The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 14 MARCH, 2018

NATIONAL

INTERNATIONAL

Parliamentary panel suggests anti-dumping duty, GST revision to boost textiles sector

The Textiles Ministry should impress upon the Finance Ministry to reconsider the overall GST structure for textiles sector and impose higher anti-dumping duty to protect the domestic industry, a Parliamentary panel has said. In its report tabled in Parliament today, the Standing Committee on Labour chaired by Kirit Somaiya said it desires the Textiles Ministry to impress upon the Department of Revenue/Finance Ministry to reconsider GST structure for textiles. The Textiles Ministry should impress upon the Finance Ministry to reconsider the overall GST structure for textiles sector and impose higher anti-dumping duty to protect the domestic industry, a Parliamentary panel has said. In its report tabled in Parliament today, the Standing Committee on Labour chaired by Kirit Somaiya said it desires the Textiles Ministry to impress upon the Department of Revenue/Finance Ministry to reconsider GST structure for textiles. The panel noted that the Textiles Ministry has also taken up the issues on inverted duties structure on man-made fibre, imposition of GST on job work, credit transfer documents issues, non refund of input tax credit, GST for weaving industry, lowering of Goods and Services Tax (GST) rates for machinery used by MSME textile units, etc. It observed that against the Textile Ministry’s proposed outlay of Rs 10,109.05 crore during the year 2018-19, the Ministry of Finance have approved Rs 7,147.73 crore only. “The Secretary, Ministry of Textiles has deposed that though it appears that Budgeted Expenditure (B.E) 2018-19 which includes Cotton Corporation of India’s loss of Rs 921.23 crore is more than the B.E 2017-18 by Rs 921.23 crore, in reality B.E 2018-19 is Rs 3 crore less than the B.E of 2017-18,” the Committee said in its report. It noted that the reduction of B.E would adversely impact implementation of ongoing schemes of the Ministry of Textiles, particularly those aimed at benefitting the unorganised sectors of powerloom, handloom, handicrafts, wool and sericulture.

Source: The Financial Express

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India’s apparel production on consistent decline, delay in RoSL - IGST refunds double whammy for MSMEs : AEPC

New Delhi : The apparel output in the country comprising of a fair share of Micro, Small and Medium Enterprises (MSMEs) have registered a decline of 10.4 per cent for the April-Jan 2017-18 period, something that the apparel sector have been fearing all along, Apparel Export Promotion Council (AEPC) said in a statement. AEPC said that the decline is seeming to be the new normal since May 2017. AEPC indicated earlier about the gradual decline in the production on account of the issues which have arose after the implementation of GST. As per the IIP figures, there has been a month to month decline in apparel productivity, From a positive growth 1.3 % in April, 2017, May saw a fall of 5%.In June the decline was 3.2 % while in July, it was 5.1 %. August, September, October, November and December recorded 6.4 %, 7.2 %, 11 %, 13.1 % and 13.5% dip respectively. Commenting over the latest figures, HKL Magu, Chairman, Apparel Export Promotion Council (AEPC) said For the period Apr- Jan 2017-18, there has been a drastic decline of 10.4%, in the apparel production. This has come at a time when exports are already registering a decline. Exports are falling since onwards with January seeing a decline of a 14 %.The Industry is suffering as their funds are blocked and they are unable to pay suppliers on time. Suppliers don’t give advance, since they can’t carry them forward for an indefinite period. “This has resulted in the decline in apparel production. The biggest deterrent to the Industry’s sentiments has been the severe capital blockage due to the dual constraint of delays in RoSL disbursements and IGST refunds. Until the refunds start flowing, things will not improve. The dip in production will not allow us to meet our export target of $20 billion”, Magu said. AEPC further informed that it has been in talks with different Ministries as well as think tank NITI Aayog but the problems are yet to see a solution. “Post GST roll out we have made several presentations to the Ministry of textile, Ministry of Commerce Drawback Committee, NITI Aaayog, Parliamentary Standing Committee etc”. AEPC has also apprised the Minister of State for MSME Giriraj Singh about the concerns and informed him that capital blockage is proving fatal for the sector. Prior to that AEPC made a request to the Ministry of Commerce and Industry to urgently release the total ITC Credit and IGST of Rs. 4097 Crores which is blocked till date. AEPC has also informed the Ministry of Commerce that on account of new taxes there is a shortfall of around 5% under GST and therefore several blocked and embedded taxes may be refunded through higher drawback and RoSL rates, along with refund of GST input tax credit(ITC). (KNN/DA)

Source: Knn India

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AEPC express concern over the drastic decline in apparel production  

India’s apparel production has shown a decline of 10.4%, for the period Apr- Jan 2017-18 due to the consistent decline since May 2017 as per the latest IIP figures released yesterday. AEPC has indicated earlier about the gradual decline in the production on account of the issues which have arose after the implementation of GST.  As per the IIP figures  there has been a month to month  decline in apparel productivity  From a positive growth 1.3 %  in April  2017  May saw a fall of  5%.In June the decline was 3.2  % while in July  it was 5.1 %.  August September  October  November and December  recorded 6.4 %  7.2 %  11 %  13.1 % and 13.5% dip  respectively.  Talking about the decline in exports Mr. HKL Magu Chairman Apparel Export Promotion Council (AEPC) said “For  the period Apr- Jan 2017-18  there has been a drastic decline of  10.4%  in the apparel production. This has come at a time when exports are already registering a decline. Exports are falling since onwards with January seeing a decline of a 14 %.  The Industry is suffering as their funds are blocked and they are unable to pay suppliers on time. Suppliers don’t give advance since they can’t carry them forward for an indefinite period. This has resulted in the decline in apparel production. The biggest deterrent to the Industry’s sentiments has been the severe capital blockage due to the dual constraint of delays in RoSL disbursements and IGST refunds. Until the refunds start flowing things will not improve. The dip in production will not allow us to meet our export  target of $20 billion.”  AEPC has been engaging  with the policy makers for an  early resolution of the issues  which is hampering the apparel  industry  post GST roll out and  has made several presentations  to the Ministry of textile  Ministry of Commerce  Drawback Committee  NITI  Aaayog  Parliamentary Standing  Committee etc. In its last  meeting with Hon’ble Minister  of State for MSME(IC) Shri  Giriraj Singh  an AEPC  delegation led by its Chairman  Mr. HKL Magu informed the  Hon. minister that if the capital  blockage continues and the cost  competitiveness of the industry  is not restored  the slippage in  exports will continue  with long  term adverse impact on India’s  positioning in this sector.  Prior to that AEPC made a request to the Ministry of  Commerce and Industry to  urgently release the total ITC  Credit and IGST of Rs. 4097  Crores which is blocked till date.  AEPC has also informed the  Ministry of Commerce that on  account of new taxes there is a  shortfall of around 5% under  GST and therefore several  blocked and embedded taxes may  be refunded through higher  drawback and RoSL rates  along  with refund of GST input tax  credit(ITC)  AEPC has requested for a  resolution of the issues of the  industry  so that it can regain the  lost opportunities in becoming a  world leader in apparel exports..

Source: Tecoya Trend

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The Price of Women’s Clothing in the U.S. Keeps Surging

Women are paying up for clothes. U.S. apparel prices jumped for the second month in February, the biggest back-to-back advance in nearly three decades, led by women’s items. All women’s apparel categories advanced, with footwear prices jumping the most since September 2000, and outerwear, dresses and suits also recording gains, according to the Labor Department’s monthly consumer price index report Tuesday. Men paid their part, too, with sweaters and shirt prices increasing at a pace not seen in more than two years. Clothing was among other consumer categories in February to show price gains, contributing to an overall CPI increase in line with forecasts. Broadly, the data indicate inflation is firming without breaking out in a way that rattled financial markets last month. The apparel-price increases could also be a sign that retailers are doing a better job managing their inventory levels -- a focus of many chains after the holiday season including shoe retailer DSW Inc. and Macy’s Inc. With less product on shelves and in warehouses, companies hope to sell a larger portion of the goods at full price, minimizing the need for discounts.

Source: Bloomberg

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Around 435 exhibitors expected at Yarn Expo Spring

A new record is likely to be made when around 435 exhibitors from more than ten countries and regions including China, Hong Kong, India, Indonesia, Korea, Pakistan, Singapore, Thailand, Uzbekistan and Vietnam converge in Shanghai for the Yarn Expo Spring. The exhibitors will showcase a full spectrum of quality and innovative yarn and fibre products. Together with Yarn Expo Spring 2018, four other trade fairs are held concurrently during March 14-16 in the same venue covering the whole textile industry from yarns to fashion: Intertextile Shanghai Apparel Fabrics – Spring Edition, Intertextile Shanghai Home Textiles – Spring Edition, PH Value and the China International Fashion Fair (CHIC). Suppliers from Hong Kong, Korea, Singapore, Thailand, Vietnam as well as leading Chinese companies will showcase their innovative products such as fancy, metallic and stretch yarns under the category of synthetic and specialty yarns. There will be an enlarged Fancy Yarn Zone featuring a number of well-known domestic enterprises with the latest innovations. India and Pakistan Zones, exhibitors from Uzbekistan and Chinese suppliers in the Natural CottonZone will present a wide selection of high-quality cotton yarns. The Quality Wool Zone will include domestic wool products. Colourful Chemical Fibre and Green Linen Zones will offer innovative and eco-friendly sourcing options. The largest producer of viscose fibre in China, Sateri will feature local mills showcasing skin-friendly hygiene options made from Sateri’s products. The Expo will also have a fashion show, Trend Area and a series of seminars to reveal the latest market trends and insights. Several new exhibitors are expected at the show. For example, HJ Lite (Korea), which produces retro reflective yarn for weaving, knitting, and sewing will showcase its new products. Rather than applying reflective tape on safety wear, for example, manufacturers can apply this yarn into their fabric. During the day, the reflective yarn appears as a decoration, and at night reflects light as a safety function. PT Daliatex Kusuma (Indonesia) will showcase MVS viscose, PV, polyester, nylon mono and mono multi filaments at the fair. The company claims their mono multi filaments are superior to others on the market due to the fact they are easier to warp.

Source: Fibre2Fashion

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Small business yet to recover from  demonetisation & GST: Report

MUMBAI : Even as the economy has  largely recovered from the  shocks of demonetisation and  GST implementation  micro  enterprises with borrowings of  under Rs 10 lakh are yet to fully  recover  a report said here.  “Micro  small and medium  enterprises (MSMEs) with  exposures from Rs 10 lakh to Rs  10 crore have recovered to predemonetisation  levels  (but) the  segment with exposure of less  than Rs 10 lakh has still not  recovered to that extent  ” the  report by Transunion Cibil and  Sidbi said.  It can be noted that the  uptick in growth  wherein the  GDP expansion accelerated to a  7.2 per cent  had led many  watchers to say that the worries  of the twin reform measures are  behind the economy.  The report reiterated that  the situation has improved in all  segments except those with  borrowings less than Rs 50 lakh  where the systemic exposure has  not caught up with predemonetisation  levels.  Further  the overall  exposure of the formal financial  system to the MSME sector was  at Rs 11.75 lakh crore of the total  credit outstanding of almost Rs  100 lakh crore.  Only 5 million of the the  over 50 million MSMEs have  accessed formal finance system  for credit.  The note ban and GST  have however  upped the  ‘formalisation’ of the economy  which is seen in an increase in  ‘new to credit’ MSMEs at 4 lakh  units in the second half of 2017  as against over 2.7 lakh in the  year-ago period.  On the critical factor of  non-performing assets  the report  said impaired assets in MSMEs  have been “range bound”  but the  proportion of stress increases  with the quantum of exposure  which means NPAs among  smaller enterprises are lower as  compared to the bigger ones.  The micro enterprises  having borrowings of less than  Rs 1 crore had an NPA of 8.8 per  cent in December 2017 versus  9.2 per cent in the year-ago  period.  The report said while there  has been a 20 per cent jump in  exposure to the under Rs 1 crore  borrower segment for the year till  December 2017 as against an  overall 3.2 per cent for the  MSME segment as a whole  the  exposure to firms borrowing  under Rs 10 lakh has been a  faster 31 per cent.  “There is a structural  opportunity in the MSME  segment  which is both profitable  as well as impactful  ” Sidbi’s  chairman and managing  Mohammed Mustafa told  reporters.  While senior officials from  the credit information admitted  that some of the growth is due to  mandatory requirements like  priority sector lending  they also  pointed out to a larger play by  the private sector lenders who are  expanding their market share.  Cibil’s managing director  and chief executive said the  smaller businesses represent a  similar opportunity as the one  held by retail lending over a  decade ago and are bound to  grow.  The state-run development  finance institution and the  leading credit information  company have tied up to launch  such reports on the sector on a  quarterly basis to understand the  progress and suggest policy  interventions. Mustafa said the  report points out to lower  coverage in states like Uttar  Pradesh and Bihar  and added  that such enterprises need to be  brought under the formal  financial system fold.

Source: Tecoya Trend

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Telangana: MoU signed for setting up Rs 100 crore apparel super hub

A Memorandum of Understanding (MoU) was signed on Tuesday between Telangana Government and a Tamil Nadu based firm, Kay Ventures Private Limited for setting up a Rs 100 crore apparel superhub in Sircilla. Speaking on the occasion Telangana IT and Municipal Minister KT Rama Rao said the superhub will be set up in 20 acres in Siricilla, which would be beneficial for the people of the state. "The investment would be of Rs 100 crores and around 15,000 people will get employment, out of which around 90 percent will be women," Rao said. Rao said also praised Chief Minister K Chandrashekar Rao for setting up the hub for the people. "We have studied textiles in Tripura and there they have excellent opportunities so we have brought up a new scheme which will prove to be helpful," Rao said. Kay Ventures will start skill development programmes for weavers from April. The hub would be developed in three phases.

Source: Business Standard

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Government slashes Bt cotton seed rates, royalties after farmers' protests

CHENNAI: In a major relief to Indian cultivators, the Central government has slashed the prices of Bt cotton seeds to support distressed farmers struggling with an infestation which is affecting crops. The move comes just a day after thousands of protesting farmers completed a six-day march to reach Mumbai demanding loan waivers and compensation for crop damage. The new price of Bt cotton seeds is Rs 740 per 450 gm packet as opposed to Rs 800 earlier. India has also cut the royalties that local seed companies pay to US agrochemical giant Monsanto, for the second time in two years. The American corporation controls some 90 per cent of the market in India. According to a government order released on Tuesday, the country’s agriculture ministry has decided to reduce royalties by 20.4 per cent. Earlier, in 2016, the company’s royalties were cut by more than 70 per cent.

Source: The New Indian Express

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Agriculture Ministry cuts US-based Monsanto's GM cotton seed royalty, may trigger another row

In 2016 the Agriculture Ministry cut Monsanto's royalties by more than 70 per cent, triggering a long-running feud that drew in the Indian and U.S. governments. India has cut royalties that local seed companies pay to Monsanto Co. for the second time in two years, potentially fuelling another row with the U.S. company that threatened to leave the South Asian country in 2016. Ministry of Agriculture & Farmers Welfare has decided to reduce royalties paid by Indian seed companies to Monsanto for its genetically modified (GM) cotton by 20.4 per cent, said a government order released on Tuesday. In 2016 the Agriculture Ministry cut Monsanto's royalties by more than 70 per cent, triggering a long-running feud that drew in the Indian and U.S. governments. “It is unfortunate that today's order further erodes trait fees (royalties), which are now less than 0.5 per cent of the cost of cultivation, while the technology continues to provide value to farmers across India,” said a spokesman for Monsanto's India joint venture, Mahyco Monsanto Biotech (India)(MMB). Cotton has been a success story for Indian agriculture with a sharp jump in both output and exports, the MMB spokesman said, but noted that the sector needed a predictable business environment to attract investment. As well as cutting Monsanto's royalties, the government also lowered the prices of GM cotton seeds by 7.5 per cent to ₹740 ($11.39) for a packet of 450 grams to help farmers who are struggling with pest infestations. Reuters last week reported the government plan to cut Monsanto's royalties and lower the prices of GM cotton seeds. Farmers buy GM cotton seeds from Indian seed makers who pay to use Monsanto's proprietary technology to produce them. Producers body, the National Seed Association of India (NSAI), last week threatened to halt supplies to 8 million cotton farmers to protest the planned move to reduce seed prices. “The new, low price would definitely impact seed supply and seed availability this year. And also next year's seed production. NSAI may even file a writ petition against the government decision,” Kalyan Goswami, director general of NSAI, told Reuters. Seed prices have fallen since 2011 but fuel, labour and other supply chain costs have risen, Mr. Goswami said. “NSAI advocated for an increase in cotton seed prices to at least 150 rupees a packet. But the idea was ignored,” he said. Last year the government kept both the royalties and the retail prices of GM cotton seeds unchanged. More than 90 per cent of India's cotton crop is genetically modified. In 2017/18 India's cotton output is set to rise by 9.3 per cent but still short of the record high predicted by industry analysts because boll worm caused damage in some regions.

Source: The Hindu

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No sigh of relief for denim retail owners

Effects of the 2016 demonetisation continue to plague big and small retailers engaged in the denim business. This is coupled with the rolling out of the goods and services tax (GST) and an increase in cotton prices which have apparently had a detrimental effect on their businesses and resulted in losses. Many retailers claim that their loyal customer bases have been eroded, and the rotation of money become considerably slow. Not only did demonetisation burn holes in their pockets, it also compelled them to use cashless transactions much to their discomfiture. Bangalore-based Denim Lab India managing partner Vishal Dubey says, “The impact of demonetisation continues to linger in minds of every retailer who are now experiencing a different kind of recession altogether. No cash transactions exist within the system any longer, with wholesalers insisting that transactions be carried online. A retailer is hardly able to earn profits anymore.” With a sluggish economy providing a backdrop, retailers do not have any other option but to slash prices of denim products. Another retailer, Ahmedabad-based Anant Apparels proprietor Suresh Agarwal says, “Retailers are looking for other means of boosting revenues—by selling large consignments.” Similar sentiments are shared by Sanjay Soni, owner of Delhi-based Mas Enterprises: “Our turnover has had a cascading effect on other things, and business come to a standstill. It is not just retailers, manufacturers and distributors  wholesalers too are adopting different modes of cashless transactions.”

Source: Fibre2Fashion

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Global Textile Raw Material Price 2018-03-13

Item

Price

Unit

Fluctuation

Date

PSF

1409.88

USD/Ton

-2.46%

3/13/2018

VSF

2314.26

USD/Ton

0%

3/13/2018

ASF

2764.48

USD/Ton

0%

3/13/2018

Polyester POY

1366.44

USD/Ton

0%

3/13/2018

Nylon FDY

3649.11

USD/Ton

0%

3/13/2018

40D Spandex

6002.86

USD/Ton

0%

3/13/2018

Nylon POY

1619.19

USD/Ton

-0.49%

3/13/2018

Acrylic Top 3D

3830.77

USD/Ton

0%

3/13/2018

Polyester FDY

5971.27

USD/Ton

0%

3/13/2018

Nylon DTY

1611.29

USD/Ton

0%

3/13/2018

Viscose Long Filament

3396.36

USD/Ton

0%

3/13/2018

Polyester DTY

2969.84

USD/Ton

0%

3/13/2018

30S Spun Rayon Yarn

3033.02

USD/Ton

0.52%

3/13/2018

32S Polyester Yarn

2187.88

USD/Ton

-0.36%

3/13/2018

45S T/C Yarn

3017.23

USD/Ton

0%

3/13/2018

40S Rayon Yarn

2353.75

USD/Ton

0%

3/13/2018

T/R Yarn 65/35 32S

2543.32

USD/Ton

0%

3/13/2018

45S Polyester Yarn

3175.20

USD/Ton

0.50%

3/13/2018

T/C Yarn 65/35 32S

2685.49

USD/Ton

0%

3/13/2018

10S Denim Fabric

1.47

USD/Meter

0%

3/13/2018

32S Twill Fabric

0.90

USD/Meter

0%

3/13/2018

40S Combed Poplin

1.26

USD/Meter

0%

3/13/2018

30S Rayon Fabric

0.71

USD/Meter

0.22%

3/13/2018

45S T/C Fabric

0.75

USD/Meter

0%

3/13/2018

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.15797 USD dtd. 13/3/2018). 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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Trade tensions cloud best global growth outlook in seven years: OECD

PARIS - Trade tensions are threatening the best global economic growth outlook in seven years, the OECD said on Tuesday, adding that four U.S. rate rises are likely this year as tax cuts stoke the world’s biggest economy while Brexit will drag on Britain. While broadly more optimistic than only a few months ago, the Organisation for Economic Cooperation and Development warned a trade war could threaten the outlook, and forecast that UK growth would lag all G20 countries due to Brexit uncertainties. Updating its outlook for the G20, the OECD, which groups 34 of the world’s leading economies, raised its global growth forecast for 2018 and 2019 to 3.9 percent — the highest since 2011 — from a previous estimate of 3.6 percent for both years. The higher forecast was in part due to expectations that U.S. tax cuts would boost economic growth there, it said. “We think the stronger economy is here to stay for the next couple of years,” acting OECD chief economist Alvaro Pereira told Reuters. “We are getting back to more normal circumstances than what we’ve seen in the last 10 years.” Rebounding global business investment would keep global trade growth at about 5 percent this year, the OECD forecast. However, it said the global economy was vulnerable to an eruption of trade tensions after the Trump administration imposed import tariffs on steel and aluminum, a move that is expected to prompt retaliation from Europe and others. “This could obviously threaten the recovery. Certainly we believe this is a significant risk, so we hope that it doesn’t materialize because it would be fairly damaging,” Pereira said. The OECD forecast the U.S. economy would grow 2.9 percent this year and 2.8 percent in 2019, with tax cuts adding 0.5-0.75 percentage points to the outlook in both years. Against that backdrop, the Federal Reserve would probably have to raise interest rates four times this year as inflation picks up, Pereira said. Previously the OECD had estimated three hikes would suffice this year. With tax cuts boosting the economy this and next year, the OECD forecast the upper bound of the target federal funds rate could reach 3.25 percent by the end of 2019 from 1.5 percent currently. Britain was seen missing out on the global upturn, lagging all other G20 countries with growth of only 1.3 percent this year. That was higher from a November forecast of 1.2 percent due to the broader global improvement. With Britain due to leave the European Union next year, its economic growth was seen easing to 1.1 percent in 2019, unchanged from the OECD’s November estimate. The OECD said high inflation would eat into UK household income while business investment would slow in the face of uncertainty over Britain’s future relationship with the EU. In contrast, stronger growth in France and Germany boosted the outlook for the broader euro zone to 2.3 percent for this year and 2.1 percent in 2019. Previously, the OECD had forecast growth of 2.1 percent and 1.9 percent respectively. Fiscal easing in Germany’s coalition agreement was seen lifting growth in the euro zone’s biggest economy to 2.4 percent this year (+0.1 percentage point) and 2.2 percent in 2019 (+0.3). President Emmanuel Macron’s social welfare, tax and labor market reforms would help France narrow the gap with Germany, with growth forecast at an 11-year high of 2.2 percent (+0.4) before easing to 1.9 percent in 2019 (+0.2). With the euro area economy resilient, rising inflation would allow the European Central Bank to reduce its bond purchases gradually this year and subsequently phase out its negative interest rate policy, the OECD said.

Source: Financial Express

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Trump eyes tariffs on up to $60 billion Chinese goods  tech, telecoms, apparel targeted

WASHINGTON/BEIJING  - U.S. President Donald Trump is seeking to impose tariffs on up to $60 billion of Chinese imports and will target the technology and telecommunications sectors, two people who had discussed the issue with the Trump administration said on Tuesday. A third source who had direct knowledge of the administration’s thinking said the tariffs, associated with a “Section 301” intellectual property investigation, under the 1974 U.S. Trade Act begun in August last year, could come “in the very near future.” While the tariffs would be chiefly targeted at information technology, consumer electronics and telecoms, they could be much broader and the list could eventually run to 100 products, this person said. The White House declined to comment on the size or timing of any move. Trump is targeting Chinese high technology companies to punish China for its investment policies that effectively force U.S. companies to give up their technology secrets in exchange for being allowed to operate in the country, as well as for other IP practices Washington considers unfair. The Trump administration is also considering imposing investment restrictions on Chinese companies over and above the heightened national security restrictions, but details on these were not immediately known. A U.S. Treasury spokeswoman did not immediately respond to requests for comment. But lobbyists in Washington expressed concern that Trump’s ambitious tariff plan would also include other labor-intensive consumer goods sectors such as apparel, footwear and toys. Higher tariffs on these products would “hurt American families,” said Hun Quach, a trade lobbyist for the Retail Industry Leaders Association. “We’re not talking about fancy cashmere sweaters, we’re talking about cotton T-Shirts and jeans and shoes that kids wear for back-to-school,” she added. “Alarm bells are ringing.” China runs a $375 billion trade surplus with the United States and when President Xi Jinping’s top economic adviser visited Washington recently, the administration pressed him to come up with a way of reducing that number. Trump came to office on a promise to shield American workers from imports and his first action as president was to pull the United States out of the 12-country Trans-Pacific Partnership trade deal. His administration is in the midst of negotiations to revamp the North American Free Trade Agreement (NAFTA) and last week announced the imposition of tariffs on steel and aluminum imports. While the tariffs on steel and aluminum, announced last week by Trump, are viewed as relatively insignificant in terms of imports and exports, moves to target China directly risk a direct and harsh response from Beijing. “If this is serious, the Chinese will retaliate. The key question is, does the U.S. retaliate against that retaliation,” said Derek Scissors, a China trade expert at the American Enterprise Institute, a pro-business think tank. That would spook stock markets, but Scissors said that the more serious the conflict became, the worse China’s position would become, due to the importance of its U.S. trade surplus. “Their incentive to negotiate is to head us off from a major trade conflict.”

NOT BIG ENOUGH

The news website Politico earlier reported that the U.S. Trade Representative’s office had presented Trump with a package of $30 billion in tariffs last week, but Trump told aides that this was not high enough. One Washington business source who had discussed the issue with the White House said the figure had now grown to about $60 billion, with a potentially wider array of products under consideration. A second person, who is an industry lobbyist in Washington familiar with the administration’s thinking, said the process was being led by Peter Navarro, an avowed protectionist, and by U.S. Trade Representative Robert Lighthizer, who also favors tariffs as a tool to rebalance trade. Speaking to reporters in the Capitol, U.S. House Ways and Means Committee Chairman Kevin Brady stressed that Trump was serious about addressing the issue of intellectual property theft with China. “He’s serious about calling their hand on this, and my understanding is they are looking at a broad array of options to do that,” Brady said. While complaints about China’s abuse of intellectual property rights are not confined to the United States, Trump’s global steel and aluminum tariffs announced last week complicate Washington’s efforts to recruit allies to help put pressure on China. A China-based business source with knowledge of discussion among senior European officials said there had been a “clear effort” by the U.S. government over the past six months to introduce a coordinated approach to Chinese industrial policy, but that Trump’s proposed metals tariffs under section 232 of the Trade Expansion Act of 1962 had undermined support from Europe. “Senior Trump administration officials had directly approached European leaders at a senior level. There had been a willingness to do something together on China. That’s impossible right now. You can’t cooperate when you’re getting whacked around,” the person told Reuters. Additional reporting by Ginger Gibson and Roberta Rampton  Writing by David Chance  Editing by Clive McKeef, Peter Cooney and Diane Craft

Source: Reuters

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Pakistan : Only value-addition to help textile exports pick up lost threads

LAHORE: Over the recent years, not only have our basic textile exports flatlined, but the value-added apparel sector has also petered out as local apparels fetch lowest per-square-meter value for clothing exported to the United States. Pakistan will have to come out of low value culture to make a mark in global textile market. It is understandable that yarn and fabric fetch lesser prices being basic raw materials for knitwear and readymade garments. But it is a pity that we are exporting most of our apparel for peanuts. Pakistan for instance is placed fourth in exports to the United States as far as the quantity is concerned  however in terms of value they are far behind than countries exporting lower quantities. The official export data of textiles by the US government reveals that in the month of February Pakistan’s small and medium enterprises (SME) sector (apparel exporters the world over are mainly SMEs) exported apparel equivalent to 222.6 million square meter of fabric against which they earned a foreign exchange worth $251 million. Bangladesh on the other hand exported apparel equivalent to 214.2 million square meter of fabric fetching $509 million. This is over two times what Pakistani exporters fetch for 20 percent higher quantity. Bangladesh is not the only country in this regard. In fact the top 14 exporters of apparel to United States fetch more dollars per square yard of fabric consumed than Pakistan. Indonesia for instances exported only 148 million square yard equivalent fabric in February 2018 and earned $428 million almost three times higher than Pakistan. India, Vietnam, China and Mexico all earned more through higher value-addition. Industry insiders say the low value-addition cannot be exclusively blamed on the private sector. The government policies in this regard also played an important role. Pakistan is a cotton producing country and its textile industry is cotton centric. The global trend is to blend 20-25 percent cotton with manmade fibers. The textile industry has conditional access to manmade fibers. The manmade fibers are subjected to import duties in order to safeguard the domestic industry. This is not fair as access to an exportable raw material should be zero rated. The government schemes that allow duty free import of raw materials used for exports are too cumbersome for the small and medium exporters. The inability to procure manmade fibers at globally competitive rates impedes manmade fibers’ use in the country. When the local spinners do not blend cotton with manmade fibers there is no possibility of producing various types of fibers popular globally. Since our fabrics lack the variety needed to produce high value-added garments our apparel exports fetch much lower prices than our competitors. Our planners makes make cumbersome policies fearing misuse of facilities provided to boost exports. The exporters particularly the smaller ones are almost always unable to fulfill the conditions required to obtain that facility and become noncompetitive globally. Out apparel exports also lack variety. In fact we are restricted mostly making shirts and trousers for men only. This way we leave out 50 percent of the total export market as women make up almost 50 percent of the global population. The government needs to take stock of the situation and allow import of manmade fibers, yarn and fabric at zero-rate for a period of five years. This would help us produce globally acceptable basic raw materials for our industry at globally competitive rates and the exporters could go for high value-addition.This would also impact the inefficient local manmade fiber industry and may result in loss of few thousand jobs and investment worth $2-3 billion but it would start creating a million jobs and an investment of at least $1 billion every year for next five years. The exports would then be on sustainable path. The local spinners, weavers and manmade fiber producers would be forced to improve their efficiencies and restart supplying yarn and fabric not only to local market but to the global markets as well. Protectionism has landed us in trouble but transparent free market approach would put Pakistan again on the global textile market.

Source: The New International

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Pakistan : Disappearing textiles

In the contemporary world, the only constant is ‘change’. The world is transforming and consumer preferences are changing across a wide range, from food consumption to the standard of living, to travelling and then to clothing. Simple textiles and clothing have evolved into fashion brands. Everyone has now jumped on the environmental bandwagon. Textile consumer preferences are shifting from cotton-based apparel to synthetic man-made apparel. In the world market, consumption of man-made or synthetic fibres against natural fibres has shifted to a ratio of 70:30, with synthetic fibres having the lions share – a decade ago it was 30:70. Polyester is now the most dominant man-made fabric across the globe. Its demand surpassed the demand of cotton in 2002, and it has continued to grow ever since at a significantly faster rate than all other types of fabric. Man-made fibres are cheaper, environment-friendly and more durable  their quality does not deteriorate with washing. Technological advances in synthetic material have offered textiles that are softer, hang better and even have better moisture absorbency than cotton. The demand for man-made fibres such as polyester staple, viscose and tencel is increasing as a substitute for cotton, amid changes in the global fashion trend. But the policy situation remains the opposite in Pakistan  its exports are still primarily cotton-based. Pakistan’s major export destination of textiles and apparel is the US and Europe. The US imports of synthetic apparel overtook cotton-based imports from 36 percent in 2006 to 54 percent in 2016. Pakistan’s share in the total textile and apparel imports of the US in 2016 declined to a mere three percent owing to its narrow export basket which basically comprises natural fibre. This means that if we do not keep up with the new world preferences, our international market share will continue to shrink. One reason for reliance on cotton based products in Pakistan is that, apart from polyester, nothing is made in Pakistan. We virtually import all synthetic fibres including nylon, viscose etc. Further, when raw materials such as Polyester Staple Fibre (PSF) are imported for the local production of synthetic man-made fibre (MMF) yarn, providing raw material to our spinning industry and helping diversifying our textile exports, the import duty reaches up to 20 percent – 7 percent import duty and 2.9 to 11.5 percent anti-dumping duty. However, when MMF yarn is imported directly it faces a lower import duty of five percent (under the South Asian Free Trade Agreement) to 10 percent, under chapter 55 for MMF yarns import, resulting in a dichotomy. Resultantly imported PSF (input to our spinning mills) becomes more expensive than international prices. The aforementioned anomaly in regulatory duties is making domestic MMF yarn production uncompetitive, even in their own domestic market. This led to a downfall of 36 percent of domestic MMF yarn production capacity in the last one year alone.  Amidst the ongoing crisis, foreign exchange spent on the import of MMF yarns from Indonesia, China, Thailand and India is around Rs12 to 16 billion. In Pakistan, the domestic production of polyester viscose blended yarns is approximately 165,000 tons per annum. More than 50,000 tons of PSF yarns are imported per annum. This is equivalent to the production of almost 15-20 domestic mills in the business of 100 percent polyester, polyester viscose blended, viscose or polyester yarns and other synthetic fibre-blended yarns spun out of a total of 45-50 mills. These mills provide employment to 100,000 people. Importers of synthetic blended yarn not only put local industries out of competition but also fully exploit them to sell the product at a cheap rate equivalent to India. On the other side, the value-added export sector imports cheap MMF yarns under the Import Policy Order 2012-15 (SRO 193(1)/2013) which allows import of MMF yarns consisting of pure polyester, polyester viscose and others, with five percent import duty on yarn imported from India. The export sector uses this imported yarn, adds value to it and then exports the product claiming full duty drawbacks, which is patently unjust. What is hurting the local synthetic fibre manufacturing industry most is the lack of a level-playing field, with higher tariff barriers being imposed on the import of raw materials and a minimal duty on import of MMF yarns, leading to the widespread dumping of MMF yarn and fabrics in the country. By imposing 20 percent regulatory duty on $100 million imports of MMF yarn, jobs of 100,000 people employed in our spinning industry can be saved with using the additional revenue of around Rs2 billion in the Federal Board of Revenue’s kitty. The MMF industry, which is backed by sufficient raw materials and a huge global demand, can give a boost to the textiles. It is high time that the government and the industry realised this and captured a bigger share in the growing market for synthetic textiles. Being high-technology products, man-made and synthetic textile products can attract additional Foreign Direct Investment (FDI) in Pakistan, since the world has moved away from cotton-based textiles. India, Vietnam and Bangladesh have gone way ahead of us in terms of growth. They could do so by following a uniform tax structure and attracting FDI through manmade synthetic textiles. With the world population growing and requirement for food grains and land available for cultivation mounting, natural fibres will diminish with time. This will in turn lead to reduced supply of natural fibres like cotton  which will increase the price due to a shortage of supply. High price and shortage of supply will further propel people to use more man-made synthetic fibre-based apparel. In Pakistan, cotton cultivated area had reduced to 16.7 percent within a year (from 2015-16 to 2016-17)’ it was substituted by sugar cane and maize. Furthermore, a growing population will need more land to grow more food crops. Synthetic fibres are here to stay and their demand will only increase over time. Synthetic fibres will find varied usages because of their property to be designed and verified as per a desired use. Pakistan is clearly missing the shift from cotton to man-made fibre apparel and needs to re-examine its position and flawed policies to become conversant in manufacturing MMF-based fabrics in order to maintain, if not improve its share in the world textile trade.

Source: The New International

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The Price of Women’s Clothing in the U.S. Keeps Surging

Women are paying up for clothes. U.S. apparel prices jumped for the second month in February, the biggest back-to-back advance in nearly three decades, led by women’s items. All women’s apparel categories advanced, with footwear prices jumping the most since September 2000, and outerwear, dresses and suits also recording gains, according to the Labor Department’s monthly consumer price index report Tuesday. Men paid their part, too, with sweaters and shirt prices increasing at a pace not seen in more than two years. Clothing was among other consumer categories in February to show price gains, contributing to an overall CPI increase in line with forecasts. Broadly, the data indicate inflation is firming without breaking out in a way that rattled financial markets last month. The apparel-price increases could also be a sign that retailers are doing a better job managing their inventory levels -- a focus of many chains after the holiday season including shoe retailer DSW Inc. and Macy’s Inc. With less product on shelves and in warehouses, companies hope to sell a larger portion of the goods at full price, minimizing the need for discounts.

Source: Bloomberg

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Around 435 exhibitors expected at Yarn Expo Spring

A new record is likely to be made when around 435 exhibitors from more than ten countries and regions including China, Hong Kong, India, Indonesia, Korea, Pakistan, Singapore, Thailand, Uzbekistan and Vietnam converge in Shanghai for the Yarn Expo Spring. The exhibitors will showcase a full spectrum of quality and innovative yarn and fibre products. Together with Yarn Expo Spring 2018, four other trade fairs are held concurrently during March 14-16 in the same venue covering the whole textile industry from yarns to fashion: Intertextile Shanghai Apparel Fabrics – Spring Edition, Intertextile Shanghai Home Textiles – Spring Edition, PH Value and the China International Fashion Fair (CHIC). Suppliers from Hong Kong, Korea, Singapore, Thailand, Vietnam as well as leading Chinese companies will showcase their innovative products such as fancy, metallic and stretch yarns under the category of synthetic and specialty yarns. There will be an enlarged Fancy Yarn Zone featuring a number of well-known domestic enterprises with the latest innovations. India and Pakistan Zones, exhibitors from Uzbekistan and Chinese suppliers in the Natural CottonZone will present a wide selection of high-quality cotton yarns. The Quality Wool Zone will include domestic wool products. Colourful Chemical Fibre and Green Linen Zones will offer innovative and eco-friendly sourcing options. The largest producer of viscose fibre in China, Sateri will feature local mills showcasing skin-friendly hygiene options made from Sateri’s products. The Expo will also have a fashion show, Trend Area and a series of seminars to reveal the latest market trends and insights. Several new exhibitors are expected at the show. For example, HJ Lite (Korea), which produces retro reflective yarn for weaving, knitting, and sewing will showcase its new products. Rather than applying reflective tape on safety wear, for example, manufacturers can apply this yarn into their fabric. During the day, the reflective yarn appears as a decoration, and at night reflects light as a safety function. PT Daliatex Kusuma (Indonesia) will showcase MVS viscose, PV, polyester, nylon mono and mono multi filaments at the fair. The company claims their mono multi filaments are superior to others on the market due to the fact they are easier to warp.

Source: Fibre2Fashion

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