The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 24 NOV 2017

NATIONAL

INTERNATIONAL

 

With garment exports in tatters, govt steps in with bigger incentives

India’s apparel sector, which has witnessed a sharp fall in exports in the ongoing fiscal, is in for some immediate relief. The government will soon double the incentive for garment exporters under the Merchandise Export from India Scheme (MEIS). A announcement raising incentives under MEIS from the current 2 per cent to 4 per cent is expected soon, sources said. In fact, Commerce & Industry Minister Suresh Prabhu also told BusinessLine that “some action is expected soon”.

The garments sector, which suffered a 39 per cent slump in exports in October to total $829.4 million this year, is one of the worse hit because of the GST’s implementation. The MEIS is the most popular incentive for exporters, under which identified sectors are given duty exemption scrips that are fixed at a certain percentage of the total value of their exports. The scrips can be used to pay duties on inputs including customs duties.

India’s exports, which had begun looking up in the last few months of the fiscal after over two years of lacklustre performance, witnessed a decline of 1.12 per cent in October to $23.09 billion, mostly due to problems related to the GST roll-out. Other export sectors, too, could expect more relief in the coming months as the Commerce Ministry has roped in the NITI Aayog to work on a package for exporters. “The Aayog will come out with an interim suggestion which will be taken into consideration,” Prabhu said.

On the recent decline in exports and the fact that exporters were attributing it to GST-related problems, Prabhu said that last month the government had responded to several procedural and operational problems that exporters were facing. “That will help them in a significant way. The impact of benefit will take some time (difficult to define the timeline),” he said.

Source: Business Line

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ISA seeks reduction in GST rates on PSF/VSF from 18% to 12%

The Indian Spinners Association (ISA) has called upon the central government to reduce the GST rates on manmade fibres (read polyester staple fibre and vicose staple fibre) from 18% to 12%.

In a representation to the government, Mr. Rakesh Mehra, President, ISA pointed out that the current GST tax regime has created a situation wherein accumulated input credit (18%) exceeds the output tax (12%) by Rs. 7 per kg. to Rs. 10 per kg. to neutralise this Yarn prices must be atleast Rs 50/kgs higher. This is not possible in view of the value addition that is as low as Rs. 15 per kg. to Rs. 20 per kg in certain cases. In the circumstances, reduction in GST rate of Man made staple fibres from 18% to 12% only will correct the issue of accumulated input credit, he emphasised. The department, Mr. Mehra said, will defend as accumulated input credit is refundable in this case. However, this refund is not only time consuming but also involves avoidable transaction cost, he added.

ISA President informed that earlier regime there only was Mandatory Excise duty 12.5% on manmade staple fibres. Along the chain there was optional route and thus spinners and weavers remained out of the chain. The government revenue in the earlier regime was only on fibres and nil on value addition. In the current GST regime, Government revenue from manmade textiles will substantially increase since GST has brought spinning and weaving in its fold. Furthermore, reduction to 12% will create a level playing field amongst man made staple fibres and Filament yarn. The manufacturing process and also the raw material for both these are similar, he stressed.

He further noted that accumulated input credit increases the cost of domestic producers making imports more attractive. Hence, the claim of ISA for reduction from 18% to 12% is justified and government needs to heed to this change in GST rate, he urged.

Source: Tecoya Trends

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Uster unveils new textile fibre cleaning system

The Uster Group, a leading high-technology instrument developer of products for quality measurement and certification for the textile industry, has launched the new Uster Jossi Vision Shield fibre cleaning system. The cleaning system will help nonwoven manufacturers highest quality of textile products for medical, personal care, and hygiene applications.

Typically, fabrics for these sensitive applications are made by the spunlacing process, which starts with the fibre raw material in loose stock form. This is where it is crucial to remove any contaminants, before they reach the fabrication process. The Uster Jossi Vision Shield fibre cleaning system is the solution. It provides maximum detection of contaminants with minimal waste. Located in the ideal position, after fine opening in the blowroom, the system uses latest-technology spectroscopes to pinpoint even the smallest particles of foreign matter in the cotton or man-made fibre raw material.

Covering a much wider wavelength than conventional camera systems, Uster Jossi Vision Shield has the power to identify and remove fragments as fine as a single human hair. At this stage in the fibre preparation routine, detection is enhanced, since the fibre tufts have the optimum opening to prevent any small contaminants being hidden inside them.

Once identified, the foreign matter pieces are automatically ejected by the system, preventing contamination of the spunlaced fabric. Some waste here is inevitable, but Uster Jossi Vision Shield controls this by continuously measuring the speed at which the fibre tufts pass through. It then uses precision valves to time each ejection perfectly, so that only the unwanted contaminant is removed, with an absolute minimum of good fibre being lost. The cost savings for the producer can be significant.

Uster Jossi Vision Shield gives spunlace producers the confidence and security to avoid quality issues in this demanding marketplace. Its technology can cope with both IR and UV light ranges and it can reliably detect various types of foreign matter. All kind of synthetics and even the finest scraps of white polypropylene – otherwise difficult to pick out – are efficiently removed, using the Uster Jossi Magic Eye in tandem with the Uster Jossi Vision Shield. (GK)

Source: Fibre2Fashion

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Wind Power: Narendra Modi government set to come up with 2000 MW projects auction

The Central government is coming up with the reverse auction of 2,000 MW of wind power projects connected to the inter-state transmission system. The Solar Energy Corporation (SECI) is expected to issue the request for selection (RfS) document for the bidding within 10 days. SECI would sign 25-year power purchase agreements (PPAs) with the winning bidders and sell the power to electricity distribution utilities of states in non-windy areas to fulfil their renewable purchase obligations (RPO). Apart from Andhra Pradesh, Himachal Pradesh and Karnataka, none of the states met their RPO norms in FY16. Winning bidders can set up the wind projects in locations of their choice, provided they match the criteria fixed by the government. A company can bid for a maximum capacity of 400 MW and a a minimum of 50 MW. The net worth of the bidder should not be less than Rs 1.5 crore per MW of the capacity quoted. Acquiring infrastructure to connect the upcoming wind projects to the electricity grid would be the responsibility of the developer.

Under-construction and un-commissioned projects as well as commissioned wind power generating units which do not have any long-term PPAs are also eligible to participate in the reverse auction. The news of the upcoming wind auctions should be a breather for the industry amid slowdown in capacity addition after the introduction of the competitive bidding system in February 2017, replacing the prevalent feed-in tariff (FiT) regime.  Tariffs of as low as Rs 2.64 per unit were discovered in the latest auction for 1,000 MW of wind-based electricity conducted by SECI. The average wind tariff under FiT was Rs 4.5 a unit.
According to research firm Icra, only 421 MW of wind energy capacity has been set up in the country in the first half of FY18. More than 5,500 MW of wind projects were installed in FY17.

Source: Financial Express

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Rupee spurts 34 paise to fresh 3-week high of 64.58 against dollar

The rupee on Thursday staged a robust rebound and ended at a fresh three-week high of 64.58 a dollar, surging by a whopping 34 paise after FOMC minutes signalled shallow rate hike path. A massive slide in US dollar overseas mainly forced banks and exporters to unwound their long dollar bets along with dovish sound of Fed meet minutes outcome, paving the way for rupee to gain strongly, according to traders. Abundant capital inflows from foreign investors into equity and debt markets predominantly catapulted the blistering rally.

This is the highest closing for the home currency since November 3. Globally, the dollar endured its biggest drop in months against other major currencies on Thursday after the minutes of the Fed's latest meeting showed that some policymakers remain concerned over persistently low inflation. Brent crude, the international benchmark, is trading marginally lower at $62.75 a barrel in early Asian trade.

In the meantime, local equities extended their winning run for the sixth-straight session led by strong gains in technology companies despite profit-taking at higher levels. Asian markets were mostly lacklustre amid massive plunge in China stocks and bonds even as the US Thanksgiving break loomed invitingly. The Indian unit opened on a highly positive note at 64.80 against Wednesday's close of 64.92 at the Interbank Foreign Exchange (forex) market on adequate dollar supply. Maintaining its highly bullish trend, the home unit scaled a fresh intra-day high of 64.57 in mid-afternoon deals before ending at 64.58, showing a smart rise of 34 paise, or 52 per cent.The rupee had settled 3 paise lower yesterday.

The RBI, meanwhile, fixed the reference rate for the dollar at 64.7949 and for the euro at 76.6264. In cross-currency trades, the rupee softened against the pound sterling to end at 85.96 from 85.93 per pound and dropped further against the Euro to finish at 76.51 from 76.29. It also drifted further against the Japanese yen to conclude at 58.13 per 100 yens from 57.94. The dollar index, which measures the greenback's value against a basket of six major currencies, was down at 93.06 in early trade.

Elsewhere, the common currency euro rebounded sharply against the US dollar after data showed Eurozone manufacturing and services activity jumped to the highest level in 17 years. The British pound traded firmly higher after reports showed the GDP growth in the UK economy accelerated slightly in the third quarter of this year in line with expectations amid some fresh optimism stemming from the Brexit negotiation. In forward market today, premium for dollar remained extremely weak owing to persistent receiving from exporters.

The benchmark six-month premium payable in April edged lower to 117-119 paise from 119-121 paise and the far forward October 2018 contract also moved down to 257-259 paise from 258-260 paise yesterday. On the International energy front, oil prices eased on Thursday, with US crude falling away from two-year highs reached the day before, but the shutdown of the Keystone pipeline and a draw-down in fuel inventories continued to bolster markets despite worries over rising output. US West Texas Intermediate (WTI) crude futures were at USD 57.89 a barrel, down 13 cents, or 0.2 percent after revisiting 2015-highs of USD 58.15 a barrel on Wednesday. Brent crude futures were at US 63.14 per barrel, 18 cents, or 0.3 per cent, below their last close.

Source: Business Standard

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GST tears apart textile sector, BJP says angst won’t hit poll prospects

Surat: For the last three decades, BJP's social and business engineering for the textile trinity — embroidery, powerloom and traders — has helped the party reap electoral riches in the city.

While the embroidery and hand-embroidery sector is dominated by Patidars, mostly women artisans, the traders are from north Indian states, and the powerloom weavers are mostly Mehsana Patels and locals.

The country's largest man-made fabric hub was worst-hit by the GST and the traders took to roads to protest against the BJP. Ahead of November 10 GST council meeting, Union ministers Piyush Goyal and Mansukh Mandaviya had rushed late night to the city and held hectic parleys with the agitating businessmen in the presence of national BJP president Amit Shah. However, none of their demands, mostly on easing the compliance, were met.

The protests on roads abated but a strong undercurrent of anger is apparent in the industry. GST levied in the complex chain of textile industry has rendered a large number of workers in the entire value chain jobless or with halved salaries.

"We closed our 25-year-old business and sold all 300 powerloom machines in scrap. Now, I will lease out my four industrial sheds in Bamroli," said Vimal Bekawala, a powerloom job-worker. "Five per cent GST on job work means we pay 25 paise as tax on the total 50 paise per meter we earn through jobwork. It is better to let out sheds and earn Rs 21,000 every month," he adds as workers dismantle the looms.

According to sources, daily around 300 looms are being sold in scrap in the industrial areas of Pandesara, Bamroli, Udhana, Katargam, Ved Road, Udhana-Magdalla, Bhestan and Limbayat.

Of 12 assembly seats in Surat city, the angst could influence at least four seats — Majura, Udhana, Choriyasi and Kamrej — where there is a sizeable population of those hit by the prevailing situation. The Congress is looking to attract this disenchanted lot by fielding two textile businessmen. In Kamrej, the party picked Ashok Jirawala, the former president of Federation of Gujarat Weavers' Association (FOGWA) who was active during the GST agitation.

In Majura, Congress has fielded Ashok Kothari, a textile trader, against the sitting BJP MLA Harsh Sanghavi, who had won by 71,000 votes in 2012 assembly election.

Sanghavi, however, claimed that the textile troubles won't affect his electoral prospects. "Situation is far better than it was few months ago. Around 450 textile traders joined me when I went to file the nomination," he said.

Vivek Patel, the BJP candidate from Udhana which has a large population of powerloom weavers, said, "Weavers are not much angry but the traders are upset. Our ministers have met them thrice and sorted out their problems."

In one year, around 80,000 conventional looms and two-for-one (TFO) machines have been scrapped and over one lakh powerlooms for job-works have been shut down, most of them after GST implementation.

Ashish Gujarati, president of Pandesara Weavers Cooperative Society Limited, said, "Two years ago, we had to put up notices outside our 'khatas' (units) for the requirement of workers. In last four months, workers are literally standing in queues outside the operational units for job. Around 50,000 are without work after note ban and GST."

It's not the tax per se but the compliance issues that are frustrating. From grey fabric to finished product, a sari or a dress material passes through 15 different stages of job-work including printing, dyeing, sizing, lace-patting, hand-embroidery, embroidery, stitch fall, pallu, packaging etc.

"How can a small trader sitting in 200 square feet shop could maintain the stock details? He will have to purchase a computer, employ a data entry person, get stationery and hire a consultant. All this will cost him Rs 40,000 per month. Again, ITC-04 requires a trader to submit all the details of job-work, which is practically impossible," said former president of Federation of Surat Textile Traders' Association (FOSTTA), Devkishan Manghani.

The clatter of powerlooms going silent is most visible in Pandesara GIDC which once housed nearly 800 powerloom units. Ramesh Ramoliya, a unit owner, said, "I sold my 48 looms for Rs 17,000 per machine in scrap. I will let out the unit on rent later."


A family of four brothers who operated four different firms in a 300 square feet office in a textile market at Ring Road had a total turnover of Rs 6 crore per annum. Post-GST, three younger brothers dissolved their firms, lent the capital of Rs 1.5 crore each to the elder brother's firm and have started working as employees there.


Worst-hit are women in hand embroidery work who earned around Rs 7,000 to Rs 8,000 for pasting diamonds, tikkis and other decorative things on saris. Around three lakh, mostly from Patidar community in Varachha, Puna, Mota Varachha, Katargam and Sarthana are involved in the work and nearly two lakh are jobless now. Kaushik Patel, who runs an embroidery hand-work unit from his house in Mota Varachha, has reduced the number of women workforce from 80 to 20 due to lack of orders. Savita Morpara, an embroidery worker in Puna Gam, said, "My mother, sister and me earned total Rs 20,000 per month. Now, it is just Rs 8,000. We are not getting work regularly."

Source: Times of India

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Successful cotton year 2016-17 for ITF Cotton Team

Demonstrating collaborative growth in Tamil Nadu’s textile sector, the Coimbatore based Indian Texpreneurs Federation (ITF) ended cotton year 2016-17 on a successful note. During the cotton year that ended on September 30, 2017, ITF formed a consortium initially of 35 spinning mills for quality cotton procurement to help the state’s textile sector.

During the year, the ITF Cotton Team purchased 2.2 lakh bales for Rs 550 crore, ITF said in a video release. It was a satisfying year for all the stakeholders and foundation was laid for meaningful partnership with ginners, the release said.

While ITF Cotton Team visited facilities of ginners, ginning mill owners, especially from Telangana and Maharashtra, visited spinning mills owned by ITF Cotton Team. It was a “great mutual learning experience to improve standards”.

The ITF Cotton Team currently comprises 37 top class spinning mills with a capacity to consume 4 per cent of India’s total cotton consumption. The team plans to target procurement of 5 lakh bales of quality cotton, upgrade its market intelligence, expand network, and thereby increase business of their partner ginners.

Informing about uniqueness of ITF Cotton Team, the video says it has “mills with strong financials, professional approach, quality cotton focus, repeat business, learn and grow together, security in trade being in a consortium, dedicated ITF agents, and win-win for all.”

The video ends with a message: “Let us demonstrate real partnership based on trust and long term mutual growth in cotton trade.”

The ITF Cotton Team was formed with the coming together of 35 of the 400 ITF member mills with an aim to jointly purchase cotton. It is because raw material (cotton) cost is the major factor in spinning mills manufacturing cost, often ranging from 60 per cent to 70 per cent. So, even one per cent savings by way of good quality, better pricing, or timely purchase can help the spinning sector reduce its cost of manufacturing. (RKS)

Fibre2Fashion

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Delay in Myanmar approvals holds up Kaladan road project

First, it was delay on the part of India that held up implementation of key India-sponsored infrastructure projects in Myanmar. Now, delay in getting due permissions from Myanmar is holding up work on the ₹2,904-crore Kaladan multi-modal transport project. Kaladan is the single largest development activity undertaken by India in a foreign country.

109-km-long road

In June this year, IRCON International awarded the contract for building the 109-km-long road connecting Paletwa river terminal in Rakhine State to Zorinpui on the Mizoram border. The construction was expected to start after the monsoon in October, but it didn’t. At a recent conference organised by the Institute of Social and Cultural Studies (ISCS) and Myanmar government think-tank MISIS, in Yangon, Indian Ambassador Vikram Misri said the construction is waiting for “some approvals” from the Myanmar government. Misri did not elaborate on the nature of approvals but, he hoped that the work would start soon. However, the delay may cost heavy due to the narrow weather window available in the region.

Indian investment

Meanwhile, the prolonged delay in completing the road project and the lack of captive cargo is diminishing the viability of existing Indian investments in Sittew Port and Paletwa river terminal, a part of the Kaladan project.India completed the port development, with six-metre assured draft, in early 2016. As per the bilateral agreement, the port was handed over to the local government. Almost two years down the line, the port has lost its navigability as draft is down to barely one metre. Sources in both India and Myanmar blame it on prolonged disuse and failure on the part of Myanmar to continue dredging activities. As a corrective measure, India is now trying to amend the agreement to bring the port under joint operations.

Trilateral Highway

Meanwhile, construction of the ₹1,173-crore road project from Kalwa to Yargi in Myanmar by the National Highways Authority of India (NHAI) is yet to take off. The project is part of the Trilateral Highway project that will connect Moreh in Manipur with Mae Sot in Thailand.

In early September, NHAI identified the potential EPC contractor for the project through competitive bidding. However, work order couldn’t be issued till availability of at least 80 per cent unencumbered land. Sources, however, told BusinessLine that Myanmar has promised to make necessary arrangements soon. The upgradation of 71 bridges on Tamu-Kalewa-Kalemyo section of the proposed Trilateral Highway is yet to take off either. Though IRCON identified a potential EPC contractor, the bid value of ₹293 crore exceeded the budgetary allocation of ₹280 crore. Thokchom Jotin Singh, general secretary of the Manipur Chamber of Commerce and Industry, however, confirmed that the construction may start in December as the government is escalating the budget.

Source: Business Line

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Production Performance of Oil & Natural Gas Sector for October, 2017

Crude Oil

1.           Crude oil production during October, 2017 was 3038.25 TMT which is 4.63% lower than target and 0.41% lower when compared with October 2016. Cumulative crude oil production during April-October, 2017 was 21062.99 TMT which is 3.62% lower than target for the period and 0.24% lower than production during corresponding period of last year. Unit-wise and State-wise crude oil production is given at Annexure-I. Unit-wise crude oil production for the month of October, 2017 and cumulatively for the period April-October, 2017 vis-à-vis same period of last year has been shown in Table-1 and month-wise in Figure-1.

Table-1: Crude Oil Production (in TMT)

Oil Company

Target

October (Month)

April-October (Cumulative)

2017-18 (Apr-Mar)

2017-18

2016-17

% over last year

2017-18

2016-17

% over last year

Target

Prod.*

Prod.

Target

Prod.*

Prod.

ONGC

23071.00

1965.86

1889.67

1872.32

100.93

13432.03

13191.66

12901.22

102.25

OIL

3734.00

317.03

286.90

275.62

104.09

2189.03

1980.50

1880.40

105.32

PSC Fields

10562.00

903.02

861.68

902.94

95.43

6232.49

5890.83

6332.90

93.02

Total

37367.00

3185.90

3038.25

3050.88

99.59

21853.55

21062.99

21114.52

99.76

Note: Totals may not tally due to rounding off.                                       *: Provisional

Figure-1: Monthly Crude Oil Production

Unit-wise production details with reasons for shortfall are as under:

1.1        Crude oil production by ONGC during October, 2017 was 1889.67 TMT which is 3.88% lower than the monthly target but 0.93% higher when compared with October, 2016. Cumulative crude oil production by ONGC during April-October, 2017 was 13191.66 TMT which is 1.79% lower than target for the period but 2.25% higher than production during corresponding period of last year. Reasons for shortfall in production with respect to target are as under:

  • Natural decline/increase in water cut in wells of matured fields of western offshore and less than estimated production from wells in SHP and NQO area due to de-optimization of wells. 
  • Production from B-193 cluster in western offshore restricted due to high back pressure in B-193 export pipeline due to choking in the line. 
  • Production from NBP field in western offshore affected due ESP related issues. 
  • Frequent power shut downs in Mehsana, Ahmedabad & Assam hampered artificial lift operations.
  • Unexpected ceasure of more flowing wells in Mehsana Asset.
  • Wells closed for cluster drilling/ rig movements in Assam and Ahmedabad.

1.2        Crude oil production by OIL during October, 2017 was 286.90 TMT which is 9.50% lower than monthly target but 4.09% higher than production in October, 2016. Cumulative crude oil production by OIL during April-October, 2017 was 1980.50 TMT which is 9.53% lower than target for the period but 5.32% higher than production during corresponding period of last year. Reasons for shortfall in production are as under:

  • Less than planned contribution from old wells – Rise in water cut in wells and decline in total liquid production of wells of Greater Hapjan and Greater Chandmari Fields.
  • Less than planned contribution from work over wells.

1.3        Crude oil production by Pvt/JVs during October, 2017 was 861.68 TMT which is 4.58% lower than the monthly target and 4.57% lower than October, 2016. Cumulative crude oil production by Pvt/JVs during April-October, 2017 was 5890.83 TMT which is 5.48% lower than target for the period and 6.98% lower than the production during corresponding period of last year. Reasons for shortfall in production are as under:

  • Around 120 wells are closed due to various reasons like high water cut, require work-over-job, etc. in RJ-ON-90/1
  • Bhagyam production is improving over last few months but reservoir is still underperforming vis-à-vis by Management Committee approved profile.
  • Production stopped from Guda and Kaameshwari-W due to non-availability of tankers from July 2017 onwards
  • Mangala production hampered due to power fluid pump tripping during Oct’17.
  • CY-ONN-2002/2: Test production from 5 oil wells. PML not yet granted.
  • CB-ONN-2004/2: Underperformance of wells.

Natural Gas

2.             Natural gas production during October, 2017 was 2808.82 MMSCM which is 4.28% lower than the target for the month but 1.95% higher when compared with October, 2016. Cumulative natural gas production during April-October, 2017 was 19221.73 MMSCM which is 5.13% lower than target for the period but 4.02% higher than the production during corresponding period of last year. Unit-wise and state-wise natural gas production is given at Annexure-II. Unit-wise natural gas production for the month of October, 2017 and cumulatively for the period April-October, 2017 vis-à-vis same period of last year has been shown in Table-2 and month-wise in Figure-2.

Table-2: Natural Gas Production (MMSCM)

Oil Company

Target

October (Month)

April-October (Cumulative)

2017-18 (Apr-Mar)

2017-18

2016-17

% over last year

2017-18

2016-17

% over last year

Target

Prod.*

Prod.

Target

Prod.*

Prod.

ONGC

24208.00

2008.69

2017.97

1943.04

103.86

13868.99

13693.21

12626.58

108.45

OIL

3000.00

252.21

243.25

245.78

98.97

1756.06

1724.51

1720.15

100.25

PSC Fields

8034.00

673.37

547.60

566.32

96.69

4636.93

3804.00

4131.94

92.06

Total

35242.00

2934.27

2808.82

2755.14

101.95

20261.97

19221.73

18478.67

104.02

Note:  Totals may not tally due to rounding off.                                      *: Provisional

 

Figure-2: Monthly Natural Gas Production

2.1         Natural gas production by ONGC during October, 2017 was 2017.97 MMSCM which is 0.46% higher than the monthly target and 3.86% higher when compared with October, 2016. Cumulative natural gas production by ONGC during April-October, 2017 was 13693.21 MMSCM which is 1.27% lower than the cumulative target and 8.45% higher than the production during the corresponding period of the last year. Restricted gas production from B- series cluster due to non-availability one Process gas Compressor at  MNP Complex under MH Asset.

2.2        Natural gas production by OIL during October, 2017 was 243.25 MMSCM which is 3.55% lower than the monthly target and 1.03% lower than October, 2016. Cumulative natural gas production by OIL during April-October, 2017 was 1724.51 MMSCM which is 1.80% lower than the cumulative target but 0.25% higher than the production during the corresponding period of last year. Reasons for shortfall in production are as under:

Ø  Shut down of few non-associated gas well at various instances due to environmental problem.

Ø  Inability of customers to offtake gas from time to time due to plant breakdown at customer end.

2.3        Natural gas production by Pvt/JVs during October, 2017 was 547.60 MMSCM which is 18.68% lower than the monthly target and 3.31% lower when compared with October, 2016. Cumulative natural gas production by Pvt/JVs during April-October, 2017 was 3804 MMSCM which is 17.96% lower than the cumulative target and 7.94% lower than the production during the corresponding period of last year. Reasons for shortfall in production are as under:

Ø  Underperformance of wells in KG- OSN-2001/3 (GSPC).

Ø  Closure of 2 wells in D1D3 field and 1 well in MA Field in KG-DWN-98/3 (RIL).

Ø  Sohagpur West: Underperformance of CBM wells. Sales hampered due to IFFCO Unit partial Shutdown (RIL).

Ø  Raniganj East (CBM Block): Few wells closed for planned maintenance and refrac jobs (ESSAR).

Ø  AAP-ON-94/1: Production deferred due to delay in grant of PML. Well shutdown due to low consumer demand during October, 2017 (HOEC).

3.        Refinery Production (in terms of crude oil processed)

Refinery production during October, 2017 was 22107.99 TMT which is 1.51% higher than the target for the month and 5.13% higher when compared with October, 2016. Cumulative production during April-October, 2017 was 144605.01 TMT which is 3.37% higher than the target for the period and 1.45% higher than the production during corresponding period of last year. Unit-wise production is given at Annexure-III. Company-wise production for the month of October, 2017 and cumulatively for the period April-October, 2017 vis-à-vis same period of last year has been shown in Table-3 and month-wise in Figure-3.

  Figure 3: Monthly Refinery Production

Table 3: Refinery Production (TMT)

Oil Company

Target

October (Month)

April-October (Cumulative)

2017-18 (Apr-Mar)

2017-18

2016-17

% over last year

2017-18

2016-17

% over last year

Target

Prod.*

Prod.

Target

Prod.*

Prod.

CPSE

140322

12614.07

12618.53

11845.72

106.52

79237.62

82788.46

79214.09

104.51

IOCL

66290

6180.28

6115.29

5542.75

110.33

37490.10

39732.30

37275.92

106.59

BPCL

27000

2300.00

2195.95

2220.13

98.91

15000.00

15421.57

14797.71

104.22

HPCL

18000

1554.27

1590.90

1523.75

104.41

10489.23

10719.29

10040.96

106.76

CPCL

10300

897.47

964.21

985.80

97.81

5713.15

6196.54

6558.35

94.48

NRL

2670

226.65

241.37

197.12

122.45

1565.19

1651.01

1440.68

114.60

MRPL

16000

1450.00

1503.67

1368.89

109.85

8945.00

9022.04

9051.42

99.68

ONGC

62

5.40

7.13

7.28

98.05

34.95

45.71

49.05

93.19

JVs

15201

1468.00

1611.29

1426.62

112.94

7982.00

8096.78

10201.67

79.37

BORL

6000

525.00

585.26

610.13

95.92

3375.00

4210.82

3883.41

108.43

HMEL

9201

943.00

1026.03

816.49

125.66

4607.00

3885.96

6318.26

61.50

Private

90480

7696.34

7878.17

7757.53

101.56

52670.45

53719.77

53116.63

101.14

RIL

70174

5980.36

6174.34

5980.36

103.24

40829.87

41653.64

40829.87

102.02

EOL

20306

1715.98

1703.83

1777.17

95.87

11840.58

12066.14

12286.76

98.20

TOTAL

246002

21778.41

22107.99

21029.86

105.13

139890.07

144605.01

142532.38

101.45

Note: Totals may not tally due to rounding off.                       *: Provisional

3.1         CPSE Refineries’ production during October, 2017 was 12618.53 TMT which is only 0.04% higher than the target for the month and 6.52% higher than the production achieved in the corresponding month of last year. Cumulative production by CPSE refineries during April-October, 2017 was 82788.46 TMT which is 4.48% higher than the target for the period and 4.51% higher than the production during corresponding period of last year. Reasons for shortfall of refinery production in some CPSE refineries are as under: 

Ø  IOCL, Barauni: Throughput is lower than plan due to restricted crude processing due to HSD upliftment.

Ø  IOCL, Paradip: Throughput is lower due to steam air de-coking shutdown in the chain of delayed Coker Unit.

Ø  CPCL CBR: Throughput lower due to product upliftment constraints 

3.2    Production in JV refineries during October, 2017 was 1611.29 TMT which is 9.76% higher than the target for the month and 12.94% higher than the production achieved in the corresponding month of last year. Cumulative production by JVs refineries during April-October, 2017 was 8096.78 TMT which is 1.44% higher than the target for the period but 20.63% lower than the production during corresponding period of last year.

3.3    Production in private refineries during October, 2017 was 7878.17 TMT which is 2.36% higher than the target for the month and 1.56% higher when compared with October, 2016. Cumulative production by private refineries during April-October, 2017 was 53719.77 TMT which is 1.99% higher than the target for the period and 1.14% higher than the production during corresponding period of last year.

3.4    Refinery-wise details of the capacity utilization and production of petroleum products during the month of October, 2017 and cumulatively for the period April-October, 2017 vis-à-vis April-October, 2016 are given at Annexures - IV and V respectively.

 Click here to see the Annexures

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Egypt keen to boost ties with India in MSMEs, textiles

Egypt is eager to boost cooperation with India, particularly in the field of micro, small and medium enterprises (MSMEs), minister of trade and industry Tarek Kabil said in a recent statement. The sectors for cooperation include textiles and leather, he said while meeting Indian ambassador to Egypt Sanjay Bhattacharyya and a delegation of 50 Indian firms. The delegation of Indian companies in machine manufacturing and technologies visited Cairo to participate in the ‘Mactech Expo’ from November 16 to 19, according to a report in an Egyptian daily.

The ministry is working on building three big textile industry clusters, which will include more than 1,000 units, Kabil said, inviting the Indian businesses to invest in one such project, an industrial zone for leather manufacturing, the biggest of its kind in the Middle East and Africa. The Indian companies were also invited to invest in Egypt and benefit from the various free trade agreements Egypt has signed with other African, Arab and European markets as well as Turkey and the Mercosur bloc. Trade between the two countries rose by 11.8 per cent to $1.421 billion between January and May 2017, compared to $1.270 billion in the corresponding period last year. Egypt’s exports to India in the same period were worth $358 million, compared to $338 million last year. India is contributing in projects in Egypt with a capital of $3 billion in the fields of textiles, energy and chemical industries, Kabil added. (DS)

Source: Fibre2Fashion

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Uzbekistan to supply textiles to Korea's largest trade networks and manufacturers

World's fifth-largest cotton producer, Uzbekistan, will supply textile products worth $70 million to South Korea until the end of 2018.  The relevant agreements were reached during the negotiations of the Uzbekengilsanoat delegation with the leaders of the major Korean trading companies Posco Daewoo, Color Paradise, Solsang International Corp, Ratel E & T Co., Ltd., Korea Factory, as well as the Lotte Mart retail network.

During the meeting with the leadership of the Korean International Trade Association (KITA) and the national electronic trading platform (KTNET), agreements on joint activities to promote Uzbek textile products in Korea in 2017-2018 through the electronic trading platform KOREA Trade, as well as on providing services through representations of Uzbek companies in Korea or Korean importers and transport companies for electronic customs clearance were reached. “Korean businessmen especially liked the dyed and melange yarn, terry and hosiery of the group of companies Uztex, Osborne Textile, as well as knitted and denim products of Uzbek brands Bofanda and Bonito,” the press center which covers the visit of the President of Uzbekistan Shavkat Mirziyoyev to South Korea reported.

The Uzbek leader has arrived in Seoul, the capital of South Korea, on a state visit at the invitation of the country’s President Mun Zhe Ying on November 22.

Since the beginning of the year, various textile semi-finished and other products worth $23.4 million were exported to the Korean market. Meanwhile, a successful supply of knitted goods to the Lotte Mart retail networks, dyed and mélange yarn for manufacturers of knitted goods from Korea was launched this year.

Uzbekistan is expected to achieve full processing of cotton fiber in 2021. By 2020, the capacity of local enterprises will ensure the full processing of cotton produced in Uzbekistan, which can lead to a significant decrease in the export supplies of this crop. Only in 2017, the country intends to bring internal processing of cotton fiber to 70 percent.

At the same time, by 2021 the production of textile and clothing and knitted products will increase by 2.2 times compared to 2016, including ready-made fabrics - 2.7 times, knitted fabrics - 3 times, knitted goods – 3.4 times, hosiery – 3.7 times. It is planned to increase the export of products by 2 times.

One of the policy priorities of Uzbekistan, the world’s fifth-largest cotton exporter, is further development of its textile industry. Annually, the country grows about 3.5 million tons of raw cotton, produces 1.1 million tons of cotton fiber.

Uzbekistan takes consistent steps to increase the volume of cotton fiber processing. In particular, it is planned to create 112 modern, high-tech industrial factories, expand, modernize and technologically upgrade 20 operating capacities. All this will increase the export potential of the industry up to $2.5 billion a year and create more than 25,000 jobs.

In the period 2010-2014, the textile industry of Uzbekistan received and spent foreign investments worth $785 million while 147 new textile enterprises with participation of investors from Germany, Switzerland, Japan, South Korea, the U.S., Turkey and other countries were commissioned. Export potential of these enterprises amounted to $670 millions.

Source: Azer News

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USA : Cotton top soft commodities bet for 2018, sugar the worst - Rabobank

Cotton is the best bet among soft commodities for 2018, with the prospect of a “more bullish price trend”, and sugar the worst - although even here there is scope for price gains, Rabobank said.

The bank, in its annual briefing on year-ahead agricultural commodity values, rated cotton as having the third best price outlook in the complex, behind corn and lean hogs, as reported elsewhere on Agrimoney.

The bank forecast New York futures prices averaging 65 cents a pound in the current, October-to-December quarter, on a spot contract basis, “under pressure” from “heavy” inventories, with stocks outside China, whose supplies are not available to the world market, forecast rising by 10m bales over 2017-18.

However, futures prices will recover to average 72 cents a pound in the last quarter of next year, as weakened farmer profitability cuts sowings in 2018-19 in major producing countries including the US, where area was forecast dropping by 1.2m acres.

‘More bullish price trend’

“A more bullish price trend is expected to emerge in late 2018, driven by strong global consumption and stock erosion,” Rabobank said. World inventories, including China’s, will drop by 10m bales to some 79m bales in 2018-19, which starts in August next year.

The forecast factored in a an expectation of a 4.3% drop in global sowings, and a 2% rise in demand, led by South East Asia, which includes the growing Vietnamese textiles industry. Prices will also be supported by the prospect of the ending in 2019-20 of China’s destocking drive, likely to herald a upswell in import demand.

‘Much lower sugar’

By contrast, for raw sugar, the bank cautioned of some outstanding pressure from a reluctance among some producing countries to cut output, despite prices which are below the cost of production in “many” nations. “We expect a muted supply-side response, given the level of protectionism in areas like the European Union, Pakistan, China and India.”

Still, in Brazil, the top sugar producer and exporter, an output drop is “likely” in the key Centre South region in 2018-19, thanks in part to the prospect of a reduced cane harvest, thanks to a higher rate of replantings, but also the switch by mills to producing more ethanol. If sugar remains less lucrative, “we will likely see a much lower sugar mix [in output], as mills will favour ethanol production,” the bank said, noting too a weak level of forward hedging by producers.

Nonetheless, the bank forecast New York raw sugar futures prices rising to 15.6 cents a pound in the last three months of 2018, up from 14.7 cents a pound expected for the current quarter.

Coffee stocks decline

The bank rated coffee as a marginally more bullish bet, forecasting a world production deficit of 4.7m bags for 2017-18, “split evenly between arabica and robusta”, above an output surplus of 3m bags forecast for next season. In fact, the bank forecast Brazil having a record harvest to 59m bags next year, comprising 42.4m bags of arabica beans and 16.6m bags of robusta, although flagging potential setbacks such as dry weather in some major growing states such as Espirito Santo.

However, this will follow a period of destocking in importing countries, which inventories in non-producing nations forecast falling by 3m-4m bags from record levels above 26m bags reached in September. The bank forecast arabica futures averaging 134 cents a pound in the last quarter of 2018, up from 130 cents a pound expected for the current quarter.

Dwindling surpluses

Cocoa futures, meanwhile, were given a mildly more bullish rating still, ranking them fifth in the Rabobank table, behind fourth-placed Chicago wheat, with price prospects supported by ideas of smaller bean production in Cote d’Ivoire, by far the top growing country.

A cut to 700 CFA francs in the government fixed price for beans “ill discourage harvesting efforts in the 2017-18 main crop, and will also result in lower fertilizer use for the mid-crop, and next year’s main crop”, the bank said. It forecast a drop of some 170,000 tonnes to 1.83m tonnes in Cote d’Ivoire output this season.

While still expecting world production surpluses ahead, estimates of 130,000 tonnes for this season, and 60,000 tonnes for 2018-19, “look smaller than they did two months ago”.

Nonetheless, stocks are large enough to “prevent any spikes in prices”, which look like ending next year at around $2,260 a tonne in New York, up $100 year on year on the bank’s forecasts.

Source:  Agrimoney.com

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USA : Los Angeles Denim Factories Are Struggling to Stay Alive

Los Angeles has always been the epicenter for manufacturing blue jeans in the United States. Major labels such as True Religion, Lucky Brand, Hudson and 7 For All Mankind built their reputations on that “Made in the USA” cachet, which signaled quality and prestige in their premium-denim products.

It was a marketing tool that helped manufacturers sell their products to upscale department stores and boutiques around the world catering to a fashionable crowd that didn’t mind paying $200 to $400 for a pair of denim dungarees.

But the rise in California and Los Angeles’ minimum wage, a move by blue-jeans owners to beef up profit margins and consumers pulling back on their clothing expense accounts are crushing Los Angeles denim factories.

Earlier this month, United Denim Inc. informed state employment officials that it planned by the end of the year to lay off 164 of its approximately 200 employees, who work in its south Los Angeles factory. “We are in survival mode,” said Mateo Juarez, the owner of the factory, which has been making blue jeans since 2009. “We are letting a lot of people go. We are taking our last breath.”

Things looked a little brighter three months ago. Juarez was getting inquiries from Gapand Abercrombie & Fitch about moving some of their production from Mexico to the United States because President Trump was threatening to fine companies producing outside of the United States. But threats of a fine fizzled and blue-jeans makers are moving out of Los Angeles as the minimum wage, at $12 an hour, is set to rise to $13.50 an hour by next summer for larger businesses. By 2021, the minimum wage will be at $15 an hour.

“If you make blue jeans in China, including the fabric washes, it is $6. If you do the same jeans in Mexico, you can make it for $10, which includes dropping if off here in Los Angeles. And if you do it in the U.S.A., you are looking at $40 to $50. That’s a big difference,” Juarez explained.

He calculates that if you manufacture 100,000 jeans in Mexico, it will cost $1 million. Make those jeans in Los Angeles, the price skyrockets to $4 million. The difference is astronomical and only economically practical if blue jeans are selling for $100 to $200.

That simple math calculation is not lost on the big private-equity groups and multimillion-dollar companies that have bought many of the premium blue-jeans labels started by Los Angeles entrepreneurs who turned a glimmer of an idea into big brands.

Jeff Lubell cofounded True Religion in 2002 and 11 years later sold it to TowerBrook Capital for $835 million. (True Religion filed for Chapter 11 bankruptcy protection earlier this year and exited bankruptcy in October.)

Peter Koral, Michael Glasser and Jerome Dahan launched 7 For All Mankind in 2000. After a split with Glasser and Dahan, Koral turned around and sold the company in 2007 to VF Corp. for $775 million, which then sold the blue-jeans lifestyle brand last year to the Israeli company Delta Galil.

Jeff Rudes and Susie Crippen started J Brand in 2004. In 2010, they sold 52 percent of the company for $85 million to Star Avenue Capital, which two years later sold a majority share to the Japanese company Fast Retailing for about $290 million. Fast Retailing is the parent company of retailer Uniqlo.

These days, new leaders in the executive offices are less concerned about that “Made in the USA” label and more concerned about return on investments. They are shaving costs by heading to Mexico, Vietnam and India, where labor costs and regulations aren’t as stiff as they are in the United States.

“Almost all denim here is going out the door,” said Ilse Metchek, president of the California Fashion Association, whose members are manufacturers and apparel and fashion-related companies. “It’s because of minimum wage. Denim is very labor-intensive.”

Singing the blues

Until five years ago, Atomic Denim had 1,000 workers in two Los Angeles factories making blue jeans for mostly True Religion. Today, there is only one factory with 70 to 100 workers who fluctuate with the season in their production for Hudson, Tom Ford and Diesel.

Last year, to meet the demand for lower prices, Atomic Denim opened a Tijuana, Mexico, factory where the salaries for the 70 workers there are about half of what they are in Los Angeles. “There is no large volume in Los Angeles like it was before. The market is different,” said Claudia Bae Kye, vice president of E & C Fashion, the parent company of Atomic Denim and Pacific Concept Laundry. “We needed to go somewhere else to match the pricing companies wanted.”

Another big blue-jeans manufacturer taking a big hit from the decline in local blue-jeans orders is Jean Mart. Three months ago, Steve Rhee took over the 100,000-square-foot factory with 600 sewing machines from his parents, who retired. Now called Factory One Studio, Rhee has only 75 workers to fill a space that used to hold hundreds of workers. The factory’s biggest clients used to be True Religion and Lucky Brand until they went elsewhere.

One year ago, the factory was rolling out nearly 3,000 pairs of blue jeans a day. Right now, the company is making about 1,500 pairs of blue jeans for Diesel, J Brand and Fear of God. Many companies are only interested in making 100 to 200 units at a time. “All the big guys are in Mexico now,” he said. “It is hard to find consistent work now in Los Angeles.”

The change in the Los Angeles denim-manufacturing industry sounded a death knell last year for American Garment Sewingin Vernon, Calif. “We used to have a lot of customers, but then it started to shift in 2015,” said Anton Pavel, the company’s owner.

In 2015, the factory—with 200 employees—had about 80 percent of its production in blue jeans—mostly for True Religion. Other production was dedicated to army uniforms. Annual revenues totaled about $10 million to $12 million.

Last year, the True Religion business dried up and blue jeans made up only 20 percent of production for labels such as Current/Elliott, Joie, Kate Spade and Theory. About 80 percent of production became army uniforms and the rest was denim. The employee workforce dropped to 100. “The big customers in denim moved out, and we tried to move in more military uniforms, which was a really slow process,” Pavel said.

A series of workers’ compensation claims saw the company’s insurance costs skyrocket from $10,000 a month to $50,000 a month and annual revenues plummeted to $6 million. “The [workers’ compensation] complaints were so high, we couldn’t cover our expenses,” Pavel said.

Also, military-uniform makers only wanted to pay the federal minimum wage of $7.25 an hour rather than the higher Los Angeles minimum wage. “So we were stuck between a rock and a hard place,” the blue-jeans-factory owner said. “Basically the expenses became huge, and we ran out of money.”

At the end of last year, Pavel paid his remaining employees and shut down his company.

Source: Apparel News

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Portugal ready to provide technology, machinery to Pakistan

Dr Joao Paulo Marques Sabido Costa, chargé d’affaires, Embassy of Portugal , Thursday said that his country wanted to enhance trade ties with Pakistan as both countries have good potential to improve bilateral trade in many areas.

He stressed that Pakistan and Portugal should exchange trade delegations and promote B2B linkages to know each other and explore new areas of mutual cooperation. He was addressing business community at Islamabad Chamber of Commerce and Industry.

Dr Joao Paulo Marques Sabido Costa said that being a hi-tech country, Portugal was ready to provide technology and machinery to Pakistan in many sectors including agriculture, textile, marble, water resources, building and constructions. He said Portugal was close to EU and Sub-Sahara and Pakistan should develop close cooperation with it to get better market access to European and African regions. He said Pakistani Basmati rice and food was quite popular in Portugal and Pakistan should focus on promoting more products to Portuguese market under GSP Plus scheme.

He said Portugal has offered a Golden Visa Program to attract investment in real estate sector and Pakistani investors should take benefit of this program. He said Portugal has PTAs with many countries and by investing in Portugal , Pakistani investors can promote exports to Europe, Africa, Canada and other regions. He said ICCI should form a delegation for Portugal to explore new business opportunities.

Speaking at the occasion, Sheikh Amir Waheed, President, Islamabad Chamber of Commerce and Industry said that trade volume between Pakistan and Portugal was not encouraging and stressed that both countries should promote strong connectivity between private sectors to identify untapped areas of mutual cooperation. He said Portugal should enhance the import of Pakistani products including textiles, garments, surgical instruments, sports goods, leather products, fruits & vegetables and other products to extend full benefits of GSP Plus to

Pakistan .

He said Portugal has good expertise in energy generation through renewable sources and it should cooperate with Pakistan in easing its energy problems. He said both countries have good potential to exchange expertise in the fields of education, science and information technology while promotion of tourism would strengthen bilateral relations. He said Portugal was quite strong in high technology and it should cooperate with Pakistan to manufacture value added and hi-tech products.

Muhammad Naveed, Senior Vice President, and Nisar Mirza, Vice President, ICCI stressed for frequent exchange of trade delegations to identify new areas for bilateral cooperation. They said Portugal’s investors should visit Pakistan to explore joint ventures and investment in CPEC and in other sectors of Pakistan’s economy. Baser Daud, Tahir Ayub, Rashid Humayun and others also spoke at the occasion.

Source: The Nation

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