The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 29 MAR, 2017

NATIONAL

INTERNATIONAL

Textile sector aim of Rs 40,000-crore investment unlikely to be met

According to the state economic survey 2016-17, “There are 16 textile parks functioning with employment of 0.23 lakh. The government’s ambitious plan to boost the textile sector by tapping investments worth Rs 40,000 crore and creating 11 lakh jobs by 2017 seems set to fall short of its target. A highly placed source in the textile department said, “Investments in the total textile projects approved by financial institutions and in various phases of enforcement by March 2017 amount to Rs 16,371 crore, with the potential to generate 2.50 lakh jobs.” According to officials, the original plan had been for five years, between 2012 and 2017. “Inaction on part of the government in the initial years and lack of response from investors are among the factors responsible for the short-fall,” said an official. To turn the figures around, the government has taken a series of steps, a senior official said. The new textile policy, announced in 2015, makes it mandatory to have textile hubs concentrated in the cotton growing belt of Vidarbha and Marathwada, as opposed to western Maharashtra, to cut down on the cost of transporting raw cotton and other expenses. According to the state economic survey 2016-17, “There are 16 textile parks functioning with employment of 0.23 lakh. Currently, there are 10.01 lakh power looms in state with 19 lakh employment.” With 42 per cent of area under cultivation, the government believes that the textile sector has the maximum potential to generate employment. But the lack of infrastructure has lead to only 25 to 30 per cent of the raw cotton being processed in the state. Roping in the private sector is one of the measures the government is using to tackle this. “The stress on public-private partnership to boost the textile sector with the concept of farm to fashion has worked in the Amravati division of Vidarbha. At Nandgaon Peth (Amravati), the total investments have crossed Rs 9,000 crore, with the involvement of big players such as Raymond,” an official in the department said. Apart from new textile parks and processing units, efforts to restructure and revive loss-making units are also underway.

Source: The Indian Express

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Anti-dumping duty likely on filament yarn from 4 countries

The Directorate General of Antidumping and Allied Duties (DGAD), under the commerce ministry, has concluded the investigations of the dumping. Anti-dumping duty likely on filament yarn from 4 countries. The government may impose an anti-dumping duty of up to USD 3.44 per kg on import of a particular variety of yarn from four countries – China, South Korea, Taiwan and Vietnam. The move is aimed at guarding domestic industry against cheap imports of elastomeric filament yarn, which is used in the manufacturing of hosiery, swimsuits, aerobic or exercise wear, golf jackets and disposable diaper. The Directorate General of Antidumping and Allied Duties (DGAD), under the commerce ministry, has concluded the investigations of the dumping. In its final findings, DGAD has concluded that the yarn has been exported to India from these countries below its associated normal value and due to this the domestic industry has suffered material injury. The authority “recommends imposition of definitive anti- dumping duty…so as to remove the injury to the domestic industry,” it said in a notification. The recommended duty ranges between USD 3.44 per kg to USD 0.15 per kg. While the DGAD recommends the duty, Finance Ministry imposes it. Countries initiate anti-dumping probes to determine if the domestic industry has been hurt by a surge in below-cost imports. As a counter-measure, they impose duties under the multilateral WTO regime. Anti-dumping measures are taken to ensure fair trade and provide a level-playing field to the domestic industry. They are not a measure to restrict imports or cause an unjustified increase in cost of products. Unlike the safeguard duty, which is levied in a uniform way, anti-dumping duty varies from company to company and country to country. India is one of the largest users of this duty against countries, including China.

Source: The Financial Express

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Domestic mills seek overseas output due to price surge

Indian textile mills are looking to buy overseas cotton, as there is a constant rise in prices of domestic output of cotton, making it unfeasible. The cost advantage of the domestically produced cotton has disappeared as until March the prices surged constantly, pushing cotton mills to sign import contracts. Since the beginning of the season, cotton prices have surged higher. The benchmark, Sankar 6's prices soared by nearly about 15% to Rs 44,000 per candy. Cotton arrivals in major markets such as Warangal, Bhatinda and Guntur slipped by 25% to 50% in the month of February; while the prices took a vertical climb of 15% to 30% over the same month of the previous year. In 2016-17, for the month of October, Cotton Advisory Board’s estimates were 351 lakh tonnes of production. Disclaimer: The contents herein is specifically prepared by ‘Dalal Street Investment Journal’, and is for your information & personal consumption only. India Infoline Limited or Dalal Street Investment Journal do not guarantee the accuracy, correctness, completeness or reliability of information contained herein and shall not be held responsible.

Source: India Infoline News Service

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Sluggish export growth may hit apparel industry

Credit rating agency Icra also expects India to report tepid growth of one per cent in dollar terms Growth in apparel exports may stay muted for a consecutive year in FY17, as demand from key importing countries remained subdued. On the back of the global apparel trade contracting by one per cent to $432 billion (Rs 28 lakh crore) in 2016, apparel exports, according to the Apparel Export Promotion Council’s (AEPC’s) estimates, were likely to close 2016-17 at $17.3 billion (Rs 1.12 lakh crore), up by roughly two per cent from $16.9 billion (Rs 1.10 lakh crore) in the previous financial year. Credit rating agency Icra also expects India to report tepid growth of one per cent in dollar terms. This is also evident from the fact the industry clocked exports of $15.5 billion (Rs 1 lakh crore) during April 2016-February 2017, a growth rate of just 0.6 per cent over the last year, according to AEPC sources. While sluggish demand from importing countries has been the primary reason for the muted guidance, what also works against India is its heavy reliance on cotton amid an increasing share of lower-priced man-made fibre-based apparels by other competing markets such as Vietnam and Bangladesh. “The other competing nations import almost all the raw materials and hence have a better economies of scale than India, which is dependent heavily on the domestic industry, predominantly driven by cotton,” said an AEPC official, on condition of anonymity.   “The exports in value terms have declined, following an increase in the share of man-made fibre-based apparels, which are lower in value vis-à-vis cotton-based apparels. This in turn has been caused by the improved competitiveness of polyester vis-à-vis cotton during the past few years,” Icra said in its March update. Apparel exports to the US are estimated to have grown by two per cent in 2016. “While this growth is modest compared to the healthy growth clocked in prior years, the growth quantum looks satisfactory in the backdrop of a one per cent decline in import quantity of the US. Similarly, apparel export quantity to the European Union (EU) is estimated to have grown six per cent in 2016, compared to a five per cent in total apparel import quantity of the EU,” Icra said. On the other hand, exports to the UK have fallen to $1.2 billion (Rs 7,800 crore) from $1.6 billion (Rs 10,400 crore) due to sluggish demand, according to AEPC sources. The previous three quarters have seen fluctuating growth for the Indian apparel industry. Top garment manufacturers such as Gokaldas Exports Limited and Mafatlal Industries, among others, have posted net loss in the third quarter of the current financial year, against a profit in the corresponding period in FY16. Gokaldas Exports posted a net loss of Rs 21.84 crore for the quarter ended December 31, 2016, against a net profit of Rs 25.92 crore for the corresponding period in FY16. It also posted quarterly revenue from operations of Rs 198 crore, down by 19 per cent as compared to Q3 of FY16. "The decline in revenue in Q3 FY17 was due to continued impact of loss of business from a key export customer and delay in onboarding and stabilising operations of a new customer. The company has been able to stabilise operations of the new customer towards latter part of the quarter and commence deliveries, complete servicing of the same is expected in the fourth quarter," the company had said. Similarly, Mafatlal Industries registered a net loss of Rs 12.5 crore in Q3 of FY17 against a net profit of Rs 1.74 crore in the Q3 of FY16. On the other hand, Arvind Limited posted net profit after taxes, minority interest and share of profit/(loss) of associates of Rs 75.62 crore for the quarter ended December, compared with Rs 90.46 crore for the year-ago period. Going forward, Icra anticipates domestic focused apparel manufacturers to do better than exporters. "Given the weak trend in global apparel trade, the domestic market-focused apparel manufacturers are expected to perform relatively better than exporters for second consecutive year in FY17. However, given the temporary pressures observed in domestic consumption owing to demonetisation, the gap between the growth rates is likely to narrow significantly. Thus, compared to an estimated revenue growth of 10 per cent for domestic market-focused players, the revenues of exporters are expected to grow by nine per cent in FY17 for the entities in Icra's sample set," it said, while adding the operating profit margins of the domestic market-focused apparel manufacturers remain higher than the apparel exporters. In FY16, too, the domestic players had reported a much higher growth rate of 14 per cent vis-à-vis six per cent growth rate achieved by exporters. "Overall, FY16 and FY17 have been years of weak growth for apparel manufacturers compared to the recent past, wherein the revenues of both apparel exporters and domestic players grew at a CAGR of 13-14 per cent during 2011-2015," Icra further stated.

Source: Business Standard

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Will rising cotton imports deter farmers?

COIMBATORE: Will the area under cotton decline next season, given that mills have opted to import despite the sufficient volumes in the domestic market? Industry sources say this is unlikely as the prices are at least 25 per cent higher than in the last season. With good realisations, farmers will be incentivised to increase the area under cotton, they add. “When the realisation is better for the farmer, why would he think of shying away?” an industry expert reasoned. “In Telangana, cotton farmers regret their decision not to cultivate the fiber, given that the realisation is at least 25 per cent more than in 2015-16.” The average price realised by farmers has risen from ₹93 a kg last year to ₹120/kg this season. When the domestic fibre ruled at under ₹100/kg, mills imported cotton at around ₹120/kg last year; this year the price variation has not been as wide, and the fiber is aplenty. But mills cite fiber quality and better yarn realisation to defend their decision to import. It is learnt that the Cotton Corporation of India has secured approval to procure 15 lakh bales this season, but has so far procured only one lakh bales. The area under cotton cultivation crossed 100 lakh hectares in 2009-10, and has gone up since then. And although the area under cultivation fell in 2016-17, production did not drop, and in fact rose from 338 lakh bales to 346 lakh bales.

Source: Business line

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All Weaver’s Federation Tribal Emporium inaugurated

Appreciating the efforts put forth by the AWFED in promoting the socio-economic interest of poor weavers of the state, the DC advised the management and weavers of AWFED to be sensitive to the identity inherent in ones culture and custom while manufacturing traditional handloom items and only modify the product in such a way as to balance the preservation of one’s identity while meeting up with the modern trends. An All Weaver’s Federation (AWFED) Tribal Emporium under the NABARD Rural Mart Scheme was inaugurated by Upper Subansiri Deputy Commissioner, A K Singh and NABARD District Development Manager, O P Maunglang on Monday last. Maunglang in his address explained about the scheme of Rural Mart under NABARD and said that the scheme is provided to all eligible NGOs, SHGs and Cooperative Societies as a support base for economic venture, covering a two-year period. After the expiry of the designated tenure, beneficiaries must be able generate their own resources. He also informed that there is a provision of Rural Hut Scheme, trainings, exposure tours and participation in handloom exhibitions conducted all around the country. DRCS-cum-Managing Director of Arunachal Pradesh State Weavers Cooperative Federation Limited, Gyati Kobing explained that catering to the needs and aspirations of the poor weavers is the prime objective of the AWFED. In their cooperative valuable services, the AWFED is providing low-priced yarn under Mill Gate Prices Scheme of National Handloom Development Corporation, Ministry of Textile, GoI, marketing avenues at state, regional and national levels and providing small short term loans at nominal interest to all weavers through cooperative societies under the Weavers Micro Finance Schemes. Textile & Handicraft Assistant Director, Dagmo Riba, AP State Weavers Cooperative Federation Limited Chairman, Hage Yasung, members of societies, NGOs and SHGs also attended the programme. (DIPRO)

Source: The Arunachal Times

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CAG points out lapses in crop loan waiver scheme

The Comptroller and Auditor General of India has pointed out lapses in the implementation of the crop loan waiver scheme announced by the State government during the year 2015-2016. The CAG, in its report on economic sector tabled in the Legislative Assembly on Monday, said verification of beneficiaries under ‘farmer family’ norm was conducted without Aadhaar numbers, despite it being mandatory in the scheme guidelines. No social audit was conducted to eliminate duplicate/multiple financing of beneficiaries, while the government had not verified the crop loans taken by farmers from other district bank branches on agriculture lands in multiple districts/mandals. Excess interest Crop loans to Rythu Mitra Groups/Rythu Mitra Sangams were waived against the scheme guidelines to treat farmer families as units. Banks claimed excess interest of ₹183.98 crore on total outstanding crop loan of beneficiaries. Some of the banks did not claim interest, though stipulated in the scheme guidelines, resulting in eligible farmers being deprived of waiver of interest to an extent of ₹66.16 crore. There was also delay in remittance of unspent amount into the government account both by the Joint Directors of agriculture and the banks, mainly due to delayed reconciliation of accounts by banks. There were unspent balances with the nodal banks and also with bank branches even after furnishing utilisation certificates to the government.

Textile parks                  

The CAG also pointed out shortcomings relating to the development of textile and apparel parks, claiming that audit of four out of the eight parks proposed in the State showed significant time overruns in their completion ranging from seven months to 151 months. The expenditure incurred by the State government (₹6.04 crore) and the Central government (₹14.34 crore) could not yield expected results in respect of textile park at Sircilla and the Whitegold Integrated Spintex Park Private Limited (WISPL). There were no export sales from textile park in Sircilla and the WISPL against the targeted ₹10 crore and ₹650 crore a year respectively. While the textile park of Pochampally reported export sales of ₹1.53 crore against targeted ₹17.5 crore a year, there was shortfall in establishment of units in the parks ranging from zero to 100% and 81% to 100% in respect to employment generation. The CAG observed that in the apparel export park of Gundlapochampally, 53% of the total units belonged to non-textile/apparel manufacturers, and the park had not achieved its intended purpose of being an apparel hub.

Source: The Hindu

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Textiles Ministry has taken various initiatives to promote carpet industry: Ajay Tamta

The Ministry of Textiles has taken various initiatives for the upliftment and growth of poor weavers and artisans in the handmade carpet industry, said Ajay Tamta, Minister of State for Textiles on Monday. “We have taken various measures for the upliftment and growth of the poor artisans in the handloom carpet industry, he said on the sidelines of the 33rd edition of the India Carpet Expo (ICE), which is being held on 27-30 in New Delhi.  “Textile sector is the second largest employer after agriculture in India. As Textile Ministry covers a vast portfolio, there is a maximum scope of employment generation at the artisans and weavers level,” Tamta said. “In order to encourage weavers and artisans to increase production of handmade carpets, the Central Government is providing a lot of facilities and subsidies,” he added. In response to the question on what government is doing on skill development, the Minister informed, “On the occasion of Handloom Day, on August 7, 2016, Ministry of Textiles has signed five memorandums of understanding (MoUs) with the Ministry of Skill Development and Entrepreneurship for skill upgradation of handloom weavers. Of these, two MoUs were related to education and one is to provide subsidised loans to the handloom weavers at the rate of 6%, through MUDRA Bank.” “The Central Government also provides 90% subsidy on everything to those weavers who want to set up their own handlooms,” he added. Tamta further said that in order to upgrade the weavers’ community, the Ministry also signed an MoU with the designers and is taking every possible step to promote this traditional skill and artwork. On the question of any new schemes for artisans in the state of UP, the Minister said that irrespective of the state government, our ministry works for the promotion of weavers and artisans all across the country. For this, we have also identified regions/clusters where the weaving community is based. Appreciating the Carpet Export Promotion Council (CEPC) for organising such a big event, Tamta said it is a good platform and opportunity for handloom weavers to showcase their art and products in front of international buyers. Handmade carpet industry is worth around Rs.10,000 crore. India is the largest exporter of handmade carpets in the world, he said. The event was inaugurated by Textile Minister Smriti Zubim Irani.

Source: The Dollar Business

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Buses & pick-up vans escape cess under GST NO MENTION OF CAB AGGREGATORS IN GST BILLS SHOPPING VOUCHERS TOBETAXEDATTHE TIME OF REDEMPTION

Four Bills for the proposed goods and services tax (GST) regime, which were introduced in the Lok Sabha on Monday by Finance Minister Arun Jaitley, did not mention cab aggregators such as Ola and Uber, but experts say these may draw up to one per cent tax collected at source (TCS) under the definition of e-commerce marketplaces. The exact nature of taxing these cab aggregators is likely to be detailed in the rules. Also, buses, including minibuses and pick-up vans, carrying more than 10 individuals, will not be subject to an extra cess under the proposed regime. The legislation has been introduced as money Bills, which will not require a nod from the Rajya Sabha, where the ruling coalition is in a minority. Formally, then, the new indirect taxation system is set for a roll-out from July. However, industry and tax experts want a September 1 roll-out. The Bills changed an earlier draft version to tax shopping vouchers given by companies at the time of receiving these. Now, the tax will be imposed at the time of redemption. Also changed was a provision about a balance left in the compensation fund after five years. Now, the balance will be shared between the Centre and states; the draft had proposed to give it to the states. There are provisions for arrests and fines in cases of tax evasion. Opposition party members protested at the way the Bills — Central GST (CGST), Union Territory GST (UTGST), Integrated GST (IGST) and Compensation — were brought in. They said they’d not been given enough time to study the proposed legislation. A debate on the Bills is set for Wednesday. A fifth Bill — state GST (SGST) — is required to be approved by the respective assemblies. Alongside, the GST Council will take up for debate the proposed rules at a meeting on Friday. After this, a committee of officers will look at fitment of rates. The Compensation Bill deals with a cap on the cess to be imposed over the peak rate of 28 per cent, to offset states for the revenue loss due to GST for the first five years of the roll-out. It caps the cess at 15 per cent for luxury cars, station wagons and racing cars. As mentioned earlier, vehicles, which can carry more than 10 individuals, including the driver, will not attract the cess. M S Mani of consultancy Deloitte says these are basically buses, minibuses and pick-up vans. Sugato Sen of the Society of Indian Automobile Manufacturers says while buses carry an excise duty of 12.5 per cent and value added tax (VAT) of 12.5 per cent in most states, vans carry an excise duty of around 24 per cent and VAT of 12.5 per cent. And, the concept of cab aggregators has been removed from the final Bill. “The need was not felt, considering there are only two companies in the cab space - Uber and Ola. We will deal with them in the rules,” said a finance ministry official. Saloni Roy of Deloitte, however, says aggregators should fall within e-commerce operator definition itself. The Bill proposes up to one per cent TCS for these e-commerce marketplaces. In the case of shopping vouchers, the GST will not be imposed at the time of receiving these but at the time of purchasing items against these vouchers. Shopping vouchers were classified as a service in the earlier draft but has been taken off that category. The tax will need to be paid at the time of the purchase against the voucher. “Actionable claims will not be treated as goods or services, which would mean that sale of multipurpose vouchers would be taxed at the time of redemption and not upon issuance,” says Pratik Jain of PwC. Jain said the government should consider September 1 as the roll-out date. The Centre will have a greater share of the residual amount in the compensation fund at the end of the five-year period agreed after GST takes effect. The Compensation Bill now provides for equal sharing of the amount, against the earlier formula which favoured states. States will receive provisional compensation bi-monthly from the Centre for loss of revenue from implementation. The draft law had provided for payment every quarter. The law also provides for arrest, ordered by no less than a tax commissioner, in suppression of any transaction or evading taxes. A person convicted is punishable by up to five years of imprisonment and/or fine. On the manner the Bills were brought in, Congress member K C Venugopal said their introduction was not listed in the day’s agenda. Parliamentary procedure had to be followed in important issues. Parliamentary Affairs Minister S S Ahluwalia said the Bills were uploaded on the government website at midnight of Friday. To which, Opposition MPs took strong objection, demanding to know how the government expected members to check the website at midnight. Why they demanded was the issue not discussed at last week’s meet of the Business Advisory Committee. Congress leader Mallikarjun Kharge, Majlis-e-Ittehadul Muslimeen leader Asaduddin Owaisi and the Trinamool Congress’ Saugata Roy were among those who objected to the Bills’ introduction.

Source: Business Standard

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Global Crude oil price of Indian Basket was US$ 49.91 per bbl on 28.03.2017

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$ 49.91 per barrel (bbl) on 28.03.2017. This was higher than the price of US$ 49.41 per bbl on previous publishing day of 27.03.2017. In rupee terms, the price of Indian Basket increased to Rs. 3248.46 per bbl on 28.03.2017 as compared to Rs. 3215.78 per bbl on 27.03.2017. Rupee closed at Rs. 65.09* per US$ on 28.03.2017. The table below gives details in this regard:

Particulars     

Unit

Price on March 28, 2017 (Previous trading day i.e. 27.03.2017)                                                                  

Pricing Fortnight for 16.03.2017

(Feb 25, 2017 to March 13, 2017)

Crude Oil (Indian Basket)

($/bbl)

                  49.91             (49.41)       

53.70

(Rs/bbl

                 3248.46        (3215.78)       

3583.94

Exchange Rate

  (Rs/$)

                  65.09*         

66.74

Source: PIB

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Global Textile Raw Material Price 2017-03-28

Item

Price

Unit

Fluctuation

Date

PSF

1135.60

USD/Ton

-0.64%

3/28/2017

VSF

2504.15

USD/Ton

-0.29%

3/28/2017

ASF

2227.53

USD/Ton

0%

3/28/2017

Polyester POY

1155.26

USD/Ton

-0.19%

3/28/2017

Nylon FDY

3348.57

USD/Ton

0%

3/28/2017

40D Spandex

5314.04

USD/Ton

0%

3/28/2017

Polyester DTY

2402.24

USD/Ton

0%

3/28/2017

Nylon POY

1412.22

USD/Ton

0%

3/28/2017

Acrylic Top 3D

3668.87

USD/Ton

0%

3/28/2017

Polyester FDY

5838.16

USD/Ton

0%

3/28/2017

Nylon DTY

1412.22

USD/Ton

0%

3/28/2017

Viscose Long Filament

3159.30

USD/Ton

0%

3/28/2017

30S Spun Rayon Yarn

3057.39

USD/Ton

-0.47%

3/28/2017

32S Polyester Yarn

1739.80

USD/Ton

-0.33%

3/28/2017

45S T/C Yarn

2707.97

USD/Ton

0%

3/28/2017

40S Rayon Yarn

2329.44

USD/Ton

0%

3/28/2017

T/R Yarn 65/35 32S

1921.79

USD/Ton

0%

3/28/2017

45S Polyester Yarn

2271.20

USD/Ton

0%

3/28/2017

T/C Yarn 65/35 32S

3217.54

USD/Ton

-0.90%

3/28/2017

10S Denim Fabric

1.36

USD/Meter

0%

3/28/2017

32S Twill Fabric

0.85

USD/Meter

0%

3/28/2017

40S Combed Poplin

1.18

USD/Meter

0%

3/28/2017

30S Rayon Fabric

0.67

USD/Meter

0%

3/28/2017

45S T/C Fabric

0.67

USD/Meter

0%

3/28/2017

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14559 USD dtd. 28/3/2017)

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

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Trump and trade

With Brexit and the inauguration of the Donald Trump administration many are amending the prospective end of the postwar liberal international economic order. Most of these are concerned with foreign trade. But ironically, both the British desire to exit a protectionist trading block to move to unilateral free trade, as well as Mr Trump’s denouncing the current multilateral trade regime as leading to unfair trade are being put in the same box. I have already argued the case for unilateral free trade in my columns on Brexit, and it seems from the UK government’s recent statements as they launch the negotiations to exit the European Union (EU), that they want to move to free trade with the EU if it concurs. If not, whilst trading freely with the rest of the world they would trade under existing World Trade Organization rules with the EU. But what about the Trump administration? As an advocate of free trade for most of my academic career, his attacks on free trade are deeply disturbing, as they go against the modern theory of trade and welfare and elementary national income accounting. Thus, his hope that protection will resurrect declining US industries is the opposite coin of the case which was made for protecting infant industries in developing countries. In both, the case for protection is ultimately based on some purported distortion in the workings of the domestic price mechanism which is best dealt with by attacking the distortion through appropriate domestic taxes and subsides. Protection is the worst policy to deal with the distortion as it causes many by-product distortions which could lead to even lower economic welfare. Whilst even the case for domestic subsidies to deal with the original domestic distortion is undermined if producers are rent seekers who will argue for all sorts of non-existent domestic distortions to get subsidies, also leading to a loss of economic welfare. Hence, as I have argued, the 19th century case for the joint adoption of free trade and laissez-faire still stands (“Free Trade and Laissez Faire: Has the Wheel Come Full Circle?”, The World Economy, 2003). Similarly, the statements made by the US president and Peter Navarro, his trade advisor (“Why the White House Worries about Trade Deficits”, WSJ, March 5, 2017), that US’ trade deficits are economically damaging, and its trade policy should seek to eliminate them is economically illiterate. From national income accounting, a country’s deficit is by definition the imbalance between domestic savings and investment, and cannot be eliminated by trade policy. It is the other side of the coin of the capital account which records capital inflows which will be in surplus by an equivalent amount. This capital inflow is economically beneficial. Mr Navarro recognises this but argues the capital inflows allow the US government to finance undesirable fiscal deficits. Furthermore, it allows foreigners to own a growing share of US assets. This he notes could be benign, but he worries that “suppose the purchaser is a rapidly militarising strategic rival intent on world hegemony. It buys up America’s companies, technologies, farmland, food-supply chain and ultimately controls much of the US defense-industrial base.” He labels this as “conquest by purchase”, and this is the real target of his advocacy for protection. And who is the strategic rival? In his book (Death by China, Pearson, 2015), it is the People’s Republic. Is this a real danger or just a paranoid fantasy? Unfortunately, as I have argued in an earlier column (“China’s geopolitical resurgence”, December 20, 2013) this can no longer be looked upon as a fantasy with President Xi Jinping’s abandonment of Deng Xiaoping’s advice to hide its “peaceful rise”, and Mr Xi’s desire to fulfil the “Chinese Dream”. This is to reclaim its status as the wealthy powerful Middle Kingdom which was the Asian overlord with most of its neighbours being its vassals. This was destroyed after the 19th century Opium Wars and the “carving up of the Chinese melon” by Western powers. The West had hoped that Deng’s opening of China and integration into the global economy and the US-led liberal international economic order, would convert it into a prosperous, peaceful “trading state” like Germany and Japan. With its growing middle class, it would also become democratic. But these hopes have been belied. As Edward Luttwak in The Rise of China vs. the Logic of Strategy has emphasised, China is reverting to its ancient assertive political habits of dealing with foreign “barbarians”. A major tool was “induced economic dependence”. This was developed after 140 years of protracted warfare with the formidable mounted nomad warriors, the Xiongnu, by the Western Han (206 BC-9 AD). The self sufficient Xiongnu were made dependent on Han produced goods, which were first supplied free as “unrequited tribute”, but were turned into “exchange for services rendered” as de facto vassals when the Han became stronger. This continues in Chinese foreign economic policy as noted in an earlier column (“China’s statist turn II: the ‘development bank’”, August 16, 2013), with the attempt to create the old Silk Route being the latest example. Mr Luttwak also noted that from this tributary past the Han “also attribute superior cunning to themselves as compared to the non-Han world” considering Americans, though strong and violent “as specially naïve, but easily manipulated”. This has been resoundingly confirmed “as the Chinese watched with increasing incredulity the absence of any American attempt to impede [its] rise” instead contributing to its rapid economic growth, “without demanding anything resembling full reciprocity”. But beginning with Mr Trump’s initial shot over the Chinese bow of taking a call from the Taiwanese president and suggesting he might reconsider the US acceptance of the “One China” policy, the US worm seems to be turning. It is in this context that Mr Trump’s “trade policy” is better seen as a strategy of confronting and containing China than abjuring free trade. Mr Navarro makes many recommendations on how the US might contain China in the future. They would shake up the multilateral trading system overseen by a seriously dysfunctional WTO — the subject of my next column.

Source: Business Standard

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Kenya : Four years down the line, empty promises fill revival of industries

Four years down the line, nothing tangible can be seen. Politicians are already on the campaign trail with even more promises. At the onset of devolution, residents of western Kenya were optimistic that industries that had collapsed would roar back to life. Governors and legislators had during campaigns promised to empower locals through revival of collapsed industries, most of which were synonymous with the region. Four years down the line, nothing tangible can be seen. Politicians are already on the campaign trail with even more promises. While millions of shillings have been pumped into revival of these factories, some are still in a sorrowful state. However, mismanagement and importation of cheap textile products sounded a death knell for cotton farmers in the early 1990s. Mulwanda, alongside other textile factories such as Kisumu Cotton Mills (Kicomi), and Rift Valley Textiles (Rivatex) were forced to close shop as a result of the influx of cheap imports flooding the market. There was a ray of hope when Busia Governor Sospeter Ojaamong and area legislators undertook to oversee revival of cotton farming in the area and Mulwanda Cotton Ginnery alongside other smaller ginneries in Nambale, Amukura and Malakisi. Over Sh10 million was earmarked in the 2015/2016 Budget for rehabilitation of Mulwanda factory. This was never to be, barely a few months to the August 8 polls. County Agriculture executive Moses Osiya however indicated plans to revive the ginnery were at an advanced stage. Kakamega Governor Wycliffe Oparanya and Mumias East MP Benjamin Washiali promised to push for the bailout of Mumias Sugar Company. The Government has since injected about Sh2.6 billion into the firm, though the move appears too little too late, according to the Kenya National Sugarcane Farmers’ Federation Secretary General Simon Wesechere. The county has pledged to give farmers financial support in a bid to revive sugarcane farming. It seeks to have the allocation to agriculture increased from Sh2.2 billion in the financial year 2016/17 to Sh2.4 billion in 2017/18. In Bungoma County, some of the projects that had been earmarked for revival included Panpaper Mills in Webuye, Kitinda Dairy Farmers Co-operatives Society and Chwele market - the second largest open air market in Kenya after Karatina in Nyeri. Governor Kenneth Lusaka had indicated his administration would revive the stalled Panpaper Mills, Kitinda Dairy Industry that stopped operations in 1995.

Source: The Standard

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Three day mega sale to promote local textile sector planned in Nairobi

The Ministry of Industry, Trade and Cooperatives to promote local brands produced by local clothing manufacturers has organized a “mega sale” of their products this week in Nairobi. The event has been dubbed the first-ever super sale of local clothing brands in the country. According to State House Spokesman Manoah Esipisu, quality brand new clothes made in Kenya at its export processing zones (EPZ) under key designer labels will be up for sale at “low and affordable prices”. They are making them available to this market so that Kenyans can have a sense and feel of what it is that is being produced here and being worn in major cities in the world but which by the time Kenyans see it again it’s like its already been worn in other markets and coming back under the used clothes’ category”. Industry, Trade and Cooperatives Cabinet Secretary Adan Mohammed said that some of the world’s biggest inner wear brands like Calvin Klein, Tommy Hilfiger & Victoria’s Secrets are being made in Kenya.The sector supports 179,000 jobs according to the government, out of which 22,000 are said to have been created over the last three years. It has potential of creating another 100,000 jobs according to the government. It is a demonstration of the importance accorded to the sector by President Uhuru Kenyatta’s administration, Mr Esipisu said. Economic Processing Zones in the country are a major economic driver for Kenya, with total investments of Sh74 billion and employing more than 50,000 people, according to the Ministry of Industry and Trade. Speaking at State House, Nakuru, on Sunday, Mr Esipisu said that there will be subsequent sales in other cities and towns in the country “so that Kenyans can see some of the fruits and works they are investing in. This is one of the pledges that has been fulfilled by the government through the Ministry of Industry and Trade. The industrial transformation programme is focused on creating a strong manufacturing base, with a goal to increase its contribution to 15 percent of the GDP from the current 10-11 percent. Mr Esipisu said that the strategy has seen initial focus around labour intensive sectors of textile and apparels, leather and agro-processing. Over this period new investment in production facilities have been made in Mombasa, Nairobi and Nakuru leading to exports to the United States under the Africa Growth and Opportunity Growth programme (Agoa) to exceed 400 million US dollars making Kenya the leading apparel exporter to the US, in sub-Saharan Africa under Agoa. The government has deliberate ensured access to affordable clothing that is duty free and VAT free, for the first time since independent. This is what one will see starting Wednesday. The Ministry of Trade has called it’s the first super sale, which is expected to promote the local textile sector. The sale will run for three days starting Wednesday at the Kenyatta International Conference Centre, (KICC). Prices will range from Sh50 to Sh600.

Source: Yarns and fibre

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Pakistani textile manufacturers delegation on a visit to Belarus

Pakistan’s two large delegations of textile producers led by Hassan Iqbal, Secretary of the Textile Industry Ministry of Pakistan are currently in Belarus to hold talks on the cooperation in light industry and establishment of joint ventures to manufacture textile products and related goods. The delegation of Punjab Province (Pakistan's center of textile industry) is headed by Sheikh Alauddin, Punjab Provincial Minister for Industries, Commerce and Investment. The visit will run from 27 to 31 March as per informed from the Belarusian Embassy in Pakistan. The Pakistani delegations will hold talks with representatives of the Council of Ministers of Belarus, the Industry Ministry, Bellegprom Concern and Belneftekhim Concern, and the Belarusian Chamber of Commerce and Industry. The Pakistani textile manufacturers will arrange stands and hold presentations at the international expo BelTEXlegprom 2017 that will take place in Minsk from 29 to 31 March. They will hold negotiations with potential Belarusian partners. Pakistan is among the world's leading cotton producing countries. It has a well-developed textile industry. As a result of a series of talks and presentations that Bellegprom Concern held in 2015 and 2016, the Pakistani side started to show stable interest in setting up joint ventures in Belarus. Considering the textile manufacturing capacities of the two countries, Belarus has a good chance of attracting Pakistani investment and textile production practices. However, the process requires some time. Today the activities of Belarusian textile manufactures in terms of the cooperation with Pakistan are focused on developing ties with Pakistani textile enterprises to purchase textile products that are not produced in the Eurasian Economic Union for the needs of Belarusian clothing companies. There are good prospects for cooperation in the purchase of Pakistani cotton fiber, provided that the Pakistani side offers good delivery terms. The light industry has been a major contributor to the development of Belarus' industrial sector. Its growth is achieved thanks to the use of local raw materials (flax fiber, chemical fiber, hide), highly skilled workforce, and the big consumer market that includes the market of Belarus and neighboring regions. As a result, all regions of Belarus have light industry enterprises (a total of some 500) who are export oriented. Pakistan's light industry is also export-oriented. Belarus would like to establish practical cooperation with Pakistani light industry companies, set up joint ventures, and invite Pakistani companies to participate in the effort to upgrade Belarusian companies. Belarus knows Pakistan's centuries-old light industry traditions, first of all, in the production of cotton yarn and fabric and the manufacture of leather goods and clothing for export. Carpet making is a fast-growing sector.

Source: Yarns and fibres

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Pakistan : Increase in cotton area recommended

Islamabad : The National Assembly Standing Committee on Textile Industry, Tuesday, recommended to Pakistan Central Cotton Committee PCCC to make efforts for increasing the area of cotton growing and fix the support price for the benefit of local farmers. NA committee met here with Khawaja Ghulam Rasool Koreja in the chair and was apprised about the research work of new cotton varieties for better cotton production and improving soil health by using modern techniques and methods. The Committee appreciated the efforts of the ministry for encouraging the growth of cotton by using modern techniques and methods. However, recommended that awareness should be given to the cotton growers and farmers through electronic and press media which could be helpful to increase the cotton growth in the Country. The Committee observed that due to non-existence of Trade Cooperation of Pakistan the price of cotton was decreased day by day however, the Committee directed the ministry to ensure to make operational the Trade Cooperation of Pakistan in order to facilitate the cotton growers. The Committee also directed that ministry should coordinate with Government of Punjab for extending the lease agreement of the land of Central Cotton Research Institute Multan. The Committee recommended that incentives should also be given to the cotton industry to develop the interest of farmers in cotton growing so that the huge revenue could be added to the Government exchequer. The Committee was of the view that the strength of scientists and staff should also be increased in order to make the research work more effective in cotton growing.

Source: Pakistan Observer

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Zimbabwe : Harsh penalties for side marketing urged

Government is considering stern measures against farmers who practice side marketing of cotton, a development that has seen most companies closing after failing to recover their investments.  Addressing farmers during a recent tour of cotton fields in Chiredzi and Checheche, Deputy Minister of Agriculture Mechanisation and Irrigation Development Responsible for Crops Cde Davis Marapira said farmers should blame themselves for destroying the cotton industry by the promotion of side marketing. He said farmers contracted by a company, should sell all their cotton to that very company and a breach of that agreement warranted arrest. “We have observed that most fertilizers which were meant for cotton production were sold to sugar cane farmers in Chiredzi,” said Deputy Minister Marapira. “Most of the cotton crop was grown without fertilizers, but surprisingly Government through the Presidential Inputs Scheme gave you adequate inputs. Private players like Parrogate contracted some of you, but you decided to sell fertilizer, for a cheap price for that matter.” Deputy Minister Marapira said he visited the Taraffen Ginnery in Triangle which closed five years ago and the officials blamed side marketing of their contracted crop. “I visited the Tarrafen Ginnery in Triangle, the ginnery is closed and they said they have a $17 million debt,” he said. “Asking them how they got that debt, they said they financed farmers with inputs, but they would breach the contract by selling the cotton to other players.” Deputy Minister Marapira said Government would allow ginneries to engage the police to arrest farmers who breached their contracts. “This year, Government says report farmers who practice side marketing of cotton,” he said. “We don’t want a situation where farmers frighten investors, we want more players coming into the industry so as to give the farmer a wider choice as to which company best suits their interests.” Asked how they are surviving in the cotton industry where most private player’s have folded their operations, ETG Parrogate southern region director Mr Dakarai Makuyana said their inter-personal relations with farmers had seen them thriving. “Side marketing affected us also to a larger extend as private players, that is why most of our friends closed down,” he said. “As ETG Parrogate, we learnt that developing a bond with your farmers is the only way we can defeat side marketing and also making sure that adequate extension services are rendered.” Cotton Company of Zimbabwe southern region business manager Ms Marjorie Chaniwa said companies which did not fund the crop should not be issued with licences to purchase cotton as that alone promoted side marketing. “The issuing of licenses for the purchasing of cotton to companies which did not finance the crop is the first step which promotes side marketing,” she said.

Source: The Herald

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Indonesia : Garment exports projected to stagnate this year

The Indonesia Textile Association (API) projects that garment exports will stagnate this year after declining by 3.2 percent to US$11.9 billion last year. “It’s good if it’s stagnant. Last year it declined because there are several problems that still persist in the country, though there have been some improvements in facilities from the government to boost the sector,” API chairman Ade Sudrajat told The Jakarta Post recently. Problems include contradictory policies between central and local administrations, complicated tax procedures, inadequate infrastructure that leads to high logistics costs and electricity and gas prices that are higher than neighboring countries. Besides internal challenges, Ade said the Indonesian textile business also faced tough competition in trying to expand its share of the international market. He called on the government to expand trade agreements with big buyers. “Indonesia can lobby the United States to expand its GSP [Generalized System of Preferences] for more Indonesian garment items so more of our product can enter the country with lower tariffs,” he added. The US is Indonesia’s biggest garment importer. Despite the challenges, the association acknowledged some improvements in logistics, such as the establishment of dozens of bonded warehouses. The association also acknowledged that the activation of more cargo lines from Gedebage Station in West Java – known as a center for garment production – to Tanjung Priok Port in Jakarta had boosted exports.

Source: The Jakarta Post

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Export earnings from CMP garment expected to exceed $2.2 billion

Export earnings from CMP (cutting, making and packaging) garment industry are expected to reach up to US$ 2.2 billion as it has received more orders from the EU and Japan, said Khaing Khaing Nwe, secretary of Myanmar Garment Entrepreneurs Association. The export earnings are calculated according to the calendar year. The commerce ministry calculates export earnings for respective fiscal years. Currently, the ministry has not released export earnings for 2016 officially. In the past, Japan placed an order for CMP garment. Now the industry receives more orders from the EU after the reinstatement of Generalized System of Preferences (GSP) rights by the EU. Khin Maung Lwin, assistant permanent secretary of the commerce ministry said: “The industry earned over $1.65 billion as of February of this fiscal year, up nearly $1 billion from the same period last year.”

Source: Eleven Myanmar

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Kraig gets certificate for silk production in Vietnam

Kraig Biocraft Laboratories, Inc., a leading biotechnology company and developer of genetically engineered spider silk based fibre technologies, has been awarded an investment certificate for the production of high technology silk in Vietnam’s Quang Nam province. The investment certificate was issued on March 26, 2017 at Quang Nam Investment conference. The investment certificate award was the necessary and final step before the company seeks central government approval for the expansion of Kraig Labs’ business. The company’s efforts to secure that final approval are well underway. Kraig’s CEO and founder, Kim Thompson, “This is a huge step forward in our plans to expand production on a large scale. We look forward to the opportunity to revitalise silk production, using high technology, in an area of the world with a strong history of quality silks and textiles.” Kraig’s COO, Jon Rice said, “While this is a momentous occasion for Kraig Biocraft Laboratories and our shareholders, it is also a turning point in the commercialisation of advanced fibres.”

Source: Fibre2Fashion

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Pakistan : 17th Textile Asia: Int'l Value-Added Textile Trade Fair begins today

Karachi : Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) and Ecommerce Gateway Pakistan are jointly organizing a three-day 17th Textile Asia – International Textile & Garments Machinery Trade Fair at Karachi Expo Center from 28th March, 2017. PRGMEA Chief Coordinator Shaikh Muhammad Shafiq said that this trade fair is expected to be visited by 65,000 people from trade and corporate sector as well as more than 1,500 foreign delegates. The focus of this trade fair is value addition in Textile industry to increase the export of our value-added textile and garment products. This 3-day trade fair will held from 28-30 March, 2017 and has been termed as the Pakistan’s biggest B2B textile, garment, embroidery, digital printing machineries and chemical and allied services Fair. More than 1,000 International Brands will display their products in over 800 Booths and over 1,500 foreign delegates from 27 countries mainly from Austria, China, Czech Republic, France, Germany, India, Italy, Korea, Taiwan, Turkey, UK, USA etc. will grace the events. 17th Textile Asia 2017 will also host Textile Asia Conference 2017 jointly organized with Textile Institute of Pakistan (TIP) on 29th March, 2017 which will be led by renowned experts and it will seek to engage stakeholders to comprehensively discuss the plan to streamline Pakistan’s textile industry and revisit and address the concerns of the companies. President Ecommerce Gateway Pakistan, Dr. Khursheed Nizam said that Textile Asia is the only UFI (Paris) approved Textile trade fair in South Asia, which showcases immense buying selling potential of textile, garment and allied industries and poised to introduce overseas suppliers of textile & garment materials, accessories a& parts and machinery to the textile and garment industry of Pakistan and complement their efforts for high quality, value added products and assist them to further develop their business in the export markets.

Source: Pakistan observer

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A tale of two textile cities - one in China and one in Pakistan

The first news came from Islamabad where the Economic Coordination Committee (ECC) approved a grant of Rs12 million to facilitate the wind-up process of Pakistan Textile City Limited, which was inaugurated with much fanfare in 2011 at Port Qasim Karachi. This textile city never produced a single meter of cloth. ‘Govt responsible for decline in textile exports’ The second was a textile city, announced recently, not in Pakistan but China. The Xinjiang Textile Park was inaugurated in the border province of China-Pakistan. Xinjiang now grows 60% of Chinese cotton. Only in 2016, 22 new enterprises were opened in Aksu Textile Park in southern Xinjiang, producing 10 million meters of cotton cloth with 800,000 spindles every year. China has plans to add another 100,000 new jobs in textile manufacturing in Xinjiang alone, which already saw 112,300 new workers hired in 2016. The Pakistan Textile City Limited envisioned to produce 80,000 new jobs, and created only administrative jobs in the headquarters. At a cost of around Rs1.2 billion, an area of 1,250 acres was purchased from PQA for the project and 774 industrial plots of various sizes were developed. To develop the area by constructing a three-kilometre road, water tanks, etc an amount of Rs2.5 billion was also taken as loan from the National Bank of Pakistan. The tale from two textile cities – one closed down before commencing commercial operations and the other expanding at “Punjab” speed should teach several lessons. Already, the Karachi Chamber of Commerce and Industry (KCCI) has shown serious concerns over “threats of further losing its market share to China”. KCCI issued a statement saying, “The anticipated glut of textile and garment from the Xinjiang textile park in the export as well as domestic markets of Pakistan poses a serious threat to Pakistan’s textile sector already struggling to remain afloat.” The chamber, in its report, said, “Setting up of the textile park at Xinjiang will give a heavy blow to Pakistani textile exports.” In 2015, I made a presentation in the PIDE Annual Conference, on how Lawrencepur Brand, Pakistan’s premier brand of clothing, was forced to move its operations from Pakistan to China. Yes, Lawrencepur is now made in China. With the Minister of Planning present, I argued that productivity is not a state-led process. The shifting of Lawrencepur to China and closure of Pakistan Textile City are two sides of the same coin. We are losing business, market share and jobs. Is the process of a general decline of Pakistani textile, as also exhibited in the stalemate of its exports, can be termed a Schumpeterian Creative Destruction? We won’t let federal govt pull the plug on Sindh’s textile city: CM This creative destruction is onset by entry of new technology, innovation and new industry, which forces old industry to shut down and opens new opportunities. It is typically enterprise driven, which embarks upon innovation and forces the old guys out. Painful but important – creative destruction is a milestone in a nation’s industrial path. However, it seems that what we are witnessing in Pakistan’s textile is not a Schumpeterian destruction – rather it is a form of Dragonian Resurrection – a term I coined to capture Chinese influence on local business. In a Dragonian Resurrection, innovation spill-overs do not happen. Local companies are either closed down or taken over by the Chinese shareholders. Of course, we cannot blame the Chinese, as the Karachi Chamber is doing. It is true that we are giving them infrastructure, yet I am not blaming Chinese for the eventual demise of Pakistan’s textile. I am ready to believe that all Chinese goods will just move from the north to south to be shipped around the world. I am also assuming that the take-over of the Pakistan Stock Exchange by Chinese and intense manoeuvres by Chinese industrialists to buy big Pakistani textile firms will also be good. However, our own textile entrepreneurs, if they want to remain in business, have to sharply re-define their business methods in this new world. The role of a well-coordinated Textile Policy cannot be under-estimated in this. One direction may be actually the big Indian market of working women, who can’t stop loving our splendid women wear designs. But here comes the crucial role of an active government, which negotiates for entry of its own businesses. Despite govt support, Pakistan’s textile industry lags behind Malaysia’s MATRADE (similar to our Trade Development Authority) is a great example of how its officers work tirelessly to win market access in locations across the world. Remember, they are not in the business of doing business, but win entry for their entrepreneurs. Thus, some kind of policy craft is essential but eventually the businesses have to deliver.

Source: The Express Tribune

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BD apparel continue steady growth: report

Bangladesh apparel exports continued steady growth, despite the global economic downturn, according to the largest B2B (Business to Business) website-VizBibe. The London-based organisation's report further said that Bangladesh annually exports around $30 billion worth of clothing every year. And last year its official export data showed that it was $28.09 billion. Third party exports accounted for the rest. The VizBibe research revealed that it was because of increased labour productivity, entrepreneurial resilience and improvements in labour safety, standards and factories that Bangladesh was able to maintain it upward trend. According to the report, Bangladesh surpassed India as the world's largest clothing exporter in 2003. It also said that currently Bangladesh holds 6 per cent of the global market. The latest trend, according to the report, is an uptick in denim exports from Bangladesh. Currently, it holds 23 per cent of the European Union (EU) market and with 11.3 US market, is the third largest exporter to the United States (US) after Mexico and China. The local value addition in the denim industry has been calculated at $2 billion. Projections are: By 2021 Bangladesh denim will be the largest exporter, globally and that includes the United States. The B2B report also said that the Bangladesh market is dominated by 10 major players although a diversity of sources are at play.

Source: Financial Express Bangladesh

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Pan Asia Coloured Yarns bags international certifications

Pan Asia Coloured Yarns (PACY) has been awarded the Oeko-Tex standard 100 and ISO 9001:2008 certifications. The Oeko-Tex certification has confirmed that its fabrics are suitable for use for all types of clothing, including inner garments and for babies and toddlers. The company has regularly been recognised for its achievements in product excellence. PACY is the sole independent yarn dyeing plant in Sri Lanka to have bagged the certifications, according to Sri Lankan media. Sri Lanka’s leading producer of polyester and nylon yarn has been certified after clearing tests in Hohenstein Textile Testing Institute, Germany. The standard is based on an increasingly stringent list of criteria relative to the intensity and frequency of skin contact with the product. "These quality certifications stand as a testament to our company’s dedication to achieving production and product excellence. Our latest certification has helped to further confirm PACY’s position as a technically advanced and internationally competitive supplier to all leading manufacturers and exporters of fabric, garments, gloves and label manufacturers in Sri Lanka," said PACY factory manager, MN Sheriff. PACY uses Verivide and Macbeth colour system with advanced colour viewing technology for standard colours and shades. PACY's factories in Sapugaskanda and Ekala have state-of-the-art laboratory facilities that has an archive of over 30,000 Dye to Match colours for yarn.

Source: Fibre2Fashion

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