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MARKET WATCH 10 MAY, 2019

NATIONAL

INTERNATIONAL

 

Trade-related talks underway in New Delhi between India and China

Trade-related talks are underway in New Delhi between senior officials of India and China. The Chinese side is being headed by Li Guo, Vice Minister of the General Administration of Customs of China (GACC). From the Indian side, officials from different departments including commerce, agriculture, animal husbandry and the Agricultural and Processed Food Products Export Development Authority (APEDA) are participating. The meeting assumes significance as India is seeking greater access for its manufactured and agricultural products in the Chinese market to bridge the widening trade deficit. Recently, India has identified and shared with China a list of 380 products, including horticulture, textiles, chemicals and pharmaceuticals, as their shipments hold huge export potential. Increasing exports of these products will help India narrow the widening trade deficit with China, which stood at 50.12 billion US dollars from April 2018-February -2019.

Source: All India Radio

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Tirupur Textile Exports to Reach Record Rs 30,000 Crore In FY20; US-China Trade War Turning Buyers To India

Textile exports will continue to be a bright spot in India's international trade for the current financial year (FY20) with industry projections pegging knitwear exports from Tirupur (Tamilnadu) at a record Rs 30,000 crore, reports Press Trust of India (PTI). According to a leading exporter and chairman of India International Knit Fair (IKF) A Shaktivel, this year's exports will top last year's (FY19) figure of Rs 26,300 crore. In FY19, exports grew at an impressive 8.3 per cent rate, and the association's overall business crossed half a trillion rupee mark with domestic sales contributing Rs 24,000 crores. Shaktivel on Wednesday (8 May) stated that exports during April (2019) have already crossed Rs 4,400 crore "which is a very encouraging sign." "Besides, India now has an advantage after the United States (US) imposed tariffs on some products made in China, as many buyers and manufacturers were approaching India for textile products," he added. According to the Tirupur Exporters Association (TEA) president Raja M Shanmugam, Tirupur's total textile business will reach an unprecedented Rs 60,000 crore mark (domestic and exports) this fiscal year (FY20). Shanmugam also said that the association is aiming at Rs 1 lakh crore turnover at the stroke of 2022. India's overall textile exports for the FY19 stood at Rs 1,12,715 crore, recording a growth rate of 4.7 per cent over the previous FY's performance valued at Rs 1,07,679 crore.

Source: Swarajya

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Economic census 2019 to include geotagged data of business enterprises

The new GDP series has been under criticism for showing high growth not corroborated by high-frequency indicators and sharp revision in earlier estimates. The upcoming Seventh Economic Census 2019 will include geotagged data of business enterprises to ensure that no bogus enterprises are included in the official statistics, a senior official said. The move comes even as the government is facing questions over its national income numbers and growth estimates. Field officials conducting the survey will include live locations of the enterprises via their mobile phones, the official told ET. “Geotagging will help to organically clean the database.” At the first stage, there will be a physical check and geotagging of all enterprises by the officers of Common Service Centres, the access points for delivering government eservices in rural and remote areas. This would be followed by a sampling check in which government’s field officers will randomly verify the location of the enterprise. The geotagging is expected to help weed out the shell companies and thereby improve data quality. This comes after a National Sample Survey (NSS) technical report on services sector enterprises in India released last week had shown that nearly a third of the companies included in the MCA-21 data were either missing or wrongly classified. This led to further criticism of the official GDP calculations as MCA-21 data is used for calculating corporate value addition in the new series with 2011-12 base. The new GDP series has been under criticism for showing high growth not corroborated by high frequency indicators and sharp revision in earlier estimates. The government had on Wednesday said the shortcomings had not impacted the data. “It is emphasised that there is no impact on the existing GDP/GVA estimates for the corporate sector as due care is taken to appropriately adjust the corporate filings at the aggregate level based on the paid-up capital,” MoSPI said.

Source: Economic Times

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GDP data debate: Economists create own benchmarks as doubt on numbers stays

Economists and investors are increasingly showing that they have little or no confidence in India's official economic data – presenting whoever is elected as the next prime minister with an immediate problem. The government itself has admitted there are deficiencies in its data collection. Economists and investors are increasingly showing that they have little or no confidence in India’s official economic data – presenting whoever is elected as the next prime minister with an immediate problem. There have been questions for many years about whether Indian government statistics were telling the full story but two recent controversies over revisions and delays of crucial numbers have taken those concerns to new heights. The government itself has admitted there are deficiencies in its data collection. A study conducted by a division of the statistics ministry in the 12 months ending June 2017 found that as much as 36 percent of the companies in the database used in India’s GDP calculations could not be traced or were wrongly classified. But the ministry said there was no impact on GDP estimates as due care was taken to adjust corporate filings at the aggregate level. Last December, the government held back the release of jobs data but an official report leaked to an Indian newspaper showed the unemployment rate had touched its highest level in 45 years. Economists and investors are now voting with their feet – by using alternative sources of data and in some cases creating their own benchmarks to measure the Indian economy. Ten economists and analysts at banks, think-tanks and foreign funds interviewed by Reuters said they were moving to use alternative data sources, or at least official data of a different kind. Among the numbers they prefer are fast-moving indicators like car sales, air and rail cargo levels, purchasing managers’ index data, and proprietary indices created by the institutions themselves to track the economy. Many economists said they were stunned when the government upwardly revised GDP growth for 2016/17 to 8.2 percent from 6.7 percent, although the demonetisation of high value notes hit businesses and jobs in that financial year. “Our response has been to spend time developing an Indian Activity Index, which takes a range of time series data that in the past were strongly correlated with real GDP growth and extract the common signal from them,” said Jeremy Lawson, chief economist at Aberdeen Standard Investments, which manages more than $700 billion in assets. The preliminary evidence from the index, which includes components like car sales, air cargo and purchasing managers’ index data suggests the government has over-estimated GDP growth, he said. “Our index would suggest that there was stable growth, rather than the rapid acceleration suggested by the GDP figures,” he said, referring to three years of data from 2014. Even those close to the government have said the lack of accuracy in the official data makes it much more likely that authorities will miss major swings in activity and be unable to react quickly to head off a crisis. It is also a problem for investors who may be misled into thinking the economy is more robust than it really is.

Missed farm crisis

The economic wing of the Rashtriya Swayemsewak Sangh, the fountainhead of the ruling Hindu nationalist Bharatiya Janata Party, said the government and the Indian central bank missed anticipating a farm crisis that has now gripped the countryside, with low crop prices driving down farmers’ incomes.  “The fact is the government advisers and the monetary policy committee of the central bank could not diagnose the farm crisis, deflationary conditions in rural economy, and ignored the need to boost growth,” said Ashwani Mahajan, the co-convenor of the group, Swadeshi Jagran Manch, adding the government was now taking steps to address the problem. The delayed response has cost Prime Minister Narendra Modi at least some support in the countryside in the current general election – although most political strategists still think he can probably hang onto power. The opposition and other critics have said Modi suppressed jobs data and “massaged” economic growth numbers in an attempt to show that his government has done better than the previous administration. A spokesman at Modi’s office said no official was available for comment as they were busy with the election while a finance ministry spokesman referred to Finance Minister Arun Jaitley’s previous comments. In a blog in March, Jaitley criticised economists for doubting the credibility of data and accused them of running a fake campaign against the government.

Idle capacity

Some investors have been burned by believing in India’s high growth story. Private power producers invested billions of dollars based on expectations of electricity demand that didn’t pan out in the rural economy. With economic growth pegged at over 8 percent a year, they had expected a pick up in demand by small businesses and household. Many of the power producers are now facing bankruptcy and legal disputes as many of the new plants they built are working at about 60 percent of capacity. In the real estate sector, developers said, it could take 3-4 years to clear about 500,000 unsold flats in and around New Delhi that were built on th assumption of higher income jobs in urban areas. To be sure, the proportion of the Indian economy that is based on the unofficial sector, such as household enterprises, makes it a nightmare to assess economic activity. P. C. Mohanan, former acting chairman of the national oversight body for statistics, who resigned to protest government interference over the release of the jobs figures and back series data on GDP, said the government hasn’t allocated the resources it needs to measure activity given the growth in the economy. Gita Gopinath, the International Monetary Fund’s chief economist, told an Indian TV channel last month the IMF had raised the issue of “transparency” with Indian officials in data collection and, in particular, measurement of the GDP deflator – the adjusted inflation rate used to estimate real GDP. In a statement, the statistics ministry said it was working to address the issue. A senior official earlier said they were open to suggestions for improvement, just not “politically motivated” criticism. There are already plans to revamp data compilation and capture the nuanced relationship between prices and real GDP, he said.

Source: Financial Express

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Rupee slumps 23 paise vs US dollar on persistent trade war worries

Falling for the fourth straight session, the rupee depreciated by 23 paise to 69.94 against the US dollar Thursday on unabated foreign fund outflows amid simmering US-China trade tensions. Firming oil prices and a prolonged spell of weakness in the equity markets also weighed on the domestic unit, dealers said. At the interbank foreign exchange market, the rupee opened marginally lower at 69.70 and slipped further to breach the 70-mark, touching a low of 70.03, before finally settling at 69.94, down by 23 paise over its previous close. The rupee has now lost a hefty 72 paise in four sessions. Globally, the Japanese yen rallied to three-month highs against the dollar as investors retreated to safe haven assets following the fresh flare-up in tensions between the US and China. Ahead of the next round of talks aimed at ending the trade conflict between the world's two largest economies, China said it will retaliate if US raises tariffs on Chinese products. "The uncertainty related to election outcome and US-China trade deal have been weighing on the rupee. Overseas investors have turned cautious for the domestic equity and debt market and started reducing their position ahead of the election outcome scheduled on 23rd May 2019," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities. The dollar has hit four-month highs against the yuan and the Australian dollar on trade tensions, he added. Foreign investors remained net sellers in the capital markets, offloading shares worth Rs 655.36 crore Thursday, provisional exchange data showed. The dollar index, which gauges the greenback's strength against a basket of six currencies, inched up 0.02 per cent to 97.64. Brent crude futures, the global oil benchmark, rose 0.17 per cent to USD 70.49 per barrel. "From the high of USD 75.60 registered on April 25, Brent crude has witnessed a correction of 7 per cent till date. However, for last four sessions, it has been holding a level above USD 69 in futures. Breaking USD 69 in Brent crude would help domestic currency to recover recent losses against dollar," Sharma added. Meanwhile, the domestic equity markets nursed losses for the seventh straight session. The 30-share BSE Sensex closed 230.22 points, or 0.61 per cent, down at 37,558.91, while the broader NSE Nifty shed 57.65 points, or 0.51 per cent, to 11,301.80. The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 69.8685 and for rupee/euro at 78.2481. The reference rate for rupee/British pound was fixed at 90.9879 and for rupee/100 Japanese yen at 63.59.

Source: Business Standard

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Mudra loans may cross Rs 3 lakh crore in 2019-20

Government data for the scheme for the last fiscal, till March 22, 2019, put the figure of Mudra sanctions at Rs 2.82 lakh crore to 541.27 lakh borrowers. Total sanctions under the Pradhan Mantri Mudra Yojana (PMMY) loan scheme for micro industries are likely to cross Rs 3 lakh crore in the current fiscal, a senior Finance Ministry source said on Thursday. Government data for the scheme for the last fiscal, till March 22, 2019, put the figure of Mudra sanctions at Rs 2.82 lakh crore to 541.27 lakh borrowers. The loan is given primarily for the purpose of employment creation at the grassroots level through formal banking credit channel. Maximum loan amount under the PMMY is upto Rs 10 lakh. Loans up to Rs 50,000 are categorised as 'Shishu', those from Rs 50,001 to Rs 5 lakh are called 'Kishore' and loans from Rs 5.01 lakh to Rs 10 lakh are categorised as 'Tarun'. The loans are being given as working capital and term loans for business enterprises in manufacturing, trading and services, including for allied agricultural activities. Finance Ministry data shows Rs 2,82,594.30 crore has been sanctioned under PMMY and the Shishu loan cornered 46 per cent of the amount , Kishore 32 per cent and Tarun makes up 22 per cent of the sanctioned amount. Out of a total 5,41,27,092 accounts, Shishu accounts are at 4,69,04 215, Kishore at 58,64,952 and Tarun at 13,57,925. Out of these accounts, women borrowers are 340.45 lakh and SC/ST/OBC borrowers are 259.71 lakhs, the new entreprenuers are 107.57 lakh, the data said. These loans require no collateral security and are guaranteed by the Credit Guarantee for Micro Units (CGFMU), and the same is provided through the National Credit Guarantee Trustee Company (NCGTC).

Source: Economic Times

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Defence ministry to adopt new procurement

The defence ministry will be adopting a new procurement policy that will define the level of indigenous content for defence equipment and give higher preference to local vendors in contracts and to start with, it has identified military textiles such as bulletproof jackets, boots and high altitude clothing for this purpose. The ministry will also identify other defence equipment where the policy can be applied. The matter stems from an order issued by the Ministry of Commerce and Industry in June 2017 on ‘Public Procurement (Preference to Make in India)’. A meeting was recently held on the policy in Mumbai. Comprising of senior officers from the army, it focussed on notifying indigenous content in the supply of technical textiles by Indian vendors. This means that the defence ministry and the army with other stakeholders will define the quantity of indigenisation in textile-based items such as bulletproof jackets, bulletproof patkas (similar to helmets), super high altitude clothing, boots and sleeping bags. A similar meeting was held by Defence Secretary Sanjay Mitra in December. According to the order, the minimum local content for an item should be 50%. While officials explained that quantum of indigenous content has not been fixed, the order adds that a ministry can prescribe a higher or lower percentage of it for a particular product. “The nodal ministry may annually review the local content requirements with a view to increasing them, subject to availability of sufficient local competition with adequate quality,” the order said. Another important part of the order is that the purchase preference for a product will be given to local suppliers. An official explained that in the procurement of an item where there is an adequate vendor base and if its value is Rs 50 lakh or less, then only local suppliers are eligible. In cases where the procurement value is more than Rs 50 lakh, if the L1 (lowest bidder) is a local supplier, the contract for the full quantity will be awarded to it. However, if the L1is a foreign vendor, then only 50% of the order quantity will be awarded to it. “Thereafter, the lowest bidder among the local suppliers, will be invited to match the L1 price for the remaining 50%. This will, however, be subject to the local supplier’s quoted price falling within the margin of the purchase preference,” explained an official. If the lowest eligible local supplier fails to match the L1 price, then the next higher local supplier within the margin of the purchase preference will be invited to match the L1price for the remaining quantity.

Source: Economic Times

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In Varanasi, weavers’ woes — post-noteban and GST — not a poll issue

Owners of handloom units in Varanasi complain that by introducing GST, the government has "cleverly increased taxes in the garb of making taxation efficient and systematic" while harping on issues that have little to do with real problems this election season. In Prime Minister Narendra Modi’s Lok Sabha constituency of Varanasi, the woes of handloom weavers, who suffered a big blow in the aftermath of demonetisation and, subsequently, Goods and Services Tax (GST), do not find mention in election speeches. Owners of handloom units complain that by introducing GST, the government has “cleverly increased taxes in the garb of making taxation efficient and systematic” while harping on issues that have little to do with real problems this election season. Rizwan Ahmed, 55, who is the owner of six power looms in the city’s Lallapura area, alleges that the arbitrary execution of economic policies has hit his business massively. “Earlier, we had to pay the Value Added Tax (VAT) and toll taxes if we had to send our products to cities like Delhi and Jaipur. Those taxes were much less than the GST filing, which we are required to do by 20th of every month. We do not receive our payments from traders for as long as 4-5 months, but the GST has to be paid every month without which the goods cannot be transported. The profit margin has shrunk to less than half of what we used to make before GST. I employ a labourer who assists the main workers. He earns a daily wage of 250-300 rupees per day. And that is equal to my profit for the day as well. Imagine, the owner and the labourer are earning almost the same amount. Things were way better before GST came into effect. The business was expanding,” he says. Ahmed, who employs 12 workers in his factory, also complains about the tax structure not being business-friendly. “The disastrous effects of demonetisation are well-known. The entire handloom industry came to a screeching halt after PM Modi decided to make the country go cashless. But what is lesser known is the condition of Banaras’ weavers post-GST. The government has, in a way, introduced higher taxes in the garb of making the economy systematic,” says Ahmed. The weavers’ complaints are contrasted by a report titled ‘Implication of GST for Indian Textiles Sector’, published by the Union Ministry of Textiles, which reads: “If applied uniformly, GST is likely to address all the major concerns of industry. It will eliminate any blockage of input taxes caused due to break of input tax credit chain. It will provide a level playing field to all segments of the textile industry. There will be a shift in tax burden from production to consumption as GST is a consumption tax. There will be significant simplification in compliance due to GSTN.” Workers in Ahmed’s factory say it was expected that the government would talk of the problems faced by the local textile industry in the election season but the economic policies are not an election issue at all — “PM Modi holds lots of rallies and talks about patriotism, Pakistan, Army and what not, but there is no mention of things like demonetisation and GST. It’s as if nothing happened in the winter of 2016!” Shalini Yadav, the Samajwadi Party candidate from Varanasi, echoes them. “Issues like sewage problems, the plight of Ganga, dismal state of local industries are not being addressed by PM Modi. Rafale is not an issue on the busy streets of Varanasi, it is the traffic jams. People here are getting water supply that reeks of sewage. Local weavers had suffered tremendous losses due to GST and demonetisation. Nobody from the BJP is talking about these issues at all,” she says. On the contrary, Professor Sanjiv Srivastava, who teaches Political Science at Banaras Hindu University, believes that the persona of the Prime Minister has become so powerful in the past five years that issues like the effects of GST and note ban won’t make much of an impact in the elections that are slated for May 19. “There are opposing voices who are trying to raise issues that would, in their opinion, sideline BJP but the fact of the matter remains that people will ultimately vote for PM Modi’s image,” he says. Talking about communal polarisation in Varanasi, Ahmed says this kind of politics is not good for the trade itself. “It is usually the case that the traders who buy our products are Hindus while the weavers hail from the Muslim Ansari community. We simply cannot be at loggerheads with each other and let our businesses suffer,” explains Ahmed. Ramesh Sabarwal (name changed), a trader based in Godoliya area of Varanasi, singles out vote bank politics as the only factor that determines the outcome of elections in Varanasi. “GST, note ban and local issues, unfortunately, are not the factors that decide the election results here. It’s all about the caste equation and the consolidated Muslim vote bank. Be it Congress or BJP, no party can actually fight the elections on real issues. The style of politics has drastically changed since the last decade. It’s all about manipulation and winning the elections at any cost,” he says. Situated at a distance of about 2.5 kilometers from the power loom hub Lallapura, the Madanpura area in Varanasi is home to a significant number of traditional handloom weavers who are predominantly Muslims. Jamal Nasir, 55, who operates seven handlooms in Madanpura area, remembers demonetisation with angst. “The note ban hurt us tremendously. The business was hit so hard that we didn’t have enough money to feed our family. We have been in the weaving occupation for many generations. We were hoping that demonetisation will cost this government dearly in the elections but ever since this frenzy about Pakistan has surfaced, all issues have become redundant,” says Nasir. Talking about government initiatives that aim at weavers’ welfare, Nasir states that the initiatives have a top-to-bottom approach. “The government recently came up with a ‘Trade Facilitation Centre’. These things don’t matter much to small-time weavers like us. Such schemes are for the traders who can afford to put up their shops in such places while our business is all about supplying material to these traders. We do not benefit from such schemes,” he says. Nasir is joined by other members of the family who talk about similar problems. An 18-year-old member of his family, who didn’t want to be named, got up from his handloom and complained about the divisive politics being practiced in the city.”We are being ostracised from Varanasi. At the day of PM Modi’s roadshow in the city, while some Muslims were ready to greet the Prime Minister with garlands at a location which was about to be visited by Modi’s cavalcade, some BJP supporters started shouting anti-Muslim slogans,” the young man said.

Source: Indian Express

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SIMA CD&RA gets nod for commercial release of its cotton varieties

The commercial release of 14 cotton varieties and one hybrid developed by SIMA Cotton Development and Research Association (CD&RA) is set to hit the fields in the ensuing sowing season. (The sowing season commences from June in the northern part of the country and later from August-September in the South.) These varieties/ hybrid have been approved for distribution across the State by the Director of Seed Certification and Organic Certification, up to March 2022, M Asha Rani, Head cum Chief Cotton Breeder, SIMA CD&RA told Business Line. Of the 14 varieties, four are of medium staple length such as SIMA HITECH -1, SIMA Compact -32, SIMA Shakthi and SIMA- 113 and five - long staple varieties such as SIMA -24, SIMA -102, SIMA-M-55, SIMA-J-23 and SIMA-374. The extra long staple varieties include SIMA-Sivashakthi, SIMA-LI-3, SIMA-5, SIMA-GB-1-5 and SIMA Mahashakthi. The hybrid -SIMA HB-3, which has also been slated for commercial release is an ELS (Extra Long Staple) cotton. “The medium staple variety SIMA Shakthi is a Bt cotton, suitable for rainfed, high density planting and machine picking. In fact, we are the second in the country to have got the approval for release of a Bt cotton variety,” claims Asha Rani. “The crop duration of this Bt variety is 155 days; It has given an average yield of 2698 kg/ hectare of cotton seed during trials,.” “SIMA-GB-1-5, an ELS variety, better known as SIMA Platinum SUVIN would hit the farmers' field only in 2020-21 and SIMA-5, a year later in 2021-22.” Of the 14 varieties developed by the association, SIMA-102, a long staple variety is said to have registered the highest yield of 3732 kg/hec, with SIMA-374 close behind at 3622 kg/ hec of kappas during trials. The SIMA CD&RA Head hinted that the TN Government has sought to procure 225 tonnes of ELS cotton through the Cotton Corporation of India during the 2019-20 cotton season and necessary arrangements for adequate supply of seeds were being made.

Source: The Hindu Business Line

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Global Textile Raw Material Price 09-05-2019

Item

Price

Unit

Fluctuation

Date

PSF

1253.84

USD/Ton

-0.47%

5/9/2019

VSF

1814.37

USD/Ton

-0.16%

5/9/2019

ASF

2546.02

USD/Ton

0%

5/9/2019

Polyester    POY

1237.61

USD/Ton

-0.12%

5/9/2019

Nylon    FDY

2773.19

USD/Ton

-0.53%

5/9/2019

40D    Spandex

4661.32

USD/Ton

0%

5/9/2019

Nylon    POY

3068.21

USD/Ton

0%

5/9/2019

Acrylic    Top 3D

5575.88

USD/Ton

0%

5/9/2019

Polyester    FDY

1475.10

USD/Ton

0%

5/9/2019

Nylon    DTY

2640.43

USD/Ton

0%

5/9/2019

Viscose    Long Filament

2728.94

USD/Ton

0%

5/9/2019

Polyester    DTY

1371.84

USD/Ton

0%

5/9/2019

30S    Spun Rayon Yarn

2522.42

USD/Ton

0%

5/9/2019

32S    Polyester Yarn

1984.01

USD/Ton

-0.37%

5/9/2019

45S    T/C Yarn

2869.07

USD/Ton

0%

5/9/2019

40S    Rayon Yarn

2131.52

USD/Ton

0%

5/9/2019

T/R    Yarn 65/35 32S

2522.42

USD/Ton

0%

5/9/2019

45S    Polyester Yarn

2802.69

USD/Ton

0%

5/9/2019

T/C    Yarn 65/35 32S

2389.66

USD/Ton

0%

5/9/2019

10S    Denim Fabric

1.36

USD/Ton

0%

5/9/2019

32S    Twill Fabric

0.81

USD/Ton

-0.36%

5/9/2019

40S    Combed Poplin

1.08

USD/Ton

0%

5/9/2019

30S    Rayon Fabric

0.63

USD/Ton

0%

5/9/2019

45S    T/C Fabric

0.70

USD/Ton

0%

5/9/2019

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14751 USD dtd. 09/05/2019). 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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US-China trade tensions ‘threat to the global economy’: IMF

Trade tensions and the exchange of tariffs between the United States and China pose a “threat to the global economy”, the International Monetary Fund warned on Thursday. Renewed tensions between the two economic superpowers were hanging over the negotiations that were set to resume later Thursday and IMF spokesman Gerry Rice renewed the call for a “speedy resolution”. “Clearly tensions between the United States and China in the trade sphere are a threat to the global economy,” Rice told reporters. “As we have said before, everybody loses in a protracted trade conflict.” The US-China talks seemed on the verge of collapse this week after President Donald Trump said he would more than double punitive tariffs on USD 200 billion in Chinese goods starting Friday, accusing Beijing of backtracking on commitments made during the year-long negotiations. Beijing denied the charge on Thursday and warned of unspecified retaliation should the new 25 per cent duties take effect. Nevertheless, Vice Premier Liu He is due in Washington for the key round of talks. Trump said Wednesday that China’s negotiators were coming to “make a deal.” Rice called on “all parties to seek a resolution… that strengthens the international trading system.” “We’d be hoping for a speedy resolution to these discussions.” The IMF last month predicted that the slowing world economy could see a modest rebound in the latter part of 2019 — provided in part that the world’s top two economies resolve their differences. Officials called the recovery “precarious.” The IMF’s World Economic Outlook once again downgraded global growth to 3.3 percent for 2019, two tenths lower than the global crisis lender forecast in January and four tenths lower than October.

Source: Financial Express

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Bangladesh sees highest ever foreign investment

Bangladesh received a record $3.61 billion last year as Foreign Direct Investment (FDI), up by 67.94% more than in 2017, thanks to various steps the government has taken to attract new investments. While China became the leading investor in the country with $1.03 billion, the United States, traditionally the top investor, dropped to fourth with only $174 million in FDI for 2018 in Bangladesh. The Netherlands invested the second largest amount of $692 million, and the United Kingdom was the third highest at $371 million. Disclosing the data at a press briefing on Thursday, Bangladesh Investment Development Authority (BIDA) Executive Chairman, Kazi M Aminul Islam, also said that Bangladesh received $2.15 billion as FDI in 2017. “It’s a record,” he said, referring to the $3.61 billion received as FDI last year. He said the power sector alone had attracted investments worth $1.01 billion, where China contributed $834 million, followed by $730 million in the food sector, and $430 million in the textile sector. Regarding the downtrend of US FDI in Bangladesh, Aminul said: “The US government has cut tax rates for businesses in the US, and that has encouraged them to invest in their own country.” The government of Bangladesh over the past few years has taken various initiatives, such as policy reforms, removing infrastructural deficiencies and creating a positive business environment to encourage more investment, and that has paid off. Trade leaders, economists, and government officials say these steps have attracted investors to park their money in Bangladesh, turning it into an economic hub in the South Asian region.

Source: Dhaka Tribune

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NRF: Higher tariffs threats to spark retail imports increases

Rising retail sales and fears of soon-to-come tariff hikes are expected to spur unusually high levels of imports at the nation’s major retail container ports through summer. This is according to the monthly Global Port Tracker report, released today by the National Retail Federation and Hackett Associates. “Much of this is driven by consumer demand, but retailers are likely to resume stocking up merchandise before new tariffs can take effect,” said Jonathan Gold, NRF vice president for supply chain and customs policy. “Tariff increases and new tariffs will mean higher costs for U.S. businesses, higher prices for American consumers and lost jobs for many American workers. We encourage the administration to stay focused on a trade agreement, and we hope the negotiations will get back on track. It would be unfortunate to undermine the progress that has been made with more tit-for-tat tariffs that only punish Americans.” The rush to bring merchandise into the country that was seen through much of last year slowed down after Trump postponed a tariff hike from January to March and then put it on hold indefinitely as trade talks with China showed signs of progress, NRF reminded. But yesterday, Trump warned the 10% tariffs on $200 billion worth of Chinese goods will rise to 25% starting Friday, and that he plans to impose new 25% tariffs on most remaining Chinese goods at an unspecified date. U.S. ports covered by Global Port Tracker include: Los Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Port of Virginia, Charleston, Savannah, Port Everglades, Miami and Jacksonville on the East Coast; and Houston on the Gulf Coast. Together, they handled 1.61 million Twenty-Foot Equivalent Units (TEUs) in March, the latest month for which after-the-fact numbers are available. That was down 0.6% from February but up 4.4% year-over-year. A TEU is one 20-foot-long cargo container or its equivalent.

April was estimated at 1.76 million TEU, up 7.7% year-over-year. May is forecast at 1.9 million TEU, up 4.2%; June at 1.92 million TEU, up 3.7%; July at 1.96 million TEU, up 3%; August at 1.98 million TEU, up 4.6%, and September at 1.91 million, up 2%. NRF noted imports have never before hit the 1.9 million TEU mark earlier than July. And the August number would be the highest monthly total since the record 2 million TEU record set last October. Imports during 2018 set a record of 21.8 million TEU, an increase of 6.2% over 2017’s previous record of 20.5 million TEU. The first half of 2019 is expected to total 10.7 million TEU, up 3.9% over the first half of 2018. “Consumption is facing the potential of increased tariffs on Chinese imports if President Trump’s tweets are anything to go by,” added Ben Hackett, founder of Hackett Associates. “One can only hope that this is a simple negotiating tactic that will run out of steam.”

Source: Home Textiles Today

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Nepal's Prime Minister begins official visit to VN

Nepal's Prime Minister K P Sharma Oli began his visit to Việt Nam yesterday, during which he will attend the UN Day of Vesak 2019. Accompany him during the four-day visit are Foreign Minister Pradeep Kumar Gyawali, advisors Bishnu Prasad Rimal and Rajan Bhattarai, and Nepali Ambassador to Thailand Khaganath Adhikari, among others. Việt Nam and Nepal set up diplomatic relations on May 15, 1975, and have maintained sound relations in many areas. The two sides have regularly exchanged delegations in various areas from politics to trade. Over the past 44 years, Việt Nam has offered support to Nepal, including US$50,000 in aid to help it recover from an earthquake in 2015. The two sides are working on the signing of an agreement on visa exemption for diplomatic and official passport holders. The two countries have supported each other at multilateral and international forums. Cultural and tourism co-operation, as well as people-to-people exchange, have been strengthened. However, economic and trade ties between Việt Nam and Nepal remain modest. By September 2018, two-way trade reached only $38 million. Việt Nam mostly exported to Nepal peppercorn and plastic products, while importing garment-textile materials, leather, and footwear. The visit takes place in the context of smooth developments in the friendship between Việt Nam and Nepal, especially collaboration through the Party channel and economic-trade partnership. Vesak 2019, or the 16th UN Day of Vesak, will be celebrated at the Tam Chúc Buddhism Culture Centre in Kim Bảng District of northern Hà Nam province from May 12-14.

Source: Vietam News

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How Far Will Tariff Expansion Go?

As the Trump administration threatened to again raise tariffs on $200 billion worth of Chinese imports as soon as May 10, many were wondering how far it would go and what it would cost the American consumer. The American Apparel & Footwear Association, a trade organization of U.S. clothing and footwear companies, has been adamantly opposed to the tariffs and has been fighting to see them eliminated. Last September, the Trump administration tacked on an additional 10 percent tariff to 6,000 Chinese import items worth $200 billion. Now Trump has threatened to raise that 10 percent to 25 percent, although this action has been threatened before and postponed a few times. Currently the affected imports include textiles, handbags, yarns, embroidery and leather as well as other goods including electronics, seafood, produce, cigarettes, carpeting and beauty products. So far, apparel and footwear items are not on the list. But Trump is saying he may expand the number of Chinese products subject to tariffs, which could include apparel and footwear. The AAFA calculates that an added 25 percent tariff will result in a family of four paying an additional $500 a year on these products. “As has been made clear by the administration’s use of tariffs during the past year, tariffs are an additional tax burden placed on Americans,” said Rick Helfenbein, the AAFA’s president and chief executive. “These taxes are not paid by foreign nations, and they result in higher costs, which are simply passed on to the American consumer.” The National Retail Federation, the United States Fashion Industry Association and the Council of Fashion Designers of America have also been pushing to have the tariffs eliminated. The National Retail Federation estimates that the added 25 percent tariff will cost the average family of four $767 million and reduce U.S. employment by more than 934,000 jobs. “A sudden tariff increase with less than a week’s notice would severely disrupt U.S. businesses, especially small companies that have limited resources to mitigate the impact,” said David French, the NRF’s senior vice president for government relations.  “We want to see meaningful changes in China’s trade practices, but it makes no sense to punish Americans as a negotiating tactic.” But the National Council of Textile Organizations, a trade group that represents much of the U.S. textile sector, has been pushing to see tariffs on Chinese products expanded to include home-furnishings textiles, apparel and textile end products. “Chinese imports of finished goods into the U.S. market have the most significant impact on domestic textile and apparel production, investment and jobs,” said Kim Glas, NCTO’s president and chief executive. “In order to address the crisis, we need to get to the very heart of the problem.” Glas points out that much of this trade dispute is about intellectual property being stolen by Chinese manufacturers. Apparel is one of the largest sections affected by Chinese factories copying U.S. designs and then passing them off as their own. “In fiscal 2016 and 2017, wearing apparel and accessories accounted for one of the single largest segments in IPR seizures,” she said. “Twenty percent of all seizures was apparel. The total value of the seizures for wearing apparel and accessories was $200 million during the past two fiscal years. This is a large and systemic problem.” But NCTO also wants to see tariffs reduced or eliminated on textile and apparel inputs that are not produced in the United States and therefore pose no threat to local industries. “Rayon staple fibers serve as a good example of a product that NCTO recommends be removed from the list,” the trade group said at a hearing last year. “Raising the production costs for these inputs will only undercut U.S. competitiveness for manufacturers that utilize them without bolstering U.S. producers, of which none exist.”

Source: Apparel News

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Bangladesh: Pvt investment contributes 23.40 percent to GDP

The role of private investment to country’s GDP is significant and the improvement of business- friendly atmosphere would help boosting private economy, experts said. Economic growth as well as development of a market economy, bank predominantly on the capability to invest and utilise resources efficiently. In case of Bangladesh, private investments have been instrumental to stimulate economic growth, they observed. In fiscal year 2019, the private investment to GDP was 23.40 percent, followed by 23.26 percent in FY2018, 23.10 percent in FY2017, 22.99 percent in FY 2016, 22.07 percent in FY2015, 22.03 percent in FY2014, 21.75 percent in FY2013, 22.50 percent in FY 2012, 22.16 percent in FY2011 and 21.57 percent in FY 2010. Considering this, the government has to take more proactive initiative to ease the ‘doing business’ of the private sector, experts recommended.  A high powered ‘National Competitive Strategic Action Committee’ under public and private initiative is needed to ensure private sector participation in policy designs conducive for trade and business, they recommended. Leaders of Dhaka Chamber of Commerce and Industry (DCCI) have underscored the need for improving doing business environment in order to develop the private sector and economy of the country. “The economic performance of the country is maintaining a consistent growth. To continue this momentum and achieve upcoming economic visions, DCCI feels some critical avenues of economy are to be addressed for private sector development” said DCCI president Osama Taseer. In 2006, Bangladesh ranked 65th while Vietnam ranked 99th out of 155 countries. On the other hand, in DBR 2019 Bangladesh ranked 176, made one of the last 15 countries and Vietnam ranked well of 69 out of 189 countries. “The reform initiatives of the government are in place but need to implement. We need to improve faster than other competing countries to achieve better position in doing business index”, said DCCI president. However, the investment as percentage of GDP reached to 31.23 percent in FY 2017-18, of which public and private investments were 7 percent and 23.26 percent respectively, said he adding net FDI inflows reached to US$ 2.58 billion in last fiscal. In FY 2017-18, highest 22.14 percent of FDI registration was in service industries followed by Textile Industry (20%), Chemicals (17.67%), Engineering Sector (15.04%) and Other Industries (24.63%). According to Bangladesh Bank, net FDI in July to September of FY19 increased by 67.53% and reached $ 849.62 million from $ 507.15 million in the same period of FY18. Recently, DCCI recommended for attracting investment in Bangladesh. DCCI is prompt in delivering its input regarding various policy comments sought by the government, private sector, donors and foreign consultation offices for new investment. Negotiation with diplomatic missions, trade associations of relevant countries for attracting relocation of Chinese, Korean and Japanese low cost manufacturing business relocation in Bangladesh, said DCCI president. Engaging Private Sector and stakeholders in policy design to understand the dynamics of the global economic shifts, he added. A high powered ‘National Competitive Strategic Action Committee’ under public and private initiative is needed to ensure private sector participation in policy designs conducive for trade and business. Talking to Daily Industry, DCCI president told that the current policies are not sufficient for Bangladesh to achieve the expected economic development. He suggested a greater focus on private sector in reforming the policies. “Currently the policies that are in place will not support this growth, thus it is imperative to facilitate modernised policy support to ensure this growth. Much of the action needs to take place in the private sector. Private sector needs to engage intensively and extensively in reform process,” he said. The government should further incorporate private sector associations and bodies in the decision-making process to further ensure private sector support for the government, he said.

Source: Daily Industry News

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Rwanda: Chinese Textile Giant to Invest in Rwanda

Jiangyin BaoRui Textile, one of China's biggest textile companies, on Tuesday signed a deal that will see the Chinese giant start producing fabrics and finished clothes in the country through a local partner, Apparel Manufacturing Group (AMG). The signing ceremony was held in China. Dianne Mukasahaha, Chairperson of the AMG, signed on behalf of her company while Hua Huang the chairman of Jiangyin BaoRui Textile Company signed on behalf of BoaRui. A statement from the Private Sector Federation indicates that Chinese textile experts will also provide new technology and capacity building to Rwandans in the textile sector, as per the new deal. This is seen as a new move that will reduce the importation of high-end clothes from abroad. "This is a great milestone for our sector. We have been facing the challenge of inadequate fabrics and importing finished clothes from different countries but now this will be done locally," said Dianne Mukasahaha, Chairperson of the AMG Company. The local partner, AMG, is one of the companies formed by the PSF with the main aim of promoting collective investment. According to the agreement, AMG will officially represent the Chinese garment company. Warehouses will be set up to cater for effective production of fabrics and clothes. A delegation of Rwanda business operator's textile industry is currently in china to look for potential investment partnerships. Members of AGM are mostly small and medium enterprises who were brought together under the same Company. With the parentship, the produced clothes will be sold locally and in other African markets at a competitive price. Eric Kabera, the head of Communications and Marketing at PSF, said it is important to promote collective investment with the aim of finetuning and enhancing performance of the sector. He said: "The whole idea is to produce these goods locally but also provide trainings to Rwandans. That's why we are promoting collective investment by targeting different sectors. "We have other companies that have been established such as Joint Exporters Group, Heart of Africa Ltd (H.A.T), and Nine United Traders Ltd that deals in cement. Kabera said the PSF is also targeting other sectors to promote collective investment. The Joint Exporters Group (JEG) deals in exports while H.A.T is a clearing and forwarding agency that deals in a travel and tour service as well as financial advisory. The Jiangyin BaoRui Textile Company boasts a set of big production equipment, including crochet machines, stranding machines, flower twisting machine and playing machines. With A 40,000 square metres modern workshop of productivity of more than 2500 tonnes, the products are exported to more than 30 countries. They are used in making knitted fabrics, weaving, carpets, bathrobes, shawls, scarves, hats, gloves, socks and other decorations

Source: All Africa

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Include finished textile items in retaliatory list: NCTO

Appreciating US Government action against China’s ‘unfair trade practices’, the National Council of Textile Organisations (NCTO) has urged for a quick and transparent exclusion process to its intent to raise tariffs on $200 billion worth imports from China from 10 per cent to 25 per cent and include finished apparel and textile items in the retaliatory tariff list. “...We remain very concerned that finished Chinese textile home furnishings and apparel are not on the administration’s retaliatory tariff list,” said NCTO president and chief executive officer Kim Glas. “Chinese imports of finished goods into the U.S. market have the most significant impact on domestic textile and apparel production, investment and jobs. In order to address the crisis, we need to get to the very heart of the problem,” he said in a statement. According to US Government statistics, China predominantly ships end items to the US versus intermediate inputs. Finished apparel, textile home furnishings and other made-up textile goods equate to 93.5 per cent of US imports from China in this sector, while fibre, yarn and fabric imports from China represent only 6.5 per cent. “NCTO also remains seriously concerned that some inputs critical to the competitiveness of US textile manufacturers remain on the retaliation list and will now face a 25 per cent tariff. Duty increases on inputs alone, without addressing the growing problem of end products can raise the cost of US textile manufacturers trying to compete with like Chinese products,” Glas said. NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers, including artificial and synthetic filament and fibre producers.

Source: Fibre2fashion

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Huntsman to display textile chemicals & dyes at Techtextil

Huntsman is set to display its comprehensive range of dyes, inks, and durable water repellents at Techtextil 2019 expo, in hall 3, stand D48. The leading international trade fair for technical textiles and nonwovens will be held from May 14-17, 2019, in Frankfurt, Germany. Huntsman is a developer of chemical products for consumers and industrial customers. Following the expansion of the long-term alliance between Huntsman and Chemours, an extended range of offerings around Phobotex and Zelan for sustainable, high performance and non-fluorinated durable water repellent finishes will be displayed at Techtextil, the company said in a media statement. Huntsman will also display the TERATOP XKS HL disperse inks. Ideal for automotive digital printing and outdoor end-uses, these inks deliver excellent light fastness and superior printing performance on Kyocera print heads. TERATOP XKS HL is the only ink range that meets the automotive industry’s light-fastness standards. The TERASIL TS water-based sublimation inks will also be a part of the show. Ideal for waterless paper transfer printing, and designed for Piezo Epson DX print heads, these inks deliver high colour density and superior printing performance for sportswear, apparel, flags, and banners. The company will present the TERASIL W/WW dyes. These are robust and high performance washfast dye range for polyester. The range achieves right-first-time performance and is bluesign approved and suitable for Standard 100 by Oeko-Tex certified textile products. (GK)

Source: Fibre2fashion

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A&E to display Integrity threads at Texprocess show

American & Efird (A&E) will be previewing its new line of advanced identification threads, branded ‘Integrity’, at the Texprocess show, from May 14-17, 2019, in Frankfurt, Germany. A&E is a portfolio company of Elevate Textiles and a leading manufacturer and distributor of industrial and consumer sewing thread, embroidery thread, and technical textiles. “One of the big challenges brands face today centres around authenticity. Loss of revenue, reputation, and brand trust are some of the potential outcomes of counterfeit products. We are looking forward to previewing our new ‘Integrity’ line at the upcoming Texprocess show in Frankfurt,” A&E president, Chris Alt said in a press release. Well known for its leadership role in innovation, product quality, and sustainability, A&E supports many of the world’s top industrial and consumer brands with thread products that require strict quality and performance. A&E’s new Integrity thread line provides a tool which adds advanced identification for greater visibility and transparency into their product creation process. “Our collaboration with A&E to adopt the CertainT platform globally is a key breakthrough for brands, which have not had the benefit of forensic systems to help them resolve counterfeit and diversion in their supply chains. We look forward to providing our full spectrum molecular brand assurance that also includes forensic expert witness and authentication services to support A&E and its customers in apparel, footwear, automotive, military, and beyond,” James Hayward, president and CEO of Applied DNA said. (GK)

Source: Fibre2fashion

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