Surat: Power loom weavers and textile traders in country’s largest man-made fabric (MMF) sector in the city heaved a sigh of relief after Goods and Service Tax (GST) Council approved refund of input tax credit (ITC) to them with effect from July 27 after several representations to the authorities for over one year. Power loom weaving industry was eagerly waiting for the decision on ITC refund at the 28th GST Council meeting in New Delhi on Saturday. Union finance minister Piyush Goyal announced that the long-pending demand of the textile sector on ITC refund has been accepted by the GST Council. However, the refund accumulation of one year will have an embargo, but fresh refunds will be allowed from July 27. Leaders belonging to the Federation of Indian Synthetic Textile (FIST), the Pandesara Weavers Association (PWA), the Federation of Gujarat Weavers’ Association (FOGWA) and the Southern Gujarat Chamber of Commerce and Industry (SGCCI) were summoned by Goyal and Union textile minister Smriti Irani on July 19 to discuss issues related to GST. They had hinted that the GST Council will be taking proactive decision for the larger benefit of the textile sector and to create more jobs in the industry on July 21. The power loom weaving sector has been demanding refund of accumulated input tax credit (ITC) for a very long time while textile traders sought simplification of GST law, relief under e-way bill and problems faced in filing the ITC-04 form. The GST Council has provided relief to textile traders by allowing filing of quarterly returns to those having turnover up to Rs 5 crore, putting on hold reverse charge mechanism (RCM) for a year and simplification in the filing of the GST returns and e-way bill. PWA president Ashish Gujarati told TOI, “This has come as a big relief to the power loom sector. The refund of ITC will make business environment conducive for the weaving sector. We are thankful to Ernst & Young for preparing a detailed presentation and pointing out to the central government the need to allow ITC refund to the textile sector.” Synthetic and Rayon Export Promotion Council regional chairman Dhiru Shah said, “About 40,000 textile workers have lost their jobs in the last one year and more than 1 lakh power loom machines sold in scrap due to accumulation of ITC refund. The industry, which was on ventilator for one year, has got a new lease of life today.”
Source: Times News Network
Domestic polyester fibre and yarn manufacturers heave a sigh of relief due to the government’s decision to raise customs duty on their import to encourage Indian producers. The incerase in import duty is set to help restrict its annual import to the tune of $1.6 billion. To encourage domestic players, the government of India this week raised import duty on all polyester items in the value chain. With this, the basic customs duty on 76 textile and apparel items raised to 20 per cent from the existing 10 per cent. One of the main manmade fire fabrics tariff line included for increasing effective customs duty is other woven fabrics dyed containing 85 per cent or more by weight of textured polyester filaments including shirting, suitings and sarees. Because of low customs duty, Indian traders in the textile value chain were importing a lot of apparel from Bangladesh due to low labour cost there. Also, a lot of consignments were reported to have been undervalued to pay low effective rate of customs duty. To tighten this loophole, however, the government fixed import duty of Rs 38 a square metre on polyester than the fixed 20 per cent of import duty earlier. “The revision in import duty is positive for domestic polyester manufacturers. The demand for low price polyester has been constantly increasing which is expected to continue in future as well. Thus the increase in import duty would benefit domestic players at large,” said Madhusudan Bhagaria, Chairman and Managing Director, Filatex India Ltd, one of the largest polyester manufacturers in India. Filatex plans to increase its production capacity by nearly 90,000 tonnes to 237,000 tonnes for FY 2018-19. A similar capacity expansion was planned by other polyester manufacturers as well. Polyester prices have moved in a narrow range over the last few months following crude oil prices. Data compiled by the Confederation of Indian Textile Industry (CITI) showed $1.6 billion worth of man-made filaments and man-made staple fibre products imported into India during the financial year 2017-18. Besides fabrics, import of manmade fibres (MMF) and MMF yarns have also surged since June 2017 when the goods and services tax (GST) was implemented. Import of polyester staple fibre (PSF) and viscose staple fibre (VSF) had increased by 5 per cent and 20 per cent respectively during the financial year 2017-18 including a similar increase in imports of other products in the polyester value chain. “In case of import of polyester spun yarn, viscose spun yarn and nylon spun yarn, the increase was 94 per cent, 526 per cent and 15 per cent respectively which is impacting domestic manmade fibre and MMF yarn manufacturers in a big way. This was very critical to protect the domestic fabrics segment, as post-GST its imports had substantially surged due to the withdrawal of countervailing duty (CV) and special additional duty (SAD) on imports. Therefore, it also needs to consider an increase in Effective rates of BCD other products of MMF textile value chain,” Narain Aggarwal, Chairman, Synthetic The Synthetic & Rayon Textiles Export Promotion Council (SRTEPC). Indian polyester manufacturers including Reliance, Filatex India and JBF Industries have added heavily to their existing manufacturing capacities to support its rising demand across all polyester value chain. Sanjay Jain, Managing Director of TT Ltd and Chairman of CITI said that the textile industry heaves a major relief as they were going under immense pressure post-GST. A substantial drop in import duty was observed after implementation of GST which has encouraged cheaper imports. This has come as a great relief to the domestic manufacturers, he added.
Source: Business Standard
Apart from tax on sanitary pads being brought down from 12 per cent to zero, the GST council has recommended rate cut on an array of products which will be effective from this Friday. The GST Council in its 28th meeting on Saturday pruned rates on a number of goods including several daily use appliances such as washing machines, vacuum cleaners, small TV sets and refrigerators. Among other products whose rates were brought down to zero, the Council meeting chaired by Finance Minister Piyush Goyal also cut GST tax on sanitary pads from 12 per cent to nil. Further, footwear having a retail sale price between Rs 500 - Rs 1000 will now be taxed at a rate of 5 per cent while those exceeding the Rs 1000 mark will continue to attract 18 per cent GST. Other than this, GST has been brought down on an array of handicraft items from 18 per cent to 12 per cent such as handbags, wooden frames, handcrafted lamps, etc. Also, handicraft items which used to attract 12 per cent of GST such as handmade carpets, lace, hand-woven tapestries and toran have been brought under the 5 per cent GST bracket. The new rates will come into effect from Friday, said Piyush Goyal. Here are all the changes in GST rates on goods and what will get cheaper after the new rates come into effect:
1. Reduced from 28 per cent to 18 per cent
2.From 28 per cent 12 per cent
3. From 18/12/5 per cent to zero
4. From 12 per cent to 5 per cent
5. From 18 per cent to 12 per cent
6. From 18 per cent to 5 per cent
Source: Business Standard
GST Council allows input credit, to reduce effective rate on fabric to 5% now from 12% earlier. Synthetic textile manufacturers are planning to cut the prices of their products by at least 5 per cent from August following the government's decision to reduce the effective GST (goods and services tax) rate on its raw materials by 7 per cent from July 27. The GST Council in its meeting held on Saturday had decided to allow input credit on manmade fabric equivalent to 7 per cent. This will provide a level-playing field to synthetic textile manufacturers through a uniform tax rate on the entire value chain. The move will cut effective GST on manmade (synthetic) fabric to 5 per cent from 12 per cent earlier. The revised GST rate will be applicable from July 27. As of now, all textile raw materials, including cotton yarn and its fabric and synthetic yarn attract 5 per cent GST. But synthetic fabric manufacturers were forced to pay 12 per cent of duty without having any opportunity to claim a refund of duty difference. This means the synthetic fabric was the only product in the textile value chain with 12 per cent of GST. "The cut in GST rate will provide a level playing field for synthetic fabric manufacturers. Assuming 1-2 per cent of the cost goes for value addition, synthetic textile raw materials will be cheaper by at least 5 per cent. This cost benefit will certainly be passed on to consumers resulting in 5 per cent cheap synthetic textiles from August," said Madhusudan Bhagaria, Chairman and Managing Director, Filatex India, one of the country's largest players in the synthetic textile industry. India produces around 4 million tonnes (mt) of synthetic yarn annually. Considering synthetic textiles' major consumption in the lower class, a 5 per cent price cut would bring in a big respite for consumers. The GST cut will also help clear backlog of nearly Rs 10 billion of duty differential which the synthetic textile industry was demanding from the government. Trading between Rs 140-150 a kg currently, synthetic yarn prices remained volatile in the last one year due to range bound crude oil prices. "The GST rate cut will bring additional demand of synthetic textiles in coming years," said a senior official of a leading synthetic yarn and fabric manufacturer.
Source: The Economic Times
The GST Council has done well to lower the indirect tax rate for over 100 items, simplify tax-return filing and let fabric makers claim credit on input taxes. Consumers would gain, and compliance become easier for taxpayers. That many items that originally were taxed 28% have been lowered to 18% in a year’s span is welcome. The reduction should be faster. A 28% rate is way too high in general and egregious in the case of a vital intermediate good like cement. It should be reserved for ‘sin goods’, inclusive of a cess that the tax-levying government is free to retain. The case to lower GST on air-conditioners is also compelling. Unlike cement, sanitary napkins, which have been exempt from GST, are not intermediate products. The exemption does not break the GST chain wherein manufacturers get credit for the taxes that they pay on inputs and is, therefore, rational. UK removed the so-called ‘tampon tax’, and EU gave flexibility to its member states to scrap the levy. Removing differential tax rates on the same kind of items (stones) will lower classification disputes, and is, therefore, welcome. But exempting more and more items from GST is not a good idea. It clutters the tax system. All sectors petroleum, electricity duty, real estate should be steadily brought under GST that cuts out the cascade of taxes, raises transparency and widens the tax base. The council’s move to allow businesses with an annual turnover of up to Rs 5 crore to file quarterly returns is welcome. It has suspended the reverse charge mechanism, meant to track small businesses outside the GST net, till September next year. Political compulsions may have led to some decisions, but the overall direction to lower rates and ease compliance is right and is likely to boost collections.
Source: The Economic Times
KOLKATA| NEW DELHI: Discretionary spending by Indian consumers is expected to bounce back as Saturday’s GST rate cut will bring down prices of several products, including refrigerators, washing machines, vacuum cleaners, shavers, juicers, sanitary pads, perfumes, deodorants and mass-segment footwear by 8-10%.The decision to cut goods and services tax on more than 50 goods has come at a good time for the industry, with the festive buying season round the corner and a depreciating rupee putting additional cost pressure on consumer electronics, industry executives said. “The rate cut has been a much-needed breather for appliance market, which along with a normal monsoon this year, will have a positive effect on buying behaviour,” said Godrej Appliances business head Kamal Nandi. Discretionary spending on electronics has been down since demonetisation in November 2016. When GST was rolled out on July 1 last year, appliances were put in the highest 28% tax bracket, thereby increasing prices by 2-3% and manufacturers hiked prices by an additional 4-6% in last one year due to hardening of commodity rates and rupee depreciation. All these impacted demand. Manish Sharma, CEO of Panasonic India and president of industry body Consumer Electronics and Appliances Manufacturers Associations, said the market is now expected to grow by 7-10% this year as compared to 3.7% last year. However, not all categories will get a boost — television prices for 32-inches and above screen sizes, for instance, will increase by up to 15% from August due to a global shortage of television panels pushing up international prices even as the Indian rupee continues to depreciate against the US dollar and other currencies. Avneet Singh Marwah, CEO of Super Plastronics that sells Thomson and Kodak television brands in India, said there will be 15% price hike for televisions in the 32- and 40-inch sizes, which account for over 80% of the Indian market, while for larger screens the price hike will be 7-10%.Smaller televisions of up to 26 inches, which account for 5% of the total market, will be insulated from price hike because they have got a tax cut. The GST Council on Saturday decided to reduce tax rate on refrigerator, washing machine, sub-26 inch television, vacuum cleaner, mixer-grinder, iron, shaver, hairdryer, lithium-ion batteries used in power banks, mobiles and geyser to 18% from 28%.GST is calculated on dealer price, hence the net price cut for consumers will be around 7.8%. A 6-kg automatic washing machine selling for Rs 15,000 is expected to see a price cut of Rs 1,200, while a 7-kg front-loading washing machine priced at Rs 33,000 may get Rs 2,600 cheaper. A 260-litre four star frost-free refrigerator model priced Rs 30,000 may see a price drop of Rs 2,300, while entry-level refrigerators will get a price cut of Rs 700-1,100, industry insiders said. The new GST rates will come into effect from July 27. FMCG COS UPBEAT. Fast-moving consumer goods (FMCG) companies, meanwhile, are confident that the GST rate cut will further boost consumption that has started to pick up recently after a long lull, riding mostly on government schemes supporting rural growth and urban demand. FMCG products like scent sprays and powder-puffs will now attract 18% GST, down from 28% earlier, while the rate on footwear of up to Rs 1,000 has been cut to 5% from 18%. The GST Council also decided to exempt sanitary napkin from the tax. It attracts 12% GST at present. Same is the case with fortified milk. The country’s largest dairy brand Amul will pass on benefits of GST rate cut to consumers in the same proportion in categories it operates in, said RS Sodhi, managing director at Gujarat Cooperative Milk Marketing Federation (GCMMF) that owns Amul brand. GCMMF makes a slew of dairy products, including milk and ice-cream, all of which could benefit by the nil GST on fortified milk. Sodhi said the fine print on the exact classification of fortified milk is still awaited. A spokesperson of P&G, makers of Whisper sanitary napkins, said the company will wait for the official notification to understand how consumers can best benefit from this decision. A senior official of a leading firm making deodorants said price cut on deodorants on the back of GST rate revision will give a boost to the category.
Source: The Economic Times
New Delhi : The Goods and Services Tax Council has lowered the applicable tax rates across alternative fuels. The tax rate on lithium ion batteries has been lowered to 18 per cent from 28 per cent in a bid to boost prospects of electric vehicles. Tax on fuel cell vehicles has been lowered to 12 per cent from 28 per cent. The GST rate on ethanol targeted for blending with petrol has also been lowered from 18 per cent to 5 per cent, the tax on bio fuel pellets has been fixed at five per cent. On the move to lower tax on batteries, Debi Prasad Dash, Director at the India Energy Storage Alliance, told BusinessLine, “Both electric vehicle and renewable energy industry will be benefited by this step. But a further reduction of GST to 5 per cent (similar to solar components) or to 12 per cent (similar to electric vehicle) is essential to boost the energy storage adoption in India.” Dash said the market for energy storage would grow to over 300 GWh during 2018-2025. “India is expected to attract investment in 3-5 Giga factories for advanced Li-ion batteries, attracting over $3 billion in investments in next 3 years. Already, over 1 GWh of annual assembling capacity is being set up for converting imported Li-ion cells into battery modules by various Indian companies,” he added. Another shot in the arm for the alternative fuel industry is lowering of tax on fuel cell vehicles from 28 per cent to 12 per cent. An industry watcher said, “India's first commercial fuel cell run bus was launched earlier this year. It was developed by Tata Motors in partnership with the Indian Space Research Organisation and is expected to be deployed in the proposed Smart Cities.” Oil companies too have something to cheer about. Director-General at the Indian Sugar Mills Association, Abhinash Verma, said, “In the pre-GST regime, the Central Excise Duty on ethanol was close to 12 per cent. But despite being a cleaner alternative, initially the GST rate for ethanol was fixed at 18 per cent. The move to lower the rate to 5 per cent for ethanol for blending will give oil marketing companies an additional leg room of ₹5 per litre they procure.” “During the present sugar season, the oil companies procured 160 crore litre of ethanol. We expect them to procure nearly 25 per cent more or nearly 200 crore litres of ethanol in the next season. The lower GST rate means the oil companies will have another ₹1,000 crore which they can pass through to the sugar mills by hiking the price of procurement and we have made representations for the same,” Verma added.
Source: Business Line
The emergence of Ethiopia as a garment hub and the increasing quantum of investment flowing from India into the country has become a cause of worry for the Indian textile industry. Some of the big textile and garment manufacturers that have gone to the African country in recent times include Raymond and Arvind. In the past few months, several Tiruppur-based garment manufacturers also got attracted by the prospects in Ethiopia. These include SCM Garments, the export arm of Chennai Silks, Jay Jay Mills, Best Corporation and KPR Mills. Arvind has set up seven apparel factories at Hawassa Industrial Park in Ethiopia, covering a total area of 13.5 acres. Arvind has two more factories in Ethiopia outside the park. These facilities export products to the US and Europe. As per reports, with the new facilities in the industrial park, the total output would go up to 30 million pieces of garments. Employment generation by Arvind in Ethiopia too would rise to 12,000 workers. Similarly, Silver Spark Apparel Ethiopia, a wholly owned subsidiary of Raymond, too has a facility in Hawassa Industrial Park and the company has invested around Rs 140 crore in the facility. SCM Garments is setting up a 500-machine garment unit in Ethiopia. Best Corporation is also setting up a 1,000-machine factory at a cost of Rs 30 crore. “Ethiopia has been luring Indian companies during the past several years. A few years back, some of the companies had put up units there. But those attempts were not quite fruitful. However, in the past two years, we have seen increasing investments flowing into Ethiopia. Several companies now find it beneficial to operate from the African country,” said K Selvaraju, secretary general, Southern India Mills’ Association. In recent years, Ethiopia has secured easy access to some of the major markets like the US, Canada and the EU at lower or nil duty. The country is eligible for preferential access to the US market under the African Growth and Opportunity Act (AGOA). Eastern and Southern African countries, including Ethiopia, have Economic Partnership Agreement with the European Union. “Exports from India have to pay duties ranging from 12 to 15 per cent, and in some categories, this goes up to 25 per cent. In the absence of free trade agreements, our exports are less competitive than our peers,” said Chandrima Chatterjee, adviser, Apparel Export Promotion Council. Further, power and labour is cheaper in Ethiopia and historically textile industry has been moving from one country to another depending upon the availability of cheaper labour. “If power is available for three cents in Ethiopia, it costs 10 to 12 cents in India. Labour is available there for $60 per month and here it costs $130 to $150,” said Selvaraju. Moreover, the Ethiopian government has become quite proactive towards attracting investments. It offers a plug and play facility for the investors and provides all the infrastructure amenities, including the building.
Source: Mydigitalfc.com
A day after the GST Council endorsed changes in Goods and Services Tax laws, Congress-ruled Punjab has asked the Centre not to push through the changes, possibly torpedoing passage of these amendments in the ongoing monsoon session of parliament. “I find that the process adopted for the finalisation of GST law is not proper and thus impinge on the states’ right of proper representation before taking up such important legislation in their respective legislatures,” Punjab finance minister Manpreet Badal wrote in a letter to stand-in Union finance minister Piyush Goyal. Punjab Chief Minister Amarinder Singh has also written to Prime Minister Narendra Modi on the same issue. In his letter dated July 22, Badal said he had not attended the full meeting and learnt that changes had been approved. “I find that GST Law is being rushed and the excellent work done by the law review committee is being ignored only with a view to get some select amendments passed at the monsoon session... I couldn’t be there for the full session and had to leave to reconcile with my disappointment at rushing through GST law changes,” he said. ET reviewed a copy of the letter. Out of 69 amendments recommended by the law review committee, only eight have been taken without changes, while 15 other suggestions have been accepted with changes and the rest ignored, Badal said. The fact that detailed report of the committee constituted by GST Council was not even made available to the full council, or placed in the public domain for feedback, sends a message for itself, he alleged. “The extremely brief consultation with stakeholders to the truncated draft doesn’t repose the kind of confidence and adequacy necessary for such important piece of legislation,” Badal said. “Even the draft approved by GSTC in its January meeting has been jettisoned without assigning any reason.” Badal said both the letters highlight the fact that the GST Law, as it stands today, has many aberrations that need immediate correction; some with retrospective effect. “This is necessary to bring relief to businesses, overcome the already existing litigation and a large amount of evidently clear future litigation,” he said. He said the process of correction should be done by involving all stakeholders, both within the GST Council as well as others, most importantly taxpayers. “This process should be adequate, fair and transparent so that the need to go back to legislatures at frequent intervals is avoided besides the inconvenience it causes to businesses both due to the deficiencies in the law as well as frequent changes in their automatic systems,” Badal said. He said changes should be brought to GST Council after they have been responded to by the states. “I suggest once again that this process should be taken up in the right earnest, allowing states to respond after studying in detail the recommendations of the law review committee and the legislative changes should only be taken up in Goods and Services Tax Council thereafter,” Badal said.
Source: Business Line
In a letter to Irani, AEPC Vice-Chairman A Shaktivel thanked her on behalf of the apparel industry for her "splendid support" toward reviving the industry. The Apparel Export Promotion Council (AEPC) today welcomed the GST Council's decision to allow input tax credit refund, a long-pending demand of the textile industry, and thanked Union Textiles Minister Smriti Irani for taking up the issue. In a letter to Irani, AEPC Vice-Chairman A Shaktivel thanked her on behalf of the apparel industry for her "splendid support" toward reviving the industry. The minister had successfully taken up the issue of ITC Refund with GST Council, which has now now agreed for the long standing demand, he said. These initiatives would help revival of the apparel sector and to become competitive globally, he added. The GST Council met yesterday and took various decisions including cutting tax rates on 88 items such as footwear, refrigerator.
Source: Money Control
CHENNAI: Striking truck operators across the country are determined to intensify their stir as there are no indications of the Centre initiating talks to resolve issues of the road transport sector. “There are no indications for negotiations till Sunday evening to resolve the issues raised by us. So, we will intensify our stir,” Bal Malkit Singh, chairman of the core committee of All India Motor Transport Congress (AIMTC), told Express on Sunday. He said “We are very firm on our demands. We have urged the government’s intervention for tangible resolution of the issues, mere assurances will not be enough this time.”
Essential services may be suspended
The government’s unwillingness to address the issues raised by the truckers may compel the transporters engaged in ferrying essential commodities to suspend operations, Bal Malkit Singh warned. Currently, AIMTC has exempted essential commodities like milk, water and medicine, from the strike. Cutting down fuel costs, ensuring seamless movement of vehicles by rationalising road toll and wiping out harassment and corruption on the road and slashing the hefty hike made in third party premium are the major demands of the national body of truck and transport operators. As the indefinite strike called by AIMTC entered the third day on Sunday, he said the combined loss to transporters over the last three days was `12,000 crore. Bal Malkit Singh said that ASSOCHAM had said that the current strike by truckers would cause a loss of `20,000-25,000 crores per day to the economy. Support to the strike is growing day by day. Several associations are joining the stir. Protests including rallies and dharnas at toll plazas are being held by the striking truck operators, he said adding that about 90 per cent of the vehicles are off the road.
Goods pile up in Tamil Nadu
Leaders of truck operators association in Tamil Nadu said that movement of goods ranging from edibles to machinery has been badly hit in the State. Huge quantity of salt has piled up at salt pans in Nagapattinam and Thoothukudi districts while crores of eggs are stacked up in poultry farms at Namakkal. “Textile items worth hundreds of crore rupees are lying idle in the mills and godowns in Tirupur and Erode. Machinery cannot be ferried from Coimbatore”, said MR Kumarasamy, president of State Federation of Lorry Owners Associations-Tamil Nadu (SFLOA-TN). He added that trucks carrying cement from Ariyalur have completely suspended operations. Meanwhile, industry sources said the State will soon feel the impact of the strike as the stock of commodities will run out shortly. It will lead to shortage and spiralling of prices. Stalin wants Centre to hold talks with truckers DMK working president and Leader of Opposition MK Stalin on Sunday urged the Union government to hold talks with the striking truck operators. He said the demand for removing the toll plazas is a plea of the public as well. The Centre should hold talks to bring an amicable solution to the strike, he added.
Source: The New Indian Express
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1289.60 |
USD/Ton |
0% |
7/22/2018 |
|
VSF |
2149.33 |
USD/Ton |
-0.34% |
7/22/2018 |
|
ASF |
3072.58 |
USD/Ton |
0% |
7/22/2018 |
|
Polyester POY |
1395.22 |
USD/Ton |
0% |
7/22/2018 |
|
Nylon FDY |
3441.88 |
USD/Ton |
0% |
7/22/2018 |
|
40D Spandex |
5170.20 |
USD/Ton |
0% |
7/22/2018 |
|
Nylon POY |
1602.76 |
USD/Ton |
0% |
7/22/2018 |
|
Acrylic Top 3D |
3537.89 |
USD/Ton |
0% |
7/22/2018 |
|
Polyester FDY |
5576.43 |
USD/Ton |
0% |
7/22/2018 |
|
Nylon DTY |
1617.53 |
USD/Ton |
0% |
7/22/2018 |
|
Viscose Long Filament |
3094.73 |
USD/Ton |
0% |
7/22/2018 |
|
Polyester DTY |
3175.98 |
USD/Ton |
0% |
7/22/2018 |
|
30S Spun Rayon Yarn |
2836.22 |
USD/Ton |
-0.52% |
7/22/2018 |
|
32S Polyester Yarn |
2079.90 |
USD/Ton |
0% |
7/22/2018 |
|
45S T/C Yarn |
2880.54 |
USD/Ton |
0% |
7/22/2018 |
|
40S Rayon Yarn |
2215.80 |
USD/Ton |
0% |
7/22/2018 |
|
T/R Yarn 65/35 32S |
2452.15 |
USD/Ton |
0% |
7/22/2018 |
|
45S Polyester Yarn |
3013.49 |
USD/Ton |
-0.49% |
7/22/2018 |
|
T/C Yarn 65/35 32S |
2540.78 |
USD/Ton |
-0.58% |
7/22/2018 |
|
10S Denim Fabric |
1.38 |
USD/Meter |
0% |
7/22/2018 |
|
32S Twill Fabric |
0.85 |
USD/Meter |
0% |
7/22/2018 |
|
40S Combed Poplin |
1.18 |
USD/Meter |
0% |
7/22/2018 |
|
30S Rayon Fabric |
0.67 |
USD/Meter |
0% |
7/22/2018 |
|
45S T/C Fabric |
0.70 |
USD/Meter |
0% |
7/22/2018 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14772 USD dtd. 22/7/2018). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
So say some of the best and brightest in the $5.1 trillion-per-day foreign-exchange market. U.S. President Donald Trump on Friday accused China and the European Union of “manipulating their currencies and interest rates lower.” The comments came after the yuan plunged to its lowest level in a year, with little sign of China’s central bank intervening to stem the slide. They also follow a decline in the euro this year and add to the calculus that European Central Bank policy makers might need to consider when they meet next week. As the world’s largest economies open up a new front in their increasingly acrimonious game of brinkmanship, the consequences could be dire -- and ripple far beyond the U.S. and Chinese currencies. Everything from equities to oil to emerging-market assets are in danger of becoming collateral damage as the current global financial order is assailed from Beijing to Washington. “The real risk is that we have broad-based unravelling of global trade and currency cooperation, and that is not going to be pretty,” said Jens Nordvig, Wall Street’s top-ranked currency strategist for five years running before founding Exante Data LLC in 2016. Trump’s recent rhetoric “is certainly shifting this from a trade war to a currency war.” China’s shock devaluation of the yuan in 2015 provides a good template for what the contagion might look like, according to Robin Brooks, the chief economist at the Institute of International Finance and the former head currency strategist at Goldman Sachs Group Inc. Risk assets and oil prices would likely tumble as worries about growth arise, hitting currencies of commodity-exporting countries particularly hard -- namely, the Russian ruble, Colombian peso and Malaysian ringgit -- before taking down the rest of Asia. “Asian central banks will initially try to stem currency weakness through intervention,” Brooks said. “But then Asian central banks will step back, and in my mind, the big underperformer on a six-month horizon could be EM Asia.” Whether the People’s Bank of China attempts to anchor the dollar-yuan exchange rate near 6.80 to avoid further escalation is key, according to Nordvig. He says ECB President Mario Draghi may elect to step into the fray at the central bank’s July 26 policy meeting, given American attempts to talk the dollar down in January were extremely unpopular in Frankfurt. The Bloomberg Dollar Spot Index fell as much as 0.8 percent Friday, the most since March. The euro ended the day up 0.7 percent at $1.1724, while the yen was almost 1 percent stronger. Treasury Secretary Steven Mnuchin said Friday that the U.S. is closely monitoring whether China has manipulated its FX rate, according to Reuters. “There’s no question that the weakening of the currency creates an unfair advantage for them,” Mnuchin said. “We’re going to very carefully review whether they have manipulated the currency.” The Treasury’s next semi-annual foreign-exchange policy report -- the government’s formal channel to impose the manipulator designation -- is expected in October. The Department in its last report in April refrained from branding China with the label, but stepped up criticism of the Asian nation’s lack of progress in rectifying its trade imbalance with the U.S. “The exchange rate is one of many instruments China could use” to counter U.S. tariffs, Joseph Stiglitz, the Nobel Prize-winning Columbia University economist and former adviser to President Bill Clinton, said in a July 17 interview. “They would make a big effort to say what they are doing is not motivated by that,” he added. “We won’t be able to clearly tell. We don’t usually know the extent of intervention.” The greenback will likely continue to suffer as investors heed Trump and back out of long dollar wagers, according to Shahab Jalinoos, Credit Suisse Group AG’s global head of FX trading strategy. Hedge funds and other speculators are the most bullish on the currency since February 2017, according to data released Friday from the Commodity Futures Trading Commission that tracks positions through the week ended July 17. “It has now been virtually defined as a currency war by the U.S. president, given that he explicitly suggested foreign countries are manipulating exchange rates for competitive purposes,” Jalinoos said. “The barrage of commentary will likely force the market to scale back long dollar positions.”
Source: Bloomberg
President of apparel exporters’ apex body M Siddiqur Rahman on Saturday said there is a huge potential of collaboration between Bangladesh and India in the textile and apparel sector which can bring opportunities for both the countries. “We have a huge potential of collaboration between our countries in the textile and apparel sector. If we can complement each other, we will have a new horizon of opportunities,” he said. The president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) made remark at a business-to-business (B2B) meeting between Bangladesh and India held at the BGMEA Bhaban in the city. A business delegation of India attended the B2B meeting with Bangladeshi apparel exporters with a view to strengthen trade relationship, specially in textile sector, between Bangladesh and India. The 25-member delegation of Indian exporters of yarn and fabric led by Chairman of the Cotton Textiles Export Promotion Council of India Ujwal Lahoti and Head of Chancery of the Indian High Commission to Bangladesh Tseten Nordon Cargyal attended the meeting as part of the delegation’s four-day business tour here. “I hope there will be more exchanges of delegation between our two countries in coming days,” said the BGMEA chief. Rahman said Bangladesh and India share a long border and a number of custom ports as well as having many geographic advantages. But the trade relationship between the two countries has not yet achieved the desired result so far, the BGMEA chief said. “In fact India is a highly potential market for us. The middle-class population in India is growing fast and their buying power is also increasing. Global brands and retailers are opening stores in India,” he said. The trade between Bangladesh and India is growing every year. Because of duty free export of Ready Made Garments (RMG) products, export to India last year was US$279 million which was only US$96 million five years ago, said the BGMEA president. “India is a highly potential market for us because of the population. Global brands and retailers are also opening their stores in India” he said adding that, “Moreover we import most of our cotton, fabrics and other materials from India to produce garments here.” He also said, there are some challenges including lack of capacity in the land custom ports, specially in Petrapole and non-payment issues, which are the major barriers. Tseten Nordon Cargyal said, India-Bangladesh relationship has grown exceptionally in the past few years. Bangladesh’s garments export to India has increased. Half of India’s export to Bangladesh comprises of raw materials and machinery used by Bangladeshi industries, specially the garment industries, she said adding that, this meeting will create more scopes of business interaction between the two countries. While large scale investments are taking place since the last few years, Bangladesh is an important trading partner of India, said Ujwal Lahoti. He said there is a need of extending ties between the textile exporters and suppliers of Bangladesh and India. “This B2B meeting is the first milestone in the long term cooperation and business prospect between the members of BGMEA and TEXPROCIL,” he said. BGMEA Vice President (Finance) Mohammed Nasir also spoke, among others.
Source: The Independent
Huge devaluation of rupee is a blessing for the textile mills using domestic gas for power generation and a disaster for the mills consuming imported liquefied natural gas (LNG) as energy prices account for 35 percent cost of basic textiles. The textile industry was under pressure for the last five years mainly because of its inability to upgrade technology. The mills in Punjab had the added disadvantage of having access to expensive imported gas. Under the 18th amendment the provinces producing gas reserve the first right to its use. Punjab’s natural gas production is not significant. The structure of the textile industry is also skewed as 70 percent of the textiles are located in Punjab and the rest in other three provinces. This means 30 percent of the textile industry has access to cheap energy, while 70 percent has to use highly expensive imported energy. Normally the exports tend to increase for a while after devaluation. This time around the industries based in Sindh, Khyber Pakhtunkhwa (KPK) and Balochistan are likely to register high sales both at home as well as overseas. The devaluation has adequately addressed their inefficiencies. They are now in a position to remain competitive even with obsolete technology. The 70 percent industry located in Punjab has lost almost all the advantage provided by massive devaluation. The price of imported gas is based on the global rates of crude oil. As the crude oil prices surged so did the price of imported gas. Devaluation is an added and almost unbearable factor that has increased the imported gas prices. The industries in Punjab would be out-bidden by the industries based in other provinces in the domestic market. They may be able to retain some export markets after the devaluation but if Pakistani exporters from other provinces challenged them in prices they would have to quit the foreign market for them. It is now interesting to see how the textile entrepreneurs react to the new situation that is to their advantage both in local and export markets. If they go all-out for exports then there would be nothing left for the domestic market. But if they preferred domestic market the Punjab based industries would be left with foreign markets only. It is pertinent to note that Pakistan exports only 25 percent of its yarn and fabric. So even if the mills based in Punjab got access to export markets they may not survive without substantial access to domestic market. The scenario at the value-added level is also very interesting. This sector either buys yarn from spinners to convert it into fabric of its choice through registered or unregistered weavers, or they import yarn or fabric under duty tax remission for exporters (DTRE) scheme. After prolonged crisis in the basic textile sector many apparel exporters took advantage of the DTRE scheme. However after massive devaluation of rupee the import of these inputs has become too expensive. They would now prefer to buy from the local market. The domestic basic textile players outside Pakistan would now be able to recapture the markets they lost to imports. But the spinners and weavers would get orders only after the mills from other provinces exhaust their capacities. In other words the textile industry has been truncated after massive devaluation creating clear winners and losers. The situation created by devaluation will prove to be a short-lived honeymoon for the mills outside Punjab unless they improve their efficiencies up to global level. For Punjab mills that have upgraded technology may barely survive, while rest would be forced to go out of business unless the state comes out with a prudent plan. One solution to this problem is to come out with the average weighted price of imported and domestic gas as has been done in the case of electricity. This move would be strongly opposed by the entrepreneurs outside Punjab. This step may reduce gas prices for Punjab substantially but the increase in gas rates outside would also be very taxing. This measure after the huge devaluation may in fact also make mills in other three provinces uncompetitive. There is another alternative that is easier and does not hurt the rights of other provinces. For this the government will have to revisit the priorities under which the system gas is distributed in Punjab. Punjab still gets about 1100mmcfd system gas from other provinces. The first priority is the domestic consumers, while the industry is the third priority. There is less gas available in the system and the third-priority consumers hardly get any gas. The exporting industry fulfills its gas needs from expensive imported re-gasified liquefied natural gas (RLNG). A study of system gas supplies in Punjab reveals that 60mmcfd gas is supplied daily to commercial users out of which high gas consumers consume 30mmcfd. Moreover, 65mmcfd is provided to general industry in the province. The state should take a bold decision and divert this 95mmcfd gas to the five exporting sectors. The availability of system gas would restore the viability of the exporting industries both in domestic and export markets. Some vested interests would oppose it strongly but the alternative is to close down 70 percent textile industry of the country. This diversion of cheap domestic gas would provide level-playing field to entire textile chain of Pakistan. However, as already pointed out, this relief would not last long as efficient productivity is linked to the upgrade of technology. The modern spindles for instance consume 60 percent less energy, produce more yarn/hour and need 2-3 times less manpower than obsolete spindles operating in Pakistan. The textile sector would then be able market its products at most competitive rates both in the domestic and global markets. The government should warn the entrepreneurs that after temporary restoration of their viability they would have to upgrade their machines. The authorities should set a deadline after which the system gas supplies to inefficient industries would be suspended. With upgraded technology the industries would be able to fulfill their needs with only 40 percent of the gas that they are getting now. Pakistan’s textile exports would multiply only from efficient technologies. The industry size could double without increasing the power supplies.
Source: The News International
The government will begin its trade mission to the United States on Monday to boost Indonesia's commerce with the world's largest economy amid the heightened global trade war. The mission, led by Trade Minister Enggartiasto Lukita, will lobby Washington following the US government's policy to review its generalized system of preferences (GSP) for Indonesia. The US government deemed that Jakarta had implemented numerous trade and investment barriers that had serious negative effects on US commerce. US Trade Representative (USTR) data shows that in 2016, Indonesia was the US' 35th largest goods export market, however the US had a $13.2 billion trade deficit. Minister Enggartiasto is scheduled to meet US Trade Representative Ambassador Robert E. Lighthizer this week to discuss the GSP review. Enggartiasto will also meet with US Secretary of Commerce Wilbur Ross. Aside from discussing the GSP issue, the trade mission also aims to expand opportunities for Indonesian exporters. For this purpose, the minister brought along several Indonesian business representatives to the US, including from the Indonesian Employers Association (Apindo), Indonesian Textile Association (API) and Indonesian Food and Beverage Association (Gapmmi), among others.
Source: Jakarta Post
The Alliance for Workers Safety is winding up its operations in Bangladesh by December, the executive director of the North American apparel companies group says. “The Alliance will not be here after Jan 1 next year,” Jim Moriarty said on Sunday at a news briefing, adding that their work will be completed before that. “We are not asking for an extension,” he said. The Alliance was formed after the deaths of over 1,200 workers in the 2013 Rana Plaza collapse following which buyers raise concerns over workplace safety in Bangladesh. The Accord is the other group which was formed with the companies of European countries. State Minister for Labour and Employment Md Mujibul Haque recently said the government would not extend the tenure of the Accord and Alliance as the Remediation Coordination Cell (RCC) is capable of running inspection and monitoring of workplace safety in garment factories. The RCC was set up last year through the collaboration of the government, the Bangladesh Garment Manufacturers and Exporters Association, and the Bangladesh Knitwear Manufacturers and Exporters Association, with technical support from International Labour Organisation. Asked whether they are closing down Bangladesh operations due to government pressure or whether their job is done, Moriarty said their job would be complete by December. “Our job will be finished. By the end of the year, we will have largely finished the work that Alliance has set up to do,” he said. The work includes physical mediation, robust training programme and introducing helpline to help workers get their problems solved. The Alliance in 2014 introduced a confidential helpline among the garment workers to allow them to report their issues round the clock toll-free. The Sunday’s briefing was organsied to inform that the ‘Amader Kotha’ (Our Voice) helpline is now housed at Phulki, and the NGO team is managing the helpline with its partners, Clear Voice and LabourLink. Moriarty said with this transition, Amader Katha is now accessible to all workers across Bangladesh. He said since 2014, the helpline has received more than 233,000 calls from workers and the broader community, and more than 80 percent of all substantive issues have been resolved.
Source: Bdnews24.com
