MARKET WATCH 04 NOV, 2019

NATIONAL

INTERNATIONAL

 

World's biggest trade deal to be delayed to 2020: Draft ASEAN statement

The signing of the world's largest trade pact will likely be kicked back to 2020, according to a draft statement by Southeast Asian leaders, delaying a deal craved by China to offset a painful tariff war with the US.  The 16-nation Regional Comprehensive Economic Partnership (RCEP) spans from India to New Zealand and includes 30 percent of global GDP and half of the world's people. Objections by India have dashed hopes of finalising the pact at this weekend's Association of Southeast Asian Nations (ASEAN) summit in Bangkok, where members of the 10- nation bloc have been joined by the premiers of India and China. "Most market access negotiations have been completed and the few outstanding bilateral issues will be resolved by Feb 2020," said a draft agreement obtained by AFPNegotiations have sputtered for several years, but the statement said the text of all 20 chapters was now complete "pending the resolution of one" member, believed to be India. But it said all members were "committed to sign the RCEP" next year in Vietnam, which will take over the ASEAN chair. New Delhi is worried its small businesses will be hard hit by any flood of cheap Chinese goods creating "unsustainable trade deficits" -- Indian Prime Minister Narendra Modi said in an interview published by the Bangkok Post. Beijing sees RCEP as a central pillar of its trade strategy for its Asian neighbourhood, and it is backed by the leaders of ASEAN and who represent a 650 million-strong market. Concluding the deal has been made more pressing by the brutal tit-for-tat trade war with the US, which has chipped back at growth in China, the world's second-largest economy. RCEP -- which includes the 10-nation ASEAN bloc along with China, India, Japan, South Korea, Australia and New Zealand -- accounts for 40 percent of global commerce. The tit-for-tat tariffs lobbed by the US and China on billions of dollars worth of goods could drag growth to the lowest rate in over a decade, according to the IMF. US President Donald Trump said he hopes to sign a deal with China's Xi Jinping in order to roll back some of the tariffs, telling reporters over the weekend an agreement could be signed in the US state of Iowa. Chinese premier Li Keqiang said earlier in the day his country remained "firmly committed to supporting ASEAN centrality" as part of its regional ties.

Source: Economic Times

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India won’t join RCEP till concerns addressed

NEW DELHI: The government is acting tough on signing the Regional Comprehensive Economic Partnership (RCEP) agreement to be part of the mega trade bloc and has pointed out that its concerns — ranging from the base year for tariff reduction to protection against Chinese imports and opening up services sector by the other 15 countries — have not been addressed yet. With talks entering the final lap ahead of a joint statement on Monday evening, negotiators are scrambling to put together a deal amid statements from Thailand and the Philippines that it may be delayed until February. Indian officials have made it clear that the Modi administration is unwilling to accept any deadline and wants the country’s interests to be fully protected before it inks the pact. Leaders from 16 countries are in Thailand for what was expected to be the final meeting. A preliminary RCEP deal is expected today, setting the stage for countries to finalise the legal text that would cover a third of the global economy, making RCEP the largest trading bloc. While some countries indicated that India had raised issues at the last minute, sources told TOI that the government had been demanding for several months that its concerns be taken on board and a solution found. During the last ministerial meeting, commerce and industry minister Piyush Goyal had flagged several issues, which led the trade ministers to provide a special 10-day window for negotiations. “The issues are yet to be resolved,” an Indian official said on Sunday evening. Indian negotiators are questioning the design of the trade agreement, which will see elimination of import duties on 80-90% of goods, along with easier services and investment rules. For India, the big concern is goods trade as domestic industry fears that lower customs duty will see a flood of imports, especially from China, with which India has a massive trade deficit. India has raised a red flag over the move to use 2014 as the base year for tariff reduction. While RCEP negotiators are seeking to sign the deal in 2020, the new tariff regime will kick in from 2022 and will see duties go back to 2014 levels. This will mean that for several products, such as mobile phones and electronic goods, tariffs may have to be eliminated over time, which runs contrary to the government’s recent moves to increase import duty as part of a strategy to boost domestic manufacturing. “This is a fundamental design issue,” said a source. Similarly, the government has asked for more protection through what is called tariff differential. Unlike the past, the other 15 countries want a common list of products on which protection is provided by insisting on value-addition. This is seen to be crucial to ensure that Chinese goods are not repackaged and routed to India via, say, Vietnam. So, 30-35% value addition in case of a mobile phone, for instance, is being sought instead of a situation where only tempered glass is put on a Chinese phone in Vietnam and then exported to India at zero or lower duty. “The principle that is being used is very weak, which can lead to misuse,” an official said. Besides, India has been seeking a special safeguard mechanism for several goods imported from China, Australia and New Zealand to immediately impose higher duties in case of a surge.

Source: Times of India

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China, Southeast Asian states push for RCEP pact despite India's doubts

New impetus to reach agreement has come from the US-China trade war, which has helped knock regional economic growth to its lowest in five years. Leaders of China and Southeast Asian states called for swift agreement on what could become the world’s largest trade bloc at a regional summit on Sunday, but new demands from India left officials scrambling to salvage progress. Hopes of finalising the Asia-wide Regional Comprehensive Economic Partnership (RCEP), which is backed by China, have been thrown into doubt at the summit of the Association of Southeast Asian Nations (Asean) in Bangkok, Thailand. Summit host Thailand said late on Sunday that the deal could be signed by February next year. Thailand had previously said it aimed to conclude negotiations by the end of the year. New impetus to reach agreement has come from the US-China trade war, which has helped knock regional economic growth to its lowest in five years. “The early conclusion of RCEP negotiations will lay the foundation for East Asia’s economic integration,” said a statement from China’s foreign ministry after Premier Li Keqiang met Southeast Asian leaders. But Prime Minister Narendra Modi did not even mention the RCEP deal in opening remarks at a meeting with Southeast Asian leaders and instead spoke only of reviewing the existing trade agreement between Asean and India. Nor did Modi mention the trade bloc, whose 16 countries would account for a third of global gross domestic product and nearly half the world’s population, in Twitter posts after meeting Thai and Indonesian leaders. An Indian foreign ministry official later told a media briefing: “Let’s take all the RCEP questions tomorrow (Monday).” Southeast Asian countries had hoped at least a provisional agreement could be announced on Monday.But India has been worried about a potential flood of Chinese imports. A person with knowledge of New Delhi’s negotiations said new demands were made last week “which are difficult to meet.”

Trade war impact

Negotiators were meeting into the evening on Sunday to try to come to an agreement, Thai government spokeswoman Narumon Pinyosinwat told reporters on Sunday.  “We don’t have a conclusion yet. Once there is one, it would be announced,” she said. “Commerce ministers are still discussing outstanding issues. The signing is expected around February next year.” Thai Prime Minister Prayuth Chan-ocha told the formal opening of the Asean summit on Sunday that the 16 nations in the potential trade bloc ought to come to agreement this year to stimulate economic growth, trade, and investment. He highlighted the risks of “trade frictions” and “geostrategic competition” in the region. Some countries have raised the possibility of moving ahead without India on forming a bloc that also included Japan, South Korea, Australia, and New Zealand. But Thai Commerce Minister Jurin Laksanawisit told Reuters on Sunday that India had not pulled out. Another advantage for Southeast Asian countries from having relative heavyweight India in the trade pact would be less domination by China. Long-standing rivals China and India, which fought a border war in 1962, clashed verbally in recent days over India’s decision to formally revoke the constitutional autonomy of Kashmir. The US decision to send a lower level delegation to the summits this year has raised regional concerns that it can no longer be relied on as a counterweight to China’s increasing regional might. Instead of President Donald Trump or Vice President Mike Pence, the US will be represented by Commerce Secretary Wilbur Ross and White House National Security Advisor Robert O’Brien.

Source: Business Standard

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Signing RCEP to be third & final assault on India economy: Khera

If the Indian Government signs the Regional Comprehensive Economic Partnership (RCEP) agreement, the nation’s economy will be destroyed. The Congress national spokesman Pawan Khera said this while addressing the media here on Sunday. Khera said that if the Modi Government signs the RCEP agreement, it will be the third major and last assault on the nation’s economy after which it will not be able to rise up. Khera said, “The Government made the first assault on the Indian economy in the form of demonetisation. The second assault came in the form of Goods and Services Tax and now an attempt is being made to destroy the economy through RCEP. Fifteen east Asian nations will be part of RCEP including China and Japan. Khera said that for the first time in 72 years, India is under pressure to sign a free trade agreement with China. “This will threaten the economic, commercial and security interests of India as cheap Chinese products will be dumped in the Indian market which will damage the business of shopkeepers, traders and small entrepreneurs. This will also damage the capacity and security of farmers in India. The nation will become a dumping ground for foreign pulses, wheat and dairy products. Our farmers will face severe losses as foreign produce will be sold in bulk in the Indian markets. Similar impact will be seen on fishery and textiles,” opined Khera. The Congress spokesman further said that according to the National Sample Survey Office, unemployment is at its highest in 45 years. According to the Centre for Monitoring of Indian Economy, the unemployment rate rose to 8.19 per cent in August 2019, which is the highest in 72 years.

Source: The Pioneer

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90% of our bad export story is domestic challenges, 10 per cent is external environment: Economist Surjit Bhalla

 “Join the Regional Comprehensive Economic Partnership (RCEP), but do not ignore your internal market and demand. Ninety per cent of our bad export story is domestic challenges, 10 per cent is external environment or external policy,” says Economist Surjit S Bhalla. Seventy-one-year old Bhalla has a tough task ahead — to make New Delhi’s voice louder at the international forums as he is set to take charge as the Executive Director for India on the board of the International Monetary Fund (IMF) shortly. BusinessLine caught up with Bhalla who recently submitted the report of the Committee on Trade and Policy – High Level Advisory Group (HLAG). The HLAG was headed by him. Excerpts: Core numbers and other data show that we should be worried about our economy. Has this been factored in the report of the Committee on Trade and Policy -- High Level Advisory Group (HLAG)? I believe that July-September quarter would represent the bottom in the economy. I am not in the camp that believes that there is a worldwide recession – based on inverted real curve. I believe inversion is more due to the fact that inflation is dead. What the report does is outline both the macro and the micro economic areas of challenges and concern. When working on the report we came across shocking statistics in some areas. For example, financial exports — banking, finance etc — in 2018 were less in absolute dollar terms than agriculture exports were in 1980, when India was a poor economy, a food-dependent economy. We should ask why the financial sector is closed. Also ask why agriculture has not seen reforms – ever. Actually, it is the only sector to have seen de-reform (financial export sector is just closed, like it has always been). Successive governments have imposed food price controls, export bans etc. The report does not believe there is much logic to these restrictions. If you were to open up the agriculture sector and allow farmers to produce and sell what they want to and whom they want to, then may be there can be a case that distribution of farmers income will not be what is socially and politically desirable. But, we have technology that will ensure that farmers can be compensated – PM Kisan. Food stamps were the original mechanism for direct benefit transfer, why did we not take the path? Sri Lanka took that path a century ago, and the US in the mid-sixties. Instead we took the path where we decided how much fertiliser we will sell to the farmer, what price the farmer will sell the produce, we buy and set up the Food Corporation of India which, in turn, sent it to the “poor”. Only, 50 per cent of the food sent by the FCI disappeared into thin air. This mechanism is still being defended. So the report asks us to think. You say agriculture and financial sectors need attention. But, isn’t the government doing the needful? Our cost of capital is the highest in the world. In the last four-five years of the economy, if you see, in 2014-15 we had a drought, 2015-16 we had a drought, which is only the fifth time in Indian history that we had two successive droughts. In the third year 2016-17 we seem to have had good agriculture year, but we had demonetisation. All these three were supply shocks and introduced demand concerns as well as uncertainty in the economy. In the fourth year 2017-18 we had two very important economic reforms — GST and IBC — which everybody knew before the reforms were introduced that you won’t get it perfect the first time. So for four successive years Indian economy faced unprecedented uncertainty. In India, we saw the real repo rate to climb the Himalayan peaks and register the highest real repo rate in the world — this has never happened before in India. This kind of monetary policy has not been followed anywhere — when uncertainty increases, the rest of the world reduces real policy rates. And this historical increase in the presence of historic low inflation. In the fifth year now, the RBI has been trying to reduce the real rate, but not succeeded, they have reduced the nominal rates, but inflation has declined even more than the reduction in repo rate. On top of this we have NBFC challenges which has further constrained the capital market, so it is not a surprise that things are not good. The big discussion these days is should we join the RCEP. Given the state of economy should we? It is a hot and topical debate. However, I want you to pose this question — assuming for a moment we join RCEP in best of terms, but with cost of capital, inflation, agriculture and financial sectors as they are here, what will happen to growth — agriculture growth, export growth? Growth will take a back seat. While I believe fully we should join in the best terms, but if we do not correct our domestic policies none of our targets will be met. Put your house in order first while doing this. Ninety per cent of our bad export story is domestic challenges, 10 per cent is the rest of the world. How do you read the recent setback at the World Trade Organization in a dispute against the US that had challenged our key export subsidy schemes including the one for special economic zones? When China joined the WTO in mid-90s they made sure that their internal policies changed. They did big reform — unified the exchange rate at an ultra competitive level and other measures — to ensure they take advantage of them joining the WTO. Globalisation primarily and almost exclusively benefits the developing countries — developed economies are at the frontier. We are the ones below the frontier. So take advantage of technology and foreign firms, who want to come where labour is cheap. Nobody is saying to stay competitive we have to earn the same wage as the Americans. That’s what catch up is all about. And we have to start taking advantage of this. We have had rapid expansion in education, particularly female education – so the labour force is much better prepared than ever before. Our labour is potentially very competitive. But, the laws that we have inherited for example in textiles — firm size the lowest in the world. Everybody has given up on archaic labour laws not India. But at least we are now trying.

So should there be stimulus for exports?

If we do reforms we should not be worried at all. We have so much low hanging fruit, forget low hanging, they are lying on the ground, but we keep stomping on the fruit. Let us do a mental experiment — so we have freed up agriculture and we have PM Kisan to do direct benefit transfer and also we have liberalised remittance scheme for individual foreign investors. With these at one stroke you make tax revenues and create jobs. People go outside to manage money, why cannot we do it here. We have different bond schemes, we want infrastructure investments. We have savings investments gap for whatever reasons. Most developing countries have it. We have about $1.5 trillion Indian money abroad, why cannot we get the money back and put it for investments here. Tax and penalty components are so high so no money comes back.

What we are talking about is then tax reforms?

Reforms in taxes have to come. The impression is that all that the government does is to raise the tax rates and get more revenue. In the report we say that we need to change the mindset. It is happening but we still have a long way to go. If you cut tax rates, tax revenue will go up; and inflation is dead. The report says spend on infrastructure, spend through DBT etc. If economy grows fiscal deficit will reduce. When there is political will then what stops them from bringing reforms? The government has full mandate to take strong decisions. I think there we are being a bit unfair. We are sitting on premise that the central bank gets instructions from Finance Ministry, which may not be true. While there has been open disagreement the situation remains the same. Report challenges the conventional wisdom that rates have to raised and explicitly states that our cost of capital should be close to the average of OECD countries -- and that average real rate is close to -0.5 per cent, which means we need a 300-400 bp reduction in the nominal rate.

What about small traders, exporters?

RBI controls both the repo and reverse repo rate. What stops them to make reverse repo rate less than 3 per cent? There are several options. We need to think policy. China despite trade war etc cut the repo rate, tax rate – even personal income tax rate. But, we say we cannot do it in India as it will benefit the rich.

Should we not question RBI/MPC on monetary policy? Every story has two sides.

Do you agree with the thinking that changing the exchange rate will work?

Many believe that economy in trouble, so change the exchange rate and you will get nirvana. When the exchange rate reduces profits increase but not by as much as when the tax rate is reduced. Our real effective exchange rate hasn’t changed for almost two decades – more and less flat it has remained. Improve your competitiveness. We are big internal market. Reforms will induce production and incomes to go up as we sell more to each other. But the approach always is “Oh god we are dead!” if the economy opens up, if economic reforms are introduced. But, since 2014, this has changed. The welcome attitude of the Modi government is that if China can do it, so can we.

Source: The Hindu Business Line

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Not being part of RCEP will harm India's exports and investment flow, says CII

Citing a potential increase in trade within Asia-Pacific region and opportunity for India to become part of the global value chains, the Confederation of Indian Industry (CII) has said the country should join the proposed Regional Comprehensive Economic Partnership (RCEP) trade agreement. The industry association said that if India does not join the agreement, it would be cut off from the RCEP region in terms of preferential access and that this would “hinder investments from many RCEP countries and thus stymie its efforts to increase its integration into regional and global chains”. “Not being part of the block is tantamount to not having an even footing in terms of preferential access and losing export competitiveness. This will only harm India’s export and investment flow in the future,” the CII said in a statement. Talks for the proposed trade pact are in the final stages in Bangkok and Prime Minister Narendra Modi is visiting Thailand from November 2-4 to participate in various ASEAN related summits, including the ASEAN-India Summit, East Asia Summit and a meeting on RCEP negotiations. “Clearly, India is under tremendous pressure to come on board. Further, Indian Industry, not having meaningfully articulated its offensive interests, is proving to be a major handicap for Indian negotiators in RCEP negotiations,” said the CII. “Even with China, we failed to use RCEP as an opportunity to seek market access given that bilaterally getting concession from China always proves difficult.” The RCEP is a proposed free-trade agreement (FTA) between the 10 member states of the Association of Southeast Asian Nations (ASEAN) and its six FTA partners – China, India, Japan, South Korea, Australia and New Zealand. RCEP negotiations began in November 2012. In 2017, RCEP countries contained 47.6% of the global population, contributed 31.6% to global gross domestic product and 30.8% to global trade, according to the CII. The CII’s statement comes at a time when various domestic industries including dairy, textile and automobiles have raised serious concerns and opposed the pact over tariff related issues, especially with China. The PM had said on Saturday that India will consider whether its concerns and interests in trade in goods, services, and investments are being fully accommodated when he attends the RCEP Leaders’ Summit. CII president Vikram Kirloskar said that while a large section of the Indian industry has expressed serious concerns about joining the RCEP on the basis of genuine reasons, especially pertaining to China, any decision on joining an agreement of this size and magnitude must not be based on concerns with regard to just one country. The CII said that growth and expansion of global value chains will also draw momentum from the ongoing USChina trade war.

Source: Economic Times

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View: The most desirable development model for a country like India

A coherent development model for India requires a road map prioritising implementation structures. To prioritise among different possibilities, we need to have a valuation framework. Today, the measure of what is valuable is indicated by prices. However, there are other significant ways of judging value in society. In her book, The Value of Everything, economist Mariana Mazzucato provides a new lens of imagining value based on social desirability in which she argues that public policy must value visions, processes and institutions that benefit people. India could consider using Mazzucato’s framework on many contemporary issues such as inequality, utilising transformative technology and the role of the State in society. Combating inequality is important in countries where income levels are higher than in India. Instead, India should value prosperity. It must create an aspiration and opportunity structure conducive to raising income levels. Half of India’s population earns very low amounts relative to other Brics (Brazil, Russia, India, China, South Africa) economies and developed countries such as the US. In such an economic reality, GoI’s focus on targets such as creating a $5 trillion economy by 2024- 25 is aligned to valuing prosperity. India should first focus on economic growth before it begins to focus on redistribution. According to the United Nations Development Programme’s (UNDP) human development indicators, the top 20 nations have an average gross national per-capita income of $51,787. India’s current gross per-capita national income is $6,353. The nations that value prosperity tend to have healthier and more educated citizens. Furthermore, there is a correlation of prosperity with other desirable outcomes in society. In Transparency International’s corruption perception index, as well as Sustainable Development Solutions Network’s world happiness index, the best performing nations are all prosperous with high-income levels. Technology is the greatest disrupter of our times. In times of such flux, it is essential that public policy understand technology’s value. Policy needs to go back to first principles & also become innovative. The Justice A P Shah Committee on data privacy has articulated the idea of first principles that include notice to individuals and consent from users about information collection, purpose limitation of data use for only those functions as has been communicated, security safeguards to be taken by data controller, and accountability measures taken by data controllers. Policy innovations must ensure that we neither shun nor blindly adopt technologies without analysing them. A recent innovation that stands out is the idea of regulatory sandboxes. A Reserve Bank of India (RBI) working committee defines it as “live testing of new products or services in a controlled/test regulatory environment for which regulators may (or may not) permit certain regulatory relaxations for the limited purpose of the testing”. If there is clarity on social benefits from these technologies, its adoption can be structured accordingly. As for the role of the State, since the 1990s, this has been ambiguous in Indian society. It must be reimagined, redefined and restructured. The State, in Mazzucato’s analysis, creates ‘tilts’ towards those objectives and outcomes that are valuable to society. John Maynard Keynes had also argued that governments should not ‘do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all’. The State is valuable, in itself, for its exclusive functions, and also because it is a co-creator of value in society along with the private sector. The exclusive function that it should develop capabilities for is fixing market failures — the inefficient distribution of goods and services by the free market. This would involve curbing monopolies to prevent market distortion and manipulation, fixing information asymmetries to empower people by creating strong accountability mechanisms, minimising negative externalities such as pollution to improve quality of life, and providing for public goods such as education, healthcare, and law and order. As co-creator of value in society, the State also invests in projects that are risky endeavours, such as space missions, ensuring that prices aren’t a hindrance for access to products such as medicines and vaccination. Finally, the State ensures security for its citizens. It’s time to appreciate that the value of what is deemed valuable cannot be limited. It is not just important, but imperative, to acknowledge social desirability as the bedrock of public policy.

Source: Economic Times

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Despite unavailability of MAT credit, 60% of firms opt for lower tax regime

In absolute terms, around 300,000 companies are now at the 22% rate, against the earlier 25-30% earlier. Around 60 per cent of taxpaying companies have moved to the government’s offer of a lower corporation tax regime, according to initial estimates of the income-tax department. In absolute terms, around 300,000 companies are now at the 22 per cent rate, against the earlier 25-30 per cent earlier.

The finance minister announced the option in September, with a shift to the lower tax regime being contingent on a company forgoing specified exemptions and incentives. With this, the government is expecting around Rs 1 trillion of forgone revenue in 2019-20, less than the initially ...

Source: Business Standard

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Aditya Birla Group completes 50 years in Thailand

The Aditya Birla Group has completed 50 years of its operations in Thailand, marking a milestone for the group who’s founder Aditya Vikram Birla was also the first Indian industrialist to venture overseas though a spinning unit in the south East Asian country. The $48 billion group is present in Thailand through nine plants and spans sectors such as textiles, carbon black and chemicals. “We arehere in Thailand with whom India has a strong cultural linkage. And we are marking 50 years of a leading Indian industrial business in Thailand. This reaffirms my belief that commerce and culture have inherent powers to unite,” said the Indian prime minister Narendra Modi who was present at an event taking place in Bangkok to mark the company’s 50 years. The Aditya Birla Group has invested $2 billion in the country over the years, said group chairman Kumar Mangalam Birla. “The last 50 years have continually reinforced the richness of Thai talent and the support of the government for business, and our commitment to Thailand is demonstrated by the $2 billion dollars of investment we have made over the years,” said Birla

Source: Economic Times

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Global Textile Raw Material Price 03.11.2019

Item

Price

Unit

Fluctuation

Date

PSF

986.04

USD/Ton

-0.79%

11/3/2019

VSF

1513.15

USD/Ton

-0.09%

11/3/2019

ASF

2180.22

USD/Ton

0%

11/3/2019

Polyester    POY

988.17

USD/Ton

0%

11/3/2019

Nylon    FDY

2273.28

USD/Ton

0%

11/3/2019

40D    Spandex

4091.90

USD/Ton

0%

11/3/2019

Nylon    POY

2315.90

USD/Ton

0%

11/3/2019

Acrylic    Top 3D

1115.33

USD/Ton

0%

11/3/2019

Polyester    FDY

2521.92

USD/Ton

0%

11/3/2019

Nylon    DTY

5370.62

USD/Ton

0%

11/3/2019

Viscose    Long Filament

1236.10

USD/Ton

0%

11/3/2019

Polyester    DTY

2159.62

USD/Ton

0%

11/3/2019

10S OE    Cotton Yarn

1876.88

USD/Ton

0%

11/3/2019

32S    Cotton Carded Yarn

2860.78

USD/Ton

0%

11/3/2019

40S    Cotton Combed Yarn

3348.83

USD/Ton

0%

11/3/2019

30S    Spun Rayon Yarn

2124.10

USD/Ton

0%

11/3/2019

32S    Polyester Yarn

1612.61

USD/Ton

0%

11/3/2019

45S    T/C Yarn

2429.57

USD/Ton

0%

11/3/2019

40S    Rayon Yarn

2386.94

USD/Ton

0%

11/3/2019

T/R    Yarn 65/35 32S

1967.81

USD/Ton

-0.36%

11/3/2019

45S    Polyester Yarn

1776.00

USD/Ton

-0.79%

11/3/2019

T/C    Yarn 65/35 32S

2287.49

USD/Ton

0%

11/3/2019

10S    Denim Fabric

1.26

USD/Meter

0%

11/3/2019

32S    Twill Fabric

0.69

USD/Meter

0%

11/3/2019

40S    Combed Poplin

0.96

USD/Meter

0%

11/3/2019

30S    Rayon Fabric

0.56

USD/Meter

-0.25%

11/3/2019

45S    T/C Fabric

0.67

USD/Meter

0%

11/3/2019

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14208 USD dtd. 03/11/2019). 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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ASEAN hopeful on trade deal

Southeast Asian leaders meet for a second day in Thailand on Sunday, hoping for a breakthrough in talks over the world’s largest trade deal to help throw off the torpor which has gripped the global economy since the US-China tariff war began. The 10-member Association of Southeast Asian Nations (Asean) opened its annual summit in Bangkok on Saturday hoping to secure a China-backed free trade pact at the three-day event, which knits together half the world’s population and around 40 percent of its commerce. For seven years the group has been wrangling over a deal spanning from India to New Zealand called the Regional Comprehensive Economic Partnership (RCEP). Though it is now seen as an urgent counterpoint to US protectionism, one senior trade delegate from the Philippines said a deal appeared unlikely before next year. Washington’s trade rumble with Beijing has weighed on markets, with the International Monetary Fund warning the spat could cut global growth to the lowest pace in more than a decade. Meanwhile, US President Donald Trump’s protectionist rhetoric has spooked some Asean nations, which fear their economies could fall under his crosshairs. Trump has repeatedly warned of further intervention to protect US businesses, and several Asian nations are waiting to find out if Washington will place them on a watch list of “currency manipulators.” Malaysian Prime Minister Mahathir Mohamad warned that the regional bloc could hit back against any punitive trade measures, but he skirted over specifics. “We will do exactly what Trump does,” he told a business forum ahead of the summit opening, calling the US leader “not a very nice man.”  “If you go alone, you will be bullied. We don’t want to go into trade war, but sometimes when they do things that are not nice to us, we have to be un-nice to them,” he added. Earlier, his Thai counterpart, Prayut Chan-O-Cha, echoed the theme of regional cooperation on the RCEP deal, while Philippines’ trade secretary Ramon Lopez said he hoped to have a “very positive report (on RCEP) come Monday” when the summit ends. But the treaty’s signing would happen only “within next year,” he added, with members meeting in February to sort out “pending issues on market access.” Separately, FIFA President Gianni Infantino signed a letter of intent with ASEAN leaders emphasizing a school program “to foster life skills and physical education” through football regionwide, the sport’s governing body said in a statement.

Tensions at sea

India, whose Prime Minister Narendra Modi is also in Thailand, poses the greatest obstacle to RCEP in its current form. New Delhi fears opening key industries such as metals, textiles and dairy to cheaper Chinese imports. Indian intransigence has cast the deal —looping in the 10 Southeast Asian economies along with Japan, India, China, New Zealand and Australia—into doubt. “We want them (India) to be in. We want to have them... they are a big economy,” Lopez told reporters. Chinese premier Li Keqiang will attend the meeting as simmering tensions in the South China Sea also lead the agenda. China supports RCEP as a way to assert its trade dominance in its Asian backyard after Donald Trump pulled the United States out of the Trans-Pacific Partnership (TPP) in 2017. The Asean summit follows a push by Washington and Beijing for a partial agreement to squash some of the tit-for-tat tariffs on billions of dollars worth of goods that have rattled both economies. But Washington has pared back its delegation to Bangkok this year. In what is being read by some as a snub to Asean, the United States is being represented by national security advisor Robert O’Brien and commerce chief Wilbur Ross. US Vice President Mike Pence attended last year’s Asean summit in Singapore, and Trump was at the 2017 meeting in the Philippines. A senior White House official rejected the notion of a snub, saying Trump and Pence are unavailable because they are “very engaged in campaigning” for a string of governors’ races. Trump trusts O’Brien “to go out and take care of big problems and small problems,” the official added.

Source: Manila Standard

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India-led South Asia moving towards center of global growth: IMF

Notably, under the IMF's geographical division of the world, South Asia does not include Afghanistan and Pakistan. For IMF, South Asia includes India, Bangladesh, Nepal, Sri Lanka, Bhutan Led by India, South Asia is moving towards becoming center of global growth and could contribute about one-third of the world's growth by 2040, according to a latest research by the International Monetary Fund. Notably, under the IMF's geographical division of the world, South Asia does not include Afghanistan and Pakistan. For IMF, South Asia includes India, Bangladesh, Nepal, Sri Lanka, Bhutan, and Maldives. Under a substantial liberalisation scenario, supported by stepped-up efforts to improve infrastructure and successfully harness South Asia's young and large workforce, the region could contribute about one-third of global growth by 2040, argues the IMF paper 'Is South Asia Ready for take Off? A sustainable and inclusive growth agenda,' to be released in New Delhi on Monday. "Looking at it both from the growth trajectory that we see and the development elsewhere in Asia, we see South Asia as moving towards being much more of center of global growth," Anne-Marie Gulde-Wolf, Deputy Director, Asia and Pacific Department, IMF told PTI ahead of the release of the report. Previewing some key aspects of the IMF research, Gulde-Wolf noted that based on demographic trends, more than 150 million people in the region are expected to enter the labour market by 2030. "We have a region with a massive potential for demographic dividend. (This is), a region that has been seen over the recent past significant growth spurt," she said. This young and large workforce can be South Asia's strength, if supported by a successful high-quality and job-rich growth strategy, leveraging all sectors of the economy in a balanced way. The IMF paper says. Although policy recommendations remain country-specific, for many South Asian economies these should include: further progress in revenue mobilisation and fiscal consolidation; greater trade and foreign direct investment (FDI) liberalisation; and investment in people, the paper notes. What can India do to harness the potential demographic dividend and to avoid pitfalls of rapid growth that we have seen in other areas, she asked. The IMF is looking at sustainable growth, avoiding massive ecological problems that could be associated with this kind of imbalanced prose. That's why IMF sees India needing a multipronged approach that leverages the advantages that the country already has, she said. "The country has already an excellent tertiary education system, built a on high value-added services. So, in no way, should any strategy devalue that aspect," she said. But it needs to be complemented with areas like manufacturing sector, wherein India is below what would one expect from a country with that level of development, she said adding that the issue is how to involve private sector to increase the manufacturing base. India, she noted, needs to create a better environment for private sector growth which looks at a product market, labour markets, land is a particular issue and obviously some of the impetus has to come from foreign direct investment, the top IMF official said. "It has to be supported by creating a basis of labour force that is able to use the opportunities that would be created here. While maintaining the quality of the tertiary education, more needs to be done to broaden the quality of primary and secondary education," she said. Together with this, there is need to reduce red tape obstacles and maybe more generally the footprint of the state, including in the financial sector, Gulde-Wolf said. Bangladesh, which has had a very impressive development history in the recent past, mainly based on the garment industry, needs to diversify its economy, she said. Noting that Bangladesh has a very low revenues to GDP ratio, low debt, but also very low investment in infrastructure, she said it is critical for this country to increase the infrastructure that would be needed for expansion of the private sector. Among other countries Nepal, Maldives and Bhutan each one has their own issues, but the common issue that really binds them together is the need to unleash more private sector groups. Sri Lanka, she noted, is in many senses, slightly different because it's benefiting less from the, demographic dividend because it's already reached its maximum. The island nation does not have the same growth history as the other South Asian nations. Responding to a question, Gulde-Wolf said subject to implementation of the IMF recommended reforms, India's income level on PPP basis would be reaching about 45 per cent of the US income level and it would one third of the global growth. Observing that it is always difficult to make a long-term forecast, she said it is important to show what the potential is and what the payoff over time off reforms can be. India has a significant potential, but there is need of a significant reform, she said, adding that these reforms need to be implemented to set the trajectory. If you lose time by delaying this reform, it will take more time to catch up to where you are. And the time window is not very big, the IMF official said. "Reforms need to be implemented. We still see that the slow down at this stage is mainly cyclical, but the most recent numbers that have come in are lower than we have expected," Gulde-Wolf said.

Source: Business Standard

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VN exporters need to use both online, offline platforms to go global: experts

Vietnamese manufacturers need “integrated marketing solutions” comprising both online and offline platforms to gain access to buyers in both traditional and emerging markets, experts have said. Speaking on the sidelines of the Global Sources Lifestyle and Fashion show last week in Hong Kong, Ronald Ng, general manager of Global Sources Lifestyle Group, said Việt Nam had become a manufacturing hub in the Southeast Asian region. Vietnamese exporters, mostly SMEs, who benefit from operating in one of the world’s fastest growing economies with stable governance and ease of doing business, are very likely to succeed in joining global trade. To build their corporate image, generate sales leads and win orders from global buyers, Vietnamese suppliers should engage in more trade promotion platforms to strengthen linkages with global buyers. In addition to trade shows, online platforms are considered one of the most effective [ways] for them to boost exports to global markets,” he said. Since China has moved up the manufacturing value chain, a significant number of international buyers now consider Việt Nam an alternative supply market. The number of orders shifting from China to Việt Nam has increased remarkably. “The price advantage is becoming less obvious while the gap in export communication between global buyers and suppliers is growing.” Online platforms are the most convenient channel, providing year-round exposure for buyers to check and learn about suppliers’ capability and then submit online inquiries. Meanwhile, offline platforms enable suppliers and buyers to meet face-to-face and gain credibility. “Combined, online-to-offline (O2O) is the most comprehensive marketing mix for Vietnamese suppliers to win more business.” A recent survey by Global Sources, the event organiser, found that 80 per cent of global buyers preview product and supplier information online before they decide to go to the show to meet with targeted suppliers. Swandi Wikassa, a buyer from Indonesia, said: “Before coming to the show for sourcing, we spent a great deal of time

learning about the product and supplier online.” According to Phạm Thị Hương, former managing director of Việt Nam National Textile and Garment Group (Vinatex), many Vietnamese products have good quality and competitive prices, but global buyers are not even aware of them since they are not available online. “Participation in exhibitions helps Vietnamese suppliers promote their products, but it is not enough. They should also look to promote their products via online platforms to reach more global buyers.” Manufacturers should also study prices, consumer tastes and trends in potential markets, and have labels and packaging in English and the local language, she said. To meet the requirements of global buyers, Vietnamese manufactures should also focus on building brands, using technology in production and improving designs, she added. Experts said in choosy markets like the US, the EU, Japan, and South Korea, exporters should be prepared to face technical barriers that could change unexpectedly. A number of Vietnamese SMEs have little experience in digital or online marketing and lack information about the field and quality human resources, according to the experts. More than 35 leading Vietnamese manufacturers of garments, textiles and fashion accessories and garment-related industries, many members of the Việt Nam Textile and Apparel Association and Vinatex, participated in the show. Last year Việt Nam’s textile and apparel exports were worth US$36 billion, up 16 per cent year-on-year, making the country one of the world’s three largest exporters. The sector has set itself a target of $40 billion for this year and more than $60 billion by 2025. The country’s economic growth is forecast to be 7.05 per cent for this year on the back of robust FDI and manufacturing exports, according to the Việt Nam Institute for Economic and Policy Research. The Hong Kong expo was organised by Global Sources, a B2B platform that connects buyers and suppliers online and offline. The platform includes more than 1.5 million global buyers, including 94 of the world’s top 100 retailers, in more than 190 countries.

Source: Vietnam News

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Tariff war: China wins WTO case to sanction $3.6 billion in US trade

The damages awarded, in a document released Friday on the Geneva-based organizations' website, are the third highest in WTO history. China secured the World Trade Organization’s go-ahead to impose $3.6 billion in sanctions against the US, in a case that predates the tariff war between the world’s two largest economies but may add a layer of tension to ongoing talks. The damages awarded, in a document released Friday on the Geneva-based organizations’ website, are the third highest in WTO history. The amount is about half of what was requested by China, which argued that some US anti-dumping rules were illegal. The case began before the 18-month-old trade war between the two nations, which has led to tit-for-tat tariffs covering some $500 billion in goods going in both directions. While the ruling deals with matters outside current negotiations to conclude phase one of a comprehensive trade deal, it gives Beijing a new — and legal — weapon to wield against the Trump administration if it opts to do so. The ruling also comes as the US is mounting an assault on the WTO’s dispute resolution system, with the current terms of two of the final three judges on its appellate body due to expire in December and Washington blocking new appointments. The Trump administration is likely to cite the case as an example of what it sees as the overreach of the WTO’s dispute system. China now can ask the WTO’s settlement body to authorise retaliatory tariffs on US goods. The next steps for the US include amending its illegal anti-dumping restrictions on the Chinese products in question, or resolving the dispute directly with China — a move that theoretically could happen as part of the broader trade-war talks between Washington and Beijing. At issue in the case were US anti-dumping duties imposed on 13 imported Chinese products including machinery, electronics, metals and minerals. It was first brought by China in 2013 and a WTO panel ruled in Beijing’s favour in 2016. The point of contention was the methodology that the US uses to calculate anti-dumping tariffs, and in particular, how Washington uses the controversial method of “zeroing” in those calculations.

Source: Business Standard

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Nigeria: Borders to remain closed till Jan 31 – Customs

The Nigeria Customs Service (NCS) says the country’s land borders will remain closed till January 31, 2020. It disclosed this in a letter addressed to the sector coordinator, joint border operation drill. According to the letter, President Muhammadu Buhari has approved the extension of ‘exercise swift response’ because “a few strategic objectives are yet to be achieved”. Nigeria’s land borders have been closed since last month to checkmate smuggling activities. “I am directed to inform you that it is observed that despite the overwhelming success of the operation particularly the security and economic benefits to the nation, a few strategic objectives are yet to be achieved. Against this background, Mr President has approved an extension of the exercise to 31st January, 2020,” the letter read. “Consequently, you are requested to convey the development to all personnel for their awareness and guidance. “Meanwhile, the allowances for personnel sustenance and fuelling of vehicles for the period of extension will be paid as soon as possible.”

Source: The New Telegraph

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GAP Partners With HKRITA To Develop New Textile Recycling Technology

The Hong Kong Research Institute of Textiles and Apparel (HKRITA) has just announced a collaboration with global apparel company Gap Inc. to develop eco-friendly technology to enable textile recycling. The research project will focus on two main areas: separating mixed-blends of spandex and sustainable decolourisation of fabrics for recycling clothing. This comes amid greater global and regional attention on the environmental footprint of the fashion industry, and suggests that more business innovations in the future will be looking at moving from a linear production system to a more sustainable circular model. In partnership with Gap Inc., HKRITA will be launching a new research project to come up with solutions for a more sustainable fashion industry using old clothing from the fashion giant. With a two-year time frame to develop new technologies, the research collaboration is to focus on two innovations that will then be available for licensing within the fashion industry. The project will focus on separating spandex from preloved garments, a material that is not currently recycled due to it commonly being blended with cotton. In this line of research, researchers will be working with textile manufacturer Artistic Milliners to develop a more eco-friendly separation method that removes spandex through biosolvents, which can then be reused in the industry. The project will additionally tackle denim decolourisation, which currently uses toxic bleach treatments associated with water and soil contamination. Alongside denim manufacturer Arvind Limited, the team hopes to develop a physical method to decolour denim without the use of bleaches so the fabrics can be reused and re-dyed in future Gap garments. Speaking on the partnership, president and CEO of Gap Inc. Art Peck said: “Our partnership with HKRITA is an important step to develop new solutions that impact our planet and are deeply important to our customers around the world.” This comes as fashion industry leaders are taking more steps to improve the sustainability of their operations. Realising the environmental impact of mainstream fashion, increasingly eco-conscious shoppers are also looking at manufacturers and retailers to instigate the sea change towards greener production practices and offerings. Especially as younger buyers are attracted to purpose-driven businesses, more companies in Asia are taking steps through upcycling and recycling fabrics. The R Collective, for instance, uses rescued textile off-cuts from luxury mills to create long-lasting garments. Unspun is another company focused on curbing fashion waste, using recycled post-consumer polyester and plastic bottles to manufacture personalised jeans.

Source: Green Queen

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