The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 17 MAY, 2017

NATIONAL

INTERNATIONAL

Textiles Min Smriti Irani Makes Most of Summer With #CottonIsCool

Looking cool in this hot summer is a hard task but cotton attire is the best idea to beat this heat. #CottonIsCool is a new campaign started by Textiles Minister Smriti Irani. It’s giving Handloom textiles a fresh kick. The new campaign from the Ministry of Textile aims to popularise cotton among the ‘aam admi’. And a trending hashtag is all it takes for Twitterati to post pictures of them wearing cotton clothes. Some celebrities were quick to jump on the bandwagon and tweeted several pictures. Take a look: Smriti Irani Leads By Example Other politicians too cashed in on the trend, donning their cotton look. Smriti Irani had also launched an #IWearHandloom campaign on National Handloom Day to support Indian Weavers on 7 August 2016.With the searing heat this summer, cotton does seem like a cool option! Home Indigenous gear for Siachen soldiers  Super high altitude clothes like rucksack socks, thermal insoles and snow goggles to be made in India Indian Army is the only force which operates and fights at heights of over 20,000 feet on the Siachen glacier, yet imports even the most basic equipment and personal items required to sustain troops there. Now the Army is attempting to reverse this and indigenise items by involving the private sector in addition to the Defence Public Sector Undertakings. The Army spends about ₹500 crore every year on basic personal items for soldiers. “Over the last two years five items costing about ₹100 crore annually has been indigenised. Over the next 3-4 years the target is to indigenise the remaining ₹400 crore,” one Army source said on Tuesday. The items include super high altitude clothing such as rucksack special socks, thermal insoles, snow goggles and High Altitude Pulmonary Oedema (HAPO) bag. These are currently imported and are quite expensive. Super high altitude is the height above 18,000 feet. In relation to this the third Defence-Indian Technical Textile Association (ITTA) joint seminar and exhibition is scheduled to be held on May 22-23 with the theme “Indigenization and provision of improved products to our soldiers.” About 40 companies from Indian Textile Industry will be displaying items of general stores including High Altitude/ Extreme Cold climate clothing an equipment for Special Force and Nuclear, biological and Chemical (NBC) protection. Reduced imports “Over the past two years through this forum, approx. 20% of our import load for Super High Altitude Areas has been reduced through indigenisation. Product improvement for about 20 items have also been undertaken to make out troops fight better,” the source added. Lt Gen RR Nimbhorkar, Master General Ordnance (MGO) said on the development: “Such initiatives supported by the textile ministry and defence ministry will lead to price competitiveness, transparency and entry of quality players which will automatically bring in much required R&D and indigenization…” To facilitate it the MGO branch is attempting to open up its procurements and streamline the policy.

Source: The Hindu

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New IIP data series captures note ban impact better

The new IIP (Index of Industrial Production) data series released by the government last week better reflects the knock taken by the economy from the effect of demonetisation. Going by the new 2011-12 data series, monthly growth in industrial production ‘realistically’ slowed down post-demonetisation as against a recovery reflected by the 2004-05 data series. To compute the demonetisation impact, monthly growth rates of industrial production were compared for two time periods, from April 2016 to October 2016 (pre-demonetisation) and November 2016 to March 2017 (post-demonetisation). Using the new 2011-12 data series, the average monthly IIP growth rate during the pre-demonetisation period was 6.3 per cent. Post-demonetisation, it fell to 3.3 per cent. The new data series clearly indicated halving of growth figures post-demonetisation. Moreover, it seems to have captured the subsequent recovery quite well. After clocking higher growth rates of 4.9 per cent and 5.7 per cent in October and November 2016, the IIP expansion slowed down to 2.6 per cent in December 2016. Subsequently, it hit a low of 1.9 per cent in February 2017 before recovering to 2.7 per cent in March; by the end of March 2017, the demonetisation process was over. However, using the 2004-05 data series, the average monthly IIP growth rates showed an improvement postdemonetisation. Compared to the pre-demonetisation growth average of -0.3 per cent, the growth figures improved to 2 per cent. This was definitely not in sync with the ground reality. With a 78 per cent weightage under the new index, it is the better representation of manufacturing data that’s made all the difference. Manufacturing growth under the 2011-12 series, clocked a monthly average rate of 6.9 per cent before demonetisation. It fell subsequently to a third of that level (2.3 per cent) during the last five months of 2016-17. As against the monthly growth rates of 5.9 per cent and 4.9 per cent in October and November 2016, growth rates fell to 0.9 per cent in December before limping back to 1 per cent plus rates in February and March. However, the 2004-05 data indicated a slight turnaround in manufacturing growth. As against a 1 per cent contraction during the first seven months of 2016-17, the growth rates improved to 1.2 per cent post-demonetisation. Moreover, contrasting trends were discernible in the electricity sectors using different data series. While growth rates slowed from 6.1 per cent to 5.7 per cent using the new 2011-12 series, under the old series, there were signs of recovery – from 4.7 per cent to 5 per cent despite the onslaught of demonetisation.

Source: The Hindu Business Line

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Global cotton rally may spur cultivation

AHMEDABAD: A sudden spurt in cotton futures in the international market over the last three days has left cotton traders perplexed in India. While the fundamentals support a possible bearish trend owing to wider sowing of the fibre crop, the recent rally in international markets is seen encouraging farmers towards further cotton cultivation. On the Intercontinental Exchange (ICE) in the US, the Cotton futures for July 2017 contract rallied by about 12 per cent in just three sessions to hit a high of 85.32 cents per pound on Monday — a level not seen in more than two years. This prompted ICE to increase the margin requirements — thereby indicating speculators’ play behind the sudden spurt. On ICE the cotton July futures cooled off a bit to 83.99 cents on Tuesday. This sent out a bullish sentiment in the global cotton markets including India, a key global cotton player. The spot rates on Indian markets rebounded by nearly ₹1,000 per candy (each of 356 kg) to trade at ₹42,700 on Tuesday. On the MCX, Cotton futures for the immediate month contract quoted at ₹21,170 per bale after hitting a high of ₹21,260. In March, Cotton futures had quoted at ₹21,060. Artificial rally? According to experts the rally is artificial and will be short-lived. The intergovernmental group, International Cotton Advisory Committee (ICAC), had projected an increase of about 1 per cent in cotton production globally to 23.1 million tonnes in 2017-18. “In 2007, in India, cotton was removed from the Essential Commodities Act. As a result, our prices got linked to global cotton prices. This sentiment of New York Cotton rising by about 10 per cent in a short span has some impact on the domestic market also, but this hike is not sustainable. For India, we have good cotton stocks of about 50-55 lakh bales (each of 170 kg). On top of it we expect a normal monsoon and timely onset. Also, the acreage is likely to go up; these are the factors not supporting any bullish sentiment,” said Indian Cotton Federation President J Thulasidharan. The trade estimates a 10-12 per cent increase in cotton area this kharif season. “However, with such prices, there will be an encouragement to farmers to grow more cotton. But the current rally lacks fundamental support and will remain short-lived," said Arun Dalal, a cotton expert from Ahmedabad. As per the initial estimates, cotton sowing in India has been estimated to increase by 10-12 per cent, while in some pockets, the cotton area may go up by as much as 20 per cent over last year. The trigger for the sharp surge in cotton area is the higher prices as compared to the other alternate kharif crops, such as paddy and pulses. “International buyers, who were to settle their positions, continued making further positions in Cotton futures for some reasons. This led to the spurt in prices. In the Indian context, due to such higher international prices, our imports will shrink more than the estimated. So, the country may feel the shortage of cotton around July and those holding cotton stocks may get ₹46,000-47,000 per bale. But that would be a very short-term as we expect more acreage this year,” said an official at a cotton export house in Ahmedabad.

Source: Hindu Businessline

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Monsanto row: Difficult to see how GM seeds will progress in India

Indeed, if the government’s latest interventions in two ongoing cases involving GM-giant Monsanto are anything to go by, the official opposition has only strengthened. Though the environment ministry has, in the past, taken a tough stand vis-à-vis the anti-GM lobby, the fact that it hastily withdrew the FAQs on GM mustard—issued a day after GEAC approval, these said the crop was safe for human consumption—suggests getting the government nod may not be that easy. Indeed, if the government’s latest interventions in two ongoing cases involving GM-giant Monsanto are anything to go by, the official opposition has only strengthened. Unlike some activists who argue the crop is unsafe for human consumption—it is being consumed even today since India imports large quantities of GM soya and rapeseed/canola oil—the government focus, though, is more on the costs of GM patents; worse, on whether patents can even be granted. Even if the environment ministry does reinstate the FAQs soon, and sticks to its stance that GM mustard is safe, developers of GM technology will come up against the issues of price control and of limiting their royalty through the Protection of Plant Varieties and Farmers Rights (PPVFR) Act of 2001. It is easy to believe the current government salvo is only directed against Monsanto. In actual fact, if the arguments are accepted by courts, all GM technology, including that developed by former Delhi University vice-chancellor Deepak Pental, will find their commercial use circumscribed. It may not matter in the case of Pental, since his research was funded by the government-owned NDDB, but it will for anyone who wants to work on GM commercially. Given how much money firms like Monsanto are spending on R&D, keeping them away from the market will probably mean Indian farmers won’t get the best technology, but going by government think-tank NITI Aayog’s Three-Year-Action-Agenda, that may not be of great concern—while talking of ‘some concern that GM seeds can be monopolized by multinationals’, NITI says ‘this concern is readily addressed by limiting GM seeds to those varieties discovered by our own institutions and companies’. It is difficult to reconcile such protectionist talk with a modern economy and institution since it suggests Make-in-India is only for Indian companies or for products where Indian companies are already present. For almost a decade, as the Bt cotton revolution spread across the country, there was no outcry from farmers on how high seed prices were crippling them. Indeed, of the 45-odd firms Monsanto has licensed its technology to, only Nuziveedu Seeds had a problem with its royalty rates, and that was after a decade—Nuziveedu accounts for around a fifth of all seeds sold using Monsanto technology. In December 2015, however, the Centre came out with a cotton seed price order that, while reducing the cost of the Bt seeds, ensured the bulk of the cut was on Monsanto’s royalty—from Rs 170 or so per bag to Rs 49. In May 2016, it even sought to put a 10% cap on royalty—as a share of the seed price which was already controlled by government—and mandated a steady cut in it but, since the prime minister was travelling to the US, this was withdrawn and the order passed off as a mere discussion note! While this cotton experience can easily be translated to a mustard one or a brinjal one when that gets approved, the latest government offensive is more direct. It has been made in two cases, one in the Delhi High Court in a case involving Monsanto and Nuziveedu and one in a case before the PPVFR Authority. Both make essentially the same point about Section 3(j) of the Indian Patents Act excluding patentability of seeds, plants and their varieties. And since Monsanto argues it is not patenting Bt cotton seeds but the genes in them—when you buy software on a CD, the copyright is for the software even though it is made available via the CD—the government is arguing that, under PPVFR, once a gene is inserted into the seed, it is a ‘variety’ and hence not patentable. That is, even if a patent is valid, it becomes invalid the moment the gene is put into a seed and cross-pollinated to create new hybrids. Normally, a GM company like Monsanto licenses its genes to seed firms like Nuziveedu, and they use this to create their own hybrids with a modified gene. Since the new argument means a Nuziveedu, or any other seed firm that gets genes from GM firms is free to renege on royalty payments, the only solution for a Pental will be to either not bother about royalty, or to insist that seed firms who take his technology register themselves under PPVFR with him as a co-owner—or he could forget his laboratory research and get into seed production on his own! Monsanto, it is true, can still pursue its case against Nuziveedu even under PPVFR, but the process will be more long-drawn, the chances of success less than under the Patents Act and the royalty—it is called ‘benefit-sharing’ under PPVFR—will be lower since this will be fixed by PPVFR instead of being bilaterally negotiated as it is now. Until these issues are addressed satisfactorily, it is difficult to see how GM seeds will progress in India even if developed by ‘our own’ companies since even they work on the basis of profits. Home DC urges farmers to increase area under cotton crop (Source: Tribune News Service, Bathinda, May 16, 2017) To increase the area under the cotton crop under the diversification project, Deputy Commissioner Diprava Lakra today visited some villages of Bathinda and Maur that are lying at the tail end of canals. He visited Kotshamir, Kotfatta, Bhai Bakhtaur and Dhan Singh Khana villages to ensure that farmers are getting proper water supply for irrigation. He said the target for cotton cultivation this year was 1.40 lakh hectares and till May 15, 1.05 lakh hectares had already been brought under the cash crop. The DC added that the target would be met before May 20. He appealed to the farmers to get proper bills while buying seeds and if they were facing any problem, they might contact the Chief Agriculture Office or respective Block Agriculture Office. The farmers said owing to the efforts of the district administration, they were getting improved water supply. The farmers also assured that they would try to increase the area under the cotton cultivation this year. The DC assured the farmers that till the sowing of cotton, they would not face any problem regarding irrigation. Chief Agriculture Officer, Bathinda, Gurditta Singh Sidhu, who was also accompanying the DC, said there was no paucity of PAU recommended cotton seeds. He added that the department had constituted eight teams at the district and block levels for the checking of dealers. To attain the targeted cotton cultivation, 14 field officers and 140 scouts have been recruited. These officers and scouts are visiting field and submitting their reports on a daily basis. If farmers face any kind of problem, they can immediately contact their respective block or district-level teams. The problem will be redressed on the spot. The DC also visited Bhai Bakhtaur village wherein the department has undertaken a bed planting technique for cotton cultivation. Gurditta Singh said, “Using the technique, one acres of land can be sown with just two packets of seeds. This saves lot of water. Using the technique, the cotton plant doesn’t wilt and the number of plants too remains same.” Agriculture Officer, Maur, Gurmail Singh, officials of the Irrigation Department and Revenue Department were also present on the occasion.

Source: Financial Express

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Global Crude oil price of Indian Basket was US$ 51.12 per bbl on 16.05.2017

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$ 51.12 per barrel (bbl) on 16.05.2017. This was higher than the price of US$ 51.08 per bbl on previous publishing day of 15.05.2017. In rupee terms, the price of Indian Basket increased to Rs. 3275.80 per bbl on 16.05.2017 as compared to Rs. 3275.25 per bbl on 15.05.2017. Rupee closed stronger at Rs. 64.08 per US$ on 16.05.2017 as compared to Rs. 64.12 per US$ on 15.05.2017. The table below gives details in this regard: 

Particulars    

Unit

Price on May 16, 2017 Previous trading day i.e. 15.05.2017)                              

Pricing Fortnight for 16.05.2017

(April 27, 2017 to May 11, 2017)

Crude Oil (Indian Basket)

($/bbl)

             51.12                (51.08)

49.22

(Rs/bbl)

            3275.80           (3275.25)

3162.88

Exchange Rate

  (Rs/$)

             64.08                (64.12)

64.26

Source: PIB

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FICCI survey pegs India's 2017-18 GDP growth at 7.4%

A median GDP growth of 7.4 per cent is forecast for the fiscal year 2017-18, with a minimum and maximum level of 7.0 per cent and 7.6 per cent respectively, says the latest round of Economic Outlook Survey conducted by FICCI. The industry and services sectors are expected to grow by 6.9 per cent and 8.4 per cent, respectively, in 2017-18. The survey was conducted during March and April 2017 amongst economists belonging to the industry, banking and financial services sector. The participants felt that with the process of remonetisation almost complete, consumption activity has witnessed an uptick and will further build up going ahead. Also, Indian Meteorological Department’s latest forecast of monsoon arriving on time and being sufficient provides some reprieve amidst earlier reports of El Nino having a dampening effect this year. Moreover, the outlook of economists with regard to prices remains benign and is in line with RBI’s projection put out in the monetary policy statement announced in April this year. According to the Economic Outlook Survey results, Consumer Price Index has a median forecast of 4.8% for 2017-18 with a minimum and maximum level of 4.0% and 5.3% respectively. Another area where the participating economists were asked to share their views was on the wave of protectionism engulfing the global economy. The respondents were asked to opine on how they see this development unfolding and what steps should India take to minimise the impact resulting from such moves. Economists participating in the survey unanimously believed that protectionism is becoming a new normal led by certain advanced economies which are increasingly looking inwards to propel growth and increase employment. This could result in increased tension between nations which could lead to trade wars according to some of the respondents. The economists felt that while protectionism is a challenge, India needs to keep its focus on implementing reforms. The situation calls for improving the investment climate in the country, enhancing hard and soft infrastructure and continuing the efforts on tackling the issue of non-performing assets. Economists felt that higher government and private investments towards infrastructure development and capacity expansion can play a pivotal role in revitalising domestic demand and would encourage the domestic industry. Participating economists were of the view that strengthening the domestic economy, in terms of sustainable macroeconomic stability, enhancing skills among youth and the workforce and continuing on the reform path will help India manoeuvre the rough patches.It was also suggested that India should look at signing preferential trade agreements with other emerging market economies.

Source: Fibre2fashion

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After 4 months, Govt withdraws some incentives from textile package

ISLAMABAD:  The government partially withdrew the textile package, announced just four months ago to boost exports, and imposed taxes and duties on import of cotton from July to generate Rs10 billion in revenue, highlighting inconsistencies in its economic policies. On a proposal by the Finance Division, the Economic Coordination Committee of the Cabinet (ECC) approved the restoration of import duty and sales tax on import of cotton with effect from July 15, 2017. The ECC also approved to double the export quantity of fertiliser to 600,000 metric tons in order to clear glut of the commodity caused by manufacturing and excess imports. It also approved a Ramazan package to provide subsidy on 19 essential commodities. The ECC took the decision to impose duties on import of cotton despite the country facing a shortfall in production this year against the annual target. Pakistan has been a net importer of cotton since 1998 and yet the government has been charging taxes under one pretext or the other. The decision has been made to boost the confidence of domestic cotton growers during the upcoming sowing season, according to a handout issued by the finance ministry after the ECC meeting. The Ministry of Finance requested the ECC that the government should restore 4% customs duty and 5% sales tax on import of cotton. With the restoration of duties and taxes, the government will be able to generate an extra Rs10 billion in revenue; by charging total 9% duties and taxes on imported cotton. The industry is compelled to import cotton due to shortfall of the commodity in the domestic market. Pakistan does not produce long staple cotton, which is an important component of value-added textile products. The decision to restore duties and taxes would encourage growers to cultivate cotton in the current season, said Hasan Iqbal, Secretary Textile Division. He said that his division managed to delay the restoration of the duties and taxes till mid-July to facilitate industries to import cotton as per their requirements. Iqbal said that the government has to watch the interests of both the farmers and industrialists. On January 10 this year, Prime Minister Nawaz Sharif had announced the textile package in an attempt to boost exports that have been declining for the last four years. Under the package, sales tax, customs duty on import of textile machinery and cotton had been abolished. However, the government’s decision to partially withdraw these incentives within four months indicates growing fiscal constraints and inconsistency in policies. The decision has been taken at a time when the textile industry is facing huge challenges to enhance its exports. The exports plunged 2.3% to only $16.9 billion during July-April period of this year, according to the Pakistan Bureau of Statistics. During the ongoing fiscal year, cotton production stood at only 10.54 million bales – which was 25% less than 14.1 million target set for this fiscal year. There is a minimum of 3 million bales’ shortfall that the industry will have to meet by importing cotton. The industry needs imported cotton until the next crop arrives. In the last fiscal year, the industry had imported 2.6 million bales while the local production had been estimated at 9.7 million bales. However, the finance ministry moved the summary on the plea that the agriculture sector has started reviving therefore; there was a need to support it by making imports expensive.

Urea export

The ECC also decided to increase the quantity of urea approved for exports from the existing 300,000 metric tons to 600,000 metric tons, said the finance ministry. The cabinet body also extended the deadline for export of urea from April 28, 2017 to October 31, 2017. These decisions were made by the ECC after considering the proposal of the Ministry of Commerce, based on the recommendations of the Fertilizer Review Committee. The ECC was informed that sufficient production and inventory of urea of domestic consumption is anticipated during Kharif 2017 for allowing export.

Source: Tribune

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Asia Apparel Expo to host 400 companies in Feb 2018

Asia Apparel Expo, an important tradeshow for apparel production in Europe, showcasing suppliers of finished apparel, contract manufacturing and private label development, will be held in Berlin, Germany from February 22-24, 2018. Over 400 leading companies based in Hong Kong, China, Bangladesh, India and Pakistan are likely to participate in the event. Suppliers of men's, women's and children's wear, sports and activewear, lingerie, swimwear, denim, industrial and workwear along with fabrics, laces, trims, buttons, zips, labels and other apparel accessories will be in attendance at the seventh edition of the expo meant for trade professionals. Asia Apparel Expo attracts close to 2,000 industry professionals from European brand manufacturers, trading companies, wholesalers, multiple retailers, chain stores, department stores, agents, designers, private label and buying offices, looking to meet with production partners from Asia. The expo being organised by Comasia Limited will also feature Asia Footwear, a new product zone dedicated to all forms of footwear.

Source: Fibre2fashion.com

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Home US cotton production projected to increase 12% in 2017

US cotton output this year is forecast at 19.2 million bales, nearly 12 per cent above the final 2016 estimate, according to USDA’s initial projection for the 2017 crop. Based on the Prospective Plantings report, 2017 cotton area is estimated at 12.23 million acres, 2.2 million acres above 2016, due to higher prices of cotton relative to competing crops. Area for both upland and extra-long staple (ELS) cotton is forecast to expand in 2017. For the upcoming season, upland acreage is projected higher in each of the Cotton Belt regions. Based on Prospective Plantings, the Southwest upland area is estimated at 7.4 million acres, above last year’s six million acres and the second highest since the early 1980s. The Southwest is forecast to account for 62 per cent of the upland area in 2017, slightly above last season’s 61 per cent. Cotton acreage in the Southeast is expected to approach 2.5 million acres in 2017, nearly 14 per cent above last season but equal to the 5-year average. In the Delta, 2017 cotton area is forecast to increase for the second consecutive season to 1.8 million acres as acreage returns to near the 10-year average. The Delta is expected to account for 15 per cent of the US upland acreage in 2017, similar to the previous season. In the West, improved irrigation supplies for the 2017 spring-planted crops—in addition to favourable prices—are expected to boost cotton area there. ELS cotton remains concentrated in the West, where over 90 per cent of the 232,000-acre total is expected to be planted in 2017. California will continue as the dominant ELS-producing state, contributing 190,000 acres of the total. As of early May, moisture conditions across the Cotton Belt are more favourable this season, although parts of the Southeast have experienced some dry conditions, the Economic Research Service of the US department of agriculture (USDA) said in its latest ‘Cotton and Wool Outlook’ report. US cotton harvested area for 2017 is projected at nearly 11.4 million acres, 20 per cent above the 2016 estimate of 9.5 million acres. The national yield is projected at 810 pounds per harvested acre and is based on the 2012-16 crop average yields, weighted by region. The initial US yield estimate is below last season’s final estimate due to the proportionally larger increase in lower-yielding Southwest acreage in 2017. Meanwhile, US cotton demand (mill use plus exports) in 2017-18 is forecast 2 per cent lower at 17.4 million bales, as reduced exports account for the decline. US cotton mill use for 2017-18 is estimated above 2016-17 at 3.4 million bales, supported by demand for US cotton textile product exports. Cotton stocks are forecast at 5.0 million bales on July 31, 2018, the highest since 2008-09. However, the 2017-18 stocks-to-use ratio (29 per cent) is forecast between last season’s 18 per cent and 2015-16’s 30 per cent. Based on these initial supply and demand projections, the 2017-18 US upland farm price is expected to range between 54 cents and 74 cents per pound. At the midpoint of the range, the farm price would be 5 cents below the 2016-17 estimate of 69 cents per pound.

Source: PTI

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Home Pakistan brings back sales tax, Customs duty on cotton imports

ISLAMABAD: The government will impose a four percent customs duty and five percent sales tax on cotton import by the middle of July, a statement said on Tuesday, reinstating the tariff after a gap of nearly seven months in response to recent large purchases from overseas. “On a proposal by the Finance Division, the ECC (The Economic Coordination Committee) of the Cabinet)) approved the restoration of import duty and sales tax on import of cotton with effect from 15th July 2017,” the government statement said. The ECC meeting was chaired by finance minister Ishaq Dar. “The decision has been made to boost the confidence of domestic cotton growers during the upcoming sowing season.” A decline in cotton production last season forced the government to withdraw import duty and sales tax. The finance ministry had estimated revenue loss of around Rs10 billion following withdrawal of duty and sale tax. Pakistan's cotton consumption is pegged around 15 million bales, while it had produced around 10.5 million bales. The country was the third largest raw cotton exporter, but it has been an importer for the last two years. Last year, Pakistan imported around 2.7m bales from India. Meanwhile, the ECC has also decided to increase the quantity of urea approved for exports from the existing 300,000 tons to 600,000 tons. “The ECC also extended the deadline for export of urea from April 28, 2017 to October 31, 2017,” the statement said. “These decisions were made by the ECC after considering the proposal of the Ministry of Commerce, based on the recommendations of the Fertilizer Review Committee.” The statement said the ECC was informed that sufficient production and inventory of urea of domestic consumption is anticipated during the Kharif 2017 for allowing export. The government, in January, extended cash subsidy on domestic sales of fertiliser and also allowed 300,000 tones of its exports in a bid to reduce surplus inventory in the country. However, ECC then allowed traders to finalise their export deals by 28th of April without any subsidy. Export permission was given in view of around one million metric tons of surplus urea fertiliser available in the country. The ECC also approved the Ramzan Relief Package 2017 with subsidies worth Rs 1.602 billion on 19 commodities to provide relief to the general public during the upcoming holy month. These commodities include wheat flour, sugar, ghee, oil, pulses, white grams, baisen, dates, rice, squashes, black tea, milk, and spices. “The commodities will be sold at subsidized rates across Pakistan through outlets of Utility Stores Corporation (USC),” the statement said. “In addition to the relief provided by the Ramzan Package, USC will also reduce prices on over 2,400 other items under different brands from 5 percent to 10 percent by obtaining special discount from vendors/suppliers and reducing its own profit margins.”

Source: The News International

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US Industrial Production Posts Biggest Gain Since 2014

WASHINGTON —  American industry expanded production last month at the fastest pace in more than three years as manufacturers and mines recovered from a March downturn. The Federal Reserve said Tuesday that industrial production at U.S. factories, mines and utilities shot up 1 percent in April from March, biggest gain since February 2014 and the third straight monthly gain. The increase was more than twice what economists had expected. Factory production rose 1 percent after declining 0.4 percent in March. Mine production increased 1.2 percent after falling 0.4 percent in March. And utility output rose 0.7 percent after surging 8.2 percent in March. Factory production has risen three of four months this year. Manufacturing has recovered from a rough patch in late 2015 and early 2016 caused by cutbacks in the energy industry and a strong dollar, which makes U.S. goods costlier in foreign markets. The overall U.S. economy grew at a lackluster 0.7 percent annual pace from January through March. But economists expect growth to pick up the rest of the year as consumers ramp up spending. A healthy job market bolsters consumer confidence. Employers last month added 211,000 jobs and unemployment fell to 4.4 percent, lowest in a decade.

Source: Financial Express

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Eurozone growth confirmed at 0.5%, more than US

BRUSSELS: Official figures confirm that the economy of the 19-country eurozone grew by a steady, if unspectacular, quarterly rate of 0.5 per cent in the first three months of the year.  The update from Eurostat, the EU's statistics agency, also confirmed that the eurozone performed better than the US in the first quarter. The US economy, according to Eurostat, expanded by 0.2 per cent.  Of the large majority that have released figures, only Greece showed output declining. Of the large majority that have released figures, only Greece showed output declining. Greece has now shrunk for two straight quarters, the technical definition of a recession.  Germany, the eurozone's largest economy, was a key ingredient behind the region's growth, expanding by 0.6 per cent. France, the number 2, fared less well, growing by 0.3 per cent.  However, a raft of indicators shows France and others picking up momentum.

Source: Economic Times

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Bangladesh may achieve 7.24% GDP growth in FY 2017

Bangladesh is expected to record gross domestic product (GDP) growth of 7.24 cent for the ongoing financial year that will end on June 30, 2017. With 7.11 per cent GDP in the fiscal year 2016, an increase is expected in the GDP for fiscal year 2017. However, over the last few years, Bangladesh has maintained a growth rate of around 6 per cent. Bangladesh government aims to achieve 7.4 per cent GDP growth in the FY18, while the target for FY20 is set at 8 per cent, Bangladesh planning minister AHM Mustafa Kamal said while addressing the media. There has been an increase in the growth rate due to significant exports and positive agriculture result, said the minister. The per capita income also rose to $1,602 in the outgoing fiscal year which was $ 1,465 in the previous financial year. Bangladesh economy of over $200 billion has significant contribution from remittances and exports of apparels. Since few years, Bangladesh has been putting in efforts to revive the GDP growth rate although some economists were skeptical about achieving the 7 per cent growth rate. "But, like the previous year, the GDP growth in this year exceeded the 7 per cent mark," he added. Speaking about World Bank's growth projection of 6.8 per cent for FY 2017, the minister said, "There’s no engineering about the country’s growth estimation, and we never changed the methodology of GDP growth estimation. The World Bank had always been very conservative about our growth projection." The minister said that the investment ratio to GDP was 30.27 per cent in the FY 2017 as against the previous year's investment of 29.65 per cent. Asked about the growth of three major sectors, he said the industrial sector has obtained highest growth of 10.50 per cent in the outgoing fiscal year followed by 6.50 per cent by the services sector while 3.40 per cent by the agriculture sector.

Source: Fibre2Fashion.com

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Home U.S. retailers urge trade envoy to save NAFTA

Robert Lighthizer, U.S. trade representative, left, is sworn in Monday by Vice President Mike Pence, right, during a ceremony with Lighthizer’s children, Claire and Robert Jr., in the Indian Treaty Room of the Eisenhower Executive Office Building in Washington. U.S. retail associations called on Lighthizer on Tuesday to “do no harm” to their supply chains while renegotiating the North American Free Trade Agreement. (Bloomberg photo) The largest U.S. retail associations called on new Trade Representative Robert Lighthizer to support the North American Free Trade Agreement, aiming to salvage an accord that has come under fire from his boss. Leaders of the American Apparel & Footwear Association, the National Retail Federation, Retail Industry Leaders Association and U.S. Fashion Industry Association sent a letter to Lighthizer on Tuesday urging him to tread lightly on the 23-year-old pact. NAFTA supports hundreds of thousands of U.S. textile and clothing jobs, along with retail operations in all 50 states, the organizations said.  “We agree that the agreement should be updated to reflect today’s business reality and better prepare for future trade patterns,” the groups said in the letter. “However, we ask for support from the administration to ensure that renegotiation will ‘do no harm’ to the successful supply chains that we rely on today.” Lighthizer was sworn in Monday, clearing the way for the administration to seek an overhaul of NAFTA. President Donald Trump called the treaty a “disaster” during the election campaign and has threatened to withdraw from the agreement with Mexico and Canada if renegotiated terms aren’t favorable enough. In a draft letter circulated in March that laid out its goals, the administration told lawmakers it wanted to strengthen the U.S. manufacturing base and “level the playing field” with its NAFTA trading partners on tax treatment. Retailers, which rely heavily on imports, have opposed any changes that would tax imports at a higher rate. “Our approach is if you look across the textile, apparel and footwear industry, there’s a very broad consensus that NAFTA works — that it creates jobs, that there’s a supply chain that supports workers and communities on both sides of the border,” Steve Lamar, executive vice president of the AAFA, said in an earlier interview. “Perhaps it can be improved, but we don’t want to start the negotiations from the perspective that this is a bad agreement.” Retail groups say NAFTA could be updated to account for digital commerce, which was virtually nonexistent when the agreement was enacted in 1994. “The ultimate concern for the business community at large is failure to come to a deal that ends in the U.S. pulling out of NAFTA,” said Jonathan Gold, vice president of supply-chain and customs policy at the NRF. “We don’t think that should be on the table.” An imperiled NAFTA comes during a challenging time for apparel retailers. Falling prices, increased competition and a lack of style trends have made it harder for clothing companies to maintain sales and profit. Now they may lose access to Mexico, a country that supplies goods at prices Americans are willing to pay. If the trade deal changes, apparel trade groups say the industry could be faced with rising costs and another blow to its already-fragile profit margins. Mexico is the largest Latin American supplier of apparel products to the U.S. and the fifth-biggest worldwide — behind countries like China and Vietnam — according to the U.S. Department of Commerce. “A renegotiated NAFTA needs to enhance the economic cooperation with these key trading partners,” the retail groups said in Tuesday’s letter. “Any improvements should provide for seamless integration with the existing NAFTA agreement.”

Source: Bloomberg News

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Declining Role of Exports in the Indonesian Economy, Textile Alert

Indonesia's export performance tumbled 10.3 percent month-to-month (m/m) to USD $13.17 billion in April 2017. Suhariyanto, Head of Statistics Indonesia (BPS), attributed this decline to a steep 35.4 percent (m/m) decline in exports of oil and gas products. Nearly all components in the oil and gas balance were plagued by declining prices. However, also in terms of volume these oil and gas exports tumbled, implying weakening global demand for energy (perhaps a sign the Chinese economy remains in slowdown-mode). But also Indonesia's non-oil and gas exports fell in April 2017, although not as steep as its oil and gas counterparts. BPS said the nation's non-oil and gas exports fell 7.4 percent (m/m) to USD $12.19 billion. This decline was particularly attributed to a steep drop in animal fat and oil exports to India, falling machinery and electrical equipment shipments to Singapore, and declining rubber (and rubber product) exports to the United States. On the other hand, there were also non-oil and gas export products that showed growth in April 2017 (on a month-to-month basis). For example exports of ores, crust, metal ash, and copper all grew. Considering Indonesia's oil production and exports have tumbled rapidly over the past decades, non-oil and gas exports now account for around 90 percent of Indonesia's total exports. Meanwhile, the significance of Indonesian exports toward the country's gross domestic product (GDP) is also on the decline. While in 2014 exports of goods and services contributed 23.67 percent to GDP, this figure fell to 19.08 percent in 2016. The declining role of exports toward the economy, despite generally rising commodity prices, is a worrying sign. Bhima Yudhistira, researcher at the Institute for Development of Economics and Finance (Indef), says the decline in exports of textiles is particularly alarming, having tumbled more than 20 percent (m/m) in April 2017. This drop is not only attributed to declining demand in the United States and Europe but also to rogue exporters. Illegal shipments of textile are estimated to cause IDR 125 billion (nearly USD $10 million) in missed earnings for the government. Customs have detected 465 cases of smuggling over the January-April 2017 period (while in full-year 2016 it only detected 551 cases of smuggling). Indef therefore recommends the Indonesian government to resolve this issue (illegal textile and clothes shipments). On a year-on-year basis, however, Indonesia's export performance in April 2017 still forms an improvement compared to the same month in 2016. Indonesia's April 2017 exports grew 12.6 percent year-on year (y/y) compared to the same month one year earlier.

Source: Indonesia-Investment

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Home Lanka gets back EU tariff concessions

Colombo- The European Union's import tariff concession GSP+ would be made available to Sri Lanka with effect from May 19 despite the country's lack of progress in meeting criteria in some areas of focus, EU Ambassador to Sri Lanka Tung-Lai Margue said today. "The removal of duties on Sri Lankan exports to the EU will come into force this Friday after publication in the EU s official journal," Margue said. This would mean full removal of duties on 66 per cent of tariff lines covering a range of products from textile to fisheries. The EU denied the facility to Sri Lanka in 2010 due to the country s failure to implement 27 international conventions on human rights, labour conditions, protection of environment and good governance. Margue said Sri Lanka still needed improvement in many areas of criteria and the EU will keep on monitoring the process for further improvement. For example the EU awaits to see the final draft of Sri Lanka's new Counter Terrorism Act which is to replace the existing Prevention of Terrorism Act. "Granting of good governance (GSP+) facility does not mean that situation in Sri Lanka with regard to progress is fully satisfactory. International Human Rights groups have described PTA as draconian which allows indefinite detention of people," Margue said. Margue said torture and forced child marriages and labor rights violations are being still reported from Sri Lanka. He said the GSP+ restoration will provide Sri Lanka with immediate benefits worth in excess of 300 million Euro annually. In 2016, Sri Lanka exported 2.6 billion Euro worth of goods to EU countries.

Source: PTI

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Kenya has backed away from plans to impose a ban

Kenya has backed away from plans to impose a ban on second-hand clothes in a move officials say will leave local textile dealers at the mercy of market forces. Industrialisation secretary Adan Mohamed told reporters in Beijing that retaining the flow of these clothes, commonly known as mitumba, into the country will allow both importers and local producers to remain in business. “...it is our desire to develop and promote our textile industry in our country to create more jobs for people in our country,” he said at a press conference on the sidelines of the Belt and Road Forum in Beijing, China. “And through the transition of market forces we would like mitumba clothes to compete with clothes that are produced within East Africa, within Kenya, and if those products are much more competitive and much more consumer friendly, then of course you will see a reduction in the mitumba business in our country. But it is not going to be through a ban or anything of that nature.” Over the past two years, East African Community member states of Kenya, Uganda, Tanzania, Rwanda and Burundi have been mulling over a joint restriction on second-hand clothes and shoes in a move meant to protect local textile manufacturers but which could harm a multi-billion shilling group of importers. This announcement came as some US lobbyists were pushing for Kenya to be suspended from the Africa Growth Opportunity Act (Agoa) group of countries for supposedly violating the principles of trade between the US and Kenya. Agoa, which was extended last year, often allows exporters from African countries that meet given terms, to export their goods into the US without the usual tough restrictions. In turn, America also gets some preferential treatment of their products. The lobbyists argue a ban could mean Kenya was disobeying the very principles it has benefited from. Mr Mohamed said the claims is based on falsehood, denying Kenya was even planning to stop any importations at all. In 2015, the EAC heads of State agreed to start drafting regulations that could guard local clothes and leather producers and “directed the council of ministers to study modalities for the promotion of textile and leather industries in the region.”

Source: Daily Nation

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