The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 03 NOV, 2017

NATIONAL

INTERNATIONAL

Indian textile companies told to promote Brand India

Hyderabad: Federation of Indian Exporters’ Organisation (FIEO) has called for exploring UAE platform for re-exports to Western world, while advising Indian textile companies to promote ‘Brand India’ in overseas markets. Vipul, Consul General of India, Dubai, said Indian textile companies should explore Dubai platform to boost their business volumes.

Speaking at Indian pavilion during International Apparel and Textile Fair, 3-day global fair opened on Wednesday, at Dubai World Trade Centre in Dubai, Vipul said: “Indian companies and businesses have benefited from leveraging Dubai’s position as supply market to the Gulf and other region. While referring to Indian Textiles sector, he said that India is positioning herself as high fashion and quality garments exporter in the region and there is huge potential to promote ‘Brand India’ in UAE and other markets in the region.” FIEO-led 112-member business delegation comprising of 51 leading manufacturer exporters from textile and apparel industry from India is participating in the global fair.

Source: Hans India

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Need to streamline process of standardization: Textiles Secy

Secretary, Ministry of Textiles, Anant Kumar Singh has underlined the need to streamline the process of standardization for faster development of the standards in the area of technical textiles and to develop the sector indigenously and fulfil the domestic requirements. It was imperative for the stakeholders, including industry, policy makers and research institutes to work in close collaboration and also suggest ways to make the process of developing standards for technical textiles faster, said Singh in New Delhi on Thursday. He also said that the Government will soon launch the new mission for technical textiles. The earlier mission has completed its period. Inaugurating the third edition of National Conclave on Standards on Technical Textiles organised jointly by the Ministry of Textiles, Bureau of India Standards (BIS) and FICCI, Singh said that eight committees had been formed at the Centre of Excellences in India to expedite the process of developing standards. These committees including industry representatives help in identifying the areas in which needed standards needed to be formulated. India had the capability, resource and market in the area of technical textiles and the need was to capitalize on these strengths. The conclave since its inception has been instrumental in bringing together institutional buyers in various segments along with industry to discuss the standards that needed to be formulated by BIS on priority. Singh said that the market of technical textiles was expanding rapidly with new products being added by the users in various industries. Thus it was imperative to formulate standards to accelerate the growth of the textiles sector. He added that the share of technical textiles in the domestic textile sector as well as at the global level was very low as compared to developed countries and this needed to be addressed. Surina Rajan, Director General, BIS said that in exports, India has to move to more value added products and textiles were no exception. There was a need to at least double India’s volume of production and exports. BIS has a supportive role in terms of standard setting which facilitates industry. Since 2014, BIS has added 104 Indian standards to the pre-existing number of 190 standards for this sector. Currently, the focus is on 45 new technical textile subjects. For moving fast and doing useful work, she called upon the stakeholders to participate actively in the standardization work. Shishir Jaipuria, Chairman, FICCI Textiles Committee, said that standardization was a pre-requisite for mandatory use of technical textiles, wherever necessary. Mandatory use of fire retardant textiles in public places like multiplexes, malls, public buildings, etc., will go a long way in increasing safety of the public at large. Similarly, promoting the use of new medical textile and hygiene related technical textiles will contribute immensely to the health and hygiene in hospitals and would reduce cross infections considerably.

Source: SME

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India: Embedded Tax And The Apparel Sector

Introduction –

The textile and apparel sectors can be referred to as one of the backbones of the Indian economy. It is the single largest instrument based on consumer needs, right after food. The sector is the second largest employer after agriculture with direct employment of over 5 crore and indirect employment of over 6 crore people. Its share of GDP and exports are 6% and 13% respectively. The apparel sector in particular is the most labour intensive sector in the manufacturing industry. When it comes to comparison with two other sectors of proportionate size, it is 80-fold more labour intensive than the automotive industry and 240-fold more intensive than the steel sector.

Present State of Embedded Tax in India –

In the wake of the new GST scheme, the exporters of garments in India are facing uncertainty and dilemma as the government decided to slash duty drawback to 2 percent from 7.5 percent with effect from October 1, 2017. This new step taken by the Government has brought nation-wide unrest and commotion among the exporters. The new rate is considered a direct slap to the already struggling Micro, Small and Medium Enterprises (MSMEs) because of the high duties imposed by foreign countries and the competition it is facing from neighbouring countries like Bangladesh and Sri Lanka. With just 2% as the drawback rate, it would be a Herculian task for the MSMEs to compete and export.In its effort to tackle this latest challenge faced by the textile and garments industry, the Apparel Export Promotion Council (AEPC), before the commencement of the GST Council's meeting on October 6, 2017, has urged the Indian government to address the refund of embedded taxes on exports of textiles and garments. These taxes also include the levies on cotton, electricity, and input tax credit restrictions for man-made fibres used in textiles and purchases made from unregistered dealers. It is the contention of the industry as a whole that the drawback rates at which the Government is planning to operate is not in the best interest of the industry nor the economy. It is expected that such meager drawbacks will definitely lead to a sharp decline in the rate of exports from the nation as a whole. Further, bear in mind that Indian exporters pay 10% duty to have access to the European markets.1 The rupee overvaluation is yet another factor, which has been haunting the export business and above all this; a new low duty drawback rate means disaster for majority of the MSME units in the apparel exports.

Conclusion –

The only reasonable approach at this point would be to keep up with the previous drawback rate in order to help the smaller industries prevail in the international market. But if there is no turning back, it would be favorable if the Government at the least hold the previous rate until the end of the current Financial Year. This would to an extent provide certain amount of time (even if it is not sufficient) for the industry to prepare itself for the new rate.

Footnotes

1 http://madb.europa.eu/madb/euTariffs.htm

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Source:  Mondaq

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Huge biz opportunities for textile, apparel in UAE: FIEO

The sector employs over 35 million people directly and accounts for 21 per cent of the total employment generated in the economy, it added. Exporters body FIEO today said huge business opportunities exist in the UAE for domestic textile and apparel sector. It said in a 112-member business delegation from the sector is participating in the 'International Apparel & Textile Fair' (November 1-3) in Dubai. India is UAE's largest trading partner and export to the Emirates in 2016 touched $32 billion, FIEO (Federation of Indian Export Organisations) said in a statement. A Sakthivel, Regional Chairman, FIEO Southern Region said India and the UAE need to work together in textile segment to promote trade of high quality products. It also said India earns around 27 per cent of the foreign exchange from export of textiles. The sector contributes about 14 per cent of the total industrial production of India. The sector employs over 35 million people directly and accounts for 21 per cent of the total employment generated in the economy, it added.

Source: The Economic Times

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8 panels to help Centre set standards for technical textiles

NEW DELHI, NOVEMBER 2: To expedite the process of developing standards for the technical textiles sector, eight committees have been formed at the Centre of Excellences in India to help identify the areas in which standards needed to be formulated, said Textiles Secretary Anant Kumar Singh. “The market of technical textiles is expanding rapidly with new products being added by the users in various industries. Thus it is imperative to formulate standards to accelerate the growth of the textiles sector,” Singh said inaugurating the third edition of ‘National conclave on standards on technical textiles’ organised jointly by the Ministry of Textiles, Bureau of India Standards (BIS) and FICCI on Thursday. India has the capability, resource and market in the area of technical textiles and the need was to capitalise on these strengths, according to an official release. It is imperative for the stakeholders, including industry, policy makers and research institutes to work in close collaboration and also suggest ways to make the process of developing standards for technical textiles faster, Singh added. The eight committees will also include industry representatives.

 Expanding market

The Secretary pointed out that the market of technical textiles was expanding rapidly with new products being added by the users in various industries. However, the share of technical textiles in the domestic textile sector as well as at the global level was very low as compared to developed countries and this needed to be addressed. The government will also launch the new mission for technical textiles soon as the earlier mission has completed its period, Singh added. The conclave, since its inception, has been instrumental in bringing together institutional buyers in various segments along with industry to discuss the standards that needed to be formulated by BIS on priority, the release said.

Source: Business Line

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Surat textile trader hit hard as UP, Bihar return goods on want of e way bill

Surat textile traders, hopeful of doing a good amount of business during the ongoing marriage season has been hit hard as Bihar and Uttar Pradesh border check post has started returning huge quantity of fabric parcels valued at crores of rupees due to the want of the e-way bill. Traders stated that despite the GST Council relaxing the e-way bill norms till 2018, local GST officials in Bihar and Uttar Pradesh are not allowing the textile goods to enter the states without e-way bill. In October last, the GST Council gave a missive stating that the e-way bills will be introduced in a phased manner by March 2018 and till then the existing laws of the individual states would apply. The Federation of Surat Textile Traders' Association (Fostta) had written to the Prime Minister and around 250 MPs in the country that the marriage season earnings of most traders in Surat has been hit hard due to the harassment by GST officials on the border check-posts of UP and Bihar. Fostta president Manoj Agarwal said that the GST implementation had cast a dark shadow on the textile trade. Traders were hopeful that the marriage season will spin their fortunes. But states like UP And Bihar are not allowing their goods without e-way bill. According to Champalal Bothra, secretary of Fostta, around 30% of the saris, dress materials and fabrics are supplied to UP and Bihar state and during the marriage season the demand for saris and dress materials pick up considerably . The central government need to act fast or else traders will lose business as UP and Bihar are big markets for traders in Surat.

Source: The Economic Times

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GST slows India's manufacturing growth in October

The rollout of goods and services tax (GST) has affected the Indian manufacturing sector badly, according to a report. The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) reading stood at 50.3 in October, down from 51.2 in September. The reduction indicated a broad stagnation in the health of the manufacturing sector during October. The PMI is based on monthly surveys of carefully selected companies representing major and developing economies worldwide. The Nikkei India Manufacturing PMI is the report based on data compiled from over 400 industrial companies. "Growth in India’s manufacturing sector lost momentum in October. Output rose only fractionally and new orders stagnated over the month. In response to subdued demand conditions, both purchasing activity and pre-production inventories decreased," said the survey. "India’s manufacturing companies struggled somewhat as the recent recovery enjoyed by the sector lost impetus in October. Disappointingly, manufacturing production rose at the weakest pace in the current sequence of growth. Inflows of new orders stagnated as the negative effects arising from the implementation of GST continued to dampen demand levels. Furthermore, overseas demand for Indian goods dipped to the greatest extent since September 2013," said Aashna Dodhia, economist at IHS Markit and author of the report. On the price front, manufacturing companies continued to face higher input costs, which rose at the fastest pace since May. Firms raised their output charges to pass on higher cost burdens to clients. That said, their ability to fully pass on higher input costs was restricted due to competitive conditions. Reflecting subdued demand conditions, firms were discouraged from engaging in input buying. Purchasing activity fell for the first time in three months, albeit marginally. Meanwhile, pre-production stocks reduced in October. “On the bright side, the labour market continued to improve, with manufacturers further increasing their staffing levels, and at a pace similar to September’s 59-month high. Business confidence eased to the weakest since February as some firms expressed concerns over negative GST effects. However, the manufacturers those were optimistic forecasted benefits of GST materialising over the next 12 months," said Dodhia. (RR)

Source : Fibre2Fashion

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Technical textiles industry to grow to substantially in 2017: Anant Kumar Singh

New Delhi:  Technical textiles industry will undergo a rapid growth in the country said Anant Kumar Singh, Secretary, Ministry of Textiles while addressing the 3rd National Conclave on Standards and Technical Textiles in New Delhi. He said that the size of technical textiles industry in India was valued at 73000 crore in the 2013-14 and is now projected to grow 1 lakh 16 crore this year. Technical textiles industry has huge potential in finding applications in government flagship schemes like sagarmala, coastal economic zones, swatch bharat. He added that and the formation of standards is the need of hour for economic development, healthcare services, sustainable development, food and national security. He informed that Ministry of textiles has constituted 8 committees comprising of industry representatives to formulate standards in the industry. Already 295 standards have been formulated in the areas of medical textiles, geo textiles, industrial textiles, protective textiles. Highlighting the importance of research in the industry he further said that the Research institutions in countries like US are continuously developing new technologies and standards, Indian research associations should try to form joint ventures with the international associations to improve the technology in the country.

Source: Knn India

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GST glitches: Infosys blames frequent rate changes

Frequent changes in the GST rates by the government have added to Infosys’ woes as the software major seeks to spruce up its network to address the glitches related to GST. Sources within the government and GST Suvidha providers told BusinessLine that “unreasonable” demands made by the government and a lack of adequate network infrastructure that can connect to their IT systems has caused considerable headache to businesses. “They (Infosys) were told to add features like ‘Opting out’ (for filers) in a couple of day’s notice, which the company said was unreasonable,” said a government source. In the midst of this proposed change, a GST Suvidha provider pointed out that they have had a problem of connecting their IT systems to the Infosys network from the third week of this month, which happened for a second consecutive time. All GST system functionalities such as registration of entities, uploading of invoices, filing of returns will be available through APIs or Appication Programming Interfaces. APIs is tech terminology for connecting into different kinds of IT systems.

Infy denies it

Infosys denies this and throws numbers to back its claims. A company spokesperson in a statement said that the system has already demonstrated success across several parameters — till date 37 crore invoices have been uploaded on the system which is designed to handle 300-320 crore invoices every month. Some of these modifications have resulted in rapid changes to the system particularly due to its integration with heterogeneous IT ecosystems, including GST Suvidha Providers, Aadhaar, Central Board of Excise and Customs and Model 1 states. Further, according to Infosys data, 70 lakh tax payers have successfully migrated to the new system and the country has recorded 25 lakh new registered taxpayers. Central and State level tax regimes have been integrated across all 29 States and 7 Union Territories in addition to managing one lakh active users with peak loads during the last two days of filing wherein 50 per cent of the filings were done. It is during this timeframe that businesses have had maximum trouble. “If you are talking about one of the largest technology rollouts, Infosys needs to ensure sufficient capacity like availability of servers to ensure that such issues do not crop up next time,” said Mohan Lavi, a Bengaluru-based Chartered Accountant. A medium-size electronics distributor in Mumbai had encountered problems as basic as emails bouncing back. “When I had sent an email regarding the value of item in case of free replacement, the mail bounced,” he said. Infosys counters that a transformative project like this has to deal with changes in both policy and stakeholder usability. “Given the complex nature of the project and rapid change management, there have been several stakeholder concerns that have also been raised. Some of our finest engineers are supporting the GSTN team as they work towards resolving these and serving all stakeholders,” said an Infosys spokesperson. This is not the first time Infosys has courted trouble in government projects. In 2016, Infosys, which was managing the Ministry of Corporate Affairs portal, came under fire from the government as businesses had difficulty in uploading documents. Recently, in the GST Council meeting, Infosys was asked to design a more user-friendly interface for the portal and deploy more manpower to ensure a smother GST filing process.

CBI probe demanded

The Confederation of All-India Traders (CAIT) has asked for a CBI inquiry on Infosys and other companies involved in the GST portal for failing to ensure satisfactory performance and has asked to release a whitepaper on the status of the portal. “Even after four months of GST implementation, the portal which was supposed to function properly from July 1 is still working like an experiment project causing much harassment and mental concern to traders across the country,” said BC Bhartia, National President of CAIT.

Source : Business Line

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Kolkata Port Trust plans 3 terminals at Haldia

The Kolkata Port Trust (KoPT) plans to augment capacity at Haldia port by adding three new terminals at an estimated cost of ₹800 crore. A total of 9 million tonnes will be added to the existing handling capacity of 43 million tonnes at Haldia. While one liquid-cargo terminal (2 million tonnes), primarily for edible oil, has been proposed at Salukhali, 15 km north of Haldia; two outer terminals — one for dry-bulk cargo (5 million tonnes) and another 2 million-tonne liquid-cargo terminal — have also been planned. Work on all the three projects is expected to begin next fiscal once environmental clearances are received. According to Vinit Kumar, Chairman, KoPT, all three terminals will be developed on the public-private partnership (PPP) model. While around ₹200 crore will be spent towards developing the Salukhali terminal,the liquid-cargo terminal, called Outer Terminal-II, is expected to entail an outgo of ₹Rs 100 crore. The remaining ₹500 crore will be spent on setting up Outer Terminal-I. “Haldia is a riverine port, and by having these projects on the outskirts, larger vessels can be accommodated. We will also gain with the better draft at these terminals,” he said. As against a 7-metre draft at Haldia, the proposed Salukhali terminal, for example, will have at least a 9-metre draft. The Haldia Dock Complex handled around 19.124 million tonnes of cargo between April and September this year, a near-18 per cent rise over the 16.242 million tonnes it handled in the year-ago period.

Container handling

These projects apart, KoPT will also be investing ₹100 crore for laying a second rail line from Durgachak to Haldia. This will help speed up cargo loading. The South-Eastern Railway is the implementing agency for the project, Kumar said. The ₹50-crore project to augment track capacity is underway at the container-handling facility at the Netaji Subhash dock. Kumar said this will help reduce the time taken between unloading containers from a vessel and loading them for the onward journey to the rake, from the prevailing seven days, to 4.5 days. The initiative might help the Kolkata port regain the confidence of Nepalese importers who are now testing more efficient cargo-handling practices at the Visakhapatnam port. Kumar, however, pointed out that delay on the part of CONCOR (Container Corporation of India) in supplying rakes is also a reason behind the slow movement of Nepal-bound cargo from the port. “Cargo loading for Nepal has stopped for the last two days due to unavailability of rakes from CONCOR,” he said. The port is also investing in parking lots and expanding the container storage capacity to improve the loading rate. Currently, restrictions on truck movement imposed by the Kolkata police are affecting loading. Kumar is also exploring the possibility of investing in a Ro-Ro (roll-on/roll-off) jetty and taking the help of the Inland Waterways Authority in ensuring movement of containers in and out of the city, avoiding the city roads.

Source: Business Line

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Taxing times: Why the filing of GSTR- 2 was postponed

The postponement of the last date for filing GSTR- 2 to November 30 and GSTR- 3 to December 11, did not surprise anyone. Since the rollout of the GST regime in July, tax payers have been struggling to adapt to the new system. While the summary returns for July, August and September ( GSTR- 3B) have been filed, the first full set of returns, including GSTR- 1, 2 and 3, have not been filed even for July. GSTR- 2 return filing comes with a unique set of issues as the purchase invoices raised by a company have to be re- conciled with those of its suppliers. Some basics first, GSTR- 1 is the return for outward supplies that have to be filled along with invoice level details by the GST assessee. Once this is done, the GSTR- 2 summary form can be downloaded from the GST portal. This summary form contains details of all inward supplies, culled from the GSTR- 1 filed by the suppliers of the company. Each of the invoices in the GSTR- 2 need to be either accepted, modified, rejected or kept pending for future action. Missing invoices have to be added to this list after which GSTR- 2 can be submitted. Given the elaborate procedure, it is not surprising that tax payers struggled through the GSTR- 2 filing exercise. Most of the issues were, however, due to the inefficient and user- unfriendly GSTN portal. “Registered persons have faced various technical errors and delays during the filing of returns due to the inefficiency of GSTN portal. At times, GSTN portal displayed wrong supplier’s name against GSTIN,” says Tanushree Roy, Associate Director, Nangia & Co LLP. Sometimes, errors crop up due to validations placed at various places in the offline tool. However, error file generated from GSTR- 2 does not provide detailed explanation of any of the error, causing unnecessary delays in filing GSTR- 2. Also, re- generation of the said error file takes 2- 3 hours, causing delay in the overall process of filing return.

Offline utility delays

Registered persons were provided a facility to download GSTR- 2A in offline mode. However, the only format available for downloading the utility GSTR- 2A was (. json) which requires special tools to read the data. In its absence, data were required to be manually filled in the form, which was extremely time consuming. The option to open such files into excel was provided only from October 27, 2017. “The government utility was released very late, there were bugs in this utility and it is not very user friendly,” says Abhishek Jain, Tax Partner, EY India.

Additional data- fields

While the government has taken pains to point out that the GSTR- 2 is an auto- populated return, it does require a lot of work as each invoice has to be checked, modified etc. “Further, though the purchase invoices were auto- populated, taxpayers had difficulty in filling the HSN details along with quantity for purchases made,” says Aditya Singhania, DGM GST, Taxmann. Roy too thinks that this has been a difficulty for companies. “Registered persons are required to furnish HSN summary of all inward supplies during a tax period in Form GSTR- 2. However, due to lack of proper knowledge, various registered persons have not recorded invoices HSN wise in their IT systems making compilation of such data a humongous task,” she says.

Reconciliation blues

GSTR- 2 of recipients ( statement of inward supplies) gets auto populated once GSTR- 1 of the supplier is filed. However, a taxpayer is expected to identify eligibility of Input tax Credit ( ITC) and map each transaction with their purchase registers in the same return which involves significant time. Also, registered persons who claimed ITC based on their purchase register in GSTR- 3B are under pressure to match it with their GSTR- 2. “Once the data is uploaded from the government utility on GSTN, it takes lot of time to process and in some cases it took more than one day to process the data. “The taxpayers, is many situations, had not captured the data correctly which was resulting in reconciliation issues,” says Jain. It is, however, hoped that once a cycle of filing GSTR- 1, 2 and 3 are complete, at least for July, there will be more clarity for tax payers and things might ease for subsequent months. Till then tax payers will have to struggle on.

Source: Press Reader

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Union Minister Smriti Irani launches Myntra's new handloom brand 'Navibhu'

Union Textiles Minister Smriti Irani on Thursday launched Online fashion retailer Myntra's new handloom brand 'Navibhu' at Tech threads 2017 event in Bengaluru. CSR initiative of Myntra in association with the Textile Ministry to help weavers in reviving demand for handloom products across the country. The new brand will showcase traditional Indian sarees such as Venkatgiri, Mangalagiri, Ilkal, Kancheepuram, polavaram among others. These products will retail on Myntra via a dedicated online space, thereby creating a one-stop shop for all handloom sarees. Speaking on the occasion, the minister said Government is giving 75% fee subsidy to the children of weavers and artisans to pursue education. CSR initiatives will help in bringing forth talented weavers of India to the world. In a series of I&B Minister said I appreciate @myntra for supporting weavers' education by coming fwd to pay difference amount of IGNOU & NIOS fees left after Govt subsidy. She also tweeted saying ( tweet - Navibhu - an initiative by @TexMinIndia @myntra carrying fwd PM @narendramodi ji's vision of taking India's textiles tradition to the world.

Source: DD News

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Cotton traders wait for price to fall

Market sentiment has moved up ever since Gujarat announced the bonus to farmers, traders said. Indian traders have not signed new cotton export contracts in the past one week as domestic prices may take a little longer to decline to get export parity. The Gujarat government has announced a bonus to cotton farmers above the Minimum Support Price (MSP), which has prevented prices from moving down. "Indian cotton prices are not competitive at this moment for exports. Once cotton arrivals pick up, Indian cotton can again become competitive," Mumbaibased cotton exporter Nayan Mirani said. Market sentiment has moved up ever since Gujarat announced the bonus to farmers, traders said. The state is the top cotton producer in India, accounting for a quarter of the nation's production of the fibre. According to exporters, India's forward cotton exports for November-January have declined substantially over the previous year due to multiple factors. Now, traders are waiting for daily arrivals to go up, which may put prices under pressure and bring export parity. According to trade experts, Indian millers consume about 1 lakh cotton bales (each 170 kg) a day. Once cotton arrivals reach 1.5-2 lakh bales a day, prices could come under pressure. Most millers entered into forward contracts at lower than Rs 38,000 a candy, while current prices are ruling at Rs 38,500 a candy (365 kg). Though there is a short-term lull in exports, traders are confident it would gather pace again. "For millers in Pakistan and Bangladesh, India cotton is the best option," said a trader. India's cotton production is likely to be between 385 lakh and 400 lakh bales, domestic millers are not willing to stock the commodity at current prices.

Source: The Economic Times

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Cotton trading goes online

The State government has introduced online trading in cotton to do away with the middlemen. The eCrop booking data system, under which details of the farmers would be fed online and cross-checked at the time of trading, is expected to eliminate the middlemen. Following a series of scandals that mired cotton purchases during 2014-15, the government is initiating a series of reforms using IT to bring in transparency in auctions. Minister for Civil Supplies Prathipati Pulla Rao, who addressed a review meeting on Thursday, said farmers bringing the produce to the yards should get their pattadar passbooks and Aadhaar cards. He also urged the farmers to sell the produce only through the Agricultural Market Committees. Though the Cotton Corporation of India (CCI) facilitates trading and steps in when there is a fall in price, the farmers have always been at the mercy of the middlemen, who procure cotton bales at a lower price and sell them at a higher price.

MSP

But the CCI is expected to play a major role this year as the average price of is hovering over ₹4,300 per quintal, which is equal to the minimum support price (MSP).

The average price of high quality cotton at Khammam and Kurnool are also around ₹4,200 to ₹4,300 per quintal. Cotton arrivals have started picking up in the district with the farmers under the NSP right canal project bringing the produce at the market yards in the Palnadu region. Cotton is cultivated in 1.82 lakh hectares in the district and the yield is expected to reach 4.66 lakh tones. “The CCI personnel are in the market and we are ready to buy cotton at MSP. We are starting 43 procurement centres across A.P.,” said CCI branch manager Mohit Sharma.

CPI(M) demand

The CP(M), however, has demanded that the MSP be fixed at ₹6,000. “Why is the government not able to demand an MSP of ₹6,000 per quintal? Hasn’t the Chief Minister promised that he would raise the MSP by at least 50% during elections? We urge the Centre to relax the procurement norms and buy cotton with a moisture content of up to 20%,” said Pasam Rama Rao, party district unit president.

Source: The Hind

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Global Crude oil price of Indian Basket was US$ 59.07 per bbl on 02.11.2017

 

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$ 59.07 per barrel (bbl) on 02.11.2017. This was lower than the price of US$ 60.00 per bbl on previous publishing day of 01.11.2017. In rupee terms, the price of Indian Basket decreased to Rs. 3815.80 per bbl on 02.11.2017 as compared to Rs. 3817.34 per bbl on 01.11.2017. Rupee closed weaker at Rs. 64.59 per US$ on 02.11.2017 as compared to 64.53 per US$ on 01.11.2017. The table below gives details in this regard:

 

Particulars

Unit

Price on November 2, 2017 (Previous trading day i.e. 01.11.2017)

Crude Oil (Indian Basket)

($/bbl)

   59.07                         (60.00)

(Rs/bbl)

  3815.80                   (3871.34)

Exchange Rate

(Rs/$)

   64.59                         (64.53)

 

Source: PIB

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SMEs not enthused by Centre’s relief package

SMEs have not not been enthused by the Centre’s relief package for the sector, including a composition scheme and suspension of reverse charge mechanism up to March 31, 2018. According to industry representatives, the package is more suited to retailers and traders, essentially the Business-to-Consumer segment — which has not been much impacted by GST — rather than manufacturing SMEs and ancillary units. The package provides little relief to SMEs which actually need the support, they say. The composition scheme provides lower tax rates than the prevailing level for businesses with an annual aggregate turnover of ₹1 crore. For traders, it is 1 per cent, manufacturers 2 per cent and restaurants 5 per cent. Reverse charge under the CGST Act and the IGST Act has been suspended up to March 31. Businesses with a turnover of up to ₹1.5 crore have been provided a relief by being allowed to file GSTR-1, 2 and 3 on a quarterly basis with filing and payments from October to December 2017. Payment of GST on receipt of advance on account of sale has been dispensed and can be paid at the time of supply. According to VS Narasimhan, National Honorary Secretary, Federation of Association of Small Industries of India, the reverse tax mechanism should be suspended permanently rather than up to March 31, 2018. The reverse charge discourages larger units from transacting with smaller players as the tax burden falls on the larger player. The turnover limit should be increased to at least ₹3 crore to cover units that are at the lower end of the SSI (Supplemental Security Income) bracket. Protecting micro units with a turnover of up to ₹20 lakh is important as this segment supports self-employment and generates jobs.

Tax payment

In addition, SSI units which avail themselves of input tax credit have to pay and file returns within 20 days of the closing of the month. But large units, including PSUs, delay payments by up to 90 days to ancillaries. SSI units should be allowed to pay GST on a quarterly basis along the lines of the composition scheme, he said. R Subramaniam, Vice-President - Coimbatore Region, Tamil Nadu Small and Tiny Industries Association, said the composition scheme, at best, may reduce paper work, and help traders and restaurants, but is not beneficial to manufacturers. It may prove more expensive for small and tiny manufacturing units. As a composite assessee, a manufacturing unit will continue to pay input tax, but cannot collect tax from the buyer. At the composite rate of 2 per cent, the outgo may often be higher and eat into the manufacturers margin compared with taking input credit and paying the tax under GST, he felt.

Source: Business Line

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Global Textile Raw Material Price 2017-11-02

Item

Price

Unit

Fluctuation

Date

PSF

1353.06

USD/Ton

0%

11/2/2017

VSF

2313.05

USD/Ton

0%

11/2/2017

ASF

2660.77

USD/Ton

0%

11/2/2017

Polyester POY

1327.36

USD/Ton

0%

11/2/2017

Nylon FDY

3582.97

USD/Ton

0%

11/2/2017

40D Spandex

5971.61

USD/Ton

0%

11/2/2017

Polyester DTY

1640.30

USD/Ton

0%

11/2/2017

Nylon POY

3719.03

USD/Ton

0%

11/2/2017

Acrylic Top 3D

5714.60

USD/Ton

0%

11/2/2017

Polyester FDY

1564.71

USD/Ton

0%

11/2/2017

Nylon DTY

3341.08

USD/Ton

0%

11/2/2017

Viscose Long Filament

2796.83

USD/Ton

0%

11/2/2017

30S Spun Rayon Yarn

2963.13

USD/Ton

0%

11/2/2017

32S Polyester Yarn

2025.81

USD/Ton

0%

11/2/2017

45S T/C Yarn

2887.54

USD/Ton

-0.16%

11/2/2017

40S Rayon Yarn

2176.99

USD/Ton

0%

11/2/2017

T/R Yarn 65/35 32S

2449.12

USD/Ton

0%

11/2/2017

45S Polyester Yarn

3114.31

USD/Ton

-0.48%

11/2/2017

T/C Yarn 65/35 32S

2434.00

USD/Ton

0%

11/2/2017

10S Denim Fabric

1.42

USD/Meter

0%

11/2/2017

32S Twill Fabric

0.88

USD/Meter

0%

11/2/2017

40S Combed Poplin

1.22

USD/Meter

0.50%

11/2/2017

30S Rayon Fabric

0.68

USD/Meter

0%

11/2/2017

45S T/C Fabric

0.72

USD/Meter

0%

11/2/2017

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.15118 USD dtd. 3/11/2017). 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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Turkey's annual textile, apparel exports approach $30 bn

Turkey's annual textile and apparel exports figure is approaching $30 billion, while $7.5 billion of this amount comes from Merter, an apparel manufacturing district in Istanbul that exports such products to 215 countries, according to the Merter Industrialists' and Businessmen's Association (MESIAD). Around 10,000 stores there employ nearly 100,000 people. All medium and large textile and apparel manufacturers in Turkey have a store or showroom in Merter, a Turkish newspaper report quoted MESIAD chairman Yusuf Gecü as saying. The number of employees in the production of these brands is much higher as 80 per cent of the players in Merter produce outside the region, he said. Merter welcomes around 3,000 importers daily from 60 countries in the Middle East, Africa, the Turkic republics, the Far East, the Gulf nations, Russia, Europe and the United States. Out of Turkey's target to exceed $50 billion in exports by 2023, the region aims to make up $15 billion, he added (DS)

Source : Fibre2Fashion

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Transparency: What does it mean for the apparel industry?

A news item that probably did not get much attention in Bangladesh media was an announcement in The Hague that an international court has accepted a case against two well-known fashion brands in March 2018. While the name of the two targeted brands that are sourcing apparel from Bangladesh has been subject to a gag order by the judge, the suit brought forth by the two international signatories to Accord, could have important ramifications in the coming months should this lead to any further ripple effects in the global apparel market. While one or two incidents do not necessarily augur bad news, everyone involved with our RMG industry and commerce ought to ask if the five years since the Rana Plaza incident have brought us any closer to compliance. The case against these two brands was brought by two global labour union federations, IndustriALL and UNI, in the Permanent Court of Arbitration (PCA) in The Hague. The ruling announced on October 16 by PCA only holds that the claims by the two plaintiffs are admissible and within its jurisdiction. The unions allege that the brands have been very slow in implementing the measures incorporated in the Accord signed by the major retailers in 2013, and identified numerous issues in the supply chain, specifically, “long hours, low pay, poor safety standards” and anti-union actions against garment workers in Bangladesh. The two unions along with major fashion brands including H&M, Primark, and Zara were signatories to the current Accord agreement which covers ready-made garment facilities, and expires in June 2018. An extension of Accord will enable it to run until 2021, and the second agreement Accord 2.0 allows for the inclusion of suppliers producing home textiles, yarn, cloth and other related products. After a boiler explosion in July killed ten and injured 50 at a garment factory, talks began to expand the scope of the Accord to include boiler safety. While the judgments made by the PCA are not legally binding, its verdict or decision represents a major victory for the parties involved. It may be recalled that PCA was involved in the Indo Bangladesh Maritime Border Dispute and more recently in a case brought by The Philippines against China in the South China islands case. The ruling against China proved to be a significant moral boost for the Philippines which found itself side-lined by China's actions in the disputed islands in the South China Sea. The adverse publicity from any judgment against the two brands doing business with Bangladesh can only be harmful for our apparel industry which has already reported some turbulent weather in our export market in recent months. According to a story entitled “Why Bangladesh apparel exports to US is declining” in Textile Today, a trade journal, the factors which appear to be adversely impacting our customer base are: higher duty, longer lead-time, appreciation of Taka against the dollar, less import by US retailers and inefficient port operations in Bangladesh. It is to be noted, though, that the report does not explain why US retailers chose to import less from Bangladesh while revealing that “shipment to the US, the country's single largest export destination, declined by 7.47 percent year-on-year” in 2016-2017. However, two well-known factors that stand out are reduced capacity in the RMG industry necessitated by remediation measures and what might be called “shifts in demand”. As is well-known, price and quantity in a competitive market, for garments as an example, are determined by both supply and demand. In the case of Bangladesh, it appears that both shifts in supply (factory closure) and demand (emergence of sources in Cambodia and Ethiopia) are responsible. But, it is worth exploring what role the recent surge in rumours against Bangladesh's labour practices and safety improvements in sourcing circles has played.  On July 28, 2017, a news item in The Globe and Mail, the largest circulating newspaper in Canada brazenly declared in a headline story: “Most Bangladesh factories are still unsafe, and consumers should not feel comfortable”. This was jointly written by Professor John Richards of Simon Fraser University's School of Public Policy and Kirk Hepburn, a graduate of School of Public Policy. The research paper they co-authored identified several problems based on their review of inspection reports and person-to person interviews. While most electrical and fire issues have been remedied according to their report, Kirk Hepburn voiced his concerns regarding structural issues which he views as lagging behind significantly and he attributed this to the higher cost of reconstruction. “They're complex and time consuming. The lack of clarity over who's going to pay or how payment will take place has been a major source of delay,” he mentioned in an interview. Incidentally, Professor John Richards is well known to The Daily Star readers. He is the author of the piece, “Our children are in school, but can they read?” published on September 20, 2017 in The Daily Star. It appears that given some questions about the state of the factories in Bangladesh, it cannot hurt for the BGMEA, with a little nudge from the government, to embrace transparency as a national goal and publish some self-assessment findings or explore sustainability reporting. There are many in the market, including “Higg Index” by Sustainable Apparel Coalition (SAC), Sustainability Reporting Framework by GRI, and Business Environment Performance Initiative (BEPI) by Foreign Trade Association (FTA). To highlight these issues and to generate interest among the stakeholders, Harvard University will host the forthcoming 4th International Conference on “Sustainable Apparel Sourcing-Multi-Stakeholder Collaboration beyond Compliance and Transparency”, in December, 2017. The day-long event is being organised by the International Sustainable Development Institute (ISDI) in collaboration with South Asian researchers and academics based in Boston. Dr Abdullah Shibli is an economist and Senior Research Fellow at International Sustainable Development Institute (ISDI), a think tank based in Boston, USA.

Source: The Daily Star

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Textile Industry Praises Trump China NME Decision, Urges Aggressive Trade Enforcement

WASHINGTON, DC —  With President Donald Trump headed to Asia this November 3-14 to visit Japan, South Korea, China, Vietnam and the Philippines, the National Council of Textile Organizations (NCTO) praised the Trump administration’s recent determination reaffirming China’s non-market economy status for antidumping purposes and called for even more aggressive U.S. enforcement to crack down on unfair trade practices. “The evidence could support no other decision,” said NCTO President & CEO Auggie Tantillo as NCTO concurred with the U.S. Department of Commerce’s exhaustively researched determination that China is still a non-market economy. Tantillo added, “Properly defining China as a non-market economy simply confirms what every U.S. manufacturer already understands – China has a set of unfair and extraordinary advantages that allow them to displace investment, production and employment in our market.” “We encourage President Trump to use his trip to Asia to reaffirm his commitment to enforcing America’s trade laws fairly, but resolutely,” Tantillo continued, pointing to public comments filed by NCTO[1] suggesting additional reasonable activities the U.S. government could undertake to improve trade enforcement, thereby creating more good jobs. NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers.

  •   U.S. employment in the textile supply chain was 565,000 in 2016.
  •  The value of shipments for U.S. textiles and apparel was $74.4 billion last year, a nearly 11% increase   since 2009.
  •  U.S. exports of fiber, textiles and apparel were $26.3 billion in 2016.
  •  Capital expenditures for textile and apparel production totaled $2 billion in 2015, the last year for which data is available.
  • NCTO is also a member of Manufacturers for Trade Enforcement, a multi-industry coalition supporting the continued designation of China as a non-market economy.

Source: The National Council of Textile Organizations (NCTO)

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EU lawmakers see little progress in Sri Lanka rights reforms

COLOMBO (Reuters) - European lawmakers said on Thursday they were disappointed about Sri Lanka’s slow roll-out of human rights reforms that the island nation had promised in exchange for trade concessions. The European Union reinstated concessions on a series of products in May - after Sri Lanka said it would ratify 27 international conventions on rights, labor conditions, the environment and governance. The island’s key garments industry benefited the most from the duty reductions and other allowances offered by the EU’s Generalised Scheme of Preferences Plus scheme. But a European Parliament delegation said they had seen little progress more than five months after the agreement. There was no immediate comment from the government. “It was noted that a number of important issues remain pending, in particular the revision of the Prevention of Terrorism Act on which the Prime Minister and other senior figures had given their personal assurances,” the EU delegation said in a statement. The United Nations has said Sri Lanka’s current terrorism legislation allows the torture of detainees. Sri Lanka originally lost the EU concession in 2010 after then-president Mahinda Rajapaksa rejected demands from the international community to address human rights abuses allegedly committed during a 2009 offensive to crush a Tamil insurgency. Rajapaksa was ousted in January last year, and the EU agreed to reinstate the concessions after a new administration, led by President Maithripala Sirisena, promised to make changes. The garments industry is Sri Lanka’s second biggest hard currency earner after remittances. It boasts annual exports of around $5 billion and produces goods for Victoria’s Secret, Tommy Hilfiger, Nike, Marks & Spencer and other well known brands.

Source: Reuters

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Pakistan : Import of polyester filament yarn: PYMA slams NTC for levying anti-dumping duties

Pakistan Yarn Merchants Association (PYMA) has criticised National Tariff Commission (NTC) for imposing antidumping duties ranging from 3.25 per cent to 11.35 per cent on import of polyester filament yarn from China and 6.35 per cent on import from Malaysia. The total requirement of art silk fabric manufacturing industry (which mainly consists of small and medium-sized units) is more than 220,000MT per annum. However, four local producers of polyester filament yarn have the capacity to produce only around 8,500 MT of fully drawn textured polyester filament yarn (which is only 4% of total requirement of downstream weaving industry) and producing around 53,000MT of drawn textured polyester yarn (which is only 25% of total requirement of downstream weaving industry), while remaining 75 percent requirement is met through imported yarn. Chairman PYMA Muhammad Usman was of the view that the NTC has imposed antidumping duties on all exporters of the PFY from China and Malaysia, which means that the user industry will pay antidumping duties on 75% of their requirement of the PFY, which the domestic industry is unable to meet. The user industry would be unnecessarily penalized even for the imports quantities, which the domestic industry cannot supply, he added. The chairman NTC and one DG are travelling to Canada to defend Gatron Industries Ltd Karachi in an antidumping investigation initiated against PET resin exported from Pakistan. The PYMA alleged that local producers of PFY takes the liberty to walk into the offices of concerned senior officers of the NTC at their own discretion without appointment and spend hours there lobbying and influencing their decisions. Therefore, Gatron Industries started claiming in the market well before the announcement of preliminary determination by the Commission that antidumping duties between 9% and 15% will be imposed. The association has further alleged that Robina Ather, one of the members of the Commission, in her letter to the secretary commerce - the report was published in Business Recorder on July 6, 2017 - claimed that it has been increasingly becoming a cause of concern that the Commission is not functioning properly and not giving results it was supposed to. According to her, the Commission's meetings are not held regularly and there are no minutes of the decisions taken in the meetings and, above all, decisions are not implemented. According to her, in fact, there is no schedule, no procedure for conducting meetings and taking decisions, and resultantly, undue advantage is being taken by one of the members to influence investigations and manoeuvre Commission's decisions. The Commission's decision to impose unnecessary antidumping duties on imports of PFY is also result of maladministration and mismanagement in the Commission and shows that the decisions are not taken on merit by taking into account the impact of antidumping duties on downstream user industry. Polyester filament yarn is imported by a number of small and medium-sized art silk fabric manufacturers, who are catering to the fabric demand of women of middle and low-income classes, which is the major population of Pakistan. The antidumping duties imposed by the NTC would increase substantially the cost of user industry (art silk weaving and knitting industry). Besides, fabric manufactured from polyester filament yarn and garments made of art silk fabric are also exported and imposition of antidumping duties would hurt exports worth millions of dollars, besides creating unemployment for thousands of skilled workers. Pakistan Yarn Merchants Association published an appeal to the Prime Minister in Business Recorded on August 24, 2017, informing the PM that polyester filament yarn fabric manufacturing industry comprising over 200,000 looms (SME sector) is already paying customs duty of 11%, the highest duty as compared to all other items in polyester chain. Moreover, local producers of the PFY with their unlimited resources and lobbying succeeded in convincing the FBR to impose 5% regulatory duty. With the imposition of 6.35% to 11.35% antidumping duty, the downstream art silk fabric industry has been forced to pay total import duties between 21.35% and 32.70%. However, the finished product polyester filament fabric (art silk fabric) is importable at customs duty rate of 16% + 5% RD. Total import duties on imported polyester filament fabric come to 21%, resultantly the polyester filament fabric will be cheaper than its basic raw material ie polyester filament yarn. Muhammad Usman said local producers of polyester filament yarn can only meet 25 percent of the downstream industry's demand, while remaining 75 percent requirement is met through imported yarn.

Source: Business Recorder

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Bangladesh to extend agreement to protect garment workers

Poor working conditions and low wages have long been a concern in Bangladesh’s garment industry, to protect garment workers Bangladesh will be extending an agreement into national regulations, promising more stringent safety checks for its 4 million apparel workers, a labour union said. The Bangladesh accord runs to May 2018, but the government has agreed for it to continue beyond that date until a national regulatory body is ready to take over monitoring, a trade union said Tuesday. The Bangladesh Accord is a legally-binding agreement between global brands and trade unions to establish a fire and safety programme for the country’s $28 billion a year textile industry. Christy Hoffman, Deputy General Secretary of Uni Global Union said that the goal of the accord has always been to transition to a credible regulatory regime by the Bangladeshi government. The talks with the government show that it recognises the importance of a safe ready-made garment industry, and they will continue to work with regulators to help enhance their capacity. The new agreement was reached on Oct. 19 between brands, trade unions, the Bangladesh Garment Manufacturers and Exporters Association, the U.N.’s International Labour Organisation and the Bangladeshi government, said a statement from the Accord. Boiler room inspections will be included in the programme following concerns after a blast in July killed 10 workers. Hoffman said that at present, they are working out how they can fund the inspections, remediation and technical expertise needed. The programme will also establish safety committees on factory floors as mandated by law to ensure better monitoring of safety features. Under the accord, more than 118,500 fire, electrical and structural hazards have been identified at 1,800 factories which supply at least 200 brands.

Source: Yarns and Fibers

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Pakistan : Ready-made garments worth US$608.071mn exported in first quarter

ISLAMABAD: Ready-made garments from the county during first quarter of current financial year 15.97 percent as compared the exports of the corresponding period of last year. During the period from July-September, 2017-18, around 9,136 thousand dozens of Readymade garments worth US$ 608.071 million exported as compared the exports of 7,686 thousand dozens valuing US$ 524.347 million of same period last year, according the data of Pakistan Bureau of Statistics. Meanwhile, the exports of knitwear increased by 9.35 percent as about 29,674 thousand dozens of knitwear worth US$ 647.650 million exported against the exports of 25,708 thousand dozens valuing US$ 592.277 million of the same period last year. About 91,147 metric tons of bed wear valuing US$ 566.963 million exported in first quarter as compared the exports of 89,559 metric tons worth of US$ 528.912 million of same period of last year, the data added. During first quarter of current financial year, about 40,307 metric tons of towels worth US$ 180.217 million exported as compared the exports of 42,287 metric tons valuing of US$ 178.596 million of same period last year, hence showing an increase of 0.9 percent. Raw cotton exports from the country during first quarter of current financial year grew by 69.70 percent as compared the exports of the corresponding period of last year. During the period from July-September, 2017-18, about 17,752 metric tons of raw cotton worth US$ 29.624 million exported as compared the exports of 10,200 metric tons valuing US$17.457 million of same period last year. Meanwhile, 123,346 metric tons of cotton yarn, worth US$ 320.290 million exported during first three months of current financial year, which was up by 4.56 percent as against the exports of 107,122 metric tons valuing US$306.958 million of same period last year. However, exports of cotton cloth decreased by 3.44 percent as about cotton cloth worth of US$ 528.275 million exported in first quarter as compared the exports of US$547.586 million of same period last year, the data reveled. During the period under review, about 450,215 square meters of cotton cloth exported, which was recorded at 536,362 square meters of same period of last year, it added. In first quarter of current financial year, exports of yarn other then cotton yarn grew by 7.67 percent as about 2,869 metric ton of yarn costing US$ 7.605 million as against 2,485 metric tons valuing US$7.063 million of the same period last year, it added. It may be recalled that the textile group exports from the country during first quarter of current financial year witnessed about 7.91 percent increase as compared the exports of the corresponding period of last year. Textile group products worth US$ 3.257 billion were exported during the period from July-September 2017-18 as compared the exports of US$ 3.018 billion of same period last year.

Source: Business recorder

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Pakistan : Demand of better grade of white gold likely to keep prices steady

Demand of better grades of white gold likely to keep prices steady while better grades of lint would fetch better prices above Rs 6,450 per maund with buyers making deals in all grades of cotton. The leading buyers made forward deals to consolidate their long positions. Spinners and mills replenished their second grade of lint stocks by making deals at around 6,375 per maund to Rs 6,425 per maund during trading session at Punjab and Sindh stations. Sellers withholding better grades of lint offered their stocks on slightly higher price and unmoved to lessen prices during trading session. Buyers also made one month forward deals at around Rs 6,200 per maund to Rs 6,250 per maund in order to stockpile produce for rainy days. Paucity of better grades kept buyers on front foot while sellers kept maintaining their demand on scarcity of better grades at the ginneries. Private sector commercial exporters made deals at Rs 6,025 per maund to Rs 6,175 per maund. Raw grades of lint changed hands at Rs 5,975 per maund depending on trash level during trading session. Around 3,000 cotton bales changed hands while ex-gin price per maund remained firm at Rs 6,300 per maund. In Kerb market trading took place in a range of Rs 6,000 per maund to Rs 6,275 per maund. Cotton analyst, Naseem Usman said that higher-than-expected cotton crop is likely this year, despite this the buyers were not reluctant in laying hands over the fine lint. He also said that the buyers were waiting for the outcome of Cotton Crop Assessment Committee (CCAC) meeting.

Source: Business recorder

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US garment and textile firms seek their own investment opportunities in VN

The Southeast Asian country’s garment-textile and footwear exports to the US are likely to increase in the coming time, even without TPP, according to Nate Herman, Senior Vice President of the American Apparel & Footwear Association (AAFA) Supply Chain as the US garment-textile and footwear businesses are seeking their own investment opportunities in Vietnam after the US withdrawal from the Trans-Pacific Partnership (TPP) earlier this year. In late October, the American Apparel & Footwear Association (AAFA) and the American Chamber of Commerce in Vietnam (AmCham Vietnam) held a series of activities in Ho Chi Minh City, including an international workshop on product safety and compliance issues. In the first eight months of 2017, Vietnam exported over 30.16 billion USD worth of goods to the US, making up 1.99 percent of the US’s total import turnover. However, during the eight-month period, Vietnam paid over 2.2 billion USD in taxes, ranking second out of the 15 countries paying the highest import taxes to the US. Nate Herman said that Vietnam continued to surpass rivals in export growth to the US in spite of receiving no benefits from any trade preferential programmes or free trade agreements. The US’s imports of Vietnam’s garment-textile and footwear grew by 8.74 percent and 11.83 percent respectively over the past 12 months and Vietnam was the second biggest exporter to the market, after China. He further said that the US retailers and consumers recognized Vietnam’s strengths of quality, prices and delivery commitments, this is the reason why the AAFA and US businesses want to arrive in Vietnam. Earlier, the National Cotton Council of America (CCI) coordinated with the Vietnam Textile & Apparel Association to organise the Cotton Day 2017 and granted investment licenses to 12 businesses operating in Vietnam and using the US cotton. The event aims to connect Vietnamese garment-textile enterprises with the US partners, suppliers and experts. Ryan Cabrera Tuazon, regional director of the US HanesBrands group, said after 10 years of operating in Vietnam, its total investment has stood at around 55 million USD with three factories in the central province of Thua Thien-Hue and the northern province of Hung Yen. Vietnam is defined as a production destination for Hanes Brands in the Southeast Asian region, the factory in Hue is equipped with the latest technologies and manufacturing equipment. Jon Fee, a senior adviser of Alston & Bird LLP, said that without TPP there are other opportunities for the garment-textile and footwear producers in Vietnam such as the Regional Comprehensive Economic Partnership (RCEP), the EU-Vietnam Free Trade Agreement (EVFTA), the “One Belt One Road” initiative, and the “Two corridors and one economic belt” of Vietnam-China strategic cooperation. However, experts said that the firms will have to pay due attention to product safety and compliance matters as Vietnam’s exports to the US will face difficulties in the coming time due to the US’s tighter regulations on product safety to reduce trade deficit.

Source: Yarns and Fibers

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Chinese wool demand unlikely to help Canada

The big demand is for fine wool production, but Canadian farmers tend to produce a coarser product. The Chinese government is making new uniforms for its military and government workers, but those garments won’t contain much Canadian wool. However, such large quantities of wool needed for this project could affect other parts of the wool market, said Canadian Co-operative Wool Growers general manager Eric Bjergso. “Unfortunately, our fine wool production is such a small percentage of our clip that some of it might be, but our volume of that wool unfortunately is not high, so I don’t expect we’ll see too much Canadian wool in the Chinese uniforms,” he said after the co-op’s general meeting Oct. 21. “Most of the fine wool they’re using is finer that what our fine wool is. It will be 21 micron and finer, and our fine wool is mostly between 22 and 25 micron.” Bjergso made his ninth trip to China in September to attend the annual Nanjing Wool Market Conference and sold several containers of graded Canadian wool. “It’s been a little tough to sell into that market the last 18 months,” he said. “I didn’t have high expectations just because of the way the market was for the coarse wools, but we did better than I thought. So that was, I hope, a good sign that the coarser wool market is on the rise.” In his report to members, Bjergso said there is a major difference in price between coarse and fine wool. Record prices have been achieved in the past year for the latter type of 22 micron and finer. He said international branding of Merino wool, along with new products that blend wool with synthetics, are likely reasons. “The broader crossbred wool market has struggled the past 18 months, and to this point in time has not been able to ride the coattails of the rising fine wool market,” Bjergso said in his report. China, which accounts for 63 percent of exports from the five top wool exporting countries, is the price setter, and it has a surplus of coarse wool products. Canadian sheep producers tend to focus on breeds with dual purpose: meat as well as wool. Many of those breeds produce coarser wool, Bjergso said. “The bulk of the Canadian clip would be between 29 and 35 micron because the breeds that we have here, everybody is primarily focused on commercial lamb production … so those breeds that we have tend to be a coarser, lighter fleece. “It’s not carpet wool. It’s still a clothing type wool for blankets, sweaters, hand knitting yarns or coating fabrics, so it’s well suited to those types of applications.” He said there are good dual-purpose breeds in Canada, and wool growers try to encourage use of those that produce good fleece as well as meat, “but it’s up to the producer at the end of the day.” Sheep numbers have been falling in Western Canada in recent years, but Bjergso said that hasn’t greatly affected the wool growers co-op. He speculated the West could see a drop in production this year because of a dry summer and resulting higher feed expenses. “Last year we had some slippage but we think it was mainly due to drought conditions in Eastern Canada, expensive feed, high cull ewe prices, which meant that producers could cull quite rigidly. It appears that’s what happened.” CCWG president David Mastine was asked about the effect of a split among Canadian sheep producers last year, which saw formation of the National Sheep Network when Alberta, Ontario and Quebec groups split from the Canadian Sheep Federation. Mastine said the wool growers are not taking sides in the matter, but “we want to see a national voice.” Bjergso echoed that sentiment in a later interview. “We feel it’s very important for the industry to have a unified voice that represents Canadian producers from coast to coast. That’s the mandate that we have. “I’m not sure how we’re going to achieve that, but certainly that has to be the end result because government is only going to look for one unified voice.” CCWG members at the annual meeting also attended the grand opening of a new 14,000 sq. foot facility east of Lethbridge. The Lethbridge facility used to be in the city’s downtown, but the age of the building and limited parking were challenging in recent years. The former building has been sold to the Long and McQuade music store.

Source:The Western Producer

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 “Cotton in the Era of Globalization and Technological Progress”

Final Statement of the 76th Plenary Meeting

1. The International Cotton Advisory Committee (ICAC) met in Tashkent, Uzbekistan during 23-27 October 2017 for its 76th Plenary Meeting since the establishment of the Committee in 1939. The meeting was attended by 345 persons, including representatives from 16 Members, 4 international organizations and 9 non- members countries.

2. World cotton production is projected to rise by 10% in 2017/18 due to an increase in harvested area, as yields are expected to remain steady. World production is projected to exceed mill use during 2017/18, and world-ending stocks will remain almost unchanged. Ending stocks in China are projected to decline during 2017/18, whilst stocks outside China are projected to increase by almost the same amount.

3. Government support to the cotton sector declined in 2016/17, as market prices rose and minimum support price programs were not triggered in a number of countries. ICAC’s annual report on government measures supporting the cotton sector shows that estimated value of the support declined by 39% in 2016/17 to US$4.5 billion from US$7.4 billion in 2015/16. The large stocks accumulated in China’s reserve as a result of government intervention from 2011/12 to 2014/15 had been drawn down by half.

4. Cotton Consumption: In 2016 world cotton mill use totalled 24 million tons, which was still 9% lower than the peak reached in 2007. Cotton’s share in the world fibre consumption fell to 27% compared to an increase usage of polyester fibres to 67%. The Secretariat was instructed to establish the consumption of polyester, which directly competes with cotton, as there are many applications of polyester staple and filament, which do not compete with cotton.

5. ICAC Discussion on Cotton Consumption: Proper fibre identification and the relatively high retail price of cotton apparel were some of the obstacles to increasing demand. Strategies for increasing the demand for cotton products included promoting the benefits of cotton as a natural, sustainable and renewable fibre and developing product logos and/or labels that would assist consumers in identifying cotton content. Governments were urged to strictly apply legislation as regards the correct labelling of textile items and reinforcing customs control to avoid falsification and illegal importation.

6. Textile innovations and cotton: Textile experts presented innovative uses of cotton

that addressed consumers’ demands for modern, functional textiles. New applications for cotton by blending with other fibres and also an assortment of other new textile materials have been developed. Governments agreed that innovation in the textile industry is crucial and that cotton has a future in this activity.

7. Biotechnology: The ICAC Researcher of the Year 2017 stated that the tools of genetic modification (GM) provide faster, more precise ways of imparting desirable traits into 2 commercial crop varieties. GM does not supplant conventional breeding; instead GM is used in conjunction with conventional breeding to speed the identification and development of effective genetic solutions. Nevertheless, some ICAC members have concerns about GMO cotton production and as a result, have not approved its planting. It was also noted that currently about 80% of the world’s cotton production is based on GM technology.

8. Technology Transfer: The Plenary was informed about the close cooperation between Brazil and the C4 countries plus Togo in developing a successful project to encourage the application of cover crops, using no till systems and integrated pest management (IPM) control. The Plenary also heard about the continuous strides made in modern communications that have radically transformed the field of ‘Agricultural extension’ in many developing countries. A representative from Better Cotton Initiative (BCI) described the process used by farmers to adopt better technologies in the 15% of cotton production currently identified as BCI. Among other advances, cotton is increasingly mechanised and a representative from India described new harvesting machinery for small holders. Concern was expressed that knowledge transfer activities were potentially being duplicated and the Plenary instructed the Secretariat to investigate the possibility of serving as a clearing-house for information concerning such activities.

9. The Committee decided to hold the 2018 Technical Seminar on the topic of Combating Pest Resistance to Biotech Cotton and Pesticides: Biotech cotton is cultivated in 15 countries and occupies 75% of the global cotton area. During the past seven years, reports of bollworm resistance to Bt-cotton and insecticides; weed resistance to herbicides and whitefly resistance to insecticides have emerged from major cotton growing countries across the globe. The resistant strains of bollworms, whiteflies and weeds can cause debilitating effects on cotton production if not properly addressed. There is a need to elucidate the reasons for rapid development of resistance in some countries compared to others and also chalk out strategies to combat the emerging problems of resistant insects and weeds.

10. Contamination: The Plenary heard reports on the work in progress for removal and elimination of contamination in baled cotton, specifically as regards all types of plastic, as current surveys have identified increased contamination in some countries during the last few years. The work extends into the fields and at the gins and new technology to identify and remove plastic in these locations is being tested to combat this problem.

11. The Private Sector Advisory Panel (PSAP) recommended broadening the terms of reference of the Secretariat’s on-going studies of the polyester market to include environmental issues related to microfibre pollution, lifecycle assessment of polyester and manufacturing processes. The PSAP recognises that cotton must coexist with polyester, but at the same time keep consumers fully aware of the facts behind competing fibres and their intrinsic properties.

12. The Private Sector Advisory Panel informed the Committee that an ePhyto industry advisory group (IAG) had been set up by the United Nations International Plant Protection Convention (IPPC) under the auspices of the Food and Agriculture Organization of the United Nations (FAO), to provide advice and guidance on the development and deployment of an electronic phytosanitary certification system. This will consist of a global hub and a generic national system to facilitate the international exchange of electronic phytosanitary information. There are ten members of the IAG and ICAC has been chosen to represent the global cotton industry.

13. Work priorities for SEEP identified: The Expert Panel on the Social, Environmental and Economic Performance of Cotton (SEEP) reported that it will work on the following 3 priority areas over the next 2 years: 1) the compilation of management practices and information relevant to cotton growers for improving soil health; 2) the continued testing and implementation of the guidance framework for measuring the sustainability in cotton farming systems (including finalising and releasing for comment by Members the 'lessons learned’ report from the pilot tests conducted using the guidance framework); 3) developing alternative ways of reporting on the sustainability of cotton production that better allow for the positives to be recognised.

14. The ICAC is evolving and it was recognised that there needed to be better communications to a greater audience through the use of social media and an improved website. The Plenary agreed that the ICAC needed to be the central repository for both economic and technical information about production, consumption and sustainability issues.

15. Membership: The Committee welcomed Bangladesh and the European Union as its newest members. The membership of Bangladesh and the European Union was a positive sign of the relevance of the ICAC to the world cotton industry.

16. Future Plenary Meetings: The Committee has accepted an invitation from the government of Côte d’Ivoire to host the 77th Plenary Meeting at the beginning of December 2018 in the city of Abidjan.

17. The Committee welcomed Mr Kai Hughes as the 7th Executive Director in its history. Mr Hughes has great management experience and knowledge of the cotton industry and Committee members expressed great enthusiasm at the prospect of a new era of leadership.

18. The Plenary thanks the Standing Committee and the Secretariat for the support and the hard work and looks forward to the continued exchange of information between the Secretariat and Coordinating Agencies.

19. Appreciation to the Host Country: The Committee thanked the people, the Organizing Committee and the Government of Uzbekistan for hosting the 76th Plenary Meeting. Delegates commented very favourably on the efficiency of the host country in facilitating the plenary meeting and the warmth and generosity that had been extended to delegates by the people of Uzbekistan.

Source: ICAC

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The Apparel Industry Has Grossly Underestimated the World’s Water Crisis and What it Could Mean for Sourcing

Water may just easily come out of the tap in the Western world, but the places the apparel industry is sourcing from and the water resources it’s drawing on are at times in much scarcer supply. That’s the message Mina Guli, founder of ThirstForWater.org, an organization dedicated to tackling the world’s water shortage crisis, delivered during a keynote at the Textile Exchange Sustainability Conference earlier this month. To put the crisis into greater perspective, Guli said, “The water that went into what you just used and put on today took more water than you have used in your entire lifetimes.” Making one cotton suit, according to Guli, uses as much as 14,763 liters of water. A cotton shirt uses 3,690 liters. The water that went into making your mobile phone was as much as 912 liters. This may not be water people see or feel or think about on a daily basis, but it’s being used. And it’s being depleted, according to Guli. “Ninety-five percent of the water we use every day is invisible,” Guli said. The combined invisible daily water footprint is 28,429 liters. “More water than you’ve drunk in your entire lifetime…What we are doing to our environment without paying attention to it is horrifying.” Last year, the World Economic Forum ranked the water crisis as the highest concern for the next decade. In an effort to bring greater attention to the world’s water crisis, Guli has run across the seven continents, across each continent’s major desert (Antarctica is also considered a desert since it gets less rain than the Sahara) in seven weeks, talking to people about issues they’re facing with water. From there, she ran 40 marathons in 40 days down six of the world’s great rivers to do the same thing. What she found in South Africa was that just the production of table grapes drained six meters out of the Richtersveld river in six years. What she found in Brazil was that water forms on tree leaves in the Amazon, in what’s called flying rivers, and what collects forms into clouds that get pushed down into cities around the country and produces rain. But deforestation is causing those flying rivers to dry up, which means places like Sao Paolo are getting less rain. What she found in the Atacama desert was people catching fog for water and using it for farming, but even that has become scarce, and a shortage of water to farm the cotton that goes into fibers to make apparel, could have drastic ripple effects all along the supply chain. In Central Asia, the Aral Sea has been shrinking drastically for the last 50 years since the two rivers that sustain it started being drawn from to grow cotton in the desert. “We are indeed a planet in crisis,” Guli said. “By 2030, experts predict that there’ll be a 40 percent greater demand for water than what’s available.” According to the World Resources Institute (WRI), cotton accounts for roughly 33 percent of all the fibers found in textiles, and it can take as much as 2,700 liters of water to make one cotton T-shirt—the same amount of water one person drinks in two and a half years. That’s why cotton farming stands to further damage areas already facing water stress, which are often precisely the areas brands and retailers are sourcing from for better costs. Beyond just cultivating the cotton, a substantial sum of water goes into actual clothing production. Roughly 20 percent of industrial water pollution is owed to garment manufacturing, according to WRI, and the world uses as much as 5 trillion liters (1.3 trillion gallons) of water each year just for fabric dyeing, which could fill two million Olympic-sized swimming pools. “We’re going to figure out how to manage water in supply chains,” Guli said. “I want to show people what it means to overuse water for the production of cotton.”

Source: Sourcing Journal Online

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