to explore new markets in the MSG group. In the past few weeks garment factories advertised for a number of positions ranging from machinist to other garment factory workers. There are a number of reasons for this. Some factories do experience an increased demand in orders in the new year and in order to meet delivery deadlines, additional staff are required, said Mr Kumar.
Also most factories close for annual leave around the Christmas and New Year period and a number of staff go back to their island, village or home towns and quite a few of them do not come back when factories reopen after the leave period. Some workers return after one or two months, therefore factories has to find replacement staff members. While, some staff move on to other jobs. Finding skilled staff remains a challenge in textile and garment industry, as in other industries. This shows that there is a demand for skilled workers in Fiji. However, the industry has had a stable period and factories affected by Severe Tropical Cyclone Winston are doing okay as well.
SOURCE: Yarns&Fibers
Cotton growers of New Mexico in the US will learn new techniques in cotton production at the New Mexico Cotton Growers Association Conference. It is an opportunity for cotton farmers to enhance knowledge on production practices and also improve their connections for easy business. The event will be held on January 11 at Ruidoso Convention Centre, New Mexico. This year’s conference will also focus on various important aspects including cotton nutrition and fertilisation, disease management, cotton varieties, cotton economics, the current regulatory environment and cotton classification and grading.
“We have a lineup of great speakers, from within and outside of New Mexico, who will deliver cutting-edge information related to cotton production practices. We will also have representatives from seed, chemical and irrigation industries, to provide information on products that can lead to cost savings for farmers,” said John Idowu, New Mexico State University Cooperative Extension Service agronomist. Cotton growers, extension educators, crop consultants and stakeholders of New Mexico will also be participating in the one-day conference. The New Mexico Cotton Growers Association Conference last held in January 2015 had highlighted the issues concerning cotton growers.
SOURCE: Fibre2fashion
Manufacturing activity in Taiwan expanded in December for the 10th consecutive month amid a gradual recovery of the domestic economy, the Chung-Hua Institution for Economic Research (CIER) said Tuesday. It said the non-manufacturing sector also showed expansion in December, for the first time in two months, with the index rising 1.5 points from a month earlier to 51.3. In the manufacturing sector, although the purchasing managers index (PMI) fell 1.4 points in December from the previous month to 55.9 points, it remained above the 50 point threshold, showing an expansion, said CIER, one of the leading think tanks in Taiwan.
CIER president Wu Chung-shu said that despite the expansion of manufacturing activity in December, the drop in the PMI was an indication that the recovery of the domestic economy was still mild. He forecast, however, continued economic growth in 2017, citing the improvement in activity in both the manufacturing and non-manufacturing sectors. In December, the sub-PMI index for suppliers' deliveries rose 0.1 from a month earlier to 56.1, while the sub-PMI index for inventories remained at 53.2, the TIER data showed. However, the sub-PMI indexes for new orders, employment, and production fell 4.0, 2.2 and 0.9, respectively from a month earlier to 57.3, 53.4 and 59.5, according to the data. Among the six industries in the PMI, the sub-index for the electricity/machinery sector remained unchanged from November, while other five -- chemical/biotech, food/textile, infrastructure/raw materials, transportation, and electronics/optoelectronics dropped, CIER said. The sub-indexes for five of the major eight industries -- education, financial/insurance, information/communications, retail and wholesale -- trended higher month-on-month in December, while the sub-indexes for the hospitability/food/ beverage and transportation/warehousing sectors fell, CIER said. The sub-index for the real estate/construction industry remained unchanged, the think tank said.
In late November, the government revised its growth forecast for Taiwan's 2017 GDP from 1.88 percent to 1.87 percent, which was higher than the 1.35 percent growth estimated for 2016, in reflection of a rebound in Taiwan's exports. Meanwhile, Wu also commented on the newly implemented five-day workweek regulation, saying it will push up operating costs for businesses and lead to higher inflation in Taiwan. Under the new rules, the maximum working hours have been reduced from 84 hours every two weeks to 40 hours a week, and employees are now entitled to one mandatory day off and one "flexible" rest day a week. Employers face stiff overtime costs if their employees have to work on the "flexible" day off and must provide a compensatory day off to employees who work on national holidays. Wu urged the business sector to launch more competitive products to deal with the effects of higher operating costs.
SOURCE: The Focus Taiwan
More than 10,000 production plants in HCM City of which most of them are small or medium sized situated outside industrial zones having limited resources and space for their business and do not adequately protect the environment will be relocated, according to the municipal People’s Committee. The production plants are mostly situated in residential areas, using outdated technologies and equipment, and have made little investment in waste disposal, with some also facing a high risk of fire. Many have severely affected the lives of local residents and made it difficult for local authorities to manage them. Those in sectors like construction materials, textiles, dyeing, and chemicals will be moved into industrial parks and complexes or out of the city. While, Small slaughterhouses will be moved to areas that group them in clusters. The city provides supports to plants that move to zoned areas on their own preference. According to city People’s Committee, the relocation of establishments not included in the city’s urban plans for 2016-20 would be done quickly,
SOURCE: Yarns&Fibers
President-elect Donald Trump’s pick for U.S. trade representative is a battle-scarred veteran of trade negotiations who shares many of the Manhattan billionaire’s views on trade — including the problems posed by China. Robert Lighthizer, a prominent trade attorney and former deputy USTR under President Ronald Reagan, got the Trump transition team’s nod for the top trade spot Tuesday morning, leaving only two other Cabinet-level positions unannounced, including the secretaries of Agriculture and Veterans Affairs and the Council of Economic Advisers.
Lighthizer, who will have to resign as a partner at the law firm Skadden, Arps, Slate, Meagher and Flom, would bring an unorthodox negotiating style to the position, a trade lawyer familiar with his negotiating prowess told POLITICO, adding that his approach isn’t that of a “choir boy.” “His personal style is that, in meetings, he uses filthy humor and vulgar language to throw people off their stride, which can be side-splittingly funny and very effective,” the trade lawyer said. But Lighthizer’s views on trade, including his lament about the “remarkably passive” U.S. response to China’s “mercantilist” trade practices, puts his squarely in line with the president-elect.
Lighthizer told the U.S.-China Economic and Security Review Commission in 2010 that allowing the rising Asian powerhouse into the WTO severely limited the ability of U.S. administrations to take unilateral action to punish Beijing for dumping steel and other unfair trade actions. The WTO’s dispute settlement process “is simply not designed to deal with a country like China,” he wrote in 35 pages of testimony to the commission. At USTR, Lighthizer was in charge of industry, agriculture, investment and trade policy. But sources said he spent most of his time traveling around the world negotiating “voluntary restraint agreements” with countries accused of dumping steel onto the U.S. market, including Japan, the European Union, Mexico and South Korea. Those countries did restrict their exports, but it was to avoid getting slapped with steep tariffs. “It was never especially voluntary,” a trade lawyer familiar with the negotiations said.
Ultimately, those agreements were deemed in violation of trading rules established under the WTO a decade later, but they are strikingly similar to the kind of deal-making Trump envisions as he seeks to fulfill his promise to get tough on China and other countries. As a lawyer, Lighthizer still represents U.S. Steel Corp. and other domestic giants in their efforts to keep foreign steel imports at bay. His bona fides are bolstered by his previous role as a chief of staff on the Senate Finance Committee, where he developed an understanding of congressional dynamics and loyalty to Chairman Bob Dole, later serving as treasurer for the Kansas Republican’s presidential campaign in 1996.
Finance Chairman Orrin Hatch said Tuesday that he looks forward to “a vigorous discussion" of Lighthizer’s trade philosophy and priorities when he comes before the committee. “Ensuring our past, present, and future trade agreements are the best possible deals for American workers and job creators is a shared goal supported by pro-trade lawmakers and the Trump Administration alike,” the Utah Republican said. “As the incoming administration undertakes this enormous responsibility, Bob will be a critical player in ensuring that America’s trade agenda reflects U.S. commercial interests, while helping set the standard for global trade.”
Sen. Sherrod Brown (D-Ohio), who has said he shares some common ground with Trump on trade, also said Tuesday that he looked forward to hearing how Lighthizer would accomplish the president-elect's goals of rewriting U.S. trade policy and creating more manufacturing jobs, "including withdrawing from the Trans-Pacific Partnership, renegotiating NAFTA, and resetting the U.S.-China trade relationship.”
Trump's announcement drew muted praise from vocal trade critic Lori Wallach, director of Public Citizen’s Global Trade Watch, who said in an emailed statement Tuesday that Lighthizer's views don't align with many in the Republican Party, including some members of Trump's proposed Cabinet, "who represent the very perspective on trade that Lighthizer has long critiqued." "Lighthizer is very knowledgeable about both technical trade policy and the ways of Washington, but what sets him aside among high-level Republican trade experts is that for decades his views have been shaped by the pragmatic outcomes of trade agreements and policies rather than fealty to any particular ideology or theory,” Wallach said.
During his campaign, Trump had promised to appoint a business leader to negotiate trade deals — something Lighthizer is not — and has picked CEOs for other Cabinet posts, such as billionaire private equity investor Wilbur Ross for Commerce secretary and Exxon CEO Rex Tillerson for secretary of State, both of whom had supported TPP in the past. But the real-estate mogul heaped praise upon Lighthizer in his announcement Tuesday morning. “Ambassador Lighthizer is going to do an outstanding job representing the United States as we fight for good trade deals that put the American worker first,” Trump said in a statement. “He has extensive experience striking agreements that protect some of the most important sectors of our economy, and has repeatedly fought in the private sector to prevent bad deals from hurting Americans. He will do an amazing job helping turn around the failed trade policies which have robbed so many Americans of prosperity.”
Trump built much of his campaign on an economic message centered on restructuring the way the U.S. trades with the world. He railed against free trade agreements like NAFTA and the Trans-Pacific Partnership, which he said hurt American workers and ultimately cost the U.S. jobs. He pledged to place a 35 percent tax on goods imported by any company that shifts jobs overseas. The president-elect repeated the threat Tuesday morning, targeting General Motors for manufacturing cars in Mexico and importing them into the U.S. without penalty. “General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border," Trump wrote on Twitter. "Make in U.S.A. or pay big border tax!”
Lighthizer was an early backer of Trump’s and is a proponent of his hard-line policies on trade. The statement emailed by Trump’s transition team said Lighthizer will work with Ross and Peter Navarro, who will head up the new National Trade Council, “to develop and implement policies that shrink our trade deficit, expand economic growth, strengthen our manufacturing base and help stop the exodus of jobs from our shores.” Lighthizer is also likely to work with Jason Greenblatt, who will be Trump’s special representative for international negotiations. “It is a very high honor to represent our nation and to serve in President-elect Trump’s administration as the U.S. Trade Representative,” Lighthizer said in the transition team’s statement. “I am fully committed to President-elect Trump’s mission to level the playing field for American workers and forge better trade policies which will benefit all Americans.”
SOURCE: The Politico
A new network to link British and Irish firms in a bid to offset any shortfall in trade caused by Brexit was launched today (3 January). The British Irish Chamber of Commerce has set up the British Irish Gateway for Trade service, which links together firms in trade associations across the UK and Ireland.
Britain is Ireland's biggest trading partner, with business between the UK and the Republic supporting 400,000 jobs across both countries and generating €60bn (£51bn, $62bn) a year, according to the joint trade body. British Irish Chamber of Commerce director general John McGrane said: "At a time when businesses are preparing for Brexit, they appreciate a resource like British Irish Gateway which helps them to grow their business by being introduced to more customers and suppliers across the UK and Ireland." He added: "Firms on both sides of the Irish Sea are looking for more trading opportunities and this new service supports the work of Chambers and the various state agencies to make those connections easier to find for businesses north south east and west."
The British Irish Chamber of Commerce said the new service allowed businesses to find "the trading partners they want within a trusted network of likeminded firms across the two islands". It added the service is free to use for members of recognised trade organisations. The British Irish Chamber of Commerce is a private sector trade body, founded in 2011 to represent businesses and employers with interests in the two islands of Great Britain and Ireland. It said its mission is to highlight, protect and grow trade between Ireland, Northern Ireland, Scotland, Wales and England.
SOURCE: The IB Times
Syed Ali said that the ambassadors of several African countries were in talks with DPMM with the hope of attracting more investment from Malaysia, as well enhancing trade ties. He called on companies involved in the hospitality, information communication technology, as well as food and agriculture industries to venture abroad, including in African countries. Bumiputera or Bumiputra is a Malaysian term to describe the Malay race and other indigenous peoples of Southeast Asia, and used particularly in Malaysia. The term comes from the Sanskrit word bhumiputra which can be translated literally as “son of the land” or “son of the soil” (bhumi= earth or land, putra=son).
In the 1970s, the Malaysian government implemented policies which designed to favour bumiputras (including a⁴rmative action in public education) to create opportunities. These policies have succeeded in creating a signi−cant urban Malay and middle class as well.
SOURCE: The CP Africa
Commerce Ministry has not yet decided to go for the second phase of the Free Trade Agreement (FTA) with China due to the inability of domestic industry to withstand the immediate opening of 90 percent of its trade as is being demanded by Beijing, official sources in Commerce Ministry told Business Recorder. Pakistan and China have held several rounds on FTA-II but the outcome shows that both sides are still reluctant to proceed further due to disagreement on some of the issues.
Last month, Pakistan and China reportedly failed to evolve a consensus on a methodology to further expand FTA after both sides expressed dissimilar claims of the impact on bilateral trade. "Pakistan has not taken any principled decision on whether it will go for FTA II or not. Commerce Ministry is seeking Prime Minister's guidance for further action," the sources added. China, sources said, maintains that Pakistan has to follow the world with respect to liberalisation if Pakistan wants to compete in the world. The sources further stated that China wants Pakistan to open 90 per cent of its trade immediately and get more time for liberalising the remaining 10 per cent tariffs. "China has also expressed willingness to extend concessions to Pakistan for 15 years instead of three years but liberalisation is mandatory. Pakistan is seeking concessions from China immediately but is not ready to reciprocate," sources revealed. "Pakistan argues that it should be given a longer cushion period for reduction in tariffs," the sources continued.
Commerce Ministry has conducted a study which shows that import of cheap raw material from China has increased competitiveness of Pakistan's industry. In addition, the Commerce Ministry is calculating revenue impact of FTAs, expected this year, as Federal Board of Revenue (FBR) maintains that FTAs are inflicting a revenue loss. "We will calculate the revenue loss from each concession," the sources further added. In reply to a question on a report recently released by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on the lack of transparency in the China Pakistan Economic Corridor (CPEC), the sources said that "obsolete thinking will not take Pakistan forward." When this question was placed before a senior official of the Ministry of Industries and Production, he said that the private sector is part of consultations on CPEC policy, adding that protection will be given to all those industries that fear any adverse impact due to CPEC.
Another official said that no scientific study has been conducted on CPEC's impact on local industry and industry so far, and no one knows whether its impact would be positive or negative. "The government must resolve concerns of local industry," he said, adding that China is also signing TIR Convention this month, which would allow its trucks to travel to other countries.
During the last meeting on FTA II, the Pakistani side highlighted the need for dovetailing all projects for co-operation between China and Pakistan including CPEC long term plan and CPFTA for integrating both the economies. In this regard, Pakistan referred to the protocol signed between the two countries in 2009 which provides a legal framework for incentivizing Chinese investment in Special Economic Zones and tariff reduction/elimination on the products manufactured in these zones. Both sides agreed to further hold internal consultations on ways and means to implement the protocol which was an integral part of CPFTA. The two sides had also agreed to discuss this issue in detail in the next round of negotiations.
SOURCE: The Business Recorder
Oil prices hit 18-month highs on Tuesday, the first trading day of 2017, buoyed by hopes that a deal between Opec and non-Opec members to cut production, which kicked in on Sunday, will drain a global supply glut. Benchmark Brent crude jumped more than 2 per cent to a high of $58.37, up $1.55 a barrel and its highest since July 2015. By 0940 GMT, Brent eased slightly to trade at $58.22, up $1.40. US light crude oil hit an 18-month high of $55.24, up $1.52 a barrel, also its highest since July 2015.
Oil futures markets were closed on Monday for New Year public holidays. Jan. 1 marked the official start of a deal agreed by the Organization of the Petroleum Exporting Countries and other exporters such as Russia to reduce output by almost 1.8 million barrels per day (bpd). "First signals suggest the Opec and non-Opec production cuts are raising hopes that the global oil oversupply will diminish," said Hans van Cleef, senior energy economist at ABN AMRO Bank N.V. in Amsterdam.
Ric Spooner, chief market analyst at CMC Markets, agreed: "Markets will be looking for anecdotal evidence for production cuts," he said. "The most likely scenario is Opec and non-Opec member countries will be committed to the deal, especially in early stages." Libya, one of two Opec countries exempt from the output cuts, has increased its production to 685,000 bpd, from around 600,000 bpd in December, an official at the National Oil Corporation said on Sunday.
Elsewhere, non-Opec Middle Eastern oil producer Oman told customers last week that it would cut its crude oil term allocation volumes by 5 per cent in March. Non-Opec Russia's oil production in December remained unchanged at 11.21 million bpd, near a 30-year high, but it was preparing to cut output by 300,000 bpd in the first half of 2017 in its contribution to the accord.
SOURCE: The Economic Times
Propylene prices moved up in Europe in the last week due to lift in buying interest in the region. In Europe, average prices marched higher by US$ 5/ton and quoted at US$ 675/ton in the last week, a growth of 0.75 cent as compared to previous week. Meanwhile in US, average prices of Propylene kept steady at 15 cents/pound in the last week compared to previous week due to mute market sentiments in the region.
SOURCE: Fibre2fashion
MEG prices moved up in Asia in the last week due to limited product availability in the region. In SE Asia, average prices improved by US$ 50/ton and quoted at US$ 895/ton in the last week, a jump of 5.92 per cent compared to previous week. In India, average prices inched higher by US$ 50/ton and assessed US$ 895/ton in the last week, a hike of 5.92 per cent over the previous week. In China, average prices stepped up by US$ 45/ton and quoted at US$ 880/ton in the last week, an increase of 5.39 per cent compared to previous week.
SOURCE: Fibre2fashion
