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MARKET WATCH 30 NOV, 2018

NATIONAL

INTERNATIONAL

Export textiles to countries other than US, EU: Prabhu

The Union minister of commerce & industry and civil aviation, Suresh Prabhu, has urged the textile industry to export products to countries other than the US and EU. For this, the government of India has been making efforts in identifying potential export partners and strengthening relationships with them, said Prabhu at a textile conclave in New Delhi. According to projections, the Indian textiles and clothing industry has the potential to grow at CAGR of 14 per cent and reach $300 billion by 2025 from $150 billion achieved in the year 2017. The export of textiles and apparels are expected to reach $82 billion by 2021. A free trade agreement with EU would relieve the pressure on the industry and enhance competitiveness. The government is also looking to fast track negotiations of Free Trade Agreements with EU and Australia, said Prabhu adding that a roadmap will help the Indian textile industry to tap the exports market. "The contribution from textiles and apparel can be improved by scaling up and increasing investments into the industry along with cost optimisation and vertical integration. Investing in new and more efficient technologies and processes will lead to more superior products," said Prabhu. The Indian textile industry should modernise their approach as well as the technologies and gain competitive advantage over neighbouring countries and diversify product range across the value chain. The commerce ministry is making all efforts to onboard all line ministries for greater synergy in order to promote exports. (RR)

Source : Fibre2fashion

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Textile industry demands 50% cut in power tariffs

Surat: The textile industry leaders will be making a strong representation to Gujarat’s energy minister Saurabh Patel to give 50% concession on the electricity tariff, which they claim will provide a level-playing field with the textile sector in Maharashtra. Patel has been invited as the guest of honour at the inauguration of the three-days Energy International exhibition organized for the first time by the Southern Gujarat Chamber of Commerce and Industry (SGCCI) at the Surat International Exhibition and Convention Centre (SIECC) at Sarsana on Friday. Industry sources said that the delegation from SGCCI, power loom weavers and textile processors have already represented the electricity tariff issue with chief minister Vijay Rupani in Gandhinagar this week. Though the CM has assured all proactive measures to be taken in the textile policy-2018, the government may not consider the 50% electricity tariff concession demand of the industry. President of South Gujarat Textile Processors Association (SGTPA), Jitu Vakharia, said, “Not only the power loom weavers, but the textile mills too are facing cut-throat competition from the mills in Maharashtra where government is giving huge subsidies to revive the closed mills. If this happens,business will shift to Maharashtra.” Vakharia added, “Many powerloom and embroidery units have shifted to Navapur and Tarapur in Maharashtra for electricity concessions and other subsidy benefits.” According to industry leaders, the power tariff in Maharashtra is Rs 3.50 per unit, whereas the textile industry in Surat pays Rs 7.50 per unit rate. Due to cheap electricity, the production cost of the units in Maharashtra is significantly less. The fabric manufactured in Maharashtra is cheaper compared to Surat. Representative of power loom weaving sector, Ashish Gujarati, said, “We will meet the minister on Friday and remind him about electricity concession scheme. If the government doesn’t concede, more units will shift to Navapur and Tarapur.””

Source : Time of India

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Garment exporters want textile cluster in India's Ludhiana

Garment exporters in Ludhiana have urged the Punjab state government to bail them out of the rising cost of production and stiff competition. A delegation from the Knitwear and Apparel Exporters Organisation recently apprised chief minister Captain Amarinder Singh of the problems and presented a memorandum demanding establishment of a textile cluster there. Ludhiana needs a big global-class textile cluster with availability of all essential services as a micro, small or medium enterprise cannot afford all types of machines and services like embroidery, printing, knitting, dyeing, and electronic computerized cutting, according to Harish Dua, president of the trade body. A textile cluster in Ludhiana with all required facilities will solve the problem if machinery is made available at a subsidised cost to members of the cluster, a report in top Indian newspaper quoted Dua as sayng. To train and mobilize women’s workforce in the state, especially in Ludhiana, is the need of the hour, said Narinder Chugh, executive council member of Apparel Export Promotion Council. (DS)

Source: Fibre2fashion

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Govt to revise rate regime for old terminals at major ports

Mumbai : The Shipping Ministry has flagged off the process of revising a contentious rate regime that governs India’s first batch of 16 public-private-partnership (PPP) cargo terminals at Centre-owned major ports. The revision has become necessary after the Ministry decided to drop an earlier plan to allow these terminals to migrate to a more favourable and market-friendly pricing structure announced for new terminals in 2013.

Lack of agreement

The migration plan failed because the Ministry and the private firms running these terminals failed to agree on the terms of the shift. The Ministry wanted the terminal operators to put up their facilities for re-bidding to discover the price afresh, with a right of first refusal given to the existing cargo handlers to match the highest bid and take the contract. The re-bidding condition was proposed as the shift to a de-regulated rate regime of 2013 would have fetched higher revenues to port operators, which had to be shared with the government-owned port trusts. This was not acceptable to the operators, including global giants such as DP World, PSA International and APM Terminals, which preferred a migration without any conditions, which was not agreeable to the Ministry, either. The validity of the 2005 rate-setting guideline ended in 2010 but has been extended repeatedly with the latest extension ending in March next year. “If migration had worked out, these terminals would have moved to the 2013 rate regime and the 2005 guideline would have become defunct. Since that has not worked out, it is a mandatory requirement for us to revise the 2005 rate norms which was due in 2010.We have to give a reason for not revising it; as long as the migration issue was there, that was all right. But once that is dropped, we have to revise it,” a Ministry official said.

‘Flawed’ clauses

These terminal operators are fighting the government over many “flawed” clauses in the 2005 rate regime either individually or under the banner of their lobby group, the Indian Private Ports and Terminals Association (IPPTA), after the rate regulator ordered rate cuts when the terminals asked for a raise. The terminal operators say that the rate cuts, if implemented, would render their facilities commercially unviable and have secured the backing of courts to stay the rate reductions ordered by the Tariff Authority for Major Ports (TAMP), some as far back as 2012. Even after its validity ended and was extended on an ad-hoc basis, the Ministry has tweaked some of the vexed clauses in the 2005 guidelines that have roiled the operators including the calculation of surplus earned by the terminals by handling much more than the volumes projected in the previous rate cycle. Such refinements were carried out with the approval of the Law Ministry and the Attorney-General.

Diminishing returns

Still, there are clauses detrimental to the interests of the older terminals. For instance, the return on capital employed (ROCE) is currently computed on the net block of assets, resulting in diminishing returns with each passing year. “The gross asset method of determining return on capital employed is more appropriate for ensuring desired stability on return on investment which is essential for any financial investment in a project,” an executive with one of the older cargo terminals said. The 2013 rate regime guarantees a raise of as much as 15 per cent on the base reference or ceiling rate (set upfront at the beginning of the contract by TAMP) during each year of the 30-year contract if the terminal operator complies with certain performance standards. The PPP operators would also be entitled to a further hike every year to account for rising prices because the base rates are indexed to the WPI to the extent of 60 per cent. In comparison, the 2005 rate guideline penalise operators for efficiency. If a terminal loads more than the projected volumes in a tariff cycle, its rate will be cut in the next tariff cycle.

Source: Business Line

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Rupee soars 77 paise, breaches 70/USD mark after 3 months

The rupee vaulted 77 paise to a three-month high of 69.85 per US dollar on November 29, propelled by easing crude oil prices and fresh foreign capital inflows. In a major relief to energy importers like India, oil prices slipped below the $60 per dollar mark as investors fretted over a supply glut. Forex dealers said a bullish trend in the equity market and a weak greenback further propped up the local unit, which racked up gains for the third straight day. The dollar weakened against some currencies overseas after US Federal Reserve Chairman Jerome Powell said that the central bank's benchmark interest rate is likely near a "neutral level".At the Interbank Foreign Exchange (forex), the rupee opened on a firm footing at 70.15 against the US dollar. It then breached the crucial 70 per USD mark and rallied to the day's high of 69.78 following dollar selling by exporters. The local unit finally finished at 69.85, showing a gain of 77 paise over its previous close. The last time the rupee closed below 70 was on August 24, when it had finished at 69.91. "The rupee remains firm on account of sharp decline in the crude oil prices in the international market. This is positive for India as decline in crude oil prices may push inflation and current account deficit lower," said Rushabh Maru - Research Analyst , Anand Rathi Shares and Stock Brokers. He added that there is lot of uncertainty in the global financial markets and domestic equities are quite volatile too, hence we may see importers rushing to cover their exposure for 2-3 months. "Near term range for the rupee is 69.50 to 71.00 levels," he said. Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management, said, "The INR appreciated on account of renewed interest by FIIs in India. After a steep 15 percent fall in the Rupee earlier this year, the Rupee has bounced back 6 percent. After pulling out $5 billion cumulatively in September and October, FIIs have bought Indian equities worth $558 million in November." Globally, Brent crude, the international benchmark, was trading 1.04 percent down at $58.15 per barrel. The 30-share Sensex surged 453.46 points, or 1.27 percent, to end at 36,170.41, while the broader NSE Nifty jumped 129.85 points, or 1.21 percent, to 10,858.70. Meanwhile, on net basis, foreign funds bought shares worth Rs 823.47 crore, while DIIs purchased share to the tune of Rs 973.31 crore November 29, provisional data showed. Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 69.9159 and for rupee/euro at 79.5801. The reference rate for rupee/British pound was fixed at 89.7389 and for rupee/100 Japanese yen at 61.71.

Source: Money Control

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Arvind launches garment manufacturing hub in Gujarat

Indian textile-to-retail conglomerate Arvind Limited, recently launched its largest garment manufacturing hub in Gujarat, as part of its capacity expansion strategy, with two manufacturing facilities in Bavla near Ahmedabad. A third facility will commence operations over the next few weeks. These units have been set up with an investment of ₹350 crore. The facilities, inaugurated on November 27 by Gujarat chief minister Vijay Rupani, will add a capacity of 3 million garments per month and generate additional revenues of ₹1,000 crore, according to a company press release. The facilities will employ 12,000 people as operations reach optimal capacity and many more ancillary jobs are expected to be created around them. Arvind also plans to invest ₹500 crore every year for the next four to five years to double revenue from its textile business to ₹12,000 crore. Currently, a mere 10 per cent of its fabrics are converted into garments, but it aims to convert nearly 50 per cent over the next five years. "Bavla (Gujarat) facilities are a step in this direction. These will also contribute to the company's foray into performance and functional wear (active wear) and synthetics. They are one of the several we are planning to create over the next few years," chairman and managing director Sanjay Lalbhai said.

Source: Fibre2fashion

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Welspun India aims 50% revenue from innovative products

Home textiles maker Welspun India is targeting around half of its revenue from innovation-based products by 2021-22, according to company chief executive officer and joint mManaging director Dipali Goenka. Around 25-30 per cent of the company’s sale is attributed to innovation-based products now. The company has no major capital expansion plans for textiles. The company, which offers bath, bedding and flooring solutions, has 29 active patents globally. For the first half of fiscal 2018-19 ending September, the company had reported a total income of ₹3,375.6 crore. Earlier this month, the company had said it plans to invest around ₹900 crore in the current fiscal, according to a news agency report. Of this, ₹320 crore has been invested in the first half. A major part of the investment will go to the flooring solutions facility that the company recently commissioned in Telangana. (DS)

Source: Fibre2fashion

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Global Textile Raw Material Price 29-11-2018

Item

Price

Unit

Fluctuation

Date

PSF

1258.62

USD/Ton

-0.06%

11/29/2018

VSF

1991.08

USD/Ton

0%

11/29/2018

ASF

2502.14

USD/Ton

-11.58%

11/29/2018

Polyester POY

1186.02

USD/Ton

-0.60%

11/29/2018

Nylon FDY

3047.71

USD/Ton

-0.93%

11/29/2018

40D Spandex

4772.83

USD/Ton

0%

11/29/2018

Nylon POY

5419.75

USD/Ton

0%

11/29/2018

Acrylic Top 3D

1466.35

USD/Ton

0%

11/29/2018

Polyester FDY

2889.58

USD/Ton

0%

11/29/2018

Nylon DTY

2472.67

USD/Ton

0%

11/29/2018

Viscose Long Filament

1372.91

USD/Ton

-0.52%

11/29/2018

Polyester DTY

3320.86

USD/Ton

-0.43%

11/29/2018

30S Spun Rayon Yarn

2688.31

USD/Ton

0%

11/29/2018

32S Polyester Yarn

1933.57

USD/Ton

0%

11/29/2018

45S T/C Yarn

2918.33

USD/Ton

0%

11/29/2018

40S Rayon Yarn

2990.21

USD/Ton

0%

11/29/2018

T/R Yarn 65/35 32S

2558.93

USD/Ton

0%

11/29/2018

45S Polyester Yarn

2084.52

USD/Ton

0%

11/29/2018

T/C Yarn 65/35 32S

2487.05

USD/Ton

0%

11/29/2018

10S Denim Fabric

1.33

USD/Meter

0%

11/29/2018

32S Twill Fabric

0.81

USD/Meter

0%

11/29/2018

40S Combed Poplin

1.13

USD/Meter

0%

11/29/2018

30S Rayon Fabric

0.64

USD/Meter

0%

11/29/2018

45S T/C Fabric

0.68

USD/Meter

0%

11/29/2018

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14386 USD dtd. 29/11/2018). 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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Bangladesh Expands Its Textile Exports, Leads US Apparel Imports

The latest figures revealed by the Department of Commerce's Office of Textiles and Apparel (OTEXA) show that Bangladesh registered the highest growth amidst 10 countries in the U.S. apparel imports for September, 2018. The country’s exports surged to 11.8% with 171m Square Meter Equivalent (SME), surpassing Honduras (90m SME), India (81m SME), and El Salvador (65m SME). Globally, Bangladesh is the second-largest ready-made garment (RMG) exporter, with net annual worth around $28 billion. The RMG Sector houses 41% factories with moderate technologies and 20% using advanced machinery. Touted as a women-driven sector, the male to female worker ratio stands at 39.2:60.8, with a total employment strength of approximately 3.5 million people. While the textile sector is responsible for 83.5% of the country’s exports, it plays a crucial role in the Gross Domestic Product (GDP) figures with 6% contribution. This comes as the country has utilized the impetus received from the government as well as private companies like Beximco Textiles. The government of Bangladesh has been instrumental in laying a strong foundation for the industry. They collaborated with the International Labor Organization for enhanced protection of factory working environment and inspections were carried out across 3,780 factories under the same. In order to ensure this as a long-term measure, the Department of Inspections of Factories and Establishments (DIFE) was re-structured with a personnel and budget boost. Beximco Group, headed by Salman F Rahman, has had a tremendous run in terms of textile exports and growth. Beximco Textiles, the textile arm of the group has integrated the government formulated policy changes with available resources making useful utility and output centric changes to their manufacturing. Salman F Rahman is also an advisor the Prime Minister of Bangladesh. Time to time, he has taken decisions that gave the textiles sector the necessary boost. In addition, skilled labor at economical prices has helped such companies achieve their objective of maximized output and reasonable market appeal. As a result, the corresponding earnings across the last decade has helped the private players establish global dominance. The concoction of all these makes Bangladesh a good sourcing destination for the US and other major importers. As the country continues to grow, the industry players are strengthening their global footprint by meeting the export standards of their core customers. Riding on the domestic growth and strong private and government initiatives, Bangladesh’s textile industry has registered strong economic precedents and growth markers with growing exports, and improving textile manufacturing. Perhaps a few years down the line, it will not be anomalous for Bangladesh to achieve its aim of $50 billion RMG export earnings by 2021.

Source: News wire

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Vietnam : Export import turnover exceeds $440 billion

Vietnam’s export import turnover is estimated to reach US$440.45 billion in the first 11 months this year, increasing 13.4 percent compared to the same period last year, reported General Department of Vietnam Customs. Of the total turnover, export value reached $223.63 billion increasing 14.4 percent while import hit $216.82 billion moving up 12.4 percent. Export of nine out of ten groups of major products remained quite good growth rate. Specifically, machines-equipment-tool-component got $15.12 billion, increasing 28.6 percent over the same period in 2017. That was followed by garment and textile with $27.7 billion, increasing 17.4 percent, wood and wooden products with $8.07 billion up 16.3 percent. Crude oil export turnover was as low as $2.08 billion, down 42.5 percent in volume and 20.4 percent in value over the same period in the previous year. The country’s trade surplus topped $6.8 billion in the first 11 months of 2018.

Source : Sggpnews

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Bangladesh's NBR weighs further tax cut for RMG exporters

 

Bangladesh’s National Board of Revenue (NBR) is now reviewing a proposal to reduce the tax at source for readymade garments (RMG) exporters to 0.25 per cent a month after apparel makers received a cut in tax at source. NBR’s income tax wing had reduced tax at source for all export-oriented sectors to 0.6 per cent from 1 per cent in September. Last year, tax at source rate for all export-oriented sectors was 0.70 per cent. NBR officials estimated a Taka 15-billion loss in income tax collection this year because of the reduction. A situation paper has already been prepared for the government high-ups' consideration, they said. The tax benefit has been demanded to stay competitive as the cost of doing business is increasing while prices of garments are declining in the global market, according to Mohammad Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). Also, corporate tax rates were reduced to 12 per cent for garment exporters and 10 per cent for green factories. Export-oriented industries are supposed to pay 35 per cent corporate tax. (DS)

 

Source: Fibre2fashion

 

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