Orders are drying up for textile exporters because of rupee appreciation relative to the dollar and the weakening of competing currencies such as the euro and the Chinese renminbi. This comes at a time when the Indian textile sector, the country’s second-largest employment generator, is facing pressure because of the introduction of the goods and services tax (GST) and increased global competition.With their global peers becoming competitive owing to their depreciated currencies, Indian textile and apparel exports are becoming costlier, leading to a gradual shift in orders to other parts of the world. "We have begun quoting three to five per cent higher prices after the rupee appreciated. This is turning away overseas buyers," said Premal Udani, chairman and managing director, Kaytee Corporation, and former chairman, Apparel Exporters Promotion Council (AEPC). In the past one year, the rupee has risen to 64.15 against the dollar from 66.8 levels last August. The rupee has risen almost six per cent (4.15 per cent year- on-year) this year against the dollar. This is in contrast to six consecutive years of depreciation. The textile and clothing (T&C) industry exports goods worth around $50 billion, and gets most of the payment in dollars. Worst-hit among these would be the apparel industry, which has hardly seen growth in its $17-billion exports. The rise in the rupee against the greenback comes at a time when export margins in apparel are two to four per cent in dollar terms. T Thirukumaran, managing director, Estee Exports, said that in the past two months his company had started feeling the pressure due to rupee appreciation. With increased competitiveness due to weakened currencies, competing nations like Bangladesh and China have cut rates further, thereby attracting more buyers. Estee Exports has seen its overseas buyers seeking better rates from the company. Industry sources say that goods from Bangladesh, Sri Lanka, and a few other countries are at least 10 per cent cheaper than in India. While exporters have resorted to hedging against currency volatility, textile and apparel companies say the impact would be higher if the rupee sustains at the current levels. "So far there has not been much impact on us due to hedging. If the currency continues to remain at these levels, there could be impact in the medium term," said Jayesh Shah, director, Arvind Ltd. Thirukumaran says most players are unable to hedge beyond a period. "One can hedge for three to six months, for which premium is not so high. You cannot hedge for a year because we cannot predict orders for a year," he said. Thirukumaran's views find support in the knitwear hub of Tirupur, a tiny town in the southern part of Tamil Nadu and a textile-sourcing hub for multinational majors starting from Walmart to Ralph Lauren, Diesel to Tommy Hilfiger, and H&M to Marks & Spencer for decades. The town has strong trade links with the US and European markets for long. Tirupur exports textiles worth more than ~25,000 crore annu- ally, nearly 55 per cent of which is in dollars. The average export rate per garment tends to be $2.5-3. While some companies have hiked their prices by three to four per cent, A Sakthivel, chairman of Poppys Group and regional chairman of the Federation of Indian Export Organisation (FIEO), stated that the hike needed to be around seven per cent to compensate for the losses from currency fluctuation. The other setback in hedging for textile and apparel exporters, said Sakthivel, is that at 30 per cent, forward contracts form a smaller share, while revised rates and spot negotiations account for the balance 70 per cent in equal measure. Rupee appreciation comes at a time when there are concerns about availing of incentives and drawbacks after September 30 under the new GST regime. Exporters are still seeking clarity on duty drawbacks, which could help them pass on benefits by one to two per cent to overseas buyers. Further, pressure could rise for Indian exporters once Vietnam's FTA (free trade agreement) with the European Union (EU) comes into force in January next year. For this, Vietnamese exporters are likely to begin taking orders from October. Similarly, Sri Lanka has also bagged concession from the EU whereby it need not attract customs duty.
Source: Business Standard
Source : Economic Times
Source : Economic Times
The cotton production is likely to increase by 3.76 per cent to 345 lakh bales in 2016-17 as compared to the last year, mainly due to better yield, a top central government official on Friday said. One cotton bale weighs 170 kg. "This year we are expecting a better crop compared to the last year due to better yield even though the area (under cultivation) has dropped significantly." "We have estimated 345 lakh bale cotton output during 2016-17," Textile Commissioner Kavita Gupta told reporters here after the second meeting of the Cotton Advisory Board. The total production in 2015-16 stood at 332 lakh bales. The cotton marketing year runs from October to September. The production is also expected to increase as there were less pest attacks, including white fly in Punjab, Haryana and pink ball worms in Gujarat, Gupta said, adding in 2017-18 the total output is likely to grow in double digit. The area under cotton plantation is estimated to decline to 108.45 lakh hectares from 122.92 lakh hectares in the previous year, the textile commissioner said. However, she said the area under cotton is expected to increase to 119 lakh hectares, or even more, in 2017-18 due to effective government intervention. "We are expecting the area to increase under cotton as the monsoon was on time and farmers got a better price for their crop. So some area under pulses was diverted to the cotton crop. There was a lot of efforts by the government," she added. The area under indigenous variety has increased and acreage under Bt Cotton has slightly declined, she said. "The Indian Council of Agricultural Research has also come up with more native varieties, which are equally good in yield. Once they are commercialised in 2017-18, the area under the indigenous variety will grow even more," she added. Total yield is estimated to grow by almost 20 per cent to 540.80 kg per hectares in 2016-17 from 459.16 kg per hectares in 2015-16. "The yield is estimated to be better in almost all cotton producing region except Tamil Nadu, where it declined significantly due to moisture stress," Gupta said. The total exports is estimated to have declined to 60 lakh bales during 2016-17 from 69.07 lakh bales in 2015-16. She said till May the shipments to Bangladesh constituted 40 per cent of the total exports, while it has shrunk drastically to Pakistan, which witnessed a bumper crop.
Source: Money control
Cotton imports may be higher during the current season (October 2016 to September 2017), said the Cotton Advisory Board. In October 2016, the board estimated imports at 17 lakh bales revising the same to 26 lakh bales on Friday. “We are almost at the end of the current season and usually cotton prices will be increasing on a weekly basis at this point of time,” said J. Thulasidharan, chairman, Confederation of Indian Textile Industry. “But, this year, the prices are reducing. This is because the cotton position is comfortable in the country. Imports are up this year,” he said. The board expects the total cotton production in the country during the current season to be 345 lakh bales and consumption by textile mills to be 294 lakh bales. The mills are under financial stress for the last two or three years. With demonetisation and implementation of GST, the industry is hit and the demand for cotton yarn is expected to revive only after Diwali. Cotton yarn exports to China have also come down. All this have reduced cotton consumption by the textile mills, say industry sources. Cotton exports during the current season is expected to be totally 60 lakh bales, according to the Cotton Advisory Board.
Source The Hindu
In a major benefit for famers, the desi variety of Indian cotton seed is rapidly replacing Bt cotton seed which farmers adopted in a big way this kharif season. Developed by the Central Institute for Cotton Research (CICR), Nagpur, the desi cotton variety has the potential for much higher yield than Bt cotton and also the benefit of weeds and pests resistance. Introduced early this century, Bt cotton crop has witnessed an intermitted pest attacks which according to Kavita Gupta, Textiles Commissioner, Ministry of Textiles, damaged cotton crops in a significant way in Punjab and Haryana in 2015-16. “India has commercialized desi cotton variety which has potential for much higher yield than Bt cotton and also benefits of pests and weeds resistance capability. Also, the desi variety is longer staple in nature which might replace some quantity of long staple cotton. Thus, the desi variety offers better realization than Bt and other conventional varieties of cotton. Consequently, farmers are aggressively adopting desi variety of cotton seeds,” said Gupta on the sidelines of the second Cotton Advisory Board (CAB) meeting here on Friday. Gupta, however, did not give any specific figure of the potential for increase in yield of desi variety and also area shifted this year under this newly launched local variety of hybrid cotton seed. She, however, confirmed that the desi variety of cotton would get greater traction from farmers in coming years with proportionate decline in the significance of Bt cotton area. The development assumes significance as cotton crop has witnessed intermittent attacks of whitefly and pink ballworm attacks. Two of the last three years i.e. in 2015-16 and 2017-18 (current season), whitefly attacks have been reported in Punjab and Haryana in addition to pink ballworm attacks in Gujarat, Maharashtra, Madhya Pradesh. Andhra Pradesh and Telangana. But, cotton output for the crop year 2017-18 (October–September) is estimated to increase in double digit due to a sharp increase in acreage. Data compiled by the Ministry of Agriculture showed 18 per cent increase in India’s cotton acreage until mid-August. The CAB in its second Advanced Estimates projected India’s cotton output at 34.5 million bales (1 bale = 170 kgs) for the crop year 2016-17 despite 11 per cent decline in acreage to 10.84 million ha. For 2017-18, however, Gupta estimates acreage to remain at 11.9 million ha. “There are reports of pink ballworm attacks in cotton crop in Gujarat, Maharashtra, Madhya Pradesh and whitefly attack in Punjab and Haryana. But, better crop management and efficient protection mechanism would reduce its impact on the productivity this year,” said Gupta. Meanwhile, Bangladesh has replaced Pakistan in terms of cotton import from India with over 40 per cent of market share so far this year. China is likely to remain India’s second largest cotton destination in 2016-17. With apprehensions over cotton availability in 2016-17, India’s cotton exports are likely to decline this year (2016-17) to 6 million bales compared to 6.9 million bales for 2015-16.
Source: Business Standard
Punjab’s agriculture department on Friday informed the Chief Minister that merely 18.1 hectares of area out of the total 3.82 lakh hectares under cotton cultivation had been damaged by whitefly. The report was read out to CM Amarinder Singh during a meeting organised on Friday to take stock of situation after whitefly attack on cotton, said a government statement. The report stated that in Bathinda, the affected area was a mere 3.6 hectares out of the total 1,40,000 hectares, 10.2 hectares out of 86,010 hectares in Mansa, and 1.6 hectares out of 64,608 in Sri Muktsar Sahib. In Fazilka, damage due to whitefly was just 2 per cent out of total 74,655 hectares and 0.7 per cent of the 5460 hectares in Barnala. No loss was reported due to whitefly infestation in Sangrur, Faridkot and Moga. The CM has asked the Agriculture Department to adopt plots with cotton crops damaged by whitefly in every village of the four districts of Mansa, Bathinda, Sri Muktsar Sahib and Fazilka, which collectively account for the highest production of cotton in the state. He directed the department to use these plots as demonstration farms to educate farmers about Integrated Pest Management, said a statement.
Source: The Indian Express
Hyderabad: In a major boost to the textiles and apparels sector in Telangana, the State government announced Telangana Textile and Apparel Incentive Scheme 2017, providing a slew of capital and operational incentives for textiles and apparels industries to be established in the State. The incentives will be applicable for both new industries as well as existing units for the next five years. As per the orders issued by Industries Principal Secretary Jayesh Ranjan on Friday, the incentives will provide towards Capital Assistance, Operational Assistance, Infrastructure Support, Capacity building and Skill development Support, and also Fibre to Fabric incentive. For units established with an investment of Rs 200 crore or above or providing more than 1,000 jobs, the incentives will be customised further. A capital subsidy of 25 per cent will be provided for conventional textile industries and 35 per cent for technical textiles industries involved in production of medical textiles, geotextiles, agrotextiles, and protective clothing among others. An additional capital subsidy of five per cent will be provided to units promoted by SC/ST entrepreneurs or persons with disability (PWD). A capital incentive of 20 per cent of cost of plant and machinery up to Rs 5 crore per unit, will be provided to existing units for modernisation and adoption of advanced technologies. An additional rebate of five per cent will be extended on capital investment and power, for industrial units with start-to-finish production chain comprising production of textile fibre to fabric as an integrated family.
Power subsidy
Similarly, an operational assistance of up to 75 per cent will be extended towards interest rates, against loans availed for establishment of these units over a period of eight years. Power subsidy ranging from Rs 1-2 per unit will be provided depending on the size of each industry up to five years. The government will reimburse 100 per cent of stamp duty paid for land purchase or lease. Further, GST collected on end product within value chain, will be reimbursed 100 per cent for a period of seven years. Towards infrastructure support, the government will allot land with rebate up to 50 percent on land cost for major industries or 25 per cent rental subsidy on built-up space owned by TSIIC for MSME units. Subsidies will be provided on industrial water supply, environmental conservation infrastructure, and infrastructure like roads, power and water. Under Telangana State Skills Development Mission, the government will provide subsidies towards capacity building and skill development support to facilitate reputed institutions involved in textiles-related training programmes to set up their permanent centres in the State.
Long staple cotton
Telangana is known for its production of long staple cotton, with an annual production of about 60 lakh bales. However, processing and value addition to cotton in the State is largely limited to ginning and pressing. Roughly 10 lakh bales are utilised by the 35 spinning mills having a capacity of 9.3 lakh spindles located within the State. Primary processed cotton from Telangana is being exported to states like Gujarat, Maharashtra, Tamil Nadu and Andhra Pradesh for further value addition. Lakhs of textile workers employed in well-established clusters in the country like Surat, Bhiwandi, Sholapur and Ichalkaranji are natives of Telangana, with rich experience. The Telangana government has decided to explore rich opportunity in textiles and apparel industry with sector-focused comprehensive incentives framework for the industry, with an aim to attract investments as well as create employment opportunities. The objective is also to encourage investments in downstream processing activities focusing on spinning, weaving, knitting, processing and garment manufacturing including made-ups within the State. In addition to encouraging new units, the incentives are also aimed at supporting the existing units for their modernisation and expansion as well as marketing and promotion activities. However, the government will terminate approvals granted and recover monetary value of accorded incentive in case these industrial units fail to provide a fair and decent wage to the workforce.
Source: Telangana Today
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 49.06 per barrel (bbl) on 17.08.2017. This was lower than the price of US$ 49.80 per bbl on previous publishing day of 16.08.2017. In rupee terms, the price of Indian Basket decreased to Rs. 3151.91 per bbl on 17.08.2017 as compared to Rs. 3199.45 per bbl on 16.08.2017. Rupee closed at Rs. 64.24* per US$ on 17.08.2017. The table below gives details in this regard:
|
Particulars |
Unit |
Price on August 17, 2017 Previous trading day i.e. (16.08.2017) |
|
Crude Oil (Indian Basket) |
($/bbl) |
49.06 (49.80) |
|
(Rs/bbl) |
3151.91 (3199.45) |
|
|
Exchange Rate |
(Rs/$) |
64.24* |
* RBI reference rate for 17.8.2017 is not available. Therefore reference rate of 16.08.2017 has been considered.
The Apparel Export Promotion Council (AEPC) has urged the Indian Government to clear the confusion over minimum wages for the garment sector after the wage code bill was cleared by the cabinet in July and clarify that the minimum monthly wages are not going to be fixed at Rs 18,000. A clarification will restore the confidence of foreign buyers, it said. The confusion has affected booking of export orders, AEPC chairman Ashok G Rajani wrote to the textile ministry, according to a press release from the council. Incorporated in 1978, AEPC is the official body of apparel exporters in India that assists exporters as well as importers abroad who choose India as their sourcing destination for garments. The cost of wages in the garment export sector is around 30 per cent of freight on board (FOB), the highest by any standard and the apparel industry is passing through a challenging phase due to slowdown of world economy, feels APEC. Doubling the minimum wages from the present about Rs 9,000 per month will make garment manufacturing unviable and unsustainable and affect employment in the sector, said APEC. Moreover, it will have an adverse impact on women as around 70 per cent of the workforce in readymade garments Industry is women. The percentage raise in the monthly minimum wage will be close to 250 in many states where readymade garment exports are concentrated. Garment exports in July 2017 registered a negative growth of 11.86 per cent in dollar terms compared to July 2016.
Source: Fibre2fashion
Turkish ministry of economy has announced imposition of provisional anti-dumping duty on partially oriented yarn (POY) with HS code 5402.46 imported from seven countries—China, India, Malaysia, Indonesia, Taiwan, Thailand and Vietnam. The ministry said that the volume of imported POY increased considerably during January 1, 2010 to December 31, 2016. The ministry had launched a preliminary investigation in February this year following a petition from Korteks Mensucat ve Sanayi Anonim Sirketi company. According to the data obtained from Turkish Statistical Institute, it was determined that POY imports had increased considerably, especially after 2010, the ministry said in an official communiqué. The share of Turkish POY imports from the above mentioned seven countries was 99.1 per cent in 2014 and 2015, and it was 99.2 per cent in 2016. In terms of volume, it has increased from 159,960,807 kg in 2010 to 295,789,479 kg in 2016. The anti-dumping duty on POY from India, Taiwan, Thailand and Vietnam will be 10.15 per cent, 14.3 per cent, 18.85 per cent and 36.28 per cent respectively. The duty on import of POY from China, Indonesia and Malaysia would be levied at $263 per ton, $120 per ton and $138 per ton respectively, the communiqué said. These duties will remain in effect until the final decision on the investigation is announced.
Source: Fibre2Fashion
ISLAMABAD: Turning down the request on the part of textile exporters, private banks have refused to reschedule loans for the revival of sustainable sick textile units. The revival of textile units running under capacity was aimed at increasing the exports in the textile sector. Talking to Pakistan Today, Senate Standing Committee on Textile Chairman Senator Mohsin Aziz said that banks refused to consider the direction of the standing committee and request of members of All Pakistan Textile Mills Association (APTMA) for restructuring loan for around 35 textile units. “We had asked the banks through State Bank of Pakistan (SBP) to revive the sick units which, in case of revival, could earn over $1 billion in foreign exchange and create five million jobs. However, according to SBP, the private banks are not willing to accept the proposal of textile sector,” he said. The revival existing units were much needed at a time when exports have declined from $25 billion to $20 billion in the last four years. “We may further contact SBP in near future for providing at least required working capital to the textile units,” he said, adding that the functioning of the existing machinery would also help in taking maximum benefit from GSP Plus facility from the European Union. On the other hand, Hassan Iqbal, Textile ministry secretary (now division after its merger with the ministry of commerce) told Pakistan Today that the government had supported some textile units for revival. “A large number of machinery were installed when there was high demand in past without keeping in view the long term feasibility of such units. A revival of few units is not the solution since the old machinery are not cost effective,” he said, adding that the exporters instead of running the de-rated machinery should opt for the latest machinery. According to him, the older machines consume 40 per cent more power than the latest basic textile machines. New machines produce more with only 33 per cent of the workforce needed in older machines. The cost of energy came substantially down in 2016. The textile industry in Punjab was completely dependent on the state supplied 18 hours per day of uncertain power and average six hours natural gas supply during summer in 2015. According to sources, the revival of only local textile units in Faisalabad could help getting $1 billion foreign exchange. Owners of these units have spent billions of rupees on its infrastructure and machinery and are in a position to start operation as soon as the running finance is made available. However, a major bottleneck was the prudential regulations of the SBP as the banks are not giving loans to these units because of Non-Performing Loans (NPL) Clause. An SBP spokesperson had earlier informed Pakistan Today that a meeting of the Senate Standing Committee on Textile was held on January 03, 2017 at the SBP to discuss rescheduling, restructuring of defaulted loans of sick textile units. In the meeting, it was decided that SBP will be playing a facilitating role and will oversee whether the restructuring decisions are taken on merit. A senior SBP official will serve as a focal person to facilitate the restructuring of defaulted loans of the textile units. In this regard, preliminary meetings with representatives of textile mills and banks have already been held, advising the banks to only consider restructuring of those units which can be revived on a sustainable basis.”
Source: Pakistan Today
The Dutch Government and several industry organisations, trade unions and NGOs concluded an agreement in July 2016 on International Responsible Business Conduct (IRBC) in the garments and textile sector to fight discrimination, child labour and forced labour, to reduce the negative impact of their activities on the environment and to prevent animal abuse. Sixty-four business establishments representing about 80 different clothing and textile brands have signed the agreement so far, representing more than 35 per cent of all textile business units in the Netherlands. The aim is to make 80 per cent of all businesses in this sector in the country to sign by 2021, according to the IRBC website. The agreement will remain in effect for a five-year period. The participating business entities seek to reduce the amount of water, energy and chemicals they use and produce less chemical waste and waste water. For the first time ever, businesses as a group will state which factories produce their clothing. The trade unions and NGOs involved will support with their expertise and networks and will involve their local partners in implementing the programmes. An independent disputes committee has been appointed with the power to issue binding rulings. Facilitated by the Social and Economic Council of the Netherlands (SER), the agreement addresses issues that cannot be resolved by one business acting alone and focuses on collective projects and cooperation, increasing the chances of success. The agreement represents the Dutch approach to the Organisation for Economic Cooperation and Development (OECD) guidelines for multinational enterprises promoting international responsible business conduct.
Source: Fibre2Fashion
ZHENGZHOU - Cotton yarn futures, the first commodity futures contracts launched in China since 2016, have entered trading on the Zhengzhou Commodity Exchange (ZCE) in central China's Henan Province Friday. Fluctuations in cotton yarn prices have a direct impact on the profit and cost of upstream and downstream firms in the textile industry, which is a pillar industry of the national economy. The new futures contract will help investors mitigate risks of price volatility by obligating them to buy or sell cotton yarn at a predetermined price at a specific time. Cotton yarn futures, as well as cotton futures and PTA futures, have formed a relatively complete futures system for textile raw materials, demonstrating a step forward for ZCE to build a global textile products futures trading and pricing center, said Chen Huaping, director of the ZCE. The ZCE has launched 17 types of futures and one variety of options, covering agriculture, energy, chemical engineering and building materials.
Source: Xinhua
Mouvent, a joint venture between Bobst and Radex focused on digital print using pioneering digital technology, has unveiled the ground-breaking expertise behind its range of innovative digital printers. The Mouvent Cluster is a radical approach, which uses clusters instead of fixed size print bars by colour, arranging them in a modular, scalable matrix. The cluster technology was developed by Radex, a start-up company owned by multiple stakeholders with a long track record in the field of DOD inkjet digital printing. Radex and Bobst created Mouvent as a joint venture in June 2017. The cluster technology is the centrepiece of revolutionary new machines developed by Mouvent for a wide variety of markets such as textile, labels, corrugated board, flexible packaging, folding carton, and more. Mouvent has already revealed some of their machines including the 8-colour digital textile printing machine TX801. It is associated with the highest print resolution of up to 2000 dpi and the highest productivity in the market with an output of up to 200 square metres/hour, at the lowest cost per square metre produced. Mouvent has also announced its first range of label printing solutions, which include two all-new, high speed 7-colour UV ink printers (LB701-UV and LB702-UV) and a water-based ink digital inkjet label printer in the narrow web segment. With single-pass machines like these, the substrate is running through at up to 100 metres/min below the fixed clusters, at one colour per cluster. Each Mouvent Cluster prints up to 170 millimetres wide. Additional clusters can be added in theory without any limit. Therefore, whatever the substrate width, the technology can be adapted accordingly. With 10,000 operating hours, the life cycle of the cluster is extremely long. They are also very light in weight, at around 1.8kg, and can be easily replaced. Beyond their digital printing presses, Mouvent offers a fully integrated, complete solution – it develops, engineers, tests, and industrialises digital printers based on the Mouvent Cluster, it writes the software around the printers, develops inks, and coatings for various substrates, as well as providing a full servicing offering. The company is promising a new standard in inkjet label production cost and quality, in ink pricing, head durability, quality, and machine performance.
Source: Fibre2Fashion
