The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 25 MAY, 2017

NATIONAL

INTERNATIONAL

Make in India gets sourcing push from Govt

The Union Cabinet on Wednesday approved a policy providing preference to domestically manufactured goods for government procurements, in a major step to boost the government’s Make in India initiative. It also approved the abolition of the Foreign Investment Promotion Board (FIPB), which has, for 25 years, been the single-point window for clearing foreign direct investment (FDI) proposals requiring government nod. The Cabinet, headed by Prime Minister Narendra Modi, also gave its nod to a “strategic partnership” model under which select private firms would be engaged to build military platforms like fighter jets, submarines and battle tanks.  The Cabinet Committee on Economic Affairs (CCEA), which met before the Cabinet, approved the closure of Janpath hotel in the national capital. The property will be used for setting up government offices. It also cleared the hike in fair price for sugarcane by Rs 25 a quintal, a move that will benefit about five crore farmers across cane-producing states.  The new procurement policy mandates that only local suppliers will be eligible for procurement of goods and services above Rs 5 lakh, provided that the specific ministry determines that there is sufficient local capacity as well as competition. The policy also has provisions for procurements beyond Rs 50 lakh, or where there is insufficient local capacity or competition. In this case, if the lowest bid is not from a foreign supplier, the lowest-cost local supplier, who is within a margin of 20 per cent of the lowest bid, will be given opportunity to match the lowest bid. Further, if the procurement is of a type which can be divided between more than one supplier, the foreign supplier who is the lowest bidder will get half of the order, while the local supplier will get the other half if it agrees to match the price of the lowest bid. In the cases where it cannot be divided, the lowest-cost local supplier will be given the order if it agrees to match the lowest bid. The policy, to be overseen by a standing committee within the Department of Industrial Policy and Promotion (DIPP), warns of penal consequences if a supplier falsely declares himself to be a local one. Small purchases of less than Rs 5 lakh are exempted. The order also covers autonomous bodies, government companies or entities under the government’s control, including the armed and paramilitary forces. While industry insiders said the policy may be construed as protectionist, it may not invite the ire of international trade bodies such as the World Trade Organization anytime soon. “Those risks are minimal since many countries, including the United States, are now putting in place such norms,” said DK Srivastav, economist and chief policy advisor at EY India. “There is now a very large global wave in favour of inward looking policies,” he added. On FIPB, Finance Minister Arun Jaitley said the body would be replaced by a new mechanism under which the proposals would be approved by the ministries concerned. He said that proposals in sensitive sectors would require the home ministry’s approval. “About 91-95 per cent of all FDI proposals are now through the automatic route. There are just eleven sectors left which needed FIPB approval,” he said at a media briefing. The respective administrative ministries would now clear proposals in these sectors in consultation with the DIPP, said an official release. The DIPP would also issue the standard operating procedure (SOP) for processing of applications and decision of the government under the extant FDI policy, it said. A senior government official told Business Standard after the cabinet meeting, that the finance ministry would take four to six weeks to wind up operations of the FIPB. “There will be no more FIPB meetings. It will take four to six weeks to end the FIPB. The DIPP will also take around the same time to come up with new guidelines,” the official said. The FDI proposals above Rs 5,000 crore would continue to be cleared by the CCEA. Meanwhile, the official ‘Make in India’ twitter handle said there would be a quarterly review by the secretaries of either the DIPP or the finance ministry’s department of economic affairs of pending proposals. It also tweeted that proposals from Pakistan, Bangladesh and those related to small arms manufacturing and private security firms would require the home ministry’s approval. “The momentous initiative, which is a follow-up of the measure announced in the Union Budget, would streamline the process of FDI approvals and thereby boost FDI flows into the country, adding to growth and employment,” said Chandrajit Banerjee, director general, Confederation of Indian Industries (CII). The fair and remunerative price (FRP), which is the minimum price sugar mills have to pay to farmers, has been increased from Rs 230 a quintal to Rs 255 for the 2017-18 season that kicks in from October. The hike, approved by the CCEA, is the first this year.  The decision to close Janpath hotel, located in the heart of Delhi and run by the India Tourism Development Corporation (ITDC), has been taken within a month of the Centre deciding to exit three ITDC hotels at Bhopal, Guwahati and Bharatpur. The committee of secretaries, under the cabinet secretary, will take a decision on details of implementation of the project and land use. “The building of Hotel Janpath has to undergo major rehabilitation work since the building structure of Hotel Janpath has been found to be unserviceable, in distressed condition and deficit in the context of seismic requirements, according to the inspection report of IIT Roorkee,” said an official statement.  The new defence partnership policy is expected to attract billions of dollars of investment in defence manufacturing by private defence majors, including leading foreign firms. After the Cabinet meeting, Jaitley, who is also the defence minister, said the government wanted to implement at the earliest the new model which was aimed at production of major defence platforms and equipment by Indian companies in collaboration with leading foreign firms.  Jaitley said the strategic partnership model was part of the Defence Procurement Policy (DPP) and the Cabinet was apprised about it.

Source: Business Standard

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Cotton cropping area this Kharif season may see 7-10% increase

In the northern states of Punjab, Haryana and Rajasthan, cotton sowing began on a brisk note and by May 15, 60-70% of the cotton sowing has been completed. CICR has been working on incorporating BT gene into some desi varieties since these are drought resistant and not prone to whitefly. While most industry experts have predicted a 15-20% increase in area under cotton for the 2017-18 season, Indian Council of Agricultural Research (ICAR)-Central Institute of Cotton Research (CICR) has preferred a more conservative approach towards crop outlook in the country. It is predicted that the area under cotton is expected to increase by nearly 7-10 % due to higher cotton prices last season (2016-17), top officials of the institute have said. Last season, the area under cotton during 2016-17 was 105 lakh hectares and there could be a 7-10% increase in this, ICAR-CICR director M S Ladaniya said. “The weather is also predicted to be favourable during 2017-18 season with the early and an above average rainfall in most of the cotton growing regions,” he said, adding that farmers are unlikely to go in for higher cropping after seeing what happened to other commodities after a bumper crop. In the northern states of Punjab, Haryana and Rajasthan, cotton sowing began on a brisk note and by May 15, 60-70% of the cotton sowing has been completed. “Initial indications are that during the current season the cotton area sown would be around 6 lakh hectares in Haryana (as against 4.98 lakh hectares during 2016-17) and 4 lakh hectare in Punjab (as against 2.56 lakh hectares in 2016-17),” he said. In Haryana, farmers are expected to cut area under pulses as well as guar to grow more cotton, Ladaniya pointed out. “In Punjab, cotton is likely to make revival in several south-western districts where paddy was grown in the last years. In Rajasthan, the area under cotton is expected to remain static at around 4.5 lakh hectares. There would be a likely reduction in the area under desi cotton in North India. Bumper yields with hirsutum hybrids (due to the absence of leaf curl virus and minimal damage due to whitefly) and low price of desi cotton during 2016-17 would be the reasons,” he said. CICR has been working on incorporating BT gene into some desi varieties since these are drought resistant and not prone to whitefly. However, reaching the commercial production levels will take some time, he said. The country will come back to desi cotton varieties in due course of time but as of now there is more pull towards BT cotton, he said. The country has been using hybrid varieties for the last 40-50 years as opposed to countries such as Australia, Brazil and China that use compact varieties of cotton with high density plantation. India needs to move to such varieties with higher cropping density and with medium to long staple fibre and shorter crop durations, he said. According to Ladaniya, the predictions of a good monsoon season and its timely onset have raised hopes of a good crop in the predominantly rainfed central and southern zones such as Maharashtra, Telangana, Andhra Pradesh. The strategy to contain pink boll worm damage suggested by ICAR-CICR and implemented by state agricultural departments and state agricultural universities during 2016-17, paid rich dividends in central zone and south zone, helping farmers realise good yield in 2016-17, he said. “Cotton prices in the local markets remained robust during January to April, 2017 that added to the profits of cotton farmers. Cotton area is likely to increase in central and south India also during 2017-18,” he said.

Source: Pune

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Co-optex does Rs 315 crores sales

Co-optex has recorded sales of Rs 315 crores during 2016-17. In a bid to increase sales, the society has initiated several steps including setting up of new outlets across Tamil Nadu. Set up in 1935, Co-optex currently has 194 outlets across the country. Co-optex is based in Tamil Nadu and has showrooms across the state and also in select cities, including New Delhi, Jaipur, Mumbai and Panaji. Silk and cotton saris and dhotis are among the products sold by Co-optex. The chain has revived near-extinct weaves and existing traditions have received a shot in the arm through innovative yarn permutations and designs that qualify as timeless classics. In December 2014, its online portal was inaugurated. Currently the site holds the distinction of generating the highest revenue among all textile cooperative society sites. The chain has tailored mix and match kurtas for women and linen shirts for men, running material, home furnishings and linen-cotton blend saris. The group also runs textile trains. Last year, two textile trains, to Sirumugai and Chettinad, were flagged off. This year, five trains are planned. These trips open up to textile aficionados the processes, realities and toil involved in handloom weaving. Co-optex sold handloom and power loom products worth Rs 313.38 crores during 2015-16.

Source: Fashion United

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Arvind Textiles Confirms $10 Mn Spend On Ecommerce Vertical In FY '17

Textile manufacturer Arvind Ltd has poured in about $10 Mn in its online business, Arvind Internet in FY ‘17. The development was confirmed by Jayesh Shah, Director and Chief Financial Officer. He said, that the company ‘spent over ten million plus last year’. Shah also confirmed that the spend will continue to see a downward trend of about 20%-25%in the next few years as well. For the financial year ending on March 31, 2017, Arvind Limited reported a 15% growth in revenue at about $1.4 Bn (INR 9,236 Cr). The company Board of Directors have recommended a 24% dividend for 2016-2017. For Arvind Internet (Ecommerce and Creyate) the loss before interest and tax was reported to be about $13.7 Mn (INR 88.87 Cr) for the year ended March 31, 2017. The loss incurred by the company for the year ending March 31, 2016 was about $3.5 Mn (INR 22.92 Cr). For the year FY ‘17, the net sales of Arvind Internet increased to about $2.3 Mn (INR 15.13 Cr) as compared to about $985K (INR 6.39 Cr) in FY 16. Arvind Internet Ltd, established in 2013 is a hybrid tech and fashion startup, with its headquarters in Bengaluru and a creative division in Mumbai. The company kicked off with custom clothing platform Creyatein 2014. In May 2016, Arvind Internet, launched an omni-channel platform NNNow.com. At the time of launch Nnnow was positioned to connect digital shoppers to merchandise from Arvind’s warehouses, 50-odd brands and a network of more than 1,200 stores across 200 Indian cities. Arvind Limited owns and manages partnerships with multiple local and global brands such as Flying Machine, Arrow, US Polo, Tommy Hilfiger, Gant, Nautica, and Gap. It also runs beauty retailer Sephora and UK department store chain Debenhams in India.

In September 2016, Arvind Internet acquired FreeCultr, a private label ecommerce company. The Indian ecommerce market is estimated to be worth $119 Bn by 2020, as per a recent Morgan Stanley report. Other major players in the fashion ecommerce category include Amazon, Flipkart (including Myntra & Jabong), Snapdeal, Koovs, etc.

Source: Inc42.com

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Poor and sick: Film spotlights plight of India's textile workers

MUMBAI- It was a childhood memory of time spent at his grandfather's textile mill in Gujarat that inspired Indian film student Rahul Jain to focus on the rhythm of factory life for his first documentary. Although Jain did not set out to make a political film, his award-winning feature "Machines" is attracting international attention for its depiction of the squalor and human suffering underpinning the global garment industry. This month the documentary opened the Copenhagen Fashion Summit where heads of leading clothing brands, charities and policy makers met to discuss ethical and sustainable fashion. "Machines" shows men and children working slave-like shifts for paltry wages in conditions where they are exposed to damaging levels of noise and intense heat. "The workers were poor, sick and they coughed a lot. Many had a hearing problem," said Jain, a student at the prestigious California Institute of the Arts. The machine noise the workers are exposed to is like a soundtrack running throughout the film. "Workers use headphones and play loud music to lock out the sound (of the machines), but that actually causes more damage," Jain told the Thomson Reuters Foundation by phone from Los Angeles. "Their lungs are damaged as they breathe fine silica dust, also very fine carbon particles." The 25-year-old director, who grew up in Delhi, spent nearly six months spread over three years filming inside a factory in the city of Surat, the capital of India's textile industry, in the western state of Gujarat. Workers told how they earned less than $3 for shifts of 12 hours or more. "When I arrive at the gate for work, I feel like turning back right there," says one child who puts in 12 hours every day. But the boy says he won't leave because he believes he is more likely to learn skills as a child than he would as an adult. The film ends with workers asking Jain to take up their demand for eight-hour shifts. Jain said that while "Machines" was never intended as a piece of activism, he hoped the government would take action to help the textile workers.

POOR HEALTH

Hundreds of thousands of migrant workers toil in Surat's numerous weaving, dying and printing factories. Fabrics manufactured in the city are exported around the world, ending up in everything from high street fashions to school uniforms. "Machines" was filmed in a factory employing 1,500 workers, including children. The camera follows them as they go about their tasks. Some are seen napping on piles of fabric. Workers interviewed in the film appeared wary of speaking about their lives. One told how he had travelled 1,600 km (990 miles) to work at the factory, but said he was not exploited and did the work out of choice. Jain said the factory jobs took a heavy physical toll with illnesses common and workers mostly quitting by the time they are 50. He said a doctor made twice-weekly visits to the factory to give medicines including multi-vitamins and vitamin D shots to the workers. "Machines", which won an award for its cinematography at this year's Sundance Film Festival, is already on release in Britain and will premiere in India later this year. Jain said screenings were being planned in the country's most densely-populated factory towns. "I hope deep down that (the film) is used to show the government what it does not wish to see," he added.

Source: Times of India

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Govt approves phasing out of 25-year-old Foreign Investment Promotion Board

FDI applications needing govt approval to be handled by the concerned Ministries/Depts

The Union Cabinet on Wednesday approved phasing out of the 25-year-old Foreign Investment Promotion Board (FIPB). The FIPB is the inter-ministerial body — or a single window clearance mechanism for applications on foreign direct investment (FDI) in India in sectors under the government approval route. The move to phase out the FIPB is aimed at making India a more attractive FDI destination and increasing FDI inflows by providing greater ease of doing business and promoting the ‘Maximum Governance and Minimum Government’ principle. The proposal entails abolishing the FIPB and allowing administrative Ministries/Departments to process applications for FDI requiring government approval, an official statement said. It added: “Henceforth, the work relating to processing of applications for FDI and approval of the Government thereon under the extant FDI Policy and Foreign Exchange Management Act, shall now be handled by the concerned Ministries/Departments in consultation with the Department of Industrial Policy & Promotion (or the DIPP, in the) Ministry of Commerce, which will also issue the Standard Operating Procedure for processing of applications and decision of the Government under the extant FDI policy.” In his 2017-18 Budget speech on February 1, Finance Minister Arun Jaitley had said: “More than 90% of the total FDI inflows are now through the automatic route. The FIPB has successfully implemented e-filing and online processing of FDI applications. We have now reached a stage where FIPB can be phased out. We have therefore decided to abolish the FIPB in 2017-18. A roadmap for the same will be announced in the next few months.” Addressing the media after the decision taken by the Cabinet chaired by Prime Minister Narendra Modi, Mr. Jaitley said in cases of applications where there are security concerns, the home ministry's approval will be required. He added that proposals pending with the FIPB will be taken up by the concerned ministries. The minister said currently around 91-95% of FDI inflow happens through the automatic route, adding that there are only 11 sectors (including defence and retail) needing government approval. The FIPB was initially set up under the Prime Minister's Office following the economic liberalisation in the early 1990s. It shifted under the DIPP in 1996, and then in 2003 to the department of economic affairs in the finance ministry. In the new mechanism, a quarterly review of pending proposals by the economic affairs secretary and annual review by the finance minister are liekly. The Cabinet Committee on Economic Affairs will continue to clear FDI proposals above Rs 5,000 crore.

Source: The Hindu

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Casual workers bore the brunt of note ban: Labour Bureau survey

Casual workers took the maximum hit from demonetisation, with as many as 1.52 lakh workers losing their jobs during the three months to December 2016. The government had invalidated high value notes of Rs 500 and Rs 1,000 early in November last year, leading to disruption in economic activity. According to the quarterly report on employment scenario in select sectors by the Labour Bureau, a wing of the labour ministry, there was a reduction of 1.52 lakh jobs in casual worker category in eight sectors, including IT, transport, manufacturing, as on January 1, 2017, compared to October 1, 2016. According to the survey, there was an increase of 1.68 lakh full-time workers while the number of part-time workers fell by 46,000. Contract and regular jobs saw a jump of 1.24 lakh and 1.39 lakh, respectively, during October-December. The overall increase over the previous quarter (July- September) in the eight sectors under review came to 1.22 lakh, which included type of economic activity, gender, type of worker (employee or self-employee), employment status (regular, contractual and casual) and duration of work (part- time or full-time). Manufacturing, trade, transport, IT-BPO, education and health contributed with an estimated increase of 1.23 lakh workers whereas construction saw a decline. The sectors that saw employment additions include manufacturing, trade, transport, IT/BPO, education and health. There was no change in accommodation and restaurant sector. Out of the total estimated change in employment of 1.22 lakh, females accounted for 52,000 and males 70,000. The self-employed category witnessed an increase of 11,000.

Source: Financial Express

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Artisan’s block: How textile printing is helping Rajasthan

It is 5 AM and Kiran is hurrying to get the morning meal ready. Dawn is just about to break in Jhag, a small Rajasthan village about 40 km from Jaipur, and the young woman is eager to finish all household chores before she reports for her new job — a development that has given her a taste of economic freedom. Kiran and her next door neighbour Mamta are part of a group of 11 women identified and trained in the Ajrakh process of block printing under ethnic-wear retailer Fabindia’s cluster development programme and are now ready to be part of the workforce. “It is very exciting to work outside the house and I share a table (for block printing) with my neighbour and friend, Mamta. It can be tiring as one has to do the household work as well, but I can use the money that I earn to buy nicer clothes for my children and give them better education,” said Kiran taking a break from her work. The block printing process observed in Jhag village draws in part from the Ajrakh process, but largely has its roots in the region itself. “This cluster had been engaged in printing for over 120 years. Today, however, only one family, Prahlad Naagar’s, is involved in printing in a village of over 750 households. For Fabindia, women empowerment was the central idea for the adoption of this cluster,” points out Pamelaa Koul, production hub head, Jaipur, Fabindia. Fabindia’s interest in nudging women from Jhag to carry forward their village’s traditional block-printing craft, under the mentorship of Naagar, also stems from the increased demand for hand-printed ethnic items in the domestic market. According to the company, the rising popularity of hand-printed fabric and garments in the domestic market had led to a four-fold growth in its sourcing from Rajasthan over the past three-four years with more than a third of its total cloth being supplied by the State. With a large number of retailers, including online companies such as Jaypore, Itokri, Gaatha and Jaipurfabric, reaching out to customers across the country, the enlarged market is slowly improving the livelihood of many craftspersons and affiliated workforce in Rajasthan. Artisans now earn anything between ₹8,000 and ₹18,000 per month depending on the amount of work they do. “About six-seven years ago, it was not possible for me to earn as much as I am earning today as there was neither enough demand nor was the payment good. Today, I earn around ₹16,000 per month. My son, who is young and more efficient, earns more,” said Hanuman from village Bagru who works for master craftsman RK Derawala. Derawala, who has been awarded the Padmashri for his contribution to promotion of Indian handicraft, belongs to the Chhipa community in Bagru which has been practising its tradition for roughly 450 years. He specialises in Dabu, an ancient mud resist hand block printing technique from Rajasthan. “There is a huge increase in demand over the past few years for block printed cloth. I have put up 24 tables in my workshop and have also provided tables to 40 households in the village who work for me. There is now enough work for my entire village of over 400 families,” Derawala said.

Source: Business Line

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Conclave on GST and impact on SMEs in Chennai tomorrow

As part of the India-Bangladesh cooperation for inland water transport, India will finance 80 per cent of the estimated ₹220 crore required for dredging to maintain navigability in the Sirajganj-Daikhawa on the Jamuna Ashugunj-Karimgunj stretch of the Kushiyara river in Bangladesh.  The Jamuna is the local name of the Brahmaputra in Bangladesh.

The Kushiyara is known as the Barak river in India. Both the stretches are part of the India-Bangladesh protocol routes. Dredging will help improve cargo movement from Kolkata to North-East through Bangladesh. According to Pravir Pandey, vice-chairman of Inland Waterways Authority of India (IWAI), the tender for dredging will be floated by Bangladesh Inland Waterway Transport Authority (BIWTA) and only Indian and Bangladeshi companies can take part in the tender. India signed an MoU for fairway development across the stretches with Bangladesh during the visit of Bangladeshi Prime Minister Sheikh Hasina in Delhi last month.  Dhaka allowed transhipment of goods through Ashugunj port, close to Tripura border, last year. The Hasina government’s decision to charge Taka 192 a tonne ( ₹155) transit fee triggered a controversy in Bangladesh as it was deemed too low.

Poor logistics facilities

However, transporters found the facility unviable due to long turnaround time and rudimentary logistics facilities at Ashugunj. Nearly n year since the treaty, only three consignments passed through Ashugunj.  Dhaka is now planning to upgrade the Ashugunj port facility using a part of the $2 billion second line of credit. (A third line of $5 billion was offered last month). This, coupled with dredging, should improve the viability of river transport through Bangladesh.

Massive waterway

From the Indian perspective, the Sirajganj-Daikhawa stretch is more important as it would help create a nearly 4,000-km-long fairway from Varanasi in UP to Sadiya in upper Assam (bordering Arunachal Pradesh) through Bangladesh. India is already developing the Varanasi-Kolkata stretch, called NW (National Waterway)-1 as a fairway at an estimated ₹5,369 crore under World Bank assistance. Post development vessels capable to carry 1,500 to 2,000 tonne of cargo can travel through the stretch round the year. A similar project for developing the NW-2 from Dhubri (bordering Daikhawa) to Sadiya, with World Bank assistance, is currently under consideration. IWAI recently organised a stakeholders’ meet in Guwahati in this regard.

Source: Business Line

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Global Crude oil price of Indian Basket was US$ 53.28 per bbl on 24.05.2017

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$ 53.28 per barrel (bbl) on 24.05.2017. This was higher than the price of US$ 52.64 per bbl on previous publishing day of 23.05.2017. In rupee terms, the price of Indian Basket increased to Rs. 3455.43 per bbl on 24.05.2017 as compared to Rs. 3410.00 per bbl on 23.05.2017. Rupee closed weaker at Rs. 64.86 per US$ on 24.05.2017 as compared to Rs. 64.78 per US$ on 23.05.2017. The table below gives details in this regard:

Particulars    

Unit

Price on May 24, 2017 Previous trading day i.e. 23.05.2017)                              

Pricing Fortnight for 16.05.2017

(April 27, 2017 to May 11, 2017)

Crude Oil (Indian Basket)

($/bbl)

             53.28                (52.64)

49.22

(Rs/bbl)

            3455.43           (3410.00)

3162.88

Exchange Rate

  (Rs/$)

             64.86                (64.78)

64.26

 

Source: PIB

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Global Textile Raw Material Price 2017-05-24

Item

Price

Unit

Fluctuation

Date

PSF

1103.14

USD/Ton

0.66%

5/24/2017

VSF

2162.74

USD/Ton

-0.67%

5/24/2017

ASF

2293.37

USD/Ton

0%

5/24/2017

Polyester POY

1110.40

USD/Ton

1.32%

5/24/2017

Nylon FDY

2438.52

USD/Ton

0%

5/24/2017

40D Spandex

5297.98

USD/Ton

0%

5/24/2017

Polyester DTY

2467.55

USD/Ton

0%

5/24/2017

Nylon POY

1328.12

USD/Ton

0.55%

5/24/2017

Acrylic Top 3D

2685.28

USD/Ton

0%

5/24/2017

Polyester FDY

5769.71

USD/Ton

-0.13%

5/24/2017

Nylon DTY

1335.38

USD/Ton

0%

5/24/2017

Viscose Long Filament

2293.37

USD/Ton

0%

5/24/2017

30S Spun Rayon Yarn

2801.40

USD/Ton

-0.52%

5/24/2017

32S Polyester Yarn

1683.74

USD/Ton

0%

5/24/2017

45S T/C Yarn

2685.28

USD/Ton

0%

5/24/2017

40S Rayon Yarn

2946.55

USD/Ton

-0.98%

5/24/2017

T/R Yarn 65/35 32S

2307.89

USD/Ton

0%

5/24/2017

45S Polyester Yarn

1814.38

USD/Ton

0%

5/24/2017

T/C Yarn 65/35 32S

2249.83

USD/Ton

0%

5/24/2017

10S Denim Fabric

1.35

USD/Meter

0%

5/24/2017

32S Twill Fabric

0.85

USD/Meter

0%

5/24/2017

40S Combed Poplin

1.17

USD/Meter

0%

5/24/2017

30S Rayon Fabric

0.65

USD/Meter

0%

5/24/2017

45S T/C Fabric

0.66

USD/Meter

0%

5/24/2017

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14515 USD dtd. 2/05/2017) 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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Equal opportunities, flexible exchange rate hold the key

Handing out equal government policy supports to all exporting sectors and flexible currency-exchange rate are among factors crucial for diversifying Bangladesh's slim export basket. Policymakers, business leaders and experts agreed on these and other policy recasts at a function Wednesday in Dhaka. They said an effective exchange rate and policy reform are a sine qua non to attract higher foreign direct investment in various productive sectors for export diversification According to them, other exporting sectors are not getting the same benefits from the government as enjoyed by the readymade garment (RMG) sector. The benefits include bonded- warehouse facility (BWF), back-to-back LC (letter of credit) and financial support from Export Development Fund (EDF). The observations and suggestions came at a roundtable on 'Trade and Exchange Rate Policies for Export Diversification' organized by the Policy Research Institute of Bangladesh (PRI) in the city. Commerce Minister Tofail Ahmed and Bangladesh Investment Development Authority (BIDA) executive chairman Kazi M Aminul Islam were present as chief and special guests at the function, also addressed by a business leaders and experts. PRI chairman Dr Zaidi Sattar moderated the roundtable while its executive director Dr Ahsan H Mansur delivered the address of welcome. "Non-RMG exports have not done well on average. During FY 1990 to 2016, they grew at less than 8.0 per cent per year as compared with 16 per cent for RMG," PRI vice-chairman Dr Sadiq Ahmed said, adding lots of new products have entered the market but few have prospered with the exception of footwear. Heavy concentration on one product-RMG-and reliance on a few large markets are among the challenges against diversification of exports, he explained and suggested local and foreign investment in export industry to remove supply-side constraint upon export diversification. Learning from the positive experience of RMG, the government should offer BWF and back-to-back LC to all exports, Mr Sadiq said, adding the system of duty drawback does not work properly whereas the BWF has delivered very good results for the apparel sector. The NBR concern over leakages can be resolved through proper technical solutions, he said. The presentation showed that the local-currency taka appreciated by 47 per cent, 34 per cent and 25 per cent against euro, US dollar and Indian rupee since 2006, 2010 and 2008 to 2016. Such substantial appreciation of the local currency in real terms against major global currencies that underlies Bangladesh exports and imports suggests a huge currency tax on exports and is a major factor why most exports have failed to fire after ignition, it added. A large appreciation of the real exchange rate over a long period poses a serious incentive problem for export and needs correction, he said, recommending the lowering of domestic inflation to address it. He termed use of tariffs and para-tariffs for revenue mobilization a highly inefficient and high-cost tax strategy that must be re-examined urgently and reformed. The proposed introduction of the new VAT law will help reduce the anti-export bias by eliminating many supplementary duties (SDs) and keeping the remaining SDs as trade- neutral, he showed in his presentation. He recommended customs duties as only instrument for long-term trade protection by eliminating SDs and regulatory duties. The minister said local exporters are not taking advantages of trade benefit in many countries like Australia, New Zealand, Japan and China as they are confined to few markets, especially the US and the EU. Stressing increased exports to countries that offer duty benefit, he said the government is providing cash incentives for many sectors and going to give such benefit to ICT sector. Admitting that source tax is increasing annually, he also favoured doing something regarding exchange rate and easing the doing-business environment in the country. The commerce minister also recommended increasing productivity to stay competitive on the global market. The BIDA chairman recommended economic diversification that includes primary, manufacturing and services which would help in employment generation both in RMG and non-RMG sectors. Dr Zahid Hussain, lead economist and country sector coordinator of the World Bank, said local market-based industries failed to grow in line with the support provided and common people pay for it buying products at a high rate. While stressing protection for local industries, he suggested that protection should be time-bound and such support can be provided through generally depreciated currency. He opined for withdrawing control over foreign-exchange market and suggested mid-term tax structure. "The annual changes in decision hamper the investment environment," he told the meet. There was so much talk including declaration of leather as product of the year regarding export diversification, but actually they did not work because of exchange rate, said Nihad Kabir, president of the Metropolitan Chamber of Commerce and Industry (MCCI). Citing example, she said two years back exchange rate was Tk 110 which is now Tk 87 but cost of production did not decrease rather export cost went up. Moreover, she said, due to infrastructure weakness, exporters have to use Dhaka airport instead of Chittagong sea port. The chamber chief recommended keeping RMG sector where it is and giving other sectors the opportunity to flourish. Abrar A Anwar, chief executive officer of Standard Chartered Bangladesh, listed footwear, toys, games, electronic and electrics, and ICT as the potential sectors after RMG. Though ICT has problems like want of skilled manpower, he said foreign direct investment is needed for skills development and to go for high-end products. Despite offering so many benefits, FDI is not coming, he said, suggesting policy reform in this regard. He noted that RMG sector gets finance from the Export Development Fund (EDF) whereas other sectors don't. President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Md Siddiqur Rahman demanded depreciation of the local currency, further lowering of bank rates and a raise in cash incentives for new market exploration. Export growth in the country's garment sector has slowed down following a declining global demand, he said, adding that competitor countries are reaping more advantage as they depreciated their respective currencies. Terming the policy set for RMG, Md Saiful Islam, president of Leathergoods and Footwear Manufacturers and Exporters Association (LFMEAB), demanded equal support and stressed innovation, research and development for product diversification.

Source: The Financial Express

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Soon, clothes that generate power from bodys motion

Washington, May 24 (PTI) Lightweight, comfortable clothes that can generate power using body movements may soon become a reality, thanks to a new coating developed by scientists that turns fabrics into circuits. Scientists at the University of Massachusetts Amherst in the US have invented a way to apply breathable, pliable, metal-free electrodes to fabric and off-the-shelf clothing so it feels good to the touch and also transports enough electricity to power small electronics. "Such conducting textiles can be built up into sophisticated electronics. One such application is to harvest body motion energy and convert it into electricity in such a way that every time you move, it generates power," said Trisha Andrew from University of Massachusetts Amherst. Powering advanced fabrics that can monitor health data remotely are important to the military and increasingly valued by the health care industry, Andrew said. Generating small electric currents through relative movement of layers is called triboelectric charging. Materials can become electrically charged as they create friction by moving against a different material, like rubbing a comb on a sweater. "By sandwiching layers of differently materials between two conducting electrodes, a few micro-watts of power can be generated when we move," Andrew said. The study published in the journal Advanced Functional Materials describes the vapour deposition method they use to coat fabrics with a conducting polymer, poly(3,4- ethylenedioxytiophene) also known as PEDOT, to make plain- woven, conducting fabrics that are resistant to stretching and wear and remain stable after washing and ironing. The thickest coating they put down is about 500 nanometres, or about 1/10 the diameter of a human hair, which retains a fabrics hand feel. The researchers tested electrical conductivity, fabric stability, chemical and mechanical stability of PEDOT films and textile parameter effects on conductivity for 14 fabrics, including five cottons with different weaves, linen and silk from a craft store. "Our article describes the materials science needed to make these robust conductors. We show them to be stable to washing, rubbing, human sweat and a lot of wear and tear," said Andrew. PEDOT coating did not change the feel of any fabric as determined by touch with bare hands before and after coating. The researchers said their invention overcomes the obstacle of power-generating electronics mounted on plastic or cladded, veneer-like fibres that make garments heavier and/or less flexible than off-the-shelf clothing "no matter how thin or flexible these device arrays are." "There is strong motivation to use something that is already familiar, such as cotton/silk thread, fabrics and clothes, and imperceptibly adapting it to a new technological application," Andrew said. "This is a huge leap for consumer products, if you dont have to convince people to wear something different than what they are already wearing," she said.

Source: India Today

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INTERVIEW-Adidas' slavery buster hopes technology can give workers a voice

LONDON- Adidas executive Aditi Wanchoo is on a mission - to wipe out any slavery in the German sportswear company's supply chain, and she hopes giving workers the technology to speak out will help. With a background in corporate social responsibility at consultancy firm Accenture, Wanchoo was hired 18 months ago in a new position created by Adidas, one of the first companies to set up a role dedicated to fighting slavery. In recent years modern-day slavery has increasingly come under the spotlight, putting regulatory and consumer pressure on companies to ensure their supply chains are free of forced labour, child labour and other forms of slavery. As apparel and footwear industries rely heavily on outsourcing, sportswear companies have faced growing scrutiny. Wanchoo said Adidas had been actively working on this issue since it was revealed at the 1998 World Cup that footballs were produced by child labourers in India and companies realised they did not have control over their suppliers. Governments are now trying to tackle the problem with new legislation, such as the UK's 2015 law requiring companies to disclose how they are ensuring supply chains are slavery free. "We have found that the UK Modern Slavery Act and recent legislative action in France and Australia have helped take the conversations to the boardroom," Wanchoo told the Thomson Reuters Foundation in an interview this week in London. "My role was created to look at building relevant partnerships to continue our work on addressing potential modern slavery risks for our extended supply chain, i.e. our Tier 2 processing facilities and Tier 3 raw material sources." Slavery has emerged as a major global problem with the Global Slavery Index by the Walk Free Foundation estimating there are nearly 46 million slaves in the world. The United Nations has a global goal to eradicate forced labour and slavery by 2030 and end all child labour by 2025. Wanchoo said she was tackling the issue in various ways such as collaborating with other companies, NGOs and governments, and training suppliers about the risks of bonded labour and the impact of recruitment fees on workers.

TECH TO GIVE WORKERS A VOICE

She said Adidas was also on a major drive to encourage workers to speak up and use this information to eradicate slavery and improve workers' conditions. The company already has "worker hotlines" giving 300,000 factory workers in China, Indonesia, Vietnam and Cambodia the opportunity to anonymously ask questions, make suggestions or express concerns via text messages and smart phone applications. But the company found this was not enough, and over the past year Adidas has run a pilot project in China with apps for workers to anonymously report issues - data that is collected and then analysed. Wanchoo said the aim is to introduce such a system in all of the company's 105 or so primary factories in the next five years and then look at cascading this down to second-tier suppliers. In Turkey these worker grievance systems had uncovered concerns about child labour and reports of illegal workers from Turkmenistan, while in Asia workers had complained about abuse by supervisors, wage issues and food, she said. She added that efforts to hear directly from workers was paying off. Last year campaign organisation KnowTheChain ranked Adidas top out of 20 firms, chosen because of their size, for its efforts to eliminate forced labour and human trafficking. "We want to make it as easy and anonymous as possible for workers," said Hong Kong-based Wanchoo, whose official title is senior manager - development partnerships, social and environmental affairs at Adidas. She acknowledged this did not always go down well with suppliers who aim to keep costs as competitive as possible. "Sometimes there can be resistance from suppliers, but we work with them to demonstrate how this can help them in the long run by improving supply chain transparency, communication, productivity and worker retention," she said.

Source: Dna India

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Pakistan: Implementation of textile policy is priority of govt

The government is working to implement the textile policy 2014-15 on priority in its true spirit and for maximum benefit of the industrial sector. Ministry of Textile through implementation of the policy will provide incentives worth Rs 162 billion for the modernization and development of textile sector, a senior official of Ministry of Textile told APP here on Wednesday. “Textile sector will get Rs 162 billion out of the Rs 180 billion “Trade Enhancement Package” announced by Prime Minister Muhammad Nawaz Sharif.” The package is for a duration of 18 months starting from January 2017 to June 2018. The government had given relaxation on the import of textile machinery to enhance the capacity of the textile sector, he added. The official said that through this package cost of doing business would decrease which would lead to further boost in business activities. Replying to a question, he said, “We introduced 16 new varieties for cotton.” He said the Ministry had started a training programme for cotton growers to help them control pest and better manage crops. About 5,000 progressive farmers and workers of field extension sections of the provincial agriculture departments were initially trained to control pest and manage crops, he added

Source: Pak observer, Islamabad

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Kenya has not reneged on ban on used clothing, says official

A senior Kenyan official, who is in Rwanda for the ongoing East African Manufacturing and Business Summit, has refuted claims that her government has reneged on a regional move to progressively ban used clothing. Betty Maina, principal secretary in the Kenyan ministry of labour and EAC affairs, told The New Times that Kenya has not made a U-turn on reduction of consumption of used clothing and that East Africans should have the dignity of wearing new clothing. Maina said: “That’s the aspiration of all regional heads of state and that’s something that has been upheld. Over the last few years, all the countries have been building up their textile industry with a view to ensuring that it can supply decent and competitively priced new cloths that will replace demand for used cloths.” “Kenya has been at the forefront of this. In the last two months Kenya sold or made available to the market in Kenya and the region new clothing made in EPZs and there is great demand for those new cloths.” An Export Processing Zone (EPZ) is a customs area where one is allowed to import plant, machinery, equipment and material for the manufacture of export goods under security, without payment of duty.  Contrary to what is being alleged, Maina said Kenya seeks to expand availability of new clothing made in the country to other east African countries and it is committed to ensuring that consumers “have an affordable choice of locally made textiles so that overtime, we can completely eliminate used clothing.”

EAC interests first

“Used clothing make a large part of exports from Europe and America to east Africa and, we are aware that their lobbyists obviously have an interest in this but east African interests come first,” Maina said. She was emphatic that the communiqué of the 18th Ordinary Summit of the EAC Heads of State, held in Dar-es-Salaam, Tanzania, last weekend “clearly affirmed the commitment of east Africans to build up a competitive local textile industry” and Kenya was part and parcel of the Summit. “The Heads of State received a progress report on the review of the textile and leather sector with a view to developing a strong and competitive domestic sector that gives consumers better choice than imported used textile and footwear and directed the Council to finalise the matter and report to the 19th summit,” reads the communiqué of the 18th ordinary summit of the EAC Heads of State. Speaking on condition of anonymity as they are not allowed to speak about the issue, some regional leaders cited Kenya’s alleged caution to other partner states saying that they should refrain from using the word “ban” in the bloc’s plan to progressively do away with imports of used clothing, saying this contravenes international trade laws. Kenya’s proposal, they say, is for EAC countries to continue with their agenda and increase duties on such imports as well as set up their own production structures and capacities to make available east African-made clothing and shoes but avoid the word “ban.”  “The EAC Summit did not use the word ‘ban’ but indicated that we will progressively phase out,” the official said, explaining that the problem is being caused by the US which “has been complaining about why we are proposing a ban on used clothing and shoes.” In his remarks at the opening of the summit in Kigali on Tuesday, Dr Mukhisa Kituyi, the secretary-general of the United Nations Conference on Trade and Development (UNCTAD), had called upon the region to speak out with one voice.

‘African dignity’

Kituyi, a Kenyan, said: “Kenya, you are wrong to reverse the stand on used clothing. East Africa should speak with one voice. If you speak as a group, there is no American lobby that will say that America is suspending relations with East Africa because you are refusing used clothing.” Most importantly, Kituyi said, the region has the potential and a peace dividend to take advantage of in spurring industrial growth. Kituyi was Kenya’s minister for trade and industry between 2002 and 2007 when he faced off with Western powers on the same matter. “When I was minister for trade and industry in Kenya, the US government pushed me, as part of negotiating AGOA [Africa Growth Opportunity Act], that we should not reduce importation of used clothing,” he said. Hawkers sells second hand clothes down town .  “But I told the US trade representative at the time, Robert Zoellick, who later became president of the World Bank, ‘can you look me in the eye and tell me that in our democratic partnership, you want us to make clothing to sell to America and after you wear them and owners of those clothing die, you export them for us to wear?’ He said, ‘no, our industry demanded it but I had to explain.’” According to François Kanimba, the minister for trade, industry and EAC affairs, the EAC Secretariat has completed a study on a roadmap how the region will implement the phase out and ultimate total ban of imports of used clothing. The EAC study, he said, will be discussed at the end of the month during which they will approve a detailed strategy on how to develop textile and leather industry in the region. Rwanda has already started implementing a phaseout of importing used clothing. Lilian Awinja, the chief executive of the East African Business Council, said they have for a long time recommended the ban of usedd clothing imports. “Why would we, for example, want east Africans to use inner garments that have been used by other people? There is no logic in that,” she said. “As a region, we must make a decision and agree that we will trade with them in other products other than clothes and footwear that is used.” Christophe Bazivamo, the EAC deputy secretary-general in charge of productive and social sectors, said the “problem behind used clothing come from a complaint on the American side.” Bazivamo said: “Americans involved in used clothing business have written officially threatening to take this issue to the US Congress the argument being that people in America involved in that business are losing jobs. “They wish East Africans to stop the campaign they are in and continue using used clothing. It is disrespectful to our citizens. It is not about defending the interests of east Africans but about protecting business interests of other countries.” The bloc’s big picture is about promoting local industries with a multiplier effect on job creation and wealth creation, among others. “We export more than 70 per cent of the cotton produced in East Africa and our local textile industries are underutilised,” Bazivamo said.

Source: THE NEW TIMES

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Status Update On NAFTA

Although the situation remains fluid, all signs now point to renegotiation (as opposed to termination) of the North American Free Trade Agreement (NAFTA or the Agreement). Late last week, press reports indicated that a draft executive order declaring the intent of the United States to withdraw from NAFTA was being considered by the White House, but President Trump tweeted last Thursday morning that he agreed with his Canadian and Mexican counterparts “to renegotiate NAFTA rather than terminate.” These developments are occurring against the backdrop of increased attention on the U.S.-Canadian trade relationship in particular, on issues ranging from new duties imposed on imports of Canadian softwood lumber into the United States to barriers to access to the Canadian market for certain U.S. dairy products. Earlier communications between the White House and Congressional leaders, however, may provide some clues regarding what changes could be in store for NAFTA. In late March, a draft letter from USTR was transmitted to both chambers of Congress to express the Administration’s intent to initiate negotiations with Canada and Mexico related to NAFTA, a requirement which must be fulfilled 90 days before renegotiations may begin, and outlining “specific objectives for negotiation” (Draft Notice of Intent to Renegotiate). The White House, however, has issued statements linking communication of the United States’ formal renegotiation positions to Robert Lighthizer being confirmed by the Senate as USTR, which suggests that the Draft Notice of Intent to Renegotiate will serve as a point of departure for developing key positions. Thus, while the formal U.S. positions or specific objectives for renegotiation have not been disclosed to date, the Draft Notice of Intent to Renegotiate is nevertheless helpful to understand potential key areas going forward.

 • With respect to trade in goods, the letter indicates that the United States will seek to eliminate non-tariff barriers to U.S. exports, maintain fully reciprocal access to NAFTA country markets for U.S. textile and apparel products, and “seek to level the playing field on tax treatment.”

• With respect to rules of origin, the letter indicates that the United States will seek to ensure that the rules support production and jobs in the United States. In particular, the United States will seek to implement provisions that address circumvention to ensure that preferential duty rates apply only to goods eligible to receive such treatment under the Agreement, the letter states.

• With respect to customs matters and enforcement, the letter indicates that the United States will seek to have the NAFTA countries improve upon their WTO trade facilitation agreements, strengthen collaboration in implementing the WTO trade facilitation agreement, and terms for cooperative efforts with NAFTA countries regarding enforcement of customs rules and related issues.

• With respect to trade remedies, the letter indicates that the United States will seek to institute a safeguard mechanism to allow temporary revocation of tariff preferences where increased imports from NAFTA countries are the substantial cause of serious injury.

• With respect to anti-dumping and countervailing duties dispute settlement, the letter indicates that the United States will seek to eliminate NAFTA Chapter 19 dispute settlement panels for anti-dumping and countervailing duty determinations. The Draft Notice of Intent to Renegotiate specifically notes that this change is the result of U.S. experience where panels have ignored the appropriate standard of review and applicable law, and where aberrant panel decisions have not been effectively reviewed and corrected.  In sum, developments regarding NAFTA renegotiation are occurring at a rapid pace. U.S. manufacturers, businesses, farmers, and ranchers that are affected by NAFTA should be ready to act quickly on pursuing key priorities and negotiating objectives in the weeks and months ahead. We will continue to provide updates as developments warrant.

Source: Jd supra

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 ‘FDI can boost fashion industry Sub-Saharan Africa’

Summary: "Growth in the fashion industry of Africa can be made possible through increased FDI (foreign direct investment), education and skill development," added Helen Hai, United Nations Industrial Development Organization (UNIDO) goodwill ambassador for industrialization in Africa, and CEO of the 'Made in Africa' initiative. "Africa is a leading manufacturer of cotton and sourcing the raw material from these countries can help the fashion industry bloom in the continent," he said. Gandhinagar: India and Africa, both being cotton growing regions, can do a lot in promoting fashion industry in the African continent, said experts during a session on 'Creating Wealth through Fashionomics'.Deliberating on possibilities that can be explored to boost fashion industry in Africa, Celestin Monga of African Development Bank said that there is huge potential in the sub-Saharan countries. "Like the traditional garment business in Gujarat, African apparel, too, can be promoted to become a major fashion statement. However, to achieve this, funding and direction are required," said Monga. Gandhinagar: India and Africa, both being cotton growing regions, can do a lot in promoting fashion industry in the African continent, said experts during a session on 'Creating Wealth through Fashionomics'.Deliberating on possibilities that can be explored to boost fashion industry in Africa, Celestin Monga of African Development Bank said that there is huge potential in the sub-Saharan countries. "Africa is a leading manufacturer of cotton and sourcing the raw material from these countries can help the fashion industry bloom in the continent," he said. "Like the traditional garment business in Gujarat, African apparel, too, can be promoted to become a major fashion statement. However, to achieve this, funding and direction are required," said Monga."Growth in the fashion industry of Africa can be made possible through increased FDI (foreign direct investment), education and skill development," added Helen Hai, United Nations Industrial Development Organization (UNIDO) goodwill ambassador for industrialization in Africa, and CEO of the 'Made in Africa' initiative.

Source: TOI

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Pak economy among top performers of South Asia but challenges remain

KARACHI: Pakistan’s economy is among the top performers of South Asia with the GDP growth expected to reach 5.2 percent in FY17, a substantial increase from 4.7 percent in FY16, says the World Bank in its latest report on Pakistan. The report further said despite this strong overall growth, external and fiscal balances have deteriorated in the past nine months. Pakistan has seen a weakening of several of the macroeconomic indicators during the first nine months of FY17 that had improved as a result of the reforms implemented at federal and provincial levels during the last three fiscal years. During this period, the current account deficit has widened due to weak export performance and a marginal decline in remittances. These developments suggest that renewed attention and efforts are warranted to protect Pakistan’s hard-won macroeconomic stability. Nevertheless, Pakistan’s economic growth is expected to accelerate in FY17. In addition to the general conditions favoring economic growth across South Asia, Pakistan enjoyed increasing consumer and investor confidence, in part as a result of the successful conclusion of the IMF-EFF program. In late 2016, the country also tapped into international markets by issuing a US$1 billion 5-year Sukuk Bonds with a lower interest rate than a similar bond issued two years ago. The economy was further supported by strong domestic consumption, some recovery in agricultural production and a marginal recovery in foreign direct investment (FDI) flows. Recent debates in media have underscored flaws in Pakistan’s measurement of GDP and needed improvements. On the other hand, the economy continues to suffer from low investment and savings rates. Total investment fell by 0.3 of a percentage point in FY16 to 15.2 percent, while national savings increased by only 0.1 of a percentage point over the same period to 14.6 percent of GDP. While these rates are low, even by regional standards, multiple structural factors explain this performance. Drivers of Pakistan’s low investment rate include an uncertain security situation and the global slowdown affecting FDI. Entry and administrative barriers in various sectors and an overall high cost of doing business have also constrained investment. On the supply side, the agricultural sector, comprising one-fifth of GDP, is expected to recover to 3.4 percent growth in FY17 after contracting by 0.2 percent in FY16. Cotton production suffered a blow in FY16, falling by 30 percent due to abnormal rainfalls, pest attacks in southern Punjab and low cotton prices. As a result, discouraged farmers invested less in cotton in FY17, leading to an immediate 15 percent fall in the sowing area. Instead, plantings switched to water-intensive sugarcane, whose production is expected to increase by 9 percent in FY17. Large-scale manufacturing (LSM) has grown at 4.1 percent, slightly lower than the last year. Some sub-sectors exhibited a drag, including jute goods, cigarettes, cars. On the other hand, LSM growth was supported by sugar production, pharmaceuticals, construction-related industries, automobiles and fertilizers, which together make up over 30 percent of LSM. The services sector is the largest and most reliant contributor towards supply-side growth with its share in GDP reaching about 59 percent in FY16. The sector itself is expected to grow by 5.6 percent in FY17, a similar rate to the 5.7 percent growth in FY16. Growth in the sector remains healthy due to the recovery in agriculture and steady growth in industrial activity, and is supported by the transport sector. Specifically, the largest sub-sector within services, wholesale and retail trade will benefit from a significant increase in sugar production and slight cotton recovery combined with an expected boost in LSM in the second half of FY17. Transport is also expected to grow based on higher sales and imports of commercial vehicles and petroleum products in addition to the additional demand created by CPEC.

Source: The News

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Switzerland-Textile machinery segments shipments vary in 2016: report

Shipments of new textile machinery segments in 2016 vary, according to the 39th annual International Textile Machinery Shipment Statistics (ITMSS), by the International Textile Manufacturers Federation (ITMF). The report covers six segments of textile machinery, namely spinning, draw-texturing, weaving, large circular knitting, flat knitting, and finishing. Deliveries of new long-staple spindles and open-end rotors soared by nearly 111 per cent and 66 per cent, respectively from 2015 to 2016. The number of shipped short-staple spindles decreased in 2016 by 12 per cent compared to the previous year. The number of shipped draw-texturing spindles fell by 14 per cent and shipments for new circular knitting machines by 3 per cent year-on-year. In contrast, deliveries of electronic flat knitting machines soared by 99 per cent in 2016. In the segment of finishing machines (fabrics continuous), the number of stenters increased in 2016 year-on-year by 22 per cent. Shipments to China, the world’s largest investor in open-end rotors, increased its investments significantly by around 92 per cent in 2016. In contrast, regions such as North America and South America recorded annual percentage declines of 72 per cent and 53 per cent, respectively. The world’s second and third largest investors in 2016 were India and Turkey. Global shipments of single heater draw-texturing spindles (mainly used for polyamide filaments) jumped by 608 per cent from over 1’200 in 2015 to nearly 8’500 in 2016. With a share of 57 per cent Asia is the region where most of the single heater draw-texturing spindles were shipped to, followed by Western Europe with a share of 24 per cent and South America with a share of 19 per cent. In the segment of double heater draw-texturing spindles, global shipments fell by 17 per cent on an annual basis to over 268’000 spindles. Asia’s share of worldwide shipments amounted to close to 84 per cent. Thereby, China remained the largest investor accounting for 58 per cent of global shipments. In 2016, worldwide shipments of shuttle-less looms increased by 4 per cent to 84’700 units. Thereby, shipments of air-jet and water-jet shuttle-less looms increased by 15 per cent (to 22’900) and by 6 per cent (to 31’800), respectively. In contrast, rapier/projectile shuttle-less looms decreased by 6 per cent to around 30’000 units. Global shipments of large circular knitting machines fell slightly by 3 per cent to a level of around 26’200 units in 2016. Also for this category, Asia is the world’s leading investor. 87 per cent of all new circular knitting machines were shipped to Asia in 2016. With 43 per cent of worldwide deliveries, China was the single largest investor. India and Bangladesh rank second and third with 4’200 and 2’200 units, respectively. In 2016, the segment of electronic flat knitting machines soared by 99 per cent to around 139,600 machines, the highest level ever. Asia received the highest share of shipments (94 per cent). China remained by far the world’s largest investor for flat knitting machines in 2016. Thereby, Chinese investments increased from 35’500 units to 101’550, a global share of 73 per cent. In the segment fabrics continuous shipments of some machine types increased in 2016 like dyeing-lines (CPB), sanforizing/compacting machines or stenters. In contrast, shipments of washing machines (stand-alone), bleaching-lines, mercerising-lines and relax drying/tumbling machines decreased. In the segment fabrics discontinuous shipments of air-jet dyeing and jigger/beam dyeing machines fell, whereas those of overflow dyeing machines rose.

Source: Fibre2fashion

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China gets a double dose of caution from Moody's, MSCI

For all the verbiage from Chinese officials on the need to rein in leverage and open markets to global investors, the nation’s leadership got a double dose of caution on Wednesday. Moody’s Investors Service unveiled a surprise downgrade of China’s sovereign credit rating, citing concerns about its continued buildup of debt. Earlier, the head of one of the world’s top stock-index compilers suggested China had more work to do to get its onshore stocks into emerging-market gauges. With a June 20 deadline looming, “there’s still a lot of issues to resolve,” MSCI Chief Executive Officer Henry Fernandez said. Underlying the critique from both: Issues stemming from the Chinese leadership’s preoccupation with control. Few analysts expect painful reforms to be unleashed ahead of the Communist Party’s leadership reshuffle due later this year. While officials preach the need to rein in credit, ensuring the economy hits a 6.5 per cent growth target remains the top priority. Moody’s highlighted that policy makers are fixated on economic growth targets, meaning already-high leverage will continue to build. For MSCI, concerns include authorities placing restrictions on financial products abroad that would incorporate Chinese stocks. “Today’s downgrade is yet another sign of the challenges faced by China,” said Luc Froehlich, Head of Investment Directing, Asian Fixed Income, Fidelity International. The broader takeaway: While the country isn’t likely to face an outright financial crisis given the still-solid expansion rate, it remains some distance from winning a place on the global financial stage commensurate with its status as the world’s No. 2 economy. But there’s a silver lining: With capital controls in place and markets still somewhat walled off, authorities enjoy the freedom of not having to rely on foreign funding — unlike their counterparts in places like Brazil. MSCI, which has three times rejected including Chinese onshore stocks in its indexes, is due to unveil its latest decision on June 20. Fernandez outlined a number of continuing concerns, with time running out. Moody’s said one reason why it anticipates leverage will continue to climb is “because economic activity is largely financed by debt in the absence of a sizeable equity market and sufficiently large surpluses in the corporate and government sectors.” China’s total debt burden is 258 percent of gross domestic product, the latest Bloomberg Intelligence estimate shows. “The combination of slower growth and higher debt poses some contingent liabilities for the government,” Marie Diron, an associate managing director at the sovereign risk group at Moody’s, told Bloomberg Television. President Xi Jinping’s ultimate goal is to raise China’s international profile across the board — as a champion of globalisation and a financier of development along old Silk Road routes across Eurasia. Another element has been winning reserve-currency status for the yuan, and authorities have increasingly opened up the bond market to outside investment as part of that initiative. Yet the yuan’s share of global payments via the SWIFT system slumped to 1.8 per cent as of March 31 from as high as 2.8 per cent in August 2015. One measure of global central banks’ share of reserves held in yuan came in at 1.1 per cent at the end of 2016. Another rejection by MSCI on A-share inclusion this year would serve as a reminder that China’s ambitions have some ways to be fulfilled.  Many policy makers around the world have faulted the ratings companies for their sovereign-grade methodology, including the US. The sovereign downgrade comes at a bad time as China seeks to open its bond market to foreign investors by making it easier to invest in its domestic market through Hong Kong. It will likely make it harder to lure foreign capital, especially given the slow pace of structural reforms, according to Bloomberg Intelligence Economist Tom Orlik. “Progress remains faltering and in some respects movement is in the wrong direction,” said Orlik. “The inefficient state sector is expanding as a share of GDP. Economy-wide leverage continues to increase, with credit growth outpacing GDP by a significant margin.” To be sure, China’s reliance on foreign funding isn’t large — external debt is around 12 per cent of GDP according to the International Monetary Fund. And foreign ownership of Chinese bonds is low, standing at around 3 per cent compared with an average of up to 30 percent for other emerging markets, according to Investec Asset Management. Still, the Moody’s move highlights China need to implement painful reforms to put its economy on a more sustainable footing. While authorities have promised to rein in financial risks, cheap credit continues to gush through the economy. And there are pockets of the bond market with foreign exposure, such as the latest rush of dollar debt from property developers. For foreign investors, the balancing act between implementing reforms and ensuring growth targets are met means a continuing air of unpredictability, said Hao Hong, Hong Kong-based chief strategist at Bocom International Holdings Co. “The domestic Chinese market works differently from the global markets that foreign investors are accustomed to,” he said.

Source: Business Standard

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