Amid concerns of end-stocks to fall to an alarmingly low level, there is an urgent need for remedial measures to be taken, to reclaim the coveted position of being the top producing nation A third of the global cotton growing area in India, hybridisation and increasing adoption of BT hybrid cotton varieties have turned India into a major exporter of cotton in the last decade. India was crowned the largest cotton producer in the world in the crop year (CY) 2015-16. In CY 2018-19, the cotton crop fared poorly due to a 20% rainfall deficit, with an estimated 14% reduction in production. Last years’ production was also lower by 11% over decadal average cotton production of 352 lakh bales. As the farmers contributed to ‘Cotton Revolution’ of the last decade, mill consumption also expanded by over 30%. Increasing quality awareness and widespread use of hybrid seeds, led to India’s cotton exports witnessing a growth until CY 2017-18, despite lower stocks. Lower crop estimates for 2018-19 pushed Indian cotton millers off the cliff to seek out their raw material requirements through imports. Though the production estimates of the significant trade body are being contested by the stakeholders, the proof of production numbers is already in the increasing trend of cotton imports estimated at 31 million bales—highest in the last decade on the back of lower exports. Added to the lower production, is also a low stock of 13 lakh bales, which is a third of the decadal closing stock of 38 lakh bales. Production numbers reveal that after reaching the peak of 398 lakh bales during CY 13- 14, production has been south-bound. Domestic consumption and augmented export demand had kept the mill consumption clock ticking annually in the last decade. Increasing exports and mill consumption led to stocks moving to a low of 5% of the consumption in CY18-19. Given that Indian productivity estimated as 502 Kg/hectare is lower than 1,751 and 944 of China and USA, respectively, one need’s to see as to what ails India’s production. Productivity levels seem to have hit a plateau and pulling the country and farmers out of the same would require multi-pronged efforts. First, and foremost issue, is ensuring the availability of adequate good quality seed with traits such as drought tolerance, pest resistance, etc. A major reason for the significant reduction in crop output witnessed during 2018-19 remain the drought conditions in major growing areas and attack of the pink bollworm. Second, the adoption of better agronomic practices such as high-density planting of short duration varieties. This has the potential to increase yields to about 29% via lower exposure to pest attack, efficient use of water and other inputs while also suppressing weeds. Also, management practices such as in-situ soil and water conservation with bunds, integrated pest management, soil fertility testing and management, drip irrigation, etc., can have a significant impact. Growing cotton varieties of high staple length is an important step towards augmenting the production and making available desired length of cotton fibre in the country. Adoption of better harvesting and post-harvest management practices will eliminate contamination, ensuring production and recovery of good quality of cotton that meets the requirements of domestic consumption as well as exports. Use of commodity derivatives platforms either directly or through aggregators will help the farmers lock their prices and create quality awareness. This will encourage the farmer to adopt better agronomic practices. Both the private and public sector agencies should work towards enhancing the availability of adequate quantities of desired quality seeds for the farmers at a subsidised rate. With the sowing of the new crop due in the next few weeks, the performance of monsoon will be a key factor for the output. Amid concerns of endstocks to fall to an alarmingly low level, there is an urgent need for remedial measures to be taken, to reclaim the coveted position of being the top producing nation.
Source: The Financial Express
Amazon India announced the launch of the Karigar store on Amazon.in on the eve of National Handloom Day, which is being celebrated today. Amazon Karigar is one of the largest stores to showcase over 55,000 products, including over 270 unique arts and crafts from 20 states. The products will also carry their interesting histories on the website. Amazon Karigar will exclusively promote handlooms and handicrafts from India, according to media reports. Its logo has been designed as a ‘thumbprint’ depicting coming together of lines symbolising the diversity, authenticity, rich culture and uniqueness of the products from all regions of India. By the end of the year, the online store will showcase crafts from all regions in India. Products showcased include Bengal handloom sarees by TJ Sarees, Pochampally ikat dress materials by GB Handlooms, Banarasi dupattas and dress materials by Kashi Fancy Sarees, Jaipur blue pottery decorative items by Aditya Blue Art Pottery and authentic tribal made handloom products by Tribes India. Through the Karigar program, Amazon is engaging with the government and handicraft bodies, training craftsmen to embrace online selling and enabling them to sell to a wide consumer base, said Gopal Pillai, vice president, seller services, Amazon India.
Easier lending norms for NBFCs, relaxed risk weights for most consumer loans some of key measures announced
Pakistan’s decision to suspend trade in response to India’s move to revoke special status of Jammu & Kashmir is unlikely to have any meaningful impact on New Delhi, due to the low level of bilateral trade, official and trade sources said on Wednesday. India’s exports to Pakistan already dropped 20.5% year-on-year in the first quarter of this fiscal to $452.5 million, or only 0.6% of our outbound shipments during this period, showed the latest official data sourced from the DGCIS. Purchases from Pakistan, too, collapsed 93.3% year-on-year in the first quarter of this fiscal to $7.13 million, not even 0.01% of our imports from overseas, mainly due to New Delhi’s imposition of a 200% duty on purchases from the neighbour following the withdrawal of its most favoured nation (MFN) status to Islamabad in the wake of the Pulwama terror attacks in February.
For Pakistan, though, the impact will be greater, as the neighbour’s purchases from India stood at over 3% in FY18. Islamabad’s latest move is part of its overall response to trim ties, including diplomatic ones, with India. “We are least bothered by Pakistan’s move. It was sort of expected that Pakistan would do such a thing. Bilateral trade as such is very low,” a senior government official told FE.
While our imports were expected to drop, given the massive duty, the fall in exports suggests Islamabad has quietly raised its non-tariff barriers for Indian products in response to New Delhi’s tariff war. India had granted the MFN status, a jargon for giving equal treatment to all trade partners under the WTO framework, to Pakistan unilaterally in 1996.
Importantly, between April 2018 and January 2019 (before the duties were raised), India’s exports to the neighbour had risen 22.1% from a year earlier to $1,768.7 million, while imports from Pakistan had inched up by 12.6% to $473.5 million, according to the data. While India’s export of cotton, the biggest item in FY19, crashed 71.4% to just $48.3 million in the April-June period of this fiscal, that of plastics dropped 24.6%. Exports of organic chemicals, however, rose 8.2% in the first quarter to $127.9 million. Together these three items made up for close to a half of India’s exports to the Islamic neighbour.
Federation of India Export Organisations president Sharad Kumar Saraf said the suspension of trade will hit Pakistan more badly as it is more dependent on India. “India’s goods exported to Pakistan has limited profile as Pakistan has not given MFN status to India and such goods have ready market in South and West Asia,” he added. Biswajit Dhar, professor at the Centre for Economic Studies and Planning, JNU, said while the broader trade is unlikely to get affected due to low volume, supplies of some farm items like fruits and vegetables to Pakistan through Wagah border will be stopped now.
Despite limited bilateral trade, the withdrawal of the MFN status in February, symbolically, has been seen as the strongest retaliation in trade yet, given the status was not revoked even after the Kargil war and the 26/11 Mumbai attacks. For its part, Pakistan hasn’t granted the MFN status to India and continues to trade with New Delhi with a negative list of 1,209 products. This means barring those products on the list, India can ship out other items to the neighbour. However, New Delhi’s retaliation may offer Pakistan an excuse to raise its negative list of tradable items with India. In 2012, Pakistan had committed to granting India the MFN status but retracted later due to domestic opposition.’
A senior government official had earlier said: “The decision to withdraw the MFN status and impose the punitive duty on imports from Pakistan was taken, keeping in mind broader national interest, and not short-term commercial gains. Pakistan is known to impose non-tariff barriers against us and they have done it in the past as well. In any case, the trade levels are low, so it (the fall) doesn’t hurt us in any manner. Ultimately, national security has to be of paramount importance.”
India had last reviewed the MFN status after the 2016 Uri attacks — which were traced to militant outfits based in Pakistan·but refrained from revoking it. In 2012, Pakistan announced the negative list, departing from its decades-old practice of trading on the basis of a positive list that had severely restricted prospects of Indian exports to that country.
Source: The Financial Express
The government yesterday set the export target for the current fiscal year at $54 billion, up 15.20 percent than that a year ago. Of the amount, merchandise export target has been fixed at $45.50 billion, which is 12.25 percent higher than the achievement of last fiscal year. Meanwhile exports from services sector has been set at $8.50 billion, a 34.10 percent year-on-year rise from that attained last fiscal year. Md Mofizul Islam, senior secretary to the commerce ministry, announced the target after a meeting with businesspeople and leaders of trade bodies and business chambers at his secretariat office in Dhaka. The target for the new fiscal year has been fixed on the achievements of the immediate past fiscal year. World economic outlooks, government policy supports, changes in the dollar exchange rate, market and product diversification, supply side capacity, improvement of safety standards in garment factories and effects of the US-China trade war have been taken into consideration during fixing of the target, Islam said. Last fiscal year receipts from merchandise shipment amounted to $40.53 billion and services sector $6.33 billion. Overall exports had registered a 14.30 percent growth, 10.55 percent in goods shipments and 46.06 percent in services sector. As usually, the highest export target has been fixed for the garment sector in the current fiscal year. This year the garment export target has been fixed at $38.20 billion, which is 11.91 percent higher than the achievement of last fiscal year. Of the amount, $18.85 billion has been targeted from knitwear and $19.35 billion from the woven sector. Last year Bangladesh exported garment items worth $34.13 billion, registering a 11.49 percent year-on-year growth. With exports not diversifying at the expected pace, the contribution of garment items in national exports claimed a larger share last fiscal year. The contribution of garment sector (knitwear and woven) increased to over 84 percent from more than 82 percent last fiscal year. Diversification in exports is slow despite government initiatives on providing cash incentives to different sectors with potential. Last fiscal year the garment sector even exceeded the annual target by 4.42 percent. The target was set at $32.68 billion, according to data from the Ministry of Commerce. Apart from garment items, the leather and leather goods sector has been considered as one of the most important sectors having potential in the current fiscal year. The commerce ministry set the export target at $1.09 billion from receipts of $1.01 billion last fiscal year. Leather and leather goods was the second highest earning sector after garments. Only leather and leather goods sector could exceed the one billion US dollar-mark after garment items last fiscal year. Replying to queries of journalists, Islam said the government has been providing incentives to some sectors like leather, footwear, plastic goods and light engineering to encourage product diversification. The government has already taken a project to diversify the export basket, he said. While Mohammad Ali Khokon, president of Bangladesh Textile Mills Association, was talking about the problems and prospects of the primary textile sector, Islam said the ministry would hold a separate meeting with businesspeople to know of their comments for taking future course of action. If the current trend of export continues, it is very much possible to achieve the export target of $60 billion by the end of 2021, said Islam.
Source: The Daily Star
The Russian technical textiles industry may receive an additional impetus for growth this year, thanks to the recently announced government plans to ease the existing restrictions on global producers taking part in public tenders for the purchase of innovative textile products for state needs. These plans have been recently confirmed by Russia’s Deputy Prime Minister Dmitry Kozak, responsible for the development of the technical textiles sector. According to Mr Kozak, he has already instructed the national government to create conditions for the better access of foreign producers of innovative textile products on public procurements in Russia. The news has been welcomed by many producers, who consider the Russian market as one of the most promising for their further development. Opportunities for growth Federico Pallini, General Manager Global Division Building Materials at Freudenberg Performance Materials, said in an exclusive interview to Innovation in Textiles that the company’s biggest hopes in Russia are put in the further expansion in the highperformance technical textiles segment, designed for the use in construction and roofing industry. According to local analysts, participation in state tenders in the Russian market could be of interest to Freudenberg, as it may provide additional opportunities for growth. “We believe the forecast is positive overall, expecting a growth to a mid-term. The main drivers are to be identified in the many projects aimed at the modernization and expansion of the country's infrastructures,” commented Mr Pallini. Currently, the segment of public procurements remains the largest in the entire Russian textiles industry in value terms, with the annual value of purchases being estimated at around US$ 3 billion. It is anticipated that the ban on the purchases of imported technical textile products will only remain in place for a limited categories of technical textile products supplied for the defence sector. The majority of Russian technical textile manufacturers and industry’s analysts believe the more active expansion of foreign producers into the domestic market may contribute to a tougher competition, especially considering that in recent years the quality of domestic produce has improved significantly. Demand for geotextiles Alexey Chichkin, a senior analyst in the field of innovative textiles, of the Russian Union of Textile and Light Industry Producers (Soyzlegprom), told Innovation in Textiles that while the share of domestic producers in the local market has increased significantly in recent years, there is a possibility that the current balance in the market may change shortly, as many global textiles producers will try to restore their lost market positions. According to experts of Soyzlegprom, at present, the biggest opportunities for growth for foreigner manufacturers may be associated with the segment of geotextiles, composites and other related products, which are primarily used in road building. This is due to the implementation of the national road building project Safe and quality roads, which will run for the next several years, contributing to the growing demand for geotextiles. Lack of support for local producers As for domestic producers, one of the options for them may be increasing their exports into foreign markets, particularly Western. In the meantime, Alexey Chichkin believes, despite the existing stable demand for innovative textile products in Russia at present, many of local producers may face with tough times this year already, due to the lack of the much-needed state support. Instead of introducing new ways of support, the local government decided to extend the already existing support programme for the Russian smart textiles industry by adopting a state decree, which facilitates technical reequipment of enterprises of the industry. This involves the provision of certain subsidies, which are only provided to the companies deemed significant, which includes only a few leading domestic producers. In contrast, most of the other industry’s enterprises do not have access to any state support.
Source: Innovation in Textiles
US-China trade is nudging the world economy toward its first recession in a decade.
The escalating trade war between the U.S. and China is nudging the world economy toward its first recession in a decade with investors demanding politicians and central bankers act fast to change course.
In the U.S. alone, the recession risk is “much higher than it needs to be and much higher than it was two months ago,” Lawrence Summers, a former U.S. Treasury secretary and a White House economic adviser during the last downturn, told Bloomberg Television. “You can often play with fire and not have anything untoward happen, but if you do it too much you eventually get burned.”
Summers, who teaches at Harvard University, still sees a less than 50/50 chance that the U.S. enters a recession in the next 12 months. Investors are much more bearish: A closely watched segment of the yield curve, the difference between 10-year and three-month notes, inverted the most since 2007, indicating bets on protracted weakness.