The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 21 NOV, 2019

NATIONAL

INTERNATIONAL

Govt considering forex loan at cheaper rate to exporters, higher insurance cover to banks: Goyal

The government is considering a proposal to provide foreign exchange loan at cheaper interest rate to exporters and higher insurance coverage to the banks on their export-credit-disbursement, commerce and industry minister Piyush Goyal informed Parliament on Wednesday. “The proposal is presently under consideration,” he said in a written reply to a question in Lok Sabha on whether the government proposes to provide foreign exchange loan at cheaper rate of interest to the exporters. It is expected that it will enable banks to revise their lending rate for export credit and to provide foreign exchange loan at cheaper rate of interest, the minister added.

US-China standoff

Replying to a separate question, he said the current trade standoff between the US and China and the slowdown in international market is likely to have its impact on the imports and exports of countries, including India, and may bring about a shift in the bilateral trading patterns. “The retaliatory tariffs between US and China have provided a limited window of opportunity for enhancing India's exports to China and US, particularly in products in which India is also competitive,” Goyal said, adding that India's exports to both the US and China have increased in 2018-19 as compared to 2017-18. “While the exact degree to which this increase can be attributed to the impact of US-China trade standoff is not clearly discernible at this point, the increase can be partly attributed to the fact that certain Indian products have gained in the US market due to higher duties on competing Chinese products and vice-versa for the Chinese market,” he said. Stating that the government has sensitised all the trade promotion bodies to work towards enhancing exports by capitalizing on this opportunity arising from the ongoing tariff standoff between the US and China, the minister said the extent to which India can capitalize on the opportunity depends upon a number of factors including the cost competitiveness of its products as compared to similar product of other competing countries in the Chinese and US markets, and other factors like generation of adequate exportable surpluses, market access.

Source: Economic Times

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DGTR simplifies process to protect domestic industry from unfair trade practices

Directorate General of Trade Remedies (DGTR), under the Ministry of Commerce and Industry, has recently taken various measures to protect domestic industry from unfair trade practices. Consequently, the number of anti-dumping duty cases has risen from 5 in 2016 to 25 up to 1st November 2019. Further, the streamlining of anti-dumping investigation process has reduced the number of days taken for initiating investigation and has also led to a reduction in the number of cases. This was facilitated due to trade notice number 03/2018 dated 1st February 2018 regarding streamlining of anti-dumping investigation process and scrutinizing of petitions. Expeditious processing of applications has eliminated the need for domestic industry to update information and data. DGTR has, for the first time, initiated two cases of bilateral safeguards this year. No bilateral safeguard case has ever been initiated in the past. There has been a reduction in the number of actual days taken to initiate investigations. Average number of days taken for initiation of anti-dumping investigations during this year is 32 days as compared to 110 days during 2017 and 259 in 2016. The steps taken by DGTR has provided a level playing field for domestic industry and the average number of days taken for initiation of countervailing duties (CVD) cases during 2019 was 66 days as compared to an average of 72 days in 2018. The actual average number of days taken for initiation of global safeguards at present is 61 days as compared to the standard 75 days earlier.

Source: PIB

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India offers huge business opportunities for Central, Eastern European companies: Piyush Goyal

India, with its 1.3 billion population, offers huge business opportunities for the companies of Central and Eastern European countries, Commerce and Industry Minister Piyush Goyal said on Wednesday. He further said both India and Europe also offer an opportunity to help kick-start economic growth in the world. "We have lots of opportunities together and I hope we can look for a greater engagement. We have both comparative and competitive advantages," he said here. Goyal was addressing the India-Europe 29 Business Forum, organised by industry body CII. Seeking investments, the minister said India provides several incentives including low tax rates for investors. "We offer incentives, we have cut down tax rates. We have 1.3 billion people market who are aspiring for a better quality of life," Goyal said. Indian and Central and Eastern European companies can enhance cooperation in areas like artificial intelligence, renewable energy and new age manufacturing. Speaking at the function, Deputy Prime Minister for Economic and Demography Policy, Bulgaria, Mariyana Nikolova too sought investments from India. She said that her country provides stable and predictable policy regime and a host of incentives for investors. Ministry of External Affairs secretary T S Tirumurti said Central and Eastern European countries can be benefitted from the opportunities that India offer in different sectors.

Source: Economic Times

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RCEP: Two futures for India and its industry

The Regional Comprehensive Economic Partnership (RCEP) aims to bring together the 10 countries of Asean in Southeast Asia, Japan, South Korea, Australia, New Zealand, China and —until this month — India. These 16 countries account for almost half the world’s population, a third of world GDP and trade, and are collectively growing at a rate that is double the rest of the world. After protracted negotiations that began in 2012, the 15 RCEP members (minus India) have committed to signing an agreement next year. RCEP is good for India Our negotiators had obtained a ...

Source: Business Standard

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RCEP did not address our concerns: Piyush Goyal

The government told Lok Sabha on Wednesday that it did not join the mega free trade agreement RCEP as the grouping did not address the outstanding issues and concerns of India. Commerce and Industry Minister Piyush Goyal in a written reply to the House said that during the third RCEP Leaders Summit on November 4 in Bangkok, India stated that the current structure did not reflect its guiding principles or address the outstanding issues and concerns of India, in the light of which India did not join the agreement. The Regional Comprehensive Economic Partnership (RCEP) bloc comprised 10 Association of South East Asian Nations (Asean) group members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six FTA partners -- India, China, Japan, South Korea, Australia and New Zealand. He said that RCEP had provisions on trade remedies which also covers anti-dumping rules. "Moreover, India was seeking an automatic trigger safeguard mechanism (ATSM) for tackling import surges," he added. Replying to a separate question on start-ups, he said 7,141 start-ups are recognised by the DPIIT during this fiscal till November 5. Out of this, a maximum of 1,778 are from Maharashtra. It is followed by Karnataka with 1,374 start-ups, Delhi with 1,152 and Uttar Pradesh with 709. In terms of sector, a maximum of 1,351 start-ups are from IT sector. It is followed by healthcare (808), education (658), professional and commercial services (400) and finance technology (362).

Source: Economic Times

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India’s abstinence from RCEP: Free marketeers getting it surprisingly wrong

India’s somewhat spectacular pause on signing up on the RCEP (Regional Comprehensive Economic Partnership), after years of hard negotiations (and recent indications suggesting the government might sign on) has been almost uniformly criticised by the free market commentariat. The critique was standard, almost at déjà vu levels – keeping off a large regional trading bloc indicates a “protectionist” India and signals an unwillingness to undertake “hard reforms” needed to make industry more competitive. At a geoeconomic praxis, keeping off RCEP gives China a free-run on a large regional platform.

There is an old chestnut – “where one stands depends on where one sits”. The passionate advocacy of FTAs (like RCEP) is puzzling, coming from selfproclaimed votaries of free markets. At a first principles basis, as well as from India’s lived-experience basis, there are questions on FTAs that are far from the panacea that they seem to be posited to be. Professor Jagdish Bhagwati, the exemplar-evangelist of the benefits of free trade and market economy, memorably described preferential trade agreements (PTAs) as Termites in The Trading System, in an eponymously titled book published in 2008. Bhagwati’s thesis was intuitively simple – in an FTA (or PTA), two or more countries agree to lower/eliminate tariff and non-tariff barriers on trade between each other. Superficially, this is good for the member countries of the FTA, but practically creates multiple distortions in free trade and its benefits to consumers/ economies. This is explained by a simple example, say, of manufactured cheese. Consider 3 trading entities – India, New Zealand and the EU – each manufacturing cheese at different price points (say 110, 105 and 100, respectively). Before a possible Indo-NZ FTA, the import duty on cheese was 10%. Which meant that landed price in India of the EU cheese was 110 and NZ cheese was 115.5, respectively. Post an Indo-NZ FTA, which eliminates import duty on NZ, the landed price changes to 105 for NZ and 110 from the EU. Consequently, India would divert all its imports of cheese from the EU to NZ, even though EU is a lower cost source of the product. Further, with NZ cheese available at a price point lower than Indian (105 versus 110), consumers would gradually move completely to NZ-sourced cheese – thereby creating trade where none existed and shutting down large numbers of Indian factories making cheese. While the example is illustrative, it isn’t entirely hypothetical. Post the RCEP pullout, Amul’s iconic ad-strip showed the Amul girl leading a farmer couple carrying milk-buckets with the punchline – “Firm PM, Farm PM”. The distortion isn’t limited to a priori trade diversion and creation. It persists over time and expresses itself via anti-dumping duties. Prof Thomas Prusa of Rutgers University and Robert Teh of WTO, in a follow-up research of Bhagwati’s hypothesis, wrote in a paper published in 2010 that FTAs proliferate anti-dumping measures taken by FTA members against non-members and likely dampen the efficiency gains that are premised as the key rationale for FTAs. The puritan theoretical view (as above) apart, there is a practical first principles issue as well. FTAs, by definition, are about countries swapping market access in areas where they have respective comparative advantages in place. In theory, this should mean India would swap market access in areas where we have a comparative advantage (primarily high-end labourintensive services) for market access where we tend to have a comparative disadvantage (primarily capital and manufactured and processed-agri goods). In practice though, most FTAs executed (and those in negotiation, like RCEP) are rather tardy on labour mobility, while getting significant freedom of capital and manufactured goods mobility. Beyond the first principles, and more pertinently for India’s trade negotiators, is the point of India’s “lived experience” with FTAs. Most of India’s highest profile FTA in the last decade have had underwhelming results, especially if balanced trade is taken as a key parameter of success. The Indo-ASEAN FTA, post its signing in 2010, has resulted in India’s trade balance deteriorating from $8 billion in 2010 to $22 billion in 2018. This was a result of not just imports from ASEAN outpacing exports to it, but also of ASEAN outpacing the rest of the world in India’s import basket. Indo-Korea FTA entered at the same time had a similar experience. Trade deficit has widened from $5 billion in 2010 to $12 billion in 2018. The experience has again been similar with the Indo-Japan FTA, where Indian exports have stagnated (even declined), while imports from Japan have surged. In a nutshell, India is coming off a decade of empirical evidence that militates against an original premise of FTAs, i.e., balanced trade. Last, but far from being the least, is the elephant (or rather the dragon) in the room, China. India’s current trade deficit with China runs at $53 billion, by far the largest share in India’s trade deficit pie. Membership of RCEP, a conglomerate where China has been historically, socially and politically embedded, sans very high safeguard walls, present more risks than rewards in the Indo-China equation. That is because an FTA imposes near-tautological restrictions for punitive (or partial) deal-making between two member-countries facing unique bilateral issues. India’s plate of bilateral issues with China is very full, and the burgeoning trade deficit is a large piece there. Arguably, India’s best chances on deal-making with China would be when several pieces in the plate are simultaneously at play. RCEP would substantially tend to make trade a very circumscribed piece. All in all, the critique of India’s RCEP stance stands on contradictory grounds, going by the critics’ own praxis and expectations. The policymakers, yet again, are likely to have taken the right call, notwithstanding the critique.

Source: Economic Times

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Tax Exemptions to Indian Exporters

In the current Goods and Services Tax regime, exports are zero rated to ensure that the goods produced in India for exports are not disadvantaged due to the domestic tax burden and stay competitive internationally. Further, Under the Foreign Trade Policy, Duty Exemptions Schemes ensure that inputs imported/locally procured for use in the export products are either exempt from duties ab-initio, or the taxes are refunded to the exporters in the form of drawback after exports. Under the current Foreign Trade Policy, there are two duty exemption schemes, namely, Advance Authorization scheme and the Duty Free Import Authorization scheme. The details of exemptions for last three years under Advance Authorization Scheme and Duty Free Import Authorization Scheme are as under: 2016-17 2017-18 2018-19 Number of Authorizations issued Number of Authorizations issued Number of Authorizations issued Advance Authorization Scheme 22853 21505 23042 Duty Free Import Authorization Scheme 581 815 1321. The duty exemptions under the Schemes ensure competitiveness of Indian exports in international markets and are compliant with India’s international commitments. This information was given by the Minister of Commerce and Industry, Piyush Goyal, in a written reply in the Lok Sabha today.

Source: Press Information Bureau

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Cabinet approves Industrial Relations Code Bill

The Centre approved on Wednesday the Industrial Relation Code Bill, which is the third code under labour reforms. The government wants to codify 44 central labour laws into four broad codes. While the Code on Wages has already been approved by Parliament, the Labour ministry will push the Code on Occupational Safety, Health and Working Conditions Bill in the Budget session. The Code on Social Security is in pre-legislative stage. The Union Cabinet, chaired by Prime Minister Narendra Modi, has given its approval for introduction of the Industrial Relations Code, 2019, in Parliament, an official statement said. The bill provides for setting up of a two-member tribunal (in place of one-member), thus introducing a concept that some of the important cases will be adjudicated jointly and the rest by a single-member resulting speedier disposal of cases. It also provides for imparting flexibility to the exit provisions relating to retrenchment and others, for which the threshold for prior approval of appropriate government has been kept unchanged at 100 employees, but added a provision for changing 'such number of employees' through notification (executive order). That means there would be no need for Parliament approval. The threshold can be changed by executive order. It also said the re-skilling fund is to be utilised for crediting to workers in the manner to be prescribed. The bill also provides for definition of Fixed Term Employment and that it would not lead to any notice period and payment of compensation on retrenchment excluded. It also provides for vesting of powers with the government officers for adjudication of disputes involving penalty as fines thereby lessening the burden on tribunal. The draft code on Industrial Relations has been prepared after amalgamating, simplifying and rationalizing the relevant provisions of three Central Labour Acts -- the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947.

Source: Economic Times

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Five non-BJP states red-flag GST dues

Punjab, Rajasthan, Kerala, West Bengal and Delhi, all ruled by non-BJP parties, on Tuesday raised concerns over their pending GST compensation and accused the Centre of creating a financial crisis for them. “GST compensation for the months of August and September, required to be paid by the central government sometime in October, continues to be outstanding till date,” a joint statement by issued by the five states said. States are facing acute pressure on their finances and are using the central bank’s ways and means facility or even overdrafts to meet payments, they said. Speaking to reporters, West Bengal finance minister Amit Mitra said: “We thought we will appeal to union finance minister (Nirmala Sitharaman) saying that she must personally look into this and not violate the constitutional provisions as passed by Parliament of India." All the states will be in distress if this compensation, which is due to them, is not given, he said. "It is a dangerous situation," he said, adding that this was the first time in history that there was a delay in the transfer of committed funds. The pending amount for West Bengal is Rs 1,500 crore, he said. Kerala finance minister Thomas Isaac said his state was supposed to get Rs 1,600 crore. "Kerala (is) under overdraft for almost one week now. This is a Centre-engineered crisis in the state finance. It has never happened in the history of India. Something drastic has to be done," Issac said. Punjab is under threat of overdraft if the dues are not released immediately, state finance minister Manpreet Singh Badal said. The state is awaiting Rs 2,100 crore as compensation, while arrears stand at Rs 2,000 crore, he said. Echoing similar concerns, Delhi deputy chief minister Manish Sisodia said due to the delay in payment, finances of states were under pressure. The outstanding GST compensation to Delhi is Rs 2,355 crore. The joint statement said GST comprised nearly 60% of the tax revenues of states and several states were already facing deficits up to 50% of the total GST. “Such huge deficits have the potential to disrupt the budget and planning processes in a host of areas, literally bringing activities of the states to a grinding halt," it said. Assurance of GST compensation was a necessary enabler in convincing states agreeing to subsume their fiscal sovereignty into GST. "It was only after the required provisions for compensation were incorporated in the Constitution that states agreed to join the GST,” the statement said, adding that the current delay had shaken the confidence of the states that had so far supported GST in a spirit of rare bonhomie. Despite many challenges from time-to-time, states have extended their support to all major decisions of the GST Council, the statement said. The states suggested that the matter be placed on the agenda of the next meeting of the GST Council and a healthy mechanism be evolved to provide compensation in future with “due urgency and judiciousness”.

Source: Economic Times

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Economic recovery to be slow and painful: SBI Chief Economic Adviser

The slack in demand and investment is likely to drag material economic recovery to next financial year, according to Dr Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI. The slack in demand and investment is likely to drag material economic recovery to the next financial year, according to Dr Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI. “GDP growth plunged to 20-quarter low to 5.8% in Q4, FY19. With this, the full-year FY19 GDP growth rate comes to 6.8% (five-year-low) compared to 7.2% in FY18. The overall GDP growth is expected to be below 5% in FY20 and any material recovery will be postponed to FY21,” he said. Speaking at the two-day IASCC-XLRI Conclave here Tuesday, Ghosh said going forward, growth prospects were tilted towards the negative side unless a course correction happens. This sentiment was reinforced despite the July budget and subsequent policy announcements. The financial sector fragility, notably in the real estate exposed NBFC sector, has increased the perception of downside risk. “The financial and corporate sector are facing the twin challenge of credibility and resilience. Sanctity of the audit process, external credit rating agencies, governance and regulatory lapses have strained the outlook of both banking and corporate sector including the relationship between the two. This trend is not healthy for both as it prevents retail and FII participation in the Indian capital markets or even FDI,” he noted. Meanwhile, there’s considerable uncertainty if the weakness is temporary or the beginning of a recession in advanced economies. While the US raised tariffs on certain Chinese imports with the latter retaliating, additional escalation was averted followed the June G20 summit. “Against this backdrop, global growth was forecast at 3.2 per cent in beginning 2019, picking up to 3.5 per cent in 2020. GDP reading so far this year, together with generally softening inflation in many economies, point to weaker-than-anticipated global activity,” he observed. Given the synchronised slowdown, the World Bank yet again downgraded FY19 growth to 3 per cent — its slowest pace since the global financial crisis. Importantly, the projected growth pickup in 2020 is also precarious, presuming stabilisation in currently stressed emerging market and developing economies, Ghosh said. He said the contemporary issue for macroeconomists is to focus on assuring adequate aggregate demand. It’s incorrect for central bankers to suggest that they have this challenge under control, or that with their current toolkit they will be able to get it under control.

Source: Indian Express

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Return filing system is working fine: GSTN

GST Network on Monday said the return filing system is working fine. The statement comes a day after certain complaints made on the social media regarding the GSTN system not functioning. GSTN said that the GST return filing system is working within expected limits. "Had it not been so, how more than 11.52 lakh GSTR3B (October) returns could have been filed yesterday with about 1.82 lakh returns filed in a peak hour," it said. Also, on November 18, more than 8.14 lakh returns were filed, while on Wednesday, over 9.23 lakh GSTR 3B returns were filed by 4.00 pm and filing is going on smooth with 6.30 lakh returns filed between 12 to 4 pm, it said. GSTN said any online system has to have a load threshold and for GST return filing system, it is at 1.5 lakh returns filing at a particular moment. If this threshold is reached, the site shows a message asking the taxpayer to wait for his turn in a few minutes, it said. Referring to complaints, GSTN said it could have been possible that some filers may have momentarily experienced being logged out at the load threshold of 1.5 lakh returns load at a particular point of time or some difficulty due to any local issue at the taxpayer filers' end. GSTN said the taxpayers are requested that they should not wait till the last three days to file their returns as normally there may be huge rush of return filing on these days.

Source: Economic Times

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NCLAT allows Reliance to delist Alok Industries

The National Company Law Appellate Tribunal(NCLAT) has allowed Reliance Industries to delist textile manufacturer Alok Industries, which it has acquired through insolvency process. A two-member NCLAT bench headed by Chairperson Justice S J Mukhopadhaya has modified the order passed by the National Company Law Tribunal (NCLT), Ahemdabad, which denied such permission. While approving Rs 5,052-crore bid of RIL for Alok Industries on March 8, 2019, the NCLT did not give its approval to RIL's plea for granting exemptions for delisting of Alok Industries' shares from the bourses. Later, RIL again sought permission, but was denied on July 26, 2019. "The Appellant (RIL) is directed to comply with the plan forthwith," said the NCLAT. The appellate tribunal observed that Securities and Exchange Board of India (Sebi) in its affidavit had also said that there is no requirement for permission of the market regulator for such delisting.

In view of the specific plea taken by the ‘SEBI' - 3rd Respondent, no further clarification is required. The ‘Resolution Applicant' will act in accordance with the stand taken by the ‘SEBI' and in accordance with law, if not yet taken. "The order dated July 26, 2019 passed by the Adjudicating Authority (Ahmedabad Bench) stands clarified/modified to the extent above," the appellate tribunal said. The NCLAT order came over a petition filed by RIL, challenging the NCLT order. The NCLT in its order dated July 26, 2019 said: "that approval of this bench (NCLT) in respect of Face Value Reduction and the Promoter Capital Reduction is/are dispensed with, however the applicant shall approach to the Competent Authority(s) viz MCA and SEBI and any other competent authorities, as the case may be for necessary compliances". As RIL relied on the Sebi amendment notification with regard to delisting of shares, the NCLAT had earlier on September 11 impleaded Sebi and on October 15 granted the regulator seven days to file a reply affidavit to make its stand clear about the amendment related to delisting of shares. Last year, Sebi relaxed requirements to comply with delisting norms for companies facing insolvency proceedings provided the resolution plan lays down the procedure for delisting that particular entity from the exchanges. In a notification, the markets regulator had said norms pertaining to delisting of equity shares would not be applicable to any entity that is getting delisted pursuant to a resolution plan approved under the IBC. The notification was issued on June 1. Alok Industries, a Mumbai-based textile company, was in the first list of 12 companies issued by the Reserve Bank of India in 2017 for initiation of insolvency process.

Source: Economic Times

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Fluctuating currency rates, multiple taxes issues in India

Bottlenecks faced by Indian and Southeast Asian garment makers include fluctuating currency rates, multiple taxes at various stages of billing cycles, poor support by councils and governments, rise in operative costs, slowdown in global markets and political unrest, according to Chetan Mathur, managing partner of Medusa Source, a supply chain management firm. The New Delhi-based company offers product sourcing solutions to brands, retailers, labels and wholesalers worldwide. However, events like Brexit and US-China trade war are certainly going to benefit India compared to its peers like China and Turkey, the other managing partner Sonal Jindal said. With rising costs due to depreciating currencies in similar countries, Indian manufacturers will be able to offer more competitive prices to meet the global demand, she added.

Source: Fibre2Fashion

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Global Textile Raw Material Price 20-11-2019

Item

Price

Unit

Fluctuation

Date

PSF

947.72

USD/Ton

0.08%

11/20/2019

VSF

1451.46

USD/Ton

0%

11/20/2019

ASF

2183.59

USD/Ton

0%

11/20/2019

Polyester    POY

985.43

USD/Ton

0%

11/20/2019

Nylon    FDY

2162.96

USD/Ton

0%

11/20/2019

40D    Spandex

4084.01

USD/Ton

0%

11/20/2019

Nylon    POY

2319.49

USD/Ton

0%

11/20/2019

Acrylic    Top 3D

1081.48

USD/Ton

0%

11/20/2019

Polyester    FDY

2426.22

USD/Ton

0%

11/20/2019

Nylon    DTY

5378.94

USD/Ton

0%

11/20/2019

Viscose    Long Filament

1216.67

USD/Ton

0%

11/20/2019

Polyester    DTY

2034.89

USD/Ton

0%

11/20/2019

30S    Spun Rayon Yarn

2063.35

USD/Ton

0%

11/20/2019

32S    Polyester Yarn

1565.30

USD/Ton

0%

11/20/2019

45S    T/C Yarn

2404.87

USD/Ton

0%

11/20/2019

40S    Rayon Yarn

1750.29

USD/Ton

0%

11/20/2019

T/R    Yarn 65/35 32S

2291.03

USD/Ton

0%

11/20/2019

45S    Polyester Yarn

2347.95

USD/Ton

0%

11/20/2019

T/C    Yarn 65/35 32S

1921.05

USD/Ton

0%

11/20/2019

10S    Denim Fabric

1.26

USD/Meter

0%

11/20/2019

32S    Twill Fabric

0.69

USD/Meter

0%

11/20/2019

40S    Combed Poplin

0.96

USD/Meter

0%

11/20/2019

30S    Rayon Fabric

0.55

USD/Meter

0%

11/20/2019

45S    T/C Fabric

0.67

USD/Meter

0%

11/20/2019

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14230 USD dtd. 20/11/2019). 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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Trade war takes toll, but Xinjiang exporters seek to diversify markets

Textile companies in Aksu, the nation's largest top cotton production base in Northwest China's Xinjiang Uyghur Autonomous Region, are seeing their exports to the US fall to almost nothing this year amid a bickering trade war between the world's two largest economies. While some have dubbed this year as the hardest for foreign trade, those textile companies have been actively moving into domestic markets, markets along the routes of the Belt and Road Initiative (BRI) and European countries to fill gaps left by US clients. With government support policies and logistics subsidies, the local manufacturers are confident of their business prospects, believing that sunshine always follows the storm and their business will recover soon with the diversification of export destinations. At Aksu Textile Industrial Park, Xinjiang's largest textile industrial park - home to hundreds of manufacturers - trade volume of textiles, cotton yarn, clothes and hats plunged 86 percent to $35.87 million in the first 10 months of 2019, according to the industrial park's committee manager Liu Jizhong. "Our exports to the US dropped to near zero amid the trade war, which weighed on the overall foreign trade volume. The escalating trade war has dragged down the industrial park's output by about 40 percent," Liu told the Global Times on Wednesday, pointing to tons of clothes in the park's warehouse due to lackluster overseas demand. Last year, the industrial park exported 5 million garments, mostly to the US. The US levied an additional tariff of 10 percent on $300 billion of Chinese imports on September 1, which reportedly covers 87 percent of textiles and clothing from China. It is not clear whether Washington will impose an additional 15 percent tariff on $156 billion of Chinese products, including clothes and toys, on December 15. The tariff hike is taking a bite on the business of Xinjiang Jinliyuan Clothing Co, a local textile manufacturer located in the park. Zhang Jie, general manager of Jinliyuan, told the Global Times on Wednesday that the company's clothing exports to the US had halted this year, including to its largest overseas clients Disney, which accounts for 30 percent of its foreign trade transactions. About 70 percent of Jinliyuan's income originates from foreign trade, of which the US used to be the producer's largest export market.

"This is the hardest year for textile companies specializing in foreign trade. We signed a 10-million-yuan ($1.42 million) initial agreement with Disney in March and then sourced fabrics for the order in bulk. But Disney called off the deal in May and we have no choice but to stock materials in the warehouse, exposing them to the dust," Zhang said. Last year, Zhang's company expanded its capacity by 24 production lines to 72 on expectations of soaring demand overseas. But now the new lines are idle, Zhang said. What's worse is that as demand slid to a crawl, the company had to lay off some employees or ask some to take a short holiday to cut costs, he said. Now, Jinliyuan employs 900 workers, most of whom are Uyghur.

Export diversification

Despite the economic loss, major producers at the industrial park are displaying a palpable level of calm and confidence in the future - just like the weather in Aksu on Wednesday, which cleared up after a sandstorm in the morning. Efforts to diversify markets and reduce reliance on the US are in progress. "We have good developments coming one after another. Our chairman has reached an intention to cooperate with Russian retailers. German clothing companies also signed a deal with us. We have begun the design process, and shipments will start next year," Zhang said. Orders to the industrial park are also surging from Europe, Southeast Asian and BRI countries, according to Liu, who urged local textile companies to take advantage of Xinjiang's geographic position as a gateway to Central Asian countries such as Kazakhstan and Kyrgyzstan. In September, the Xinjiang government announced favorable policies that aim to subsidize transportation costs for southern Xinjiang manufacturers, including those in Aksu. Companies no longer need to pay railway costs from Aksu station to Urumqi, the capital city. They will also be able to get a 50 percent discount for shipments from Urumqi to stations abroad. "We're mulling over more policies to help local companies contain costs and guide them into neighboring markets," Kahaerjiang Kuerban, an official of Aksu's foreign trade bureau, told the Global Times on Wednesday. Shifting to the domestic market is another choice. Domestically, Jinliyuan has set up a children's wear brand Ayoryor, targeting markets in eastern and central China. Foreseeing potential business opportunities at home and abroad, Liu said it will certainly take some time for the foreign orders to bounce back, but the future is of great potential and promising.

Source: Global Times

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Nigeria: Textile rebound as catalyst to self-sufficiency

Last week, the Senate charged the Federal Government to ban importation of textiles into the country for a period of five years to encourage local production just as Taiwo Hassan looks at the impact of Central Bank of Nigeria (CBN)’s N100 billion intervention on the project. Indeed, the move by the Federal Government to resuscitate the country’s textile sector, which at a time was the second highest employer of labour after agriculture, has been applauded by all and sundry. In fact, the paradigm shift towards the revival of the moribund industry is apt as it is coming when the Federal Government is thinking of sustainability and self-sufficiency in all spheres of the economy. To set the ball rolling and demonstrate its stance on sufficiency, government had since August closed the country’s borders with her neigbours to ensure that Nigerians consume what they produce and also promote local production of goods. However, as government shifts attention to reviving the country’s textile industry, industry stakeholders have so far expressed satisfaction with the role of CBN, especially as it is boosting the effort with N100 billion funding intervention.

Presidential directive

Recently, President Muhammadu Buhari said he had directed the CBN to pump money into the sector for local production of textiles and garments. The president stated that the cotton, textile and garment sectors had the capacity to transform Nigeria’s economy and refine the sector to bring about an industry capable of creating more than two million jobs. While confirming the presidential directive, the CBN Governor, Godwin Emefiele, said that the apex bank was looking at injecting N100 billion as its intervention in the cotton, textile and garment value chain, saying that about two million jobs are to be created afterwards. Emefiele explained that the apex bank had already disbursed about N50 billion to the cotton and ginning components of the sector. The CBN governor said the bank’s intention was to ensure that local players took control of the cotton, textile and garment industry and get it revived to facilitate its job creation capacity. He disclosed that an “approval to the tune of N19.18 billion has been granted to finance nine ginneries with a view to retooling their processing plants, while providing them with improved access to finance at single digit interest rate.” The same support, he said, would be extended to the textile and garment firms, adding that the apex bank had invested heavily in local textile and garment factories “to retool and produce assorted uniforms for our uniformed services that meet international standards.”

Textile committee

The governor explained that the CBN had constituted a Textile Revival Implementation Committee (TRIC) whose members include the CBN, Federal Ministries of Agriculture and Rural Development; Water Resources; Industry, Trade and Investment; and the Governments of Kano, Kaduna, Katsina, Gombe and Zamfara States. He said: “This Committee is driving the initiative to achieve self-sufficiency in cotton production and textile materials within a span of three years.”

Bad policies

The lawmaker further said that government policies like increase in taxation, high cost of production, trade liberalisation resulting in massive importation of textile materials had negatively affected the production of local textile materials. Barkiya said that the resuscitation of the industry would provide additional revenue and assist government to diversify the nation’s economy. Last week, the Senate charged the Federal Government to ban importation of textiles into the country for a period of five years to encourage local production just as Taiwo Hassan looks at the impact of Central Bank of Nigeria (CBN)’s N100 billion intervention on the project Indeed, the move by the Federal Government to resuscitate the country’s textile sector, which at a time was the second highest employer of labour after agriculture, has been applauded by all and sundry. In fact, the paradigm shift towards the revival of the moribund industry is apt as it is coming when the Federal Government is thinking of sustainability and self-sufficiency in all spheres of the economy. To set the ball rolling and demonstrate its stance on sufficiency, government had since August closed the country’s borders with her neigbours to ensure that Nigerians consume what they produce and also promote local production of goods. However, as government shifts attention to reviving the country’s textile industry, industry stakeholders have so far expressed satisfaction with the role of CBN, especially as it is boosting the effort with N100 billion funding intervention.

Presidential directive

Recently, President Muhammadu Buhari said he had directed the CBN to pump money into the sector for local production of textiles and garments. The president stated that the cotton, textile and garment sectors had the capacity to transform Nigeria’s economy and refine the sector to bring about an industry capable of creating more than two million jobs.

While confirming the presidential directive, the CBN Governor, Godwin Emefiele, said that the apex bank was looking at injecting N100 billion as its intervention in the cotton, textile and garment value chain, saying that about two million jobs are to be created afterwards. Emefiele explained that the apex bank had already disbursed about N50 billion to the cotton and ginning components of the sector.The CBN governor said the bank’s intention was to ensure that local players took control of the cotton, textile and garment industry and get it revived to facilitate its job creation capacity. He disclosed that an “approval to the tune of N19.18 billion has been granted to finance nine ginneries with a view to retooling their processing plants, while providing them with improved access to finance at single digit interest rate.” The same support, he said, would be extended to the textile and garment firms, adding that the apex bank had invested heavily in local textile and garment factories “to retool and produce assorted uniforms for our uniformed services that meet international standards.”

Ban

However, at the upper chamber of the national assembly, the challenges facing the country’s textile industry came to the front burners with the Senate emphatically urging the Federal Government to ban importation of textile into the country for five years to encourage local production. In a debate on a motion sponsored by Sen. Kabir Barkiya (APC-Katsina Central) during plenary on “Urgent need to revamp the nation’s comatose textile industry,” the upper chamber lauded government’s stronger motivation to encourage local textile manufacturing companies, by providing them with soft loans and easy access to credit facilities through the Bank of Industry. While debating the motion, Barkiya noted that the textile industry in the country played a significant role in the manufacturing sector of the Nigerian economy with a record of over 140 companies in the 1960s and 1970s. He said: “The textile industry recorded an annual growth of 67 per cent and as at 1991, employed above 25 per cent of the workers in the manufacturing sector. “The textile industry was then the highest employer of labour apart from the civil service.” He noted that the industry had witnessed massive decline in the last two decades with many textile companies such as Kaduna Textile, Kano Textile and Aba Textile among others closing shops and throwing their workers into the job market. Contributing, Sen. Robert Boroffice (APC-Ondo North) said that the importation of textile materials was as a result of the comatose level of the textile industry. “The closure of our borders is an eye opener. China closed its borders for 40 years for its industrialisation and development. I believe that the closure of our borders should be extended to allow us put our house in order.”

Source: New Telegraph

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International textile and garment industry exhibitions open in Ho Chi Minh City

A series of expos showcasing technologies, solutions and trends meant to upgrade the entire textile and footwear production chain opened the Saigon Exhibition and Convention Centre (SECC) on November 20. They include Vietnam International Textile and Garment Industry Exhibition, Vietnam International Textile and Apparel Accessories Exhibition, Vietnam International Dyeing and Chemical Industry Exhibition, and Vietnam International Footwear Machinery and Material Industry Exhibition. The exhibitions featured about 800 booths set up by 530 exhibitors from 17 countries and territories.On display are high-performance automatic textile production machinery along and high-quality yarns, fabrics, filaments, dyes and specialty chemicals. The expos will also feature several seminars with experts from Vietnam and other countries sharing the latest information about the industry and offering market forecasts and solutions. The exhibitions which runs until November 23 are expected to help industry professionals update their knowledge and connect with experts and potential partners.

Source: Nhan Dhan Online

Smart Clothing is the Future of the Wearables Industry

The future is going to be wild, mostly because technology is moving out from the palm of our hand and into the sleeve of our shirt. Wearables have long been heralded as the future of smart technology. What used to be an industry of clunky wristwatches and headsets is not slowly becoming one centered around smart textiles. Wearables that you actually wear as clothes. For the most part, modern wearables are still a pretty niche product. Sure fitness trackers have permeated throughout society, but how many people do you know who are using smart glasses or even keep wearing their fitness trackers forever after they buy them? This lack of use or also loss of use signals that the modern wearables industry still has a while to go until their benefits outweigh their inconvenience – and smart-textiles may just be the solution. In order to understand what might be coming in the realm of textile smart wearable tech, let's take a look at a few trends in the industry.

Change the color of your clothes

You've probably seen shirts that can change color based on ambient lighting or heat. These forms of color-changing shirts are becoming fairly popular as they offer a way to easily set your t-shirt apart from others. This same tech is being used to create clothes that can change color on command, rather than through passive stimuli like light or body heat. Early prototypes for this kind of technology already exist. Researchers have developed a yar that has copper wire in the center sheathed by a sleeve made of a type of polymer. The polymer sheath is laced with pigments that are already in-use in these color-changing shirts. The copper wire, rather, gives the user the ability to slightly vary the temperature of the pigment, changing its color. As long as the microcontroller for the shirt knew the exact pattern of the textile, it could create specific patterns all across the fabric.

Know everything about your fitness

Fitness and health are key drivers of the wearables industry. It seems like a clear niche, but that doesn't mean that every single wearable in the health market would be a perfect fit. Take fitness trackers for example. Around 30 percent of the people that buy them eventually stop wearing them. That ultimately means that the data or benefit these trackers were providing people weren't good enough for them to go out of their way to wear them. There's another segment here too, physical improvement. Say you're trying to improve your golf swing or kick a soccer ball better, textile-based wearables may be able to help you do that in the future. At the end of the day, if you want to know exactly what your body is doing, the best way for you to do that is by having sensors all over your body. What more seamless way of having sensors in your body them by simply integrating them into the clothes you're already wearing. Industrial engineers have been able to develop motion sensors that are incredibly thin and can be embedded in shoulders of shirts or into shoe soles. The sensors could be powered by tiny watch batteries and be fairly easily integrated into any clothing that has a little bit of thickness to it. As technology gets better, these sensors will get smaller and smaller and could soon even be woven into fabric.

Fashion and wearables

Fashion and wearable technology seems like a match made in heaven. Whether it be the color-changing technology we mentioned before or textiles that light up, "smart textiles seem like the natural evolution of the smart textile industry. Designers have already made clothes that are made from fiber optic strands which allow the wearer to control their lighted appearance with a few clicks. OLEDs are also so small at this point that they are as thin as a normal textile fiber. This means that they can be woven into fabric and the wearer will have essentially no way of telling whether they are there unless they are on.

Charger your phone with your pants

Humans move a lot. They also let off quite a bit of thermal energy. If we had clothes that had piezo-electric cells built-in, we'd be able to harness all of that energy and make it charge our phones. Researchers are working on ceramic plate generators that sit on your skin while being a part of a textile that you are wearing. The side close to you is warmed by your body and the other is exposed to air. This temperature differential causes the semiconductor material in the middle of the generators to diffuse electrons towards the cold side of the device, creating a voltage. If you did this enough across the entirety of your body, you could create enough voltage to charge a battery, like a smartphone – or your other wearable technology. Unfortunately, this type of wearable thermoelectric generator doesn't yet produce enough energy to power anything of significance. That's, however, largely due to a lack of efficiency and not due to there not being enough thermal energy let off by the human body to power devices. Wearable textiles are headed to the forefront of wearable tech. They'll likely be cheaper than you might think too. Keep an eye out for a shirt that could help you analyze your golf swing or shoes that help you run better. Wearable technology is the future.

Source: Interesting Engineering

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