Feeling the heat of slump in business, one of India’s biggest textile body, Northern India Textile Mills’ Association (Nitma) held a meeting with Ravi Capoor, secretary textiles, Government of India, to discuss the critical issues concerning the textile sector. The Nitma delegation comprised president Sanjay Garg, vice-president Mukesh Kumar Tyagi, and others. Garg said, “The meeting with the textiles secretary was held in a very cordial environment, and we discussed all the issues bothering the textile sector. The major points which came up for discussion in the meeting included the anomaly in the FTA (free trade agreement) with Indonesia and Vietnam, which is leading to closure of MSME (micro, small, and medium enterprises) scale spinning mills.” He added, “On the issue of an existing anomaly due to Asean (Association of Southeast Asian Nations) FTA, it was explained that due to inclusion of the finished product of the mills in the list of items in the said FTA, it had been cleared of imports with Asean certificate with zero duty. Hence, there has been a surge in imports, particularly from Indonesia and Vietnam, mostly in the post-GST period. This has denied a level playing field for the Indian spinning mills, as compared to their counterparts in Indonesia.” Garg also said, “In the meeting, it was also mentioned that this surge in imports has been happening of late, as some of our existing duties — which were acting as a safeguard against imports in the pre-GST period — were removed, while the government introduced the GST. Post-GST, with the removal of Cenvat and SAD, polyester yarn is being cleared with zero duty. We have suggested for urgent exclusion of Polyester Staple Yarn (PSY) from the FTA list or inclusion of its raw material, the PSF, in the FTA list of items. It was submitted that this would allow us to strengthen the vision of ‘Make in India’, and also provide the much-needed competitiveness to spinning mills products, which have been undergoing stress due to this grave anomaly, affecting their future and survival, as huge capacity is being added in our competing countries.” The secretary assured the body that the textile ministry was ready to facilitate the industry by all means to enhance their growth competitiveness, and hence, necessary steps were being taken to unleash the growth of the textiles sector, which has a huge potential for growth in India.” Garg also informed that important decisions were expected in the next GST council meeting, which would further help improve the competitiveness across the entire textile value chain. The secretary further said, “It may be difficult to make the changes in the Asean agreement, and it may also take a little longer to review the current Asean trade agreement.” He reiterated that he had understood the difficulties being faced by this segment, and was sincerely willing to provide the yarn manufacturing sector a level playing field.
Source: Times of India
Hanoi expects India to become a new source of materials for its textile and garment industry and Vietnam at large following the COVID-19 outbreak which has been causing a shortage of supplies. Hanoi expects India to become a new source of materials for its textile and garment industry and Vietnam at large following the COVID-19 outbreak which has been causing a shortage of supplies. Secretary of the municipal Party Committee Vuong Dinh Hue made the remarks at a reception hosted for Indian Ambassador to Vietnam Pranay Verma during which the two sides discussed the possibility for cooperation between Hanoi and Indian cities. Hanoi attaches importance to relations with India, Hue said, suggesting the two sides should strengthen their partnership. He said the city has been accelerating innovation to improve productivity and support startups, and wants to learn from Indian experience in this area. He also expected India to import textiles and garment from Hanoi. Verma, for his part, spoke highly of Vietnam’s efforts to contain the epidemic, saying the Hanoi administration has created a safe environment for foreigners living in the city. He agreed that the two sides should reinforce ties, and unveiled that India has also been taking steps to bolster cooperation with Vietnam in economics, trade and investment. He hoped to see more investors from Hanoi and Vietnam opening businesses in India in the future. The diplomat went on to mention the International Day of Yoga, to be held in Hanoi in June, noting India has been closely monitoring the developments of the COVID-19 outbreak while preparing for the event.
Source: Vietnam Plus
To promote textile ecosystem in Punjab, especially near Ludhiana and Barnala clusters, the textile mills have demanded setting up a mega textile park spread across 1,000 acres. According to the industry, the proposed move will generate employment besides boosting exports. At a meeting with Ravi Capoor, Secretary, Textiles, recently, the Northern India Textile Mills’ Association (NITMA), an apex body of textile units in North India, has sought setting up one of the 10 proposed mega textile parks in Punjab. Capoor said the ministry was ready to approve the textile park for Punjab provided availability of 1,000 acres by the state government was ensured. He suggested the NITMA to work closely with the ministry and the state government for setting up the park. Availability of land is a major impediment in boosting industrialisation in Punjab. To address the issue, the Punjab Government is contemplating to convert vacant panchayat land into an industrial park. The NITMA also invited him to address the textile fraternity of Ludhiana so that new vigour and dynamism could be generated among young entrepreneurs for investing in the sector and promotion of exports of man- made fibres (MMF) along with technical textiles and blends. A delegation led by Sanjay Garg, president, NITMA, also highlighted the need to make cotton available for spinning mills at competitive prices. The association also apprised him of the current impasse in the cotton market which had led to increase in prices of raw materials, affecting its supply and working capital availability. The NITMA has sought government’s intervention to resolve the crisis situation. Garg said Capoor had assured them that the government was closely following the cotton economy, its supply-side issues and would come out with Direct Benefit Transfer scheme for farmers and reduce the stress for spinning industry. The Rs 50,000-crore textile industry of North India has specialised manufacturing clusters in Ludhiana, Panipat and Baddi-Barotiwala-Nalagarh belt of Himachal. Punjab is among the largest producers of cotton, blended yarn and mill-made fabrics in the country. The industry body has also sought a level-playing field for man-made fibre industry by removing anti-dumping duty on competitiveness in the value chain. There is a tremendous scope in investment and exports of man-made fibres which are bound to unleash its growth together with technical textiles and blends. According to Garg, the Secretary assured them that he would take necessary steps to resolve this issue which had been hurting the growth and competitiveness of the textile industry, including the acrylic sector.
Source: Tribune India
Top officials of the finance ministry are set to meet government departments responsible for a range of industries on Saturday to discuss further steps amid mounting fears over the impact of the coronavirus epidemic on the Indian economy. A senior finance ministry official told reporters on Friday that the government was weighing the impact on different sectors and may step in to deal with any disruption in trade. Top brass of the ministry will meet on Saturday to assess the feedback from different arms of the government handling aviation, pharmaceuticals, chemicals, textiles and heavy industries on ways to deal with the coronavirus threat, another official told Mint. The panic about the spread of Covid-19 derailing economic growth was visible in the markets on Friday with investors rushing for safe haven assets, such as gold, in place of equities, forcing the rupee to shed 60 paise from previous close to settle at 72.21 against the US dollar at the end of day’s trade. According to Care Ratings Ltd, in the worst-case scenario based on certain extreme assumptions, India’s exports could fall by $13.4 billion in case of a shutdown by China. The analysis said trade disruption could impact real gross value added (GVA) or gross domestic product (GDP) by 0.29-0.43% in a simulated scenario on an annual basis. N.R. Bhanumurthy, a professor at the National Institute of Public Finance and Policy, a think tank, said the risk to the Indian economy from coronavirus is going to be broad-based with impact to be felt on trade and finance. CII director general Chandrajit Banerjee said India’s dependence on Chinese imports continues to be high in electronics, machinery and organic chemicals. “In pharmaceuticals, India sources about 65-70% of active pharmaceutical ingredients from China," he said, adding that the government could expedite approvals for ramping up domestic production.
Source: Live Mint
Finance Minister Nirmala Sitharaman on Friday said the "steadiness" in the economy is a good sign, soon after the official data showed the December quarter GDP growth at 4.7 per cent. Speaking at CNBC TV 18's business leadership awards event, Sitharaman made it clear that she was not expecting a jump in the number either. India's economic growth slowed to 4.7 per cent in October-December 2019, according to official data released on Friday. The Gross Domestic Product (GDP) growth was registered at 5.6 per cent in the corresponding quarter of 2018-19, as per the data released by the National Statistical Office (NSO). On the impact of coronavirus on the economy, she said there is no need to immediately press the "panic button", but admitted that it may get challenging if the issues prolong for another two or three weeks, citing her conversations with the industry players over the last few days. She also said the pharmaceutical and electronic industries, which depend heavily on imports from China for raw materials, have suggested airlifting of essential items and the government may consider the same. However, the logistics of the same, like aggregating the goods and getting them to a single place will have to be done by the industry itself, she said, promising help from the government through the consular staff. Sitharaman said the government is "pushing the banks like never before" to lend as much as possible across all categories, including retail, home and agriculture segments. She, however, said that the government wants to learn from the experiences of the 2008-09 and ensure that there are no non-performing assets piled up for later years. Sitharaman said the government is working creating a development finance institution (DFI), as were bodies like ICICI and IDBI before they turned into full-fledged banks. The minister said that the ministry has managed to do whatever it can for the economy within the space offered by keeping the fiscal deficit under check and also added that it is not "closing options" on the same.
Source: Business Standard
Interestingly, the GDP estimates for FY19 have been revised downwards significantly, pushing up quarterly growth estimates for the current financial year. Unprecedented contraction in investment and manufacturing output in two successive quarters dragged down India’s economic growth to a 27-quarter low of 4.7 per cent in the quarter ended December 2019 (with the previous quarter’s growth having been corrected). Looking ahead, gross domestic product (GDP) growth is set to stagnate at 4.7 per cent in the March quarter (Q4) too, according to the annual estimate of 5 per cent by the National Statistical Office (NSO). Even in annual terms, investment is set to show a contraction of 0.6 per cent, according to the second advance estimate for FY20 released by the NSO. Manufacturing is set to show 0.9 per cent growth, the lowest since 2012-13 in the current GDP series. Still, two areas have offered a respite. First, consistent growth above 6 per cent in the services sector, which occupies more than half the space in the economy, has kept the economy afloat. Secondly, positive signals on farm output in the rabi season are seen to gradually push agricultural growth above 3 per cent. Consumer spending (private final consumption expenditure), on the other hand, is seen growing below 6 per cent for many quarters. Balancing this, government spending has grown strongly at 13.2 per cent and 11.8 per cent in the second and third quarters (Q2 and Q3), respectively. Responding to the data released by the NSO, the Department of Economic Affairs said GDP growth had bottomed out, and that positive growth in core sector output bode well for the manufacturing sector in this quarter and later. Interestingly, the GDP estimates for FY19 have been revised downwards significantly, pushing up quarterly growth estimates for the current financial year. For example, Q2 GDP growth of 4.5 per cent has now been revised to 5.1 per cent. The finance ministry has been highlighting “green shoots” in the economy, and several indicators have indeed shown improvement in Q3 over Q2. But the extent of the economic downturn raises doubts over revival. Experts too said any uptick in growth was a tough ask. “Despite the fact that Q3 shows strong results due to the festive season and higher rural spending driven by the kharif harvest, the growth slowdown is continuing,” said Devendra Pant, chief economist at India Ratings. D K Srivastava, chief policy advisor at EY India, said: “The current slowdown is likely to continue at least for one more quarter. The Centre’s gross tax revenues also show a contraction of 2 per cent during April-January FY20.” Capital investment, represented by gross fixed capital formation, contracted by 4.1 per cent and 5.2 per cent in Q2 and Q3, respectively. The investment rate, which is the ratio of capital formation to GDP, fell to 26.1 per cent in Q3, at least a decadal low. As a result, investments, which used to contribute 35 per cent to the economy in FY13, now contribute only a quarter (26.1 per cent). While investments have stagnated in the past, a strong and a consistent contraction has happened for the first time in many years. Lowest-ever capacity utilisation in industry, at 69 per cent, suggests little chance of investment revival. Yet, the government expects that gross fixed capital formation will show an uptick in Q4, and a back-of-the-envelope calculation shows it growing at 2.5 per cent in the March quarter. The government expects bumper rabi output and has factored in a 5 per cent increase in agriculture growth in Q4, sharply rising from 3.5 per cent growth in Q3. In FY20, low private consumer spending growth of 5.3 per cent is set to be compensated by 9.8 per cent growth in government spending. But this rests heavily on revenue mobilisation, which has shown poor growth compared to the previous year.
Source: Business Standard
The latest decision of the government is likely to benefit around 43.3 lakh handloom weavers and allied workers in the country. In what may further boost the economic prospects of artisans involved in making handloom, the Central Government has made the purchase of 20 per cent products of handloom origin from Khadi and Village Industries Commission (KVIC), and others including Weavers having Pehchan Cards, mandatory for Central Government departments. To effect this change, the Ministry of Finance has amended Rule 153 of the General Financial Rules (GFR) 2017. The latest decision of the government is likely to benefit around 43.3 lakh handloom weavers and allied workers in the country. Union Minister of Textiles, Smriti Zubin Irani, in a written reply in the Lok Sabha had said last year, “As per 3rd handloom census, there are 43.31lakh handloom weavers and allied workers in the country, including Rajasthan, Uttar Pradesh and Maharashtra.” As per the previous rules, all items of hand-spun and hand-woven textiles (khadi goods) was reserved by the Central Government for “exclusive purchase” from KVIC. Rule 153 of GFR 2017 also “reserved all items of handloom textiles required by Central Government departments for exclusive purchase from KVIC and/or the notified handloom units of Association of Corporations and Apex societies of handlooms. These rules have been partially amended.
What the amended rule says
As per the amended rule, 20 per cent of the textiles required by Central government departments should be handloom product procured from KVIC, Weavers having Pehchan Card etc. “The Central Government, through administrative instructions, has reserved all items of hand spun and hand-woven textiles (khadi goods) for exclusive purchase from Khadi Village Industries Commission (KVIC). Of all items of textiles required by Central Government departments, it shall be mandatory to make procurement of at least 20% from amongst items of handloom origin, for exclusive purchase from KVIC and/or Handloom Clusters such as Co-Operative Societies, Self Help Group (SHG) Federations, Joint Liability Group (JLG), Producer Companies (PC), Corporations etc.including Weavers having Pehchan Cards,” said an Office Memorandum dated 17-02-2020 of the Department of Expenditure Procurement Policy Division (PPD).
Source: Financial Express
Federation of Surat Textile Traders’ Association (FOSTTA) has urged Union ministry of micro, small and medium enterprises (MSME) to provide status of MSME to textile traders in the city. FOSTTA office-bearers held a meeting with special secretary and development commissioner of MSME, Ram Mohan Mishra, who was on a day’s visit to the Diamond City on Friday. The traders’ body raised several issues including that of their longpending demand of providing MSME status to textile traders. Purshottam Agarwal, joint secretary of FOSTTA, said, “Textile trading business involves 60% job work on cloth, which passes from more than 12 different types of processes. However, traders are also manufacturers and that they should be given the status of MSME.” Traders said a representation has been made to MSME development commissioner for setting up a ready-made garment centre in Surat. FOSTTA president Manoj Agarwal said, “We raised an important issue with MSME development commissioner for setting up a skill development centre for women doing hand-embroidery on saris and dress material. After GST implementation, hundreds of women have been rendered jobless.
Source: Times of India
The report said that high number of respondents looking to diversify continues, suggesting a manufacturing shift from China is more structural and longer term in nature. India is expected to be a big beneficiary of the ongoing trade battle between US and China. Evidence of this trend is already visible from foreign direct investment (FDI) pipeline doubling to $175 billion from last year’s $87 billion. Given the rise in protectionism and tariff barriers, corporations are looking at shifting supply chains . UBS, the world’s largest wealth manager, in its US CFO survey found that 76% of the respondents have either shifted their supply chain or are planning to shift in response to protectionist policies such as trade tariffs and India continues to be among the top destinations in Asia for manufacturing shift. The report also said that high number of respondents looking to diversify continues, suggesting a manufacturing shift from China is more structural and longer term in nature. While FDI in India has increased in the last one year, there has been interest from global companies to set up manufacturing facilities for not only electronics but also heavy manufacturing as well. India’s current FDI pipeline has doubled and key focus sectors include construction, electronics, infrastructure, textiles, food processing, pharma among others. Even while analyzing the earnings transcripts of 44 global companies there has been increased references to ‘India’ and ‘trade war’ and spot nuances in language signify a potential relocation of manufacturing to India. According to UBS, meetings with policymakers, UBS Evidence Lab results, trade data analysis, and newsflow, all point to early evidence of a pickup in manufacturing exports (including import substitution). “Exports is one of the keys in our ‘4 Keys framework’ from which we expect an earnings cycle inflection. We expect a 15% earnings CAGR in Nifty over FY21-23, compared with 6% over the past five years. Our Nifty target for end-December 2021 is 14,700,” said UBS in its report. However it also stated that, it is too early to call whether India will have major success, but the next three years should be better than the past five years. Also, exports are highly correlated with earnings and GDP growth. Post the corporate rate tax and recent Budget incentives for exports have been ignored by investors, believes UBS. In the recent past, government has taken steps like easing customs duties, liquidity for exporters and higher credit availability to boost manufacturing and exports. “Local corporate commentary also suggests some pickup in mentions beyond the chemicals sector, including in contract manufacturing companies and consumer appliance companies,” said UBS.
Source: Financial Express
While scientists across the world are busy developing vaccine and other ways to stop the spread of the deadly coronavirus, the situation can only temporarily benefit the Indian textile industry. It is because India does not have the large-scale capacity similar to China, the epicentre of the virus outbreak, for production of yarn, fabric and other textiles. "At the moment, the word coronavirus (COVID-19) is creating more fear than anything else around the world. This is impacting business, especially imports from China. This has led to an improvement in the local market and for the time-being the situation is benefitting India," Satyanarayan Agarwal, president, All India Texturisers' Association, told Fibre2Fashion. Voicing a similar sentiment, Vikram Jain, director, SBT Textiles Pvt Ltd, said: “Basically, products that are not made in India and are imported from China are going to feel the pinch. But, of course, these are sunshine days for products that we make in India. Fabric, yarn, raw materials, and several accessories are normally imported from China, and the demand for these products is huge. India cannot build up the capacity requirement in just few months. From March onwards, China is likely to start operations, but in the meantime, we have already lost three crucial months. It’s a long time for the industry to recover.” Talking about trade disruption and preparing for the same, Smarth Bansal, DGM-product management, Colorjet group, said, "At Colorjet, we already have invested towards indigenous manufacturing and contribute in 75 per cent value addition due to in-house capability with CNC, LVDs, laser and other machines, and our dependence on China is becoming negligible. In addition to this, we are also gearing up for export markets where shortages will occur once the existing stocks get depleted. “A lot of importers have started facing issues with supplies of both machines and spare parts which will ultimately impact the expansion decisions of many textile printing units. However, we will be able to timely deliver our Indian manufactured machines by Colorjet.”
Source: Fibre2Fashion
The group's chief believes that reviving the handicraft and handloom sector could be a critical step in developing a more robust economy. The silken sheen of a Banarasi sari, the gossamer lightness of Chanderi, the robust weaves of Nagaland and the stunning double ikats of Gujarat — these are just a few among India’s impressive repertoire of handwoven textiles that face an uncertain future. On the one hand, they bear the brunt of steadily decreasing government support — as per statistics from the Ministry of Textiles, the funds set aside for the Handloom Weavers Comprehensive Welfare Scheme have halved from Rs 20 crore in 2019-20 to Rs 10 crore in 2020-21. On the other hand, craftspeople find themselves ...
Source: Business Standard
Shares of TVS Motor Co. tumbled as much as 6.7% on Tuesday after India’s third-biggest two-wheeler maker said that a shortage of some parts imported from China may lead to a drop in production this month. TVS isn’t alone. Swathes of Indian businesses that import raw materials from China are bracing for a hit from the coronavirus outbreak that has shuttered plants that feed the global supply chain with all sorts of industrial components. While India has so far reported only three confirmed cases, compared with over 82,000 globally, prolonged disruption in raw-material supplies can delay a recovery in India’s economy -- set for its weakest growth in 11 years. Shifting overnight to suppliers elsewhere in Asia isn’t feasible and airlifting parts for transport will bump up the cost of components, according to ICICI Direct. To be sure, there will also be some winners from the coronavirus crisis. Textiles, fertilizers, oil refiners and other users of global commodities will benefit from the softening in their prices, according to Nomura and Citi Research. Producers of the basic ingredients used in medicines are expected to gain from the rise in their prices, according to Emkay Global Financial Services.
Here’s what some brokerages are saying:
ICICI Direct
March quarter is unlikely to see an immediate impact as vendors stocked-up on inventory ahead of Chinese Lunar New Year holidays Prolonged shutdown will severely impact sales of air-conditioners, LEDs, fans and kitchen appliances, which will been seen in the April-June quarter Alternatives in Thailand, Malaysia, Vietnam unprepared to meet challenge of sudden demand; airlifting parts will boost cost of components and finished goods by 5%-6%
Nomura
China accounts for about 14% of India’s imports; disruption will lower import of primary and intermediate goods, hurt domestic production. Over 60% of Chinese shipments to India comprise electrical machinery and equipment and organic chemicals, with an additional 7% in the form of plastic articles and fertilizers. Pharmaceuticals, autos, electronics, solar and agriculture among sectors to be hurt Gainers include textiles, fertilizers and mid- and small-sized firms that would face less competition from Chinese imports
Emkay
Peak summer sales could be at risk if the delay in part supplies persists beyond February. Chemicals and agro-chemical companies like Dhanuka Agritech Ltd., Rallis India Ltd., Vinati Organics Ltd. and Camlin Fine Sciences Ltd. appear vulnerable. Tata Motors Ltd. and Motherson Sumi Systems Ltd. may be hurt in autos; Oil & Natural Gas Corp. earnings may be impacted due to lower crude prices. Lower oil prices to benefit companies like Asian Paints Ltd., Pidilite Industries Ltd. and Apollo Tyres Ltd. Lower LNG prices to help Gujarat Gas Ltd., Gujarat State Petronet Ltd., among others; Divi’s Laboratories Ltd. and Granules India Ltd. to gain from expected rise in API prices
Citi Research
India’s direct vulnerability to coronavirus outbreak, beyond supply chains, is limited. Manufacturing sector accounts for less than one-fifth of India’s real GDP. Support from monetary policy side may come if needed as fiscal space remains constrainedElectronics, electrical machinery, chemical, pharmaceutical and textiles are most vulnerable sectors. Electronic goods imported from China, including mobile phones, are mostly sold by unlisted companies
Capital Economics
Coronavirus outbreak to have limited macroeconomic impact on India
There could be “serious consequences" for companies in textiles and electronics, which respectively import a third and half of intermediate goods from China. It will be difficult for these sectors to source goods from other suppliers immediately
Source: Live Mint
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
933.44 |
USD/Ton |
0% |
2/28/2020 |
|
VSF |
1368.10 |
USD/Ton |
0% |
2/28/2020 |
|
ASF |
2002.27 |
USD/Ton |
0% |
2/28/2020 |
|
Polyester POY |
983.32 |
USD/Ton |
-1.15% |
2/28/2020 |
|
Nylon FDY |
2166.15 |
USD/Ton |
-0.65% |
2/28/2020 |
|
40D Spandex |
4090.04 |
USD/Ton |
0% |
2/28/2020 |
|
Nylon POY |
2422.67 |
USD/Ton |
0% |
2/28/2020 |
|
Acrylic Top 3D |
5344.13 |
USD/Ton |
0% |
2/28/2020 |
|
Polyester FDY |
1232.71 |
USD/Ton |
-0.57% |
2/28/2020 |
|
Nylon DTY |
2009.39 |
USD/Ton |
-0.35% |
2/28/2020 |
|
Viscose Long Filament |
2180.40 |
USD/Ton |
0% |
2/28/2020 |
|
Polyester DTY |
1140.08 |
USD/Ton |
0% |
2/28/2020 |
|
30S Spun Rayon Yarn |
2023.64 |
USD/Ton |
0% |
2/28/2020 |
|
32S Polyester Yarn |
1610.36 |
USD/Ton |
0% |
2/28/2020 |
|
45S T/C Yarn |
2401.29 |
USD/Ton |
0% |
2/28/2020 |
|
40S Rayon Yarn |
1752.87 |
USD/Ton |
-0.81% |
2/28/2020 |
|
T/R Yarn 65/35 32S |
2265.91 |
USD/Ton |
0% |
2/28/2020 |
|
45S Polyester Yarn |
2180.40 |
USD/Ton |
0.66% |
2/28/2020 |
|
T/C Yarn 65/35 32S |
1945.26 |
USD/Ton |
0% |
2/28/2020 |
|
10S Denim Fabric |
1.26 |
USD/Meter |
0% |
2/28/2020 |
|
32S Twill Fabric |
0.68 |
USD/Meter |
0% |
2/28/2020 |
|
40S Combed Poplin |
0.96 |
USD/Meter |
0% |
2/28/2020 |
|
30S Rayon Fabric |
0.53 |
USD/Meter |
0% |
2/28/2020 |
|
45S T/C Fabric |
0.67 |
USD/Meter |
0% |
2/28/2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14251 USD dtd. 28/02/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Advisor to Prime Minister on Commerce, Textile, Industries and Production Abdul Razak Dawood has said the present government is working on textile policy to achieve growth and business targets. The textile policy would be announced in next two weeks, he said while talking to a private news channel. “We had gained free trade agreement (FTA),” he said, adding that there was no problem of duty-free access to markets. “The focus has been given to agriculture and industrial sectors through China Pakistan Economic Corridor projects,” he added. Commenting on the United States relations with Pakistan in terms of trade, Dawood said the business ties in the past had been tough but after the visit of Prime Minister Imran Khan to Washington, the hurdles to enhance trade activities between the two countries had been reduced, he added. The business and trade volume with Americans would have results in next meetings, he assured. To a question about relations with China, he said that Pakistan’s relation with neighbouring country China had been marvelous. Also addressing a press briefing the other day, Dawood said Pakistan desired market access to the United States and their investors to increase their investment here. “We also prioritise for increasing our exports to achieve the objective of exports-led growth besides enhancing the bilateral trade with US,” he said. The adviser said during a meeting with the US Secretary of Commerce they discussed the issues related to bilateral trade and enhanced market access for Pakistan. Razak said Pakistan is committed to acquire US Generalised System of Preference (GSP) programme, which provided nonreciprocal, duty-free tariff treatment to certain products imported from designated beneficiary developing countries (BDCS). He said that as part of ongoing efforts to create jobs and economic growth on both sides, the two countries had held held regular consultations in May last under the Trade and Investment Framework Agreement (TIFA). The TIFA meetings goal was to expand bilateral trade and investment in goods and services in future. Razak said Pakistan and the US also discussed ways to enhance the US investment in energy, oil and gas, agriculture, food processing and e-commerce besides increasing trade in agricultural goods and medicines. He said this was a high time for the US companies which invested in Pakistan for increasing bilateral economic and trade relations. He said the US secretary’s visit was the outcome of the previous discussions between Prime Minister Imran Khan and President Donald Trump to promote bilateral trade and enhanced economic engagements. The advisor also suggested that the US International Development Finance Corporation (IDFC) was appropriate forum, which also can help in developing of new businesses in Pakistan. The IDFC involved in funding of $60 billion for all the developing countries. He said that about IDFC assistance, Secretary Ross sounded positive and suggested that the commerce ministry should propose projects in that regard. The advisor said that the US also agreed to improve the travel advisory for Pakistan for bringing mega brands and US investment in different sectors to Pakistan to create employment opportunities. Razak also hoped that Pakistan would achieve trade benefits from GSP-Plus provided by European Union for 10 year till 2023. He said that Pakistan wanted to get access to the potential markets of African region, Russia and North America for enhancing the trade liberalisation to achieve the objective of export led growth.
Source: Pakistan Profit
More domestic end markets for textiles need to be found through reuse or the UK risks facing a “mountain” of clothing being sent to incineration or landfill. That was the verdict of Sinead Murphy, business account manager at resources charity WRAP, who was speaking at the Waste Prevention Exchange conference held by the North London Waste Authority earlier today (28 February). Ms Murphy was discussing the work of WRAP’s Sustainable Action Clothing Plan 2020, which was launched in 2012 and aimed to reduce the impact the textile industry has on the environment. She explained that while targets have already been met for reducing water consumption and carbon reduction targets are on track, waste reduction has fallen short. The amount of textile waste being sent to landfill or incineration fell 4% since 2012, WRAP said, against a target of 15%.And, with “market uncertainty” in the industry increasing, greater reuse of clothing is required to avoid more being sent to landfill. “We’re in the midst of Brexit and we don’t know what trade terms are going to look like, we don’t know the implications for those importing or exporting textiles,” she explained. “We know we export 60% of the textiles we collect, and we’re the second biggest exporter of second hand clothing in the world, but we have lost considerable market share and we have countries like China that will massively overtake us in a few years. “So the markets are becoming more and more uncertain, and if we don’t have markets for these products we will end up with mountains of clothes- and at the moment we have no markets here in the UK and they’re going to end up in incineration or landfill.”
Technology
Prior to Ms Murphy, Claire Dawson, senior lecture in fashion management at Coventry University London, said consumer trends are changing for reuse, but more work is required. Ms Dawson said that while more and more people are reusing clothes and some brands are taking a lead in selling second-hand items, it is difficult to scale this out as sorting technology isn’t widespread, and the quality of cheap clothes is poor. “Textile sorting, in particular for re-use, is a human concept. There aren’t machines or lasers which recognise what is a 90s denim outfit, for example. We need humans to make those judgments so it is hard,” she explained. On quality, Ms Dawson added: “I think brands need to increase the quality of clothing, poor quality items can only be worn a set amount of times and it is harder to keep in the loop.” Ms Dawson added that a very small percentage of textiles, less than 1%, is recycled ‘fibre to fibre’, and while advancements are being made the technology isn’t widely available on a large scale, so reuse is the only option now.
Europe
Offering a European perspective was Michal Len, director of RReuse, an international non-profit network representing social enterprises which run a number of projects. He said the UK can learn from other initiatives we have seen rolled out across the continent. For example, in Austira many households have a ‘reuse box’ in their house which contains items such as clothes, so these can be collected by schemes and given to social causes.
Producer responsibility
The issue of ‘fast fashion’ and its impact on clothing quality for the recycling sector has been a growing one for recyclers, who have said this has meant it is harder to sell these items on. China is also entering into emerging markets and selling cheap clothes in emerging markets at a cheaper rate than many UK merchants. One hope though is that some form of producer responsibility for the sector, which the government promised to review before 2025 in in the Resources and Waste Strategy, would mean producers have to think more about quality. However it is unclear if it will be introduced and what form it might take.
Source: Lets Recycle
Temporary factory closures and layoffs have already begun to hit low wage workers across Asia as quarantines and travel restrictions from the new coronavirus disrupt supply chains linked to China. For 31-year-old Myanmar worker Aye Su Than, the suspension of production at Hunter Myanmar, which produces clothes for an Italian fashion brand, came out of the blue when managers informed its 900 employees almost two weeks ago. “They said, ‘There are no orders, no buyers, because of the virus we are going to shut down,’” said Aye Su Than, who is five months pregnant and makes about $130 per month. She said she got $320 in compensation from the factory, which declined to comment when contacted. “We don’t know what to do now… It is not easy to apply for a job elsewhere during my pregnancy,” Aye Su Than said, sitting in a tea shop in Hlaing Tharyar, an industrial district on the outskirts of Yangon. Such bad news is being repeated in many parts of Asia’s more than $290 billion textile industry, which accounted for 60% of the world’s readymade garments, textiles and footwear in 2015, according to World Trade Organisation statistics. Low-wage workers are particularly vulnerable to any global economic downturn triggered by travel restrictions and quarantines as the coronavirus outbreak spreads from China around the world, roiling supply chains. International brands from Uniqlo to Adidas have wide networks of suppliers and can potentially shift production outside China to fill the potential gap in production from that country - the world’s largest apparel and textile manufacturer. Still, sourcing lines in the clothing industry are deeply intertwined and factories in southeast Asia are dependent in turn on China for supplies like cloth, buttons and zippers. Cambodia said this week that 10 factories had already applied to suspend operations and would pay partial wages to about 3,000 workers. The government in Phnom Penh expects a total of 200 to slow or stop production in March because of coronavirus, affecting 100,000 of more than 850,000 employed in the $7 billion sector, which is Cambodia’s largest employer. In Bangladesh, the world’s second-largest garment manufacturing industry after China, factories are still running but anxiety is growing. “Nobody knows what will happen ahead but the factory owners are really worried,” said Mohammed Nasir, a director of the Bangladesh Garment Manufacturers and Exporters Association.
DEPENDENCE ON CHINA
Readymade garments are a mainstay of Bangladesh’s economy, contributing almost 16% of national output and about $34 billion worth of exports in the last fiscal year ending in June 2019. “Almost 70% of our woven fabrics come from China and naturally if goods do not arrive on time, the readymade garments industry will be affected. If the crisis in China is prolonged, the impact would be severe,” Nasir said. Bangladesh has about 4,000 garment factories employing some 4 million workers. Neighbouring Myanmar has a smaller industry but is more dependent on China, with the Myanmar Garment Manufacturers Association warning that half of the nation’s 500 factories could shut down by March if the crisis persists. China supplies about 90% of fabrics sent to Myanmar, which so far has not reported any cases of the virus, but the closure of the land border to try to keep infections out has disrupted the supply chain. “We can still export, but we cannot say what is going to happen in the next one or two months,” Aung Min, vice-chairman of the manufacturers’ association, told Reuters. “This is kind of scary – the situation is uncertain.” A prolonged crisis could eventually see retailers face a shortage of clothing, although fashion giant H&M Group said it currently doesn’t see the virus causing any larger delays in deliveries. “We are in close contact with our suppliers in China and evaluating the situation together with them on a daily basis,” H&M spokeswoman Ulrika Isaksson said, adding that the company was also exploring other options for production. Manufacturers, too, are scrambling to find alternative suppliers of everything from fabric to buttons and zippers. “It is not easy to shift the sourcing destination overnight. But buyers are currently looking for alternative sources,” said Siddiqur Rahman, a leading garment exporter. Alternative raw material suppliers are being explored in Thailand, Indonesia, Pakistan and India but then costs will go up, he said. “Are the buyers ready to pay more? I don’t think so. So, it is not that easy. But we’ll have to look beyond China to survive in the long run,” said Rahman.
Source: Reuters
In the years since China’s accession to the World Trade Organization in 2001, the country’s economy has grown to become second only to the United States in purchasing power parity terms. In the past decade, its global trade influence has also spread, and China has gradually usurped the US as the major supplier of goods to Europe, Asia, Africa and South America. As long as it operated as a cheap factory, China’s growth was welcomed by the US, and its emergence as a new market for consumer goods was eagerly anticipated. However, in the mid-2010s — possibly provoked by China’s covert military expansion into the South China Sea and its expansive Belt and Road Initiative, as well as an ambitious plan to move up the value chain outlined in 2015 — the relationship between the rising nation and the incumbent superpower became more competitive. With the election in 2016 of Donald Trump on an “America First” platform, the gloves came off. Unhappy with the trade imbalance, the US president kicked off a trade war in 2018, imposing tariffs in two waves to encompass around $400bn worth of goods shipped between the US and China. The fallout for companies has been considerable. This new, more combative relationship has changed the global commercial landscape, disrupting supply chains — most noticeably, perhaps, in the technology sector. It has arguably accelerated a trend that was already under way, giving China an incentive to develop its own standards and achieve self-reliance in critical strategic sectors, including high tech. Perhaps the most significant consequence of this is the potential for a longer-term decoupling of China and the US, and the emergence of two rival and separate spheres of influence, in both trade and technology. The coronavirus outbreak, which emerged in Wuhan in December 2019, shutting down China’s economy for an extended period, has served to highlight the likely consequences of a dislocation of the world’s two largest economies. On January 28 2020, the FT Future Forum Think Tank brought FT commentators and China experts together with companies representing sectors from retail to law to discuss these developing challenges. In this report, we discuss the impact of the US-China trade war and the implications for European and British companies. The short-term implications 1. Trade diversion — the US is buying things from places other than China. This is a small positive for the EU and UK. In early 2019, the National Bureau of Economics estimated that as much as $165bn of trade would have to be rerouted per year to avoid even the tariffs in place at the end of 2018. Now in its second year, the trade war has indeed siphoned orders away from China and the US to alternative suppliers. It is not only cheap suppliers in Asia that have benefited. The United Nations Conference on Trade and Development has shown that the EU, together with Taiwan, Mexico and Vietnam, has picked up some of the crumbs. As China’s exports declined by around $25bn in the first half of 2019, the EU exported an additional $2.7bn to the US, with the highest proportion of that in machineries sectors. Even if this might mean that China loses out, the result is not an outright win for the US either. An economic model co-authored by Robert Zymek, lecturer at the University of Edinburgh and a Future Forum attendee, anticipates that improvements in the US trade deficit with China will be almost entirely offset by declines in the American position relative to its other trading partners. This invites the question whether the US will simply watch its other trade balances worsen without taking action? Future Forum attendee Gordon Cheung, an associate professor at Durham University, observes that there are more Chinese students in UK universities. “[T]he general impression is that the numbers have gone up greatly.” He notes that this may not be sustainable should relations between the US and China normalise.
2. The “phase one” trade deal — China has committed to buying $200bn more in goods from the US across sectors including agriculture, services, manufacturing and energy. This is potentially negative for the EU and UK. Any increase in Chinese purchases from the US is unlikely to be new buying, so it will have to be diverted from somewhere else. Matthew Rous, chief executive of the China-Britain Business Council, who also attended the Forum, is looking on the bright side. He notes that the ceasefire signalled by the “phase one” trade agreement reached by the US and China in January removes the risk of UK companies being affected by any imposition of new American controls on products containing Chinese-made components. He also contends that “the Chinese promise to encourage more agricultural imports from the US by bringing regulations on farm produce more closely in line with WTO rules and standards benefit American and non-American producers alike”. Bear in mind, however, that China will have to ditch existing trading partners such as Argentina and Brazil in order to satisfy this US condition, and that would not be easy. A more likely outcome is that the coronavirus outbreak allows China to delay implementation of this aspect of the deal — or even to renegotiate it. The US presidential election in November adds to the uncertainty: even a second term for Mr Trump is no guarantee that the terms of the deal will not be changed.
3. The coronavirus — while not directly related to the trade war, it has exacerbated the estrangement between the US and China. Supply chains have been thrown into disarray. Several international airlines have temporarily shut down their routes to China and many others have slashed their capacity to Asian destinations. Everyone loses. Virus-induced embargoes have put a strain on many high-profile companies, from those that sell in China to those that manufacture there. Wuhan, the city most affected by the outbreak, is a centre for car parts, so automakers have been hit particularly hard. Just a few weeks into the crisis, Volkswagen shut its plants in China and other global carmakers warned that European and US based facilities were also just weeks away from closures. Problems for the companies mean problems for their financiers, too. Adam Shepperson, head of trade origination and structuring at Santander, stresses concerns around “extended supply chains in the industrial and manufacturing space”. Here, cancellation of orders and resultant factory shutdowns can imperil “business models and ultimately client creditworthiness”. The medium-term outlook 1. Switching suppliers — as the trade war has dragged on, companies have had to consider finding alternative sources of inputs for their production chains. Less simple than buying completed goods from new vendors, switching to new component suppliers comes with friction costs as well as, potentially, higher prices. Trust, quality assurance and logistical networks all have to be rebuilt. The chain is not well oiled, at least to start with. Manufacturers lose. For reasons including politics and commercial sensitivities, few companies are prepared to share what they have been doing to restructure their sourcing. But consider Li & Fung, a Hong Kong-based sourcing agent, which revealed in its 2019 interim results that it had helped one US retailer move reduce its reliance on Chinese inputs from 70 per cent to 20 per cent over two years, with plans for another to go from 40 per cent to 10 per cent by 2020, outsourcing to at least seven other economies. Not all companies are moving that quickly. A September 2019 survey carried out by the EU Chamber of Commerce in China noted that just 10 per cent of respondents had changed suppliers, although this number had risen from 6 per cent in a January 2019 survey. One company admitted that its reliance on China was “dangerous”. As recently as January 2020, Citi’s Financial Strategy and Solutions Group also noted that one-third of western European companies in the global MSCI index have “meaningful China trade risk exposure driven by larger manufacturing activity”. The coronavirus outbreak has provided a stark illustration of how reliant many companies still are on China. For those that have hesitated, and are resilient enough to survive, it may finally provide the necessary impetus for supply chain diversification.
4. Uncertainty paralysis — investment decisions are increasingly on hold as companies cannot predict what happens next in the trade war. Another broadly negative situation. The World Uncertainty Index, which tracks uncertainty around the globe, shows that the condition is rampant worldwide. The measure, based on the frequency of the word “uncertain” in Economist Intelligence Unit reports for over 140 countries, spiked in the fourth quarter of 2019. As usual in such an environment, companies are trying to do as little as possible. In May 2019, one-third of respondents to an AmCham China survey said that they had delayed or cancelled their investment decisions, more than in a similar survey taken the year before. The September 2019 EUCham survey also noted that there was a strikingly high level of paralysis: nearly two-thirds of respondents said that they had left their strategies unchanged but were “monitoring the situation”. Compared to a previous questionnaire in January, a higher proportion were taking steps to adapt to the trade war — partly accounted for by the 15 per cent who said they had delayed investment and expansion decisions. Uncertainty surrounding US policy does not help. During the Future Forum panel discussion, the FT’s Martin Wolf noted that even the Americans don’t seem to have decided what they want. Mr Wolf said that the phase one trade deal came “in the context of America going through a massive rethink in its relations with China, and it hasn’t made its mind up yet”. Worse, the deal itself is not fixed, given that it allows Mr Trump to retaliate if he does not like the way the Chinese implement the agreed terms.
5. The phase one trade deal — this has secured some gains for EU and British companies. Laws which focus on fairer treatment of foreigners, open up some of the financial sector to foreign investment and put in place protections for intellectual property are good for Britain’s financial sector, and both EU and British creative and design industries. The US has been vocal about its commercial losses due to China’s “economic aggression”. The White House has estimated that intellectual property theft costs the US between $225bn and $600bn a year. No wonder then that it has been pushing China to address the issue. The phase one deal extracted concessions on the treatment of foreign interests in China. Forced technology transfers have been outlawed, ownership limits on pension management and life insurance enterprises have been relaxed. Britain, in particular, still thrashing out the terms of its departure from the EU, should welcome the opportunities this presents — assuming that China enforces the new laws. The long term view The conflict between the US and China is not simply economic — it has political, cultural and military dimensions. For these reasons it is unpredictable and is unlikely to dissipate any time soon. The greatest risk over the longer term is that the US and China split into two spheres of influence, one servicing the US and abiding by its standards — from technology to governance — and another centred around China. As the charts tracking the change in trade dependency shows, the likelihood is that China’s sphere will be larger and incorporate the lion’s share of global growth potential. Will those caught in the middle, including companies in the EU and Britain, be able to operate in both? 1. Manufacturing capacity shifts — this is tougher and involves even more cost than moving sourcing, requiring new factories and workers. Even if they are able to relocate facilities, it is not a given that companies would be able to use their non-Chinese Asian capacity to service the US sphere, should two distinct trading blocs develop. Localising operations in each of the US and Chinese spheres also may not solve the problem due to conflicting laws, loss of control or property and difficulties in repatriating profits. In December 2018, Paul Maidment, adviser to Oxford Analytica, noted in the Harvard Business Review that companies were starting to move their production facilities. Now, he says, if you want to find a textile or factory worker in Vietnam, “bad luck”. Capacity in this first choice for relocation is already constrained. An executive from an Asian sourcing company agrees that the easy wins have already been achieved: “Buckets, plastic pots and so on are hard to move because injection moulding equipment is not easily relocated.” As for textile factories, even Vietnam still needs to import the fabric from China, since it does not have the necessary mills. This only superficially circumvents country of origin issues and arguably does not meaningfully reduce reliance on China. Meanwhile, China is being more strategic about which parts of the supply chain it gives up. AmCham points out that companies in Shenzhen, which have tended to dominate production of technology outsourced from the US, may farm out lower-end assembly to neighbouring countries while holding on to higher value processes. And, as with Vietnam and textiles, China provides many of the components required by the end-product. It is striking that Vietnam has overtaken Germany as China’s fifth largest export partner. The chances of such production capacity returning to the west, certainly in the near term, are slim. Mr Maidment points to comments from Tim Cook, chief executive of Apple, that production engineers in China could fill several football fields, but barely a room in the US. On the upside, moving production to new countries could both put producers nearer to fast-growing markets and help to develop more backward economies, even if this is some way off. “Thailand is well established for outsourced manufacturing. But Laos or Cambodia? The regulations and legal infrastructure, human capital . . . not there”, Mr Maidment observes. Nonetheless, Mr Shepperson notes that given the longer term risk of a decoupling of the US and China, “it is critical that commercial counterparties retain optionality” and have strategies in place to cope with future change. 2. Technology divorce — makers of technology products in the US and China are increasingly barred from using each other’s products on “national security” grounds. China plans to rip foreign technology out of state offices by 2023. The US has barred government agencies from buying equipment from certain Chinese suppliers including Huawei and Hikvision. The UK has already fallen foul of the US for allowing Huawei a limited role in its 5G rollout. The ban has been bad for vendors of US technology into China, but has also left the EU and Britain, and their companies, in a tricky position — as illustrated by the diplomatic fallout from the UK’s Huawei decision. At the very least, US moves to put China behind a firewall are likely to accelerate the latter’s quest to develop its own technology standards. It also makes the self-sufficiency identified as an overarching policy aim in the “Made in China 2025” plan a far more pressing need. The Council on Foreign Relations notes that the plan targets 70 per cent self-sufficiency in high tech industries by 2025 and a dominant position in global markets by 2049, through methods including use of subsidies, acquisitions and tech transfers. In a 2017 analysis of China’s ambitions, the EU chamber of commerce in China noted that the Chinese press had reported RMB2tn in funds gathered in 2015 to support the effort. Its advice to European companies looking to cope with the challenge includes aligning themselves with China’s long-term goals, continuous innovation, identification of emerging competition by monitoring international mergers and acquisitions and diversification of markets and clients. This may not be easy, but it is imperative for survival. “The existential threat”, says Mr Maidment, is that “China becomes technologically innovative on top of its production and engineering expertise, but the US, while it can still design, cannot recover its lost production and manufacturing skills. Then the west becomes dependent on China rather than China being dependent on the west.” The US’s policies appear to be accelerating this trend. 3. The tech divide cements the economic divide into two spheres — Dr Yu Jie, senior research fellow on China at Chatham House, noted on the Future Forum panel that China wants to assert what she termed the “discourse of power”, not only developing and acquiring technology but setting standards. She suggested that China might make it a condition of market access that international companies adhere to these standards. Trying to operate across two distinct spheres could become as impossible as using a Betamax cassette in a VHS video player used to be. The Balkanisation of technology systems from hardware to software could exacerbate the difficulties of operating between jurisdictions if electronic communications, for instance, are not standardised. Anyone who has tried to use Google in China has already encountered this challenge. Without a united front, navigating the middle ground between China, whose money is needed for investment, and the US, the traditional ally whose clout is relied on for defence, will be difficult for companies in Europe. This is especially the case for post-Brexit Britain. As already noted, it has clashed with the US over Huawei, although given the existing telecommunications infrastructure, there was no cheap alternative. British companies may pay the price. Many representatives of businesses at the Forum said they felt themselves to be in an invidious position. Conclusion There is an outside chance that China and the US will “re-couple”. The economic damage wreaked by the coronavirus might make the global community pull together. It may also, as commentators including the FT’s Jamil Anderlini have posited, lead to regime change in China. In similar vein, Martin Wolf pointed out on the Forum panel that Robert Lighthizer, the US trade representative, supports a strategy designed to “break open China”, as he did with Japan in the 1980s. He is backed by a vocal lobby in the US, with organisations such as Tariffs Hurt the Heartland publicising the costs of the trade war borne by US consumers. But this position is not shared by Mr Trump, who wants trade rebalanced and may well get re-elected in November, nor by national security hawks, who warn of China’s infiltration into US systems and may hold sway even under a Democratic president. The more likely outcome is that the US ends up being contained by its own efforts to contain China, boxing in its allies along with it.
Source: Financial Times
Textile millers on Friday rejected recommendations made by the National Assembly’s Standing Committee on National Food Security and Research to impose a ban on the import of cotton. Talking to this scribe, All Pakistan Textile Mills Association (APTMA) Group Leader Gohar Ijaz said, “By purposing the ban, it seems that the standing committee wants to halt the production of textile mills, layoff half the workforce and confine the country’s exports to $8.5 billion only.” Ijaz said that around 10 million textile workers across the country were processing and converting cotton bales into textile exports worth $13.5 billion and that they were trying to increase the country’s exports to $25 billion in the next five years. “We need to import cotton if we want our textile industry to thrive, as we only produced around 8.5 million bales this year against the target of 15 million bales,” he said. Agreeing with him, APTMA Punjab Vice-Chairman Aamir Sheikh said against the consumption demand of 15 million bales, the country was expected to produce only 7 million bales in the next year. “We need to import long-staple cotton to produce fine counts, besides importing contamination-free cotton to make high-end fabric,” Sheikh asserted. Naveed Gulzar, a spinning miller from Faisalabad, said that government’s decision to place a ban on cotton import would prove to be ac “deathblow to the textile sector”. “Unfortunately, Pakistan’s cotton crop and production area has been declining for the last decade and no research is being carried out by research institutes regarding new cotton seeds and pesticides that are damaging our cotton crop,” he added. He said the textile sector should be given an opportunity to import better quality cotton at cheaper rates from abroad. “There is a shortage of cotton in the country and we need to import the commodity to run our industries.” Gulzar said the quality of locally produced cotton would improve only if the country competes with its regional competitors. Otherwise, he added, the production area, as well as the quality of the cotton crop, would continue to decline. He maintained that the textile sector was ready to pay cotton cess [per bale] “but with a condition that it should be used only for research purposes”. It is pertinent to mention that in July 2012, the government had increased the rate of cotton cess from Rs20 per bale to Rs50 per bale. But APTMA had gotten stay orders against the decision after noting that the said amount was not being used on the research of cotton and rather it was being used to pay the salaries of officials at the research institutes.
Source: Pakistan Profit
