The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 15 DEC 2017

NATIONAL

INTERNATIONAL

 

Foreign Trade Policy: More than sops, promote exports as growth engine

The recent mid-term review of foreign trade policy (FTP) promises to scale up exports, as the government believes exports are the engine of growth, and if the country wants to grow at 7% then exports need to provide that extra stimulus. The review, aimed at mid-course correction, focuses on policy measures to boost exports of goods and services and increase employment generation and value-addition in the country. A first look suggests the government is sensitive towards the fact that the manufacturing sector needs considerable encouragement to perform well and better integrate with the global economy. The ‘missing middle’ appears to have been thought about and good sense has prevailed, which is reflected in this review, where the government has offered incremental sops to exporters of traditional manufacturing such as leather, textiles, processed food and agricultural sector. The government is taking steps towards ease of doing business and this would help India’s attempts towards trade facilitation, which is a major focus of developing and developed economies in WTO negotiations. In this review, a major course correction is an additional 2% incentive for labour-intensive sectors under the Merchandise Exports from India Scheme and Services Export from India Scheme, which is in the form of freely transferable duty scrips that can be used by exporters to pay custom duties. This provision has been extended to 24 months from the existing 18 months. Duty credit scrip is one of the most important export promotion incentives offered by the government to exporters. This additional emphasis on scrips will perk up exports by giving tax incentives to exporters. The scrips will also help promote exports of certain goods to specific markets. Self-certification scheme for duty-free imports is another important incentive. A new trade data analytics division under DGFT is a welcome move that will analyse real-time data to help fine-tune policy. This approach would form a matrix of products/markets dynamics that would help to focus on products that have a strong global market. Exporters are sometimes devoid of working capital and therefore bank on credit, which is available to them at a high cost, which, in turn, decreases their global competitiveness. To safeguard exporters, the government will provide them with incentives to the tune of Rs 8,450 crore. It’s apparent that the government’s intent towards promotion of exports as a viable medium for registering high growth rate and as a medium of global integration is clear. Of these incentives, Rs 749 crore is for leather and footwear, Rs 1,354 crore for agriculture and related items, Rs 759 crore for marine exports, Rs 369 crore for telecom and electronic items, Rs 921 crore for handmade carpets, Rs 193 crore for medical and surgical equipments, and Rs 1,140 crore for textiles and ready-made garments. On the whole, incentives for goods exports stand at Rs 4,567 crore, and for services exports at Rs 1,140 crore.More than sops, exports need focus on issues such as availing lower transaction costs, less red tape in clearances, robust infrastructural development having state-of-the-art port, airport and superhighway facilities to augment domestic and external trade. Rational labour laws and provision of cheaper electricity to exporters, especially MSME, are the need of the hour. Exports, for the first time in a year, fell in October, owing to delays in refunds that resulted in lack of working capital for exporters because of GST. Now, with improvisation on that front to an extent in terms of establishing better network, exporters will be able to get refunds possibly faster. Such dynamics should encourage exporters to pursue with their vendors to file GST return, to be able to claim their own refunds. As the government’s focus at the five-year term of FTP (2015-20) was to reach $900 billion worth of exports by 2020, a lot depends on what kind of favourable and liberalised export policies the government designs to make MSME sector globally more competitive. This, in turn, would generate employment, which is the main agenda of the government. Sustained growth in exports also depends on the pace of global recovery, and signs of recovery seem to be visible in the US, the EU and Japan.

Source: Financial Express

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Rupee gains as US Fed decision knocks down the dollar

The rupee opened with a gap-up on Thursday following a sharp fall in the dollar index. The US dollar was beaten down after the outcome of the US Federal Open Market Committee’s (FOMC’s) final meeting for this calendar year on Wednesday. The Fed, as expected, increased interest rates by 25 basis points. Also, it left the median projection of the policy rates unchanged for the next year at 2.1 per cent. This leaves room for three rate hikes next year.

Strong economy

The Fed continues to remain confident about US economic growth. This is evident from the higher revisions in its growth projections. The Fed expects the US to grow at 2.5 per cent this year, up from 2.4 per cent projected in September. For 2018, it has revised the growth rate higher to 2.5 per cent from its earlier projection of 2.1 per cent made in September. The central bank said the changes in tax policies could provide “some lift” to economic activity. However, the Fed Chair, Janet Yellen, said the higher revisions in the growth projections should not be assumed by the market to be driven by the proposed tax policy change as it is only one among the many factors that are considered for the projections.

Dollar falls

A no-surprise from the US Federal Reserve’s meeting on Wednesday triggered a sell-off in the dollar. The dollar index fell 0.7 per cent from around 94.1 to 93.4 on Wednesday. It bounced up slightly, after hitting a low of 93.33 on Thursday and is currently trading around 93.45. Immediate support is at 93.25, which is holding as of now. If the index manages to sustain above this support, a bounce to 93.8 is possible in the near term. A strong break above 93.80 is needed for the index to bring back the bullish sentiment. On the other hand, if the dollar index breaks below 93.25 in the coming days, it can fall to 93 or even 92.7 thereafter. The year 2017 has been bad for the dollar. The dollar index has tumbled about 9 per cent (yearto-date) so far this year. With this sharp fall, the dollar is all set to close 2017 on a negative note for the first time since 2012.

Rupee gains

The sharp fall in the dollar index helped the rupee gain momentum on Thursday. The domestic currency opened with a gap-up and touched an intraday high of 64.25 before closing at 64.35 on Thursday. The rupee is likely to retain its strength and move higher to test the key resistance level of 64.18 in the coming days. Whether the currency breaks this hurdle or not will then decide the next move. If the rupee manages to breach 64.18, it can strengthen to 64 or even 63.85 in the coming weeks. But if it reverses lower from 64.18, there is a strong likelihood of it weakening to 64.35 and 64.5 levels again.

Source: Business Line

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Cotton yarn exports fall 10% y-o-y on poor China demand

Coimbatore: With China, the largest importer of yarn, reducing its purchases, cotton yarn exports from the country fell 10.2% year-on-year (y-o-y) to 464 million kgs (mkgs) between April and September this year. Cotton yarn exports advanced by a mere 1.1% y-o-y in value terms to around $1.5 billion during the timeframe. Exports to China saw the biggest fall in both volume and value terms. Cotton yarn shipments to China plunged 31.9% to 105.9 mkgs between April and September, data with the union commerce ministry showed. It fell 36.7% y-o-y in value terms to $285 million. Incidentally, cotton yarn exports hit a record $4.5 billion in 2013-14 as spinning mills performed well by taking advantage of various sops including the 2% incremental export incentive, 2% interest subvention and 3% focus market incentive. However, export incentives provided to cotton yarn were withdrawn in 2014. Following this, yarn exports started declining and fell 26% to $3.3 billion in 2016-17. "This policy decision has adversely affected cotton yarn exports to China, the largest importer," said Sanjay Kumar Jain, chairman, Confederation of Indian Textile Industry (CITI). "China has shifted from India to Vietnam/Indonesia as they have duty free access while Indian yarn carries 3.5% import duty," he said. "From 2013-14 to 2016-17, there has been a decline in India's cotton yarn exports to China by 42% while exports from Vietnam and Indonesia have increased 83% and nearly 14% respectively in the same period," Jain stated. "Profit margin in the yarn industry are thin and profits are made with volumes. Withdrawal of the export incentives for cotton yarn has reduced our competitive edge by increasing our prices to the tune of 5%-6%," he said. "Many old textile mills have been shut down. Over the last five years, spinning EBITDA (earnings before interest, taxes, depreciation and amortisation) margins have decreased at an alarming rate of 21% per annum," the CITI chairman said. He said that the 3% IES (Interest Equalisation Scheme) benefit is essential to maintain 6-9 months of cotton inventory since it is a seasonal commodity available for four months and also to ensure consistency in quality of yarn supplied at a lower interest cost. "Indian interest rate ranges between 10% and 12.5% while interest rates of our competing nations ranges much lower at 4%-6%," Jain said. "There is an urgent need to restore the MEIS (Merchandise Exports from India Scheme) and IES benefits for cotton yarn immediately," he said. "There are no reasons why other segments in the textile value chain should get this benefit including MMF (man-made fibre) yarn while cotton yarn should not get the same," the CITI chairman stated.

Source: The Times of India

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Restore MEIS & IES benefits for cotton yarn: CITI to govt

The Confederation of Indian Textile Industry (CITI) has urged the Central government to immediately restore Merchandise Exports from India Scheme (MEIS) and Interest Equalisation Scheme (IES) benefits for cottonyarn. During April-September 2017, India’s cotton yarn exports fell 10 per cent to 464 million kg from 517 million kg during same period in 2016. Indian cotton yarn exports are struggling due to various policy lapses, said CITI chairman Sanjay K Jain in a press release. “There is an urgent need to restore the MEIS and IES benefits for cotton yarn immediately. There are no reasons why other segments in the textile value chain should get this benefit including MMF yarn while cotton yarn should not get the same.” He pointed out that Indian spinning mills performed well in exports during 2013-14 taking advantage of the 2 per cent incremental export incentive, 2 per cent interest subvention and 3 per cent focus market incentive and achieved a record export of around $4,555 million of yarn. However, in 2014, the benefits of export incentives provided to cotton yarn were withdrawn due to some inexplicable reasons. During the year 2016-17, the cotton yarn export was only around $3,352 million, registering a decline of 26 per cent. This is despite adding over 3 million spindles and 62,000 rotors spinning capacity during the same period. Jain further stated that India is today exporting more than 60 lakh bales of cotton every year i.e. about 20 per cent of the total cotton production. “Exporting of raw cotton bales instead of value addition by converting to yarn is leading to loss of valuable foreign exchange, employment and better remuneration to farmers.” “When export benefits such as MEIS and IES were introduced …, every other segment in the textile value chain including MMF spun yarn were provided with the benefits while cotton yarn was not considered. This policy decision has adversely affected cotton yarn exports to China, the largest importer of cotton yarn,” Jain said in the release. During the last few years, China has shifted from India to Vietnam/Indonesia as they have duty free access while Indian yarn carries 3.5 per cent import duty. From 2013-14 to 2016-17, there has been a decline in India’s cotton yarn exports to China by 42 per cent while exports from Vietnam and Indonesia have increased at a remarkable rate of 83 per cent and 14 per cent respectively in the same period. He added that profit margin in the yarn industry are thin and profits are made with volumes. “Withdrawal of the export incentives for cotton yarn has reduced our competitive edge by increasing our prices to the tune of 5 to 6 per cent. Many old textile mills have been shut down while new capacities are coming up at the cost of tax payer’s money. Over the last five years, spinning EBITDA margins have decreased at an alarming rate of 21 per cent per annum.” Cotton being a seasonable commodity available for four months, 3 per cent IES benefit is essential to maintain six to nine months cotton inventory and also to ensure consistency in quality of yarn supplied, at a lower interest cost. Interest rate in India ranges between 10 per cent and 12.5 per cent while interest rate in competing nations ranges much lower between 4 per cent and 6 per cent.

Source: Fibre2Fashion

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Cotton rises 2.5% on low output worries

PUNE: Cotton prices in the spot market have increased 2.5% in a week, a development that traders attributed in part to widespread belief that the output for 2017-18 would be less than 370 lakh bales although the Cotton Advisory Board has forecast 377 lakh bales in its first estimate. Traders said that this combined with the main trigger of Pakistan’s decision to allow import of Indian cotton resulted in price rise of Rs 1,000 per candy to Rs 39,500 per candy. Explaining the rationale for the forecast, Cotton Advisory Board chairman Kavita Gupta said, “We believe that 19% increase in area under cotton could compensate to some extent the losses that could be suffered due to pink bollworm problem, which has been mainly noticed in five states of the country.” The area under cotton has increased to 122 lakh hectares from 108 lakh hectares in the previous year. The board has forecast 9.3% higher output than the production of 345 lakh bales in 2016-17. However, traders peg the output this year at 355-365 lakh bales. Cotton harvest continues for several months as the crop yields multiple pickings. As per trade estimates, about 100 lakh bales of cotton have come to the market so far, indicating that a large crop remains to be harvested. The Cotton Association of India, which mainly represents cotton traders, had earlier said that it estimated cotton production of 375 lakh bales for the 2017-18 season.

Source:  The Economic Times

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TT to set up mega garment plant in UP to move from textiles to garments

TT Ltd said it has decided to set up a mega garment plant in place of Spinning Machinery at Gajroula in Uttar Pradesh. The move is part of its attempt to diversify from textile making to making garments. “TT is exiting from spinning and entering the garmenting and fabric business on a massive scale,” the company said. Garment and Fabric turnover is targeted to be doubled up 2018-19 and to target speedy growth in years thereafter, it said. It said it will continue to open branded stores in the franchisee model to push its garments. “The company is also emphasing and expanding its retail stores under brand of “T T Bazaar”,” it said, adding that it has already opened 50 such showrooms. “Another 50 stores are in pipeline. The Company is targeting to open 250 such stores by 2019. All such stores shall be on Franchisee model.” It said it is appointing distributors states where it has lower coverage, such as Chhattisgarh, Assam, Andhra Pradesh, Tamil Nadu, Telangana, Maharashtra and Karnataka. The company also said its new factory will enjoy benefits of central subsidies and incentives as well as special subsidies and incentives declared by the new Textile Policy of Uttar Pradesh.

Source: Ultra.news

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Khadi Mela 2017 kicks off at Taltala grounds

Kolkata: The Khadi Mela was kicked off at Taltala grounds in Jodhpur Park area on Thursday. The mela was inaugurated by state Power minister Sobhandeb Chattopadhyay and Minister of state for Micro Small & Medium Enterprises and Textiles Swapan Debnath. "We have set a target of sales of around Rs 3 crore in this year's Khadi Mela. Last year it was Rs 2.65 crore. The focus this year has been on ladies garments and dress material," said a senior official of West Bengal Khadi & Village Industries Development Board (WBKVIB), which organises the fair. The main attraction of the fair will be modernised designs on Khadi clothes. There are as many as 93 stalls among which are 41 Khadi Societies spanning across the state. There will be 43 stalls on Khadi Gramin. "Our aim in organising this fair is to provide craftsmen the opportunity to sell garments directly to customers, thus ruling out middlemen. It also gives us the chance to promote export of Khadi products and handicrafts," the WBKVIB official added. Cotton, woolen, silk and hand-woven Khadi fabrics, handicrafts, garment products and food stalls will be part of the mela. There will be Muslin garments, along with Kantha Stitch, which is extremely popular, particularly with the young generation. There will be a fashion show on December 17 where the latest fashion in Khadi and Muslin will be displayed. The fair will continue till January 2.

Source: Millennium Post

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India all set to create history at New York Fashion Week 2018

Ludhiana: Hollywood Celebrity Stylist James R. Sanders who has styled many Hollywood stars for Red Carpet in Oscars and Grammy Awards was in the city to look for the fabrics. As there will be 60 garments to be presented by India at New York Fashion Week to be held in the mid of the February in New York including 50 women wear and 10 men wear. James R Sandres said as New York is aesthetic to the perspective and we are looking forward to design semi western styles with the different hues."The city where all black is the uniform . I breath fresh air when I see vibrant colours here while securing the fabric for the construction of garments in the street of Sraffan Bazar, especially the hand do enlightened work which is intrinsic , sophisticated and polished." “The fashion will push beyond the boundaries as India is full of talented and creative young designers who understand the true meaning of Fashion." "The sleek fashion element will now be known to New York as this collection will reflect the love for black along with the mixture of various hues which is the signature of Indian fashion." "Even the theme is 'Vibrant India' which itself represents the rich heritage, culture, colours and all the designs. But still there is need to incorporate the traditional Indian garment to streamline according to the audience of New York.he added Ritu Kochar, Corporate Director INIFD said that this is the first student organisation who is representing India at the three season of London Fashion week and have been addressed by the UK Embassy.

Our Designers have incorporated the craft from each and every state pan India to create something which will leave the audience spell bound at the New York Fashion Week. We have incorporated according to the trend report, the designers have contributed their work and creativity with a background of Indian centric which is mentored by him. we will set a new benchmark at the NYFW. While Arvind Gupta , Director of institute said that it is a matter of pride as after presenting 'India Day" during London Fashion Week at Fashion Scout institute is now all set to present "Vibrant India" at New York Fashion Week. We are following the 5 "F" formula given by honourable Prime Minister Narendra Modi from Farm to Fiber, Fiber to Fabric, Fabric to Fashion, Fashion to Foreign. James was amazed to explore the Manchester of India, city rich in textiles, extending facilities for different embellishments and home for different type of embroideries expressed his desire to do a bit of fabric sourcing. Sunil Raj Vinayak , who is an alma mater of INIFD said that through trend forecast process , James came and had look and feel of the fabric and now I am ready with the five garments . I have to make 60 garmets in 32 days. As I have represented India in Fashion Scout as Independent designer , we get an exposure to get a finishing in through the international standard of the garment Vinayak added.

Source: The Times of India

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Global Textile Raw Material Price 2017-12-14

Item

Price

Unit

Fluctuation

Date

PSF

1329.24

USD/Ton

-0.85%

12/14/2017

VSF

2144.91

USD/Ton

0%

12/14/2017

ASF

2431.91

USD/Ton

0%

12/14/2017

Polyester POY

1299.03

USD/Ton

-0.23%

12/14/2017

Nylon FDY

3383.52

USD/Ton

-0.44%

12/14/2017

40D Spandex

5739.90

USD/Ton

0%

12/14/2017

Polyester DTY

2567.85

USD/Ton

0%

12/14/2017

Nylon POY

1601.13

USD/Ton

-0.47%

12/14/2017

Acrylic Top 3D

3625.20

USD/Ton

0%

12/14/2017

Polyester FDY

5709.69

USD/Ton

0%

12/14/2017

Nylon DTY

1548.26

USD/Ton

0%

12/14/2017

Viscose Long Filament

3164.50

USD/Ton

-0.24%

12/14/2017

30S Spun Rayon Yarn

2824.64

USD/Ton

0%

12/14/2017

32S Polyester Yarn

2027.09

USD/Ton

-0.07%

12/14/2017

45S T/C Yarn

2885.06

USD/Ton

0%

12/14/2017

40S Rayon Yarn

2175.12

USD/Ton

0%

12/14/2017

T/R Yarn 65/35 32S

2416.80

USD/Ton

0%

12/14/2017

45S Polyester Yarn

2975.69

USD/Ton

0%

12/14/2017

T/C Yarn 65/35 32S

2492.33

USD/Ton

0%

12/14/2017

10S Denim Fabric

1.41

USD/Meter

-0.11%

12/14/2017

32S Twill Fabric

0.87

USD/Meter

0%

12/14/2017

40S Combed Poplin

1.21

USD/Meter

0%

12/14/2017

30S Rayon Fabric

0.67

USD/Meter

0%

12/14/2017

45S T/C Fabric

0.72

USD/Meter

0%

12/14/2017

Source: Global Textiles

 

Note: The above prices are Chinese Price (1 CNY = 0.15105 USD dtd. 14/12/2017). 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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WTO has lost its way

Yet another WTO Ministerial Conference has ended with the 164 members of the organisation failing to agree on how to take the agenda of the organisation forward. At the end of the 11th Ministerial Conference (MC11), there should be no doubt that the WTO has lost its way. Trade ministers have failed to deliver a work programme for the WTO for the second time in a row—a first for this 22-year-old organisation. In the past, failures of the Seattle Ministerial (1999) and the Cancun Ministerial (2003) were quickly put behind with members agreeing to work together. Like in Seattle and Cancun, MC11 ended without a Ministerial Declaration. Thus, while the Declaration at the Nairobi Ministerial (2015) showed deep divisions among the members, the absence of one at MC11 can only be interpreted as widening differences. An obvious reason why MC11 failed was the refusal of the US to engage. The largest economy being absent at the negotiating table was a strong reason, but this doesn’t explain the failure in its entirety; other processes, like climate-change negotiations and the TPP have found ways of continuing without the US.Should it then be argued that, unlike these processes, none of the WTO members are interested in steering it away from choppy waters? The members should introspect, both individually and collectively, and provide an answer. If no answer is forthcoming, they should not hesitate to close shop in Geneva. But, before closing shop, which may be on the agenda of other leaders besides US president Donald Trump, members must indicate how the rules for global trade will be developed and implemented. FTAs don’t seem to be particularly favoured—plenty of questions have been, and are being, asked about their outcomes, including by our own political parties. Therefore, governments must take the responsibility of informing all stakeholders as to how they intend to prevent the global economy from lapsing into the dangerous days of the inter-war years, when, in the absence of agreed-to trade rules, the world experienced its worst economic depression. Those following the run-up to MC11 knew weeks earlier that it was headed for failure. A bunch of countries, barely a fifth of the total WTO membership, had forced discussions on divisive issues like e-commerce and investment facilitation. There was a hypocritical element in the way these countries introduced the issues; they argued that these have a strong development dimension since MSMEs would benefit by developing WTO rules. These countries therefore spoke of eliminating tariffs on e-commerce and removing restrictions on foreign investors.  Elimination of tariff on e-commerce would result in complete trade liberalisation of goods (both agriculture and industry), something that most developing countries aren’t willing to do at present. It may be pointed out that one of the reasons for the current stalemate is developing countries resisting the pressures of the larger economies to even reduce tariffs, let alone eliminate them. These countries have argued that their small farmers and MSMEs would find it difficult to compete with the transnational corporations, and as a result, livelihoods would be lost and domestic food security would be under threat in their economies. Despite these arguments being on record, the so-called “Friends of E-commerce for Development” (FED) argued that small farmers and businesses would benefit. These countries didn’t want to recognise the fact that in most developing countries, poor digital infrastructure would not allow the professed benefits to be secured. Also, promotion of e-commerce would result in free-flow of personal data, concerns about which have been expressed in many countries like India. The good news is that the MC11 could not make any headway on this issue. Investment facilitation was a divisive issue since the WTO members had rejected extending rules of the organisation to cover investment. Of late, investment rules for investor-protection have become very contentious in many developing countries, including India, because investors have initiated a slew of cases against host governments by invoking the investor-state dispute settlement (ISDS) mechanism. India’s present government had reworked the rules for investor protection in 2015 in response to these cases, to limit the use of ISDS. At the end, the inevitable happened in Buenos Aires—there was no decision on this issue. It seems India’s only interest was protecting its interests in agriculture, especially finding a “permanent solution” to the vexed issue of public stockholding (PSH) for food security purposes. The WTO’S agriculture subsidies’ regime makes it difficult for India to implement the Food Security Act. At the Bali Ministerial Conference (2013), India was able to negotiate a “peace clause”, which said that even if it violated the rules on subsidies, no dispute in the WTO will be initiated until a “permanent solution” was found. But, while pushing its interests in PSH, India found itself on a tricky wicket during MC11. The pressures from a number of countries resulted in a draft text on permanent solution on PSH, which India could not have accepted under any circumstances. Finally, there was no decision on this issue, too.One factor that must be mentioned is the last minute intervention by India to push its offensive agenda. India brought a proposal to link grant of patents based on biological material to the protection of biological diversity. ‘This is an absolute “no” for major transnational corporations who want to free-ride on the genetic material available in developing countries, without compensating the provider countries. While the Indian delegation needs to be commended for taking this offensive stance, it should also draw a lesson from this experience—without an offensive agenda, the country’s core interests cannot be protected. This is the biggest takeaway for India from MC11.

Source: Financial Express

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Failing WTO not good news for India

It is but natural for Indian participants in the failed Buenos Aires ministerial of the World Trade Organisation (WTO) to focus, in the collapse of the ministerial, on US intransigence on reaching a permanent solution to the question of keeping expenses on public stockholding meant for ensuring food security outside the 10% cap on agricultural subsidies. There was no agreement on ending subsidies on illegal fishing either. The fact is that the US, under President Donald Trump, has no faith in multilateral agreements and prefers bilateral deals or agreements among small groups. This overall change in developed-country appetite for multilateral liberalising of trade is the primary reason for the collapse of the current ministerial and the probability of ministerials of all member nations gradually giving way to meetings of what US trade representative Robert Lighthizer described as groups of like-minded countries. It is likely that the US would also champion a change in WTO decision-making from consensus among all members to a mixture of plurilateral agreements that like-minded countries can opt into and even decisions by majority. India would, naturally, have to oppose such moves. However, India and other large developing countries stand to gain from WTO’s continued salience as the primary instrumentality of rules-based world trade, rather than from its gradual decline and disuse. To this end, they must not only stoutly oppose the US-kind of overreach but also build consensus of their own, to enable the body reach definitive agreements. Domestic politics makes governments score brownie points by acting tough at WTO. However, statesmanship lies in balancing short-term political gains with the economy’s long-term gains from making savvy concessions.

Source: Economic Times

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‘WTO farm talks should be based on India-China plan to curb rich nation subsidies’

China has said its joint proposal with India — on the elimination of the huge trade-distorting farm subsidies of rich nations — should form the basis of future agriculture reforms at the WTO. “We would want to continue agriculture reforms at the WTO in the future, but it has to be in the right direction. That direction will be the AMS (aggregate measurement of support) reduction of developed countries,” said Zhang Xiangchen, Permanent Representative of China, in an interview with BusinessLine at the WTO ministerial meet here. Several developed countries are trying to focus on Other Trade Distorting Support (OTDS) that includes small subsidies given by developing countries, while the need is to trim the AMS entitlements of the rich nations, he said. According to a joint paper circulated by India and China recently, the developed world, including the US, the EU and Canada, has cornered 90 per cent of total entitlements, amounting to a whopping $160 billion annually. Zhang said his country is opposed to the focus on OTDS and the only direction to move in the area of farm subsidies is to reduce AMS. Upset over the US’ refusal to support a permanent solution on public stockholding, he said the US reluctance to mention the Doha development agenda in the mandate is also disappointing. “If we fail now, what is the guarantee that we are going to succeed next time?” he asked. While China supports new issues such as investment facilitation and e-commerce, it doesn’t support plurilateral talks, he said. “We are trying to insist that we would like to see the discussion conducted in a multilateral approach. We oppose plurilateralism.” China is an advocate of investment facilitation and hopes to engage more WTO countries in discussion and not negotiations, he added. “We think that not everyone, including like minded countries, share this (insistence on multilateralism). Like in e-commerce, someone wants to organise a group. It is not the idea we can share with them,” Zhang said.

Key position

China’s position against plurilateralism is important as members such as the EU have been hinting that if there isn’t enough support to new issues at WTO, members might hold plurilateral negotiations.

Source: Business Line

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Bangladesh plans to increase apparels exports mark to USD50 bn by 2021

Bangladesh plans to double its apparel export to reach a high ambition mark of USD 50-billion by 2021 which currently stands at USD 28 billion by expanding its global markets. It is going to be a difficult task but the only way to increase the export amount is by adding value to the apparel. The set target to increase apparel exports is in line with the government's Vision 2021, which is centred around a goal for the country to attain the middle-income country status by that year when the nation celebrates the golden jubilee of its independence. The current competitive advantage of Bangladesh is already being challenged by countries that depend on low-cost production—like Ethiopia. Many European and US retailers and brands will follow these countries if better margins are offered. Moreover, if Bangladesh is to graduate into a middle-income country, then the wages for its four million workers involved with the garment industry will have to rise at the expense of the margins of the apparel producers, resulting in lower profitability and losing that competitive edge. It is a catch-22 situation given our current low-cost production strategy. And it's doom to failure because of the law of nature about a developing country that must offer the benefits of a higher living standard in its journey to becoming a nearly industrialised one. Therefore, for the growth vision for 2021 to deliver, it is high time the apparel industry leadership fostered change as regards its customer base. The first option is to keep the customers in the apparel sector, not with low cost, but with innovation, collaboration and proliferation, thereby increasing the production volume and margin. Simultaneously, growing the number of customers in the value creation process will be an added bonus. For decades, international buyers for large international apparel chains and brands have worked under the assumption that labour cost must be kept as low as possible in order for garments to be produced at competitive prices. This widely-held belief has made the industry move from country to country, as the increase in labour cost erode each local market's temporary advantage. One day, possibly soon, this journey will come to an end. Cheap labour is becoming a rare commodity while the number of low-cost countries is also dwindling. Demonstrated thought leadership by the international retailers and brands need to get ahead of this trend by assessing what they can influence with their existing production partners to generate sustainable efficiency gains, improve their production speed, and ultimately take pressure off labour cost management, thus ensuring that margins are offered as a part of efficiency—not through cheaper labour. Consequently, the challenge for the apparel buyers is to collaborate with their production partners to advance the ideas of innovation, collaboration and proliferation. By inspiring, generating and adopting production innovations that improve speed and efficiency, they can increase their responsiveness to fashion cycles. By collaborating on adopting a standard unit of measure, both parties can, through this act of co-creation, help bring cost transparency to the supply chain and boost productivity. And by managing sub-suppliers and improving coordination with tier one, two and three for fabric, trim and sundries, they can proactively manage the raw material suppliers, consequently delivering positive proliferation. Next to streamlining the internal processes to gain value growth, the other obvious concept to support the growth of Bangladesh apparel export is the external shift from volume to value customers. According to the Boston Consulting Group, there has been a rebound in consumer confidence since the last financial crisis. As confidence rises, consumers become more willing to splurge on expensive products. Therefore, there are many opportunities for the Bangladesh apparel industry to grow margins by adding value and attracting premium brands and retailers. A blouse or pair of jeans cost more or less the same to produce, and it is mainly the raw materials that are adding cost to production. Managing the raw materials will be crucial but the margin gains will be many times more as the medium to premium brands and retailers sell at a much higher retail price and can buy the product in Bangladesh at a higher price. The biggest trend in EU and the US for capturing margin building and value adding growth is Experience Economy, which is estimated at USD 1.3 trillion in annual consumer spending in the US alone. The shift from personal goods to experiences will benefit some fashion companies, provided they are positioned correctly. For example, the rise of health and wellness experiences benefits companies that make activewear, athletic footwear, and other apparel for exercising, hiking, and spending time outdoors. The rise in leisure travel will mean higher sales of layering clothes, luggage, and travel accessories. To respond to this, companies will need to reposition themselves—at the levels of the portfolio and individual brands—by orienting products around specific experiences. This is where the other opportunity lies for supporting the growth vision for Bangladesh by 2021: shortcutting the traditional entry price brands by adding new medium to premium brands and retailers that are targeting the experience economy. Quick gains could come by addressing these brands in the medium to premium segment with the already established production and supply chains in Bangladesh and harvesting the margins as the retail prices are higher than the entry price brands. In this, Bangladesh faces a few challenges. Medium to premium brands and retailers are looking for value adding design perspectives that will enhance the consumer experience and set the products apart from competition. The second challenge is the perception of Bangladesh as a production hub that ignores social and ethical issues leading up to the collapse of factory buildings due to lack of health and safety. Many US and EU boards of directors see Bangladesh as a liability that can get a bad press and damage their image. The value creation performance of the Bangladesh apparel industry has, for over 40 years, delivered continued growth but if the apparel industry is to continue to support the growth, change management and repositioning from volume to value are the key.

Source: YarnsandFibers

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Pakistan : Cotton output may drop to 12.6 million bales on Punjab lows

LAHORE: Cotton production is feared to plunge to 11 million bales during the current season against the revised target of 12.6 million bales as the country’s key crop producing province Punjab is likely to deliver an output setback, officials said on Thursday. The officials said there is a further decline in cotton output compared with the already downward revised estimates as Punjab’s output failed to pick up despite hefty increase in the acreage. The revised cotton production forecast was 12.6 million bales of 170kg each – a way below the original output target of 14.04 million bales for 2017/18. The harvest in Punjab, which contributes around 70 percent to national production, is projected to be at almost the same level achieved last year despite nearly a 20 percent increase in area under cultivation. Pakistan, which is the world’s fourth largest cotton producing country, falls short of around four million bales a year to meet the local demand of nearly 16 million bales. Industry officials said the much-touted off-season management by the Punjab Agriculture Department failed to yield positive results in terms of increasing the output of silver fiber. A senior official of Punjab Agriculture Extension Wing said a downward trend in cotton arrival’s data suggested low productivity this year. The official added that Punjab’s cotton output would hover around the last year’s production. “Cotton output figures are still not final.” The Central Cotton Advisory Committee’s meeting, scheduled early 2018, is expected to present the final cotton estimate. The United States Department of Agriculture estimated Pakistan’s 2017/18 cotton production at 10.55 million bales of 170kg each and it would be up around 0.6 million bales from the last year. Harvested area is estimated at 2.8 million hectares this year, which is up 0.4 million hectares from last year. The yield is estimated at 638 kilograms per hectare, down nine percent from the last year. Cotton ginning industry also expects around 11 million bales of cotton output this year. A ginner said a ‘sharply-slowing’ pace of arrivals supported the forecast of a reduced crop. The decrease in cotton output in Punjab has baffled many as a considerable area was brought back to cotton crop this year. The off-season management was termed by officials as a solution for all ills of cotton crop. The government also praised it during the last meeting held to asses cotton output. An official commended the efforts of Punjab’s off-season management, aiming at delaying cotton sowing till April in order to avoid pest attack. The official said dent in cotton production, despite achieving higher area under cultivation, was due to climate change. The erratic rains, especially in the cotton sowing belt during crucial period of crop coupled with extreme temperature led to decline in yield, he added. An increase in cotton production was expected due to increase in area as well as a record package announced by the government. The Rs70 billion support package of federal as well as Punjab governments promised subsidies both on urea and diammonium phosphate, concession in interest rates, reduction in electricity tariffs for tube well pumps and taxation incentives. However, it appears that all these input support have not yielded desired results.

Source: The News International

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MySize unveils measuring solution for online cloth market

MySize, Inc., a maker of proprietary, smartphone measurement applications, is set to unveil a new measurement solution technology that will revolutionise the way consumers shop for clothing online. The new technology is currently in the testing phase at some Israel-based academic institutions, and to date, has shown promising results under lab conditions. MySize’s innovative technology has been designed to allow consumers to measure themselves using their smartphone and then be matched with an online apparel item in their size. The technology is expected to have the potential to significantly reduce the margin of error for customers purchasing the wrong size apparel online. MySize’s R&D engineers have developed a system that pulls data from anthropometric databases, which is then combined with studies on body measurements of diverse populations groups. MySize’s proprietary methodology combines this data with the measurements obtained from an individual via the smartphone app to estimate the circumference of different body parts that determine the size of garments. In order to help consumers determine the key body measurements needed for fitting apparel purchased online, MySize invented a simpler and more accessible three step process which include performing convenient body measurements using a smartphone, predicting the body circumferences required by the retailer size-chart using the MySize’s new proprietary algorithms, and recommend to the user their appropriate garment size according to the retailer’s size chart. Recording accurate and detailed body measurements via traditional methods is generally difficult. The main traditional methods involve advanced 3D scanners, or manually using multiple tape measures and calipers. In both cases, they can be expensive, require expertise to operate, and are not available to consumers. MySize is the only company that is able to do that based on recently awarded patented technology that uses actual body measurement. MySize CEO, Ronen Luzon said, “MySize has developed an innovative solution that will enable consumers to shop for better-fitting apparel online, across multiple vendors, and get their correct size, based on their individual smartphone-based body measurements. The US ecommerce apparel market alone is over US $72 billion of the total ecommerce market of US $394 billion, and we believe that the MySize solution will help reduce returns to retailers due to sizing issues, thereby benefitting consumers by assisting them to purchase apparel that fits their specific size.” (GK)

Source: Fibre2Fashion

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Super bacteria could soon be eating China’s textile waste

In China, the textile industry is transforming, as key players look to make their manufacturing more sustainable, especially when it comes to effluent discharge, The stricter water rules are part of China’s actions to increase enforcement in environmental measures. (Image Source: Bloomberg) Fabric-based bacteria-powered battery can generate ‘smart’ clothes, wearablesBacteria in printed circuits can help create solar cells, produce electricity even without light

A Friendly Force

In a Hong Kong laboratory, researchers are working with one of the world’s biggest cloth makers to improve its production process using a special ingredient: bacteria. TAL Apparel Ltd, which has factories in mainland China and Southeast Asia, has teamed up with City University to identify bacteria that can clean up more efficiently the vast quantities of waste water the textile industry produces. It’s one of hundreds of efforts by China’s private and state-owned companies to fix a problem that could end up rewriting the playbook of the global fashion industry. After decades of almost unbridled industrial growth that left China with a legacy of rampant pollution, shrinking aquifers and soaring water prices, the government is cracking down on big industrial users, and the textile industry is in the front line. Cloth-making ranks third in China for the amount of waste water it discharges – 3 billion tons a year – after chemicals and paper, according to a 2015 report by New York-based non-profit group Natural Resources Defense Council, which has an office in Beijing. The price of ensuring a sustainable water supply in China is yet another expense for factories that are already being squeezed by higher land and labor costs. And while automation and overseas production offer some respite, China’s companies are turning to other technologies to preserve operating margins that, even for major players such as Crystal International Group Ltd, can be less than 10 percent. In 2015, the government released its Water Ten Plan, ushering in stricter waste-water regulations. It sets out 10 general measures to control pollution discharge, promote technology and strengthen water management, with a 2020 deadline to meet its goals. The stricter water rules are part of China’s actions to increase enforcement in environmental measures. Penalties for environmental violations by the country’s manufacturers rose 34 percent in 2015, from the previous year, according to China Water Risk, a Hong Kong-based non-profit organization focusing on disclosing risks related to China’s water resources.

Fast Fashion

Owners of brands including H&M, Zara, Nike and Adidas are among those that have committed to achieve zero discharge of hazardous chemicals in production by 2020. (Image Source: Bloomberg) The clean-up goes to the heart of an industry that leveraged decades of cheap labor and capital, and a unique close-knit supply chain of cloth, dyeing, sewing, fasteners, trimmings, labels and logistics, to deliver so-called fast fashion – rapidly shifting style from the catwalk to the mass market at prices that make garments almost a disposable commodity. “Customers are happy because clothes are even cheaper than a decade ago, and retailers can benefit from low costs,” said Felix Chung, a Hong Kong legislator representing the textile industry. “But the result is massive waste – and the brands will need to pay for it in the future.” With that model coming under fire for its environmental record, top brands like H&M Hennes & Mauritz AB, Target Corp and Gap Inc have adopted water quality standards for their suppliers and monitor them to protect their reputation with consumers. Owners of brands including H&M, Zara, Nike and Adidas are among those that have committed to achieve zero discharge of hazardous chemicals in production by 2020. The problem is how to achieve better environment and labor standards without raising prices for consumers who have become addicted to cheap fashion. “We talk about social responsibility, but people are not willing to pay for it,” said TAL’s chairman Harry Lee. “Stricter regulation requires manufacturers to upgrade their facilities. It’s good, but it requires capital.”

Dead Bacteria

TAL, which opened its first factory in mainland China in 1994, had been buying bacteria from other labs to treat water used in washing cloth. Using bacteria instead of chemicals to digest organic compounds can cut the amount of waste sludge generated by as much as 80 percent and enables 100 percent of the water to be recycled in the plant. During a production halt during the week-long Chinese New Year break this year, the bacteria in its system died, so TAL set up a research program that is using DNA sequencing to find a “superbacteria” that would be cheaper and more efficient, Lee said.

The H&M Foundation offered a 1 million euro award this year to encourage ideas for a more sustainable way to use resources in the fashion industry. (Image Source: Bloomberg) But researching and upgrading technology is expensive. For many smaller suppliers on wafer-thin margins, it’s money they don’t have. In a June-July survey of 85 Chinese textile manufacturers by China Water Risk, more than half those polled said they have invested at least 2 million yuan to upgrade their factories – equivalent to almost 40 percent of the average annual profit for a small textile company in 2012. More than a quarter of the suppliers said the effort had increased operating costs by between 20 percent and 40 percent. Fourteen percent felt they may face the risk of having to shut down. The day is coming when retailers will have to adjust their retail prices as manufacturers cannot continue to absorb the costs of compliance. “There are clear questions around the long-term business model, especially around potential cost-sharing by brands and consumers,” said Dawn McGregor, a Hong-Kong based manager at China Water Risk. “We’ve already seen manufacturers shutting down and consolidating, which means less choice and higher prices for brands.” The big retail brands are also playing a part in trying to develop techniques that would cut costs and allow the industry to be less wasteful. H&M Foundation, a non-profit organization under the Stefan Persson family, founders and main owners of H&M group, announced this September that research with its partner, the Hong Kong Research Institute of Textiles and Apparel, had developed a chemical process that could recyle blended textiles into new fabrics and yarns. The foundation offered a 1 million euro award this year to encourage ideas for a more sustainable way to use resources in the fashion industry. At the Hong Kong lab, scientists hope to develop their superbacteria within two years. If they succeed, TAL will share the results with other manufacturers, Lee said. “Hopefully more factories will be willing to use it,” said Lee, “But it’s a very slow process.”

Source: The Indian Express

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American wool exports rebounds strongly by 24 pc in market year 2017

The American Sheep Industry Association cooperates with the U.S. Department of Agriculture’s Foreign Agricultural Service program. The FAS program’s has been vital in the expansion of American wool exports to other countries. With this matching fund program, ASI is allocated approximately $1 million each year and it has been key to bringing foreign wool companies to the United States, as well, as other promotional programs to export American wool, said ASI Wool Marketing Director Rita Samuelson. In the market year 2017 (Oct1, 2016 to Sept 30, 2017) the American wool exports has rebounded strongly with a 24 percent increase in total exports to 8.64 million pounds clean weight compared to the previous market year. American wool exports increased 29.5 percent to $22.6 million U.S. dollars. Greasy wool exports accounted for 74.8 percent of total exports. Assuming that American wool production in 2017 remains the same as it was the previous year (25.7 million lbs. greasy), then 67.2 percent of the total clip was exported—up from 54.2 percent the previous year. China remains the No. 1 export destination with a very significant increase of 51.3 percent in United States exports to 4.39 million lbs. clean. This amounts to 50.8 percent of all exports compared to MY2016’s level of 41.7 percent. Western Europe took the No. 2 destination from India with a 7.9 percent increase to 1.18 million lbs. clean and a 13.7 percent share in U.S. exports. Exports to India have reduced by 28.1 percent to 993,800 lbs. clean and an 11.5 percent share of total exports. Eastern Europe became the No. 4 destination, mostly due to Bulgarian imports of greasy wool. The region saw a 32.1 percent increase in American wool imports to 896,800 lbs. clean, amounting to a 10.4 percent share of total U.S. exports. The wool pelts market improved slightly by volume by 1.4 percent to 1,029,704 pieces (pelts only). Importantly, the average unit price per pelt level improved to $14.66 versus $13.89 the previous year. In dollar terms, the increase was 7.1 percent to $15,101,148, reflecting the gradually improving unit price level. This is a significant increase from the low in recent years (2015) of $10.62. This high level of market activity was a factor in the increase of American wool exports. As there was only a 0.3 percent change year-on-year in the exchange rate (U.S. dollar to Australian dollar), but this had very little effect. Stronger world demand and steady world wool production resulted in record wool prices as indicated by the Australian Eastern Market Indicator. In U.S. dollars, this represented a 30.7 percent increase year-on-year as of early November, and prices have continued to increase heading into the Christmas recess.

Source: YarnsandFibers

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