NATIONAL

• Granite, textile yarn industries badly hit by Covid-19
• Coronavirus: Tale of dues and cancelled orders for textile units
• China’s factory output shrinks first time in three decades; India gets window to push supply
• Oil slumps below $30 as coronavirus spreads, OPEC rancor remains elevated
• Apparel exporters face a cut in profits

INTERNATIONAL

• Global Textile Raw Material Price 17-03-2020
• Egypt textile exports hit $257M in Jan.
• Pakistan: Enhancement of textile exports urged
• Pakistan: Textile group exports increases 3.68pc in 7 months of FY 2019-20
• Indonesia to relax trade rules to tackle COVID-19 impact

Granite, textile yarn industries badly hit by Covid-19

Suggested keywords: granite, textile yarn, Gem Granites, China, Indian stones, demand, exports, Tamil Nadu, synthetic stones. The granite and textile yarn industries are among those badly hit by the coronavirus outbreak. “Half of our exports go the East, this market is completely gone,” says Rangaswami Veeramani, Chairman of Gem Granites, one of the country’s leading granite exporters. In 2018-19, India exported stones worth ₹5,651 crore, according to the data provided by the Ministry of Commerce. In the first ten months of the current fiscal, the exports of these products amounted to ₹4,465 crore. But now, there is a drastic fall in demand. As for cotton yarn, India exported $1.28 billion worth last year, which, incidentally, was a steep fall from the previous year’s $2.09 billion — the fall was because of the US-China trade war. As much as 40 per cent of the exports go to China, says Hari Thiagarajan, Executive Director, Thiagarajar Mills, Madurai. Veeramani told BusinessLine that China is a big market for Indian stones. In the stones industry, unlike other minerals such as iron ore or coal, each colour or variety is a product by itself and the demand changes fast in consonance with the ‘fashion factor’ abroad. China, he says, is a buyer of several products — Tam Brown, Galaxy, Maple Red — for which there is no demand anywhere else in the world. Roughly 25 lakh people are employed in the Indian granite industry, more than half of them have lost jobs because of the fall in demand. Even in the best of times the granite industry has been buffeted by many problems, biggest among them being the refusal of many State governments to automatically renew mining licences, high royalties, a recent levy called ‘district mineral development fund’ and the system of allocating mines by auctioning despite the fact that the mines are discovered and developed by companies. The absence of guarantee for renewal hampers investments and the auction method of allotting mines kills the initiative to put down money to discover and develop mines. In addition to these, in Tamil Nadu, which has large granite resources, the State government reckons the recovery of granite from the mines at 90 per cent of stone pulled out, though the industry norm is 15 per cent. On top of all this, the industry has been facing competition from ‘synthetic stones’, which are chipping away at its market share.

And then came the crippling coronavirus.

Veeramani pleads for moratorium on interest payments to banks; he wants the RBI to tell banks not to treat non-payment of interest as bad loans, so that banks could continue to lend for working capital — a crucial need of the hour. The yarn industry, on its part, is also asking for a similar moratorium on interest payments and protection from being branded NPA by banks. In addition, it also wants the government to extend the scheme that provides ‘rebate of state and central taxes and levies’ (RoSCTL) to yarn. The benefits of RoSCTL are available to exporters of ready-made garments and made-ups. Thiagarajan, who is also the Chairman of the Tamil Nadu Chapter of the Confederation of Indian Industry, also seeks reduction in import duty on key inputs for the textile industry — chemicals, dyes, resins and non-woven fabric. A big source for these items — China — has dried up, hence this plea. He also requests the Tamil Nadu government to temporarily lower electricity tariffs “by one or two rupees” while the coronavirus threat persists.

Source: The Hindu Business Line

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Coronavirus: Tale of dues and cancelled orders for textile units

TIRUPUR: The impact novel Coronavirus has had on the textile sector has been devastating, say industrialists. Explaining the impact of COVID-19, Tiruppur Exporters’ Association (TEA) President Raja M Shanmugham on Monday said that garment exporters are yet to receive Rs 1,200 crore from European countries due to the spread of the virus. Shanmugam said, “European buyers, particularly from Italy and Spain, have already asked exporters not to ship garments. They have asked that exporters wait for one or two months.” “Some buyers are even cancelling the orders. Further, some are even deferring the payment for the goods that have already been exported.”

Source: New Indian Express

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China’s factory output shrinks first time in three decades; India gets window to push supply

Coronavirus has brought China’s industrial production to a standstill, giving India a window to push its supplies to fill the gap. China’s industrial production unexpectedly contracted by 13.5 per cent in the first two months of 2020. In February alone, industrial output dropped by 26.63 per cent from January, according to data published by the National Bureau of Statistics. This is the first time in the last three decades when the industrial production of China has shrunk. The contraction in the factory output is observed at a time when the street estimated expansion of 1.5 per cent. Due to the Covid-19 pandemic, most of the countries are facing business disruption and travel restrictions. This has severely affected businesses worldwide and since the virus originated in China, the highest impact is also felt by the same country. The production in China fell for all categories including manufacturing by -15.7 per cent; utilities by -7.1 per cent; and mining by -6.5 per cent. Industry-wise, the output dropped for most categories including automotive, general equipment manufacturing, railway, textile, metals, etc.

Source: Financial Express

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Oil slumps below $30 as coronavirus spreads, OPEC rancor remains elevated

Oil prices fell below $30 a barrel on Monday as the worldwide coronavirus outbreak worsened over the weekend, exacerbating fears that government lockdowns to contain the spread of the disease would spark a global recession. Top global oil producers Saudi Arabia and Russia, having failed to agree on a plan to curb supply as the fall in global economic activity destroys oil demand, and have turned on each other to start a price war. Saudi Aramco reiterated on Monday its plans to boost output to record levels to take a bigger share of the global market. Brent crude settled down $3.80, or 11.2%, to $30.05 a barrel. The international benchmark earlier fell to $29.52 a barrel, its lowest since January 2016 US West Texas Intermediate (WTI) crude fell $3.03, or 9.6%, to end at $28.70 a barrel, its lowest since February 2016. Saudi Aramco is likely to sustain higher oil output planned for April in May, Chief Executive Amin Nasser said, signaling the top oil-producing company is prepared to live with low oil prices for a while. The coming flood of supply from Saudi Arabia and other producers could result in the largest surplus of crude in history, said global information provider IHS Markit. The coronavirus outbreak, which has infected at least 174,000 people and killed around 6,700, already has caused oil prices to plummet by 50% since the start of the year. Many forecasters have adjusted down estimates on demand for crude, as the virus disrupts business activity, travel and daily life. With Saudi Arabia and Russia pledging to boost production, IHS Markit estimates that oversupply of oil could come to 800 million to 1.3 billion barrels. The projection is two to three times what existed in late 2015 to early 2016, when the Organization of the Petroleum Exporting Countries pumped more oil to combat the growing U.S. shale industry. The last time that there was a global surplus of this magnitude was never. Prior to this, the largest six-month global surplus this century was 360 million barrels. What is coming will be twice that or more,” said Jim Burkhard, vice president and head of oil markets at IHS Markit. An OPEC and non-OPEC technical meeting planned for Wednesday in Vienna has been called off as attempts to mediate between Saudi Arabia and Russia after the collapse of their supply cut pact made no progress, sources said.

CENTRAL BANK ACTION

Central banks globally took action over the weekend to try to quell the economic fallout of the pandemic, but the measures did little to strengthen stock markets in freefall, as investors anticipate a sharp contraction in demand in coming weeks anyway. The U.S. Federal Reserve on Sunday slashed its key rate to near zero, triggering an unscheduled rate cut by the Reserve Bank of New Zealand to a record low as markets in Asia opened for trading this week. The Bank of Japan later stepped in by easing monetary policy further, while Gulf central banks also cut interest rates. "The price response is understandable, given that lower interest rates and new bond purchasing programmes will do nothing to combat the current weakness of oil demand," Commerzbank analyst Carsten Fritsch said. In China, where the virus began, daily refinery throughputs dropped 4.8% in the first two months of the year, sliding to the lowest level since December 2018, data from the National Bureau of Statistics showed on Monday. Brent's premium to WTI narrowed to less than $1 during Monday's session, falling to its lowest since 2016, making U.S. crude oil uncompetitive in international markets. Numerous U.S. oil companies have swiftly cut back spending, with analysts anticipating consolidation or restructurings as a result of the supply shock. U.S. crude output has grown in recent years to nearly 13 million bpd, making it the world's largest producer. "Some of them (U.S. shale oil companies) may not survive prolonged low oil prices, and in this event U.S. production would decrease. Less crude availability in the U.S. is likely to reduce the WTI discount to Brent," Societe Generale analysts in a note to clients. U.S. President Donald Trump said on Friday that the United States would take advantage of low oil prices and fill the nation's emergency crude oil reserve. The move is aimed to help energy producers struggling from the price plunge. The United States could begin purchasing domestically produced crude oil for the Strategic Petroleum Reserve as soon as two weeks from now, and fill it in several months, an Energy Department source said on Monday. However, the purchases are not seen as likely to offset the drop in demand nor the increase in supply, Energy Aspects said in a note. US oil output growth from the Permian basin is expected to offset declines in every other shale formation in April, helping push overall production up by about 18,000 barrels per day (bpd) to a record 9.08 million bpd, data showed.

Source: Business Standard

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Apparel exporters face a cut in profits

Indian apparel exporters are facing testing times with falling demand globally and operational challenges domestically due to the coronavirus outbreak. Apparel exporters are expected to report a moderate profit this fiscal, with pressures likely to sustain at least in the near term and the turnover growth to be subdued, except for a few larger players with an established client base. The industry is facing challenges such as increased bargaining power of buyers amid intense competition, cost-side pressures emanating from disruptions in procurement of materials and consumables (such as colours, chemicals, accessories/trims, etc) from China and write-backs of export incentives booked previously — all of which are expected to adversely impact profitability.

Fall in US imports

Jayanta Roy, Senior Vice-President and Group Head, Corporate Sector Ratings, ICRA, said in addition to sustained pressures on liquidity owing to delays in clearance of the Government dues, a fall of 100-150 bps in operating profit of Indian apparel exporters is expected this fiscal. This may result in a moderation in debt coverage metrics and the impact will be more pronounced for leveraged and smaller companies, with limited bargaining power with customers, modest liquidity cushion and less financial flexibility to absorb the impact, he said. This apart, demand in key markets has remained subdued with rapid spread of the Covid-19 across regions in the recent weeks. While demand from the EU has remained weak, recent trends in US apparel imports have also been discouraging, corroborated by a 12 per cent fall in apparel imports by the US in Q3 this year and an overall decline of 0.3 per cent in nine months of this fiscal.

Competition from peers

Competition from peer nations is intensifying with increasing penetration of free trade agreements. For instance, Bangladesh has duty-free access to the EU markets under the Everything but Arms scheme, while the EU-Vietnam Free Trade Agreement is in advanced stages of execution. While the exporters factored in the export incentive benefits under the Rebate of State and Central Taxes and Levies (RoSCTL) scheme and the Merchandise Exports from India Scheme (MEIS) for the period March 2019 to December 2019, MEIS was discontinued with retrospective effect from March 2019 onwards. This has necessitated a write-back of export incentives already booked in the orders shipped during the current fiscal, affecting profitability.

Source: Business Line

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Global Textile Raw Material Price 17-03-2020

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14280 USD dtd. 17/03/2020). 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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Egypt textile exports hit $257M in Jan.

Egypt's textile exports witnessed a slight decline estimated at 0.4 percent in January to reach $257 million, down from $258 million in the same month in 2019. In its monthly report, the Textiles, Apparel, and Home Textiles Export Council said the exports of ready-made clothes rose by 1 percent to hit $96.2 million in January, compared to $95.6 million in the same period last year. The US ranked first in terms of importing Egyptian textile products with a percentage of 37.4.

Source: Egypt Today

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Pakistan: Enhancement of textile exports urged

FAISALABAD: Pakistani Ambassador designated to Denmark Ahmad Farooq Monday said Faisalabad should further enhance textile exports to explore new opportunities for the export of frozen vegetables to Denmark. Addressing the business community in Faisalabad Chamber of Commerce & Industry (FCCI), Ahmad Farooq said both the countries could also launch joint ventures for value addition in Agriculture products for the benefit of the two countries. Addressing the business community in Faisalabad Chamber of Commerce & Industry (FCCI), he particularly mentioned huge trade deficit Pakistan was facing for the last many years and said we must focus on enhancing our exports to bridge the widening gap between imports and exports. He said Denmark is very small country, but a rich and developed country. He said Pakistani exports to Denmark are around $ 1.81 million while imports are $100 million. He mentioned the exports of bed linen from Faisalabad to Denmark and said Pakistani products are comparatively cheap and much better in quality as compared to the other rival countries. He said Pakistani bed sheets are widely used in hotels and hospitals and there is still room for further expanding its exports. He said Fuji Foundation has recently started export of frozen vegetables and being an agrarian economy and centrally located city of Pakistan, Faisalabad should also contribute its role in the export of frozen vegetables. He said he will review the potential of Danish market so that our exporters could make arrangements for the exports of frozen vegetables at larger stage. He said there was huge untapped potential to launch joint ventures for technology transfer particularly for the value addition of agriculture products. He also mentioned Sialkot and said this city was also exporting 3 million footballs per annum. He said there was a very small mission of Pakistan in Copenhagen, there is no dedicated Trade Officer and hence he will have to perform dual duties of trade officer as well as Ambassador. He requested the business community to cooperate with him so that he could play his role in enhancing Pakistani exports to Denmark. Regarding Danish investment, he said that there were huge chances of technology transfer and interested exporters must remain in touch with him so that proper step could be taken to enhance our exports. To a question, he said he will review to setup a display centre for Pakistani products in Copenhagen. Regarding value addition and technology transfer, he said Danish development agency is installing a waste water treatment plant in Faisalabad with an estimated cost of 130 million euro. He said the business community of Faisalabad should identify more viable projects for which financial help could be sought from this agency. About image building of Pakistan, he said he will try his optimum best but the business community should also support him in brining the business community of two countries closer to each other. About the possibilities of the export of rice, he assured that he will review the opportunities of export to Denmark so that rice exporters could make proper arrangements of its exports. FCCI president Rana Sikandar Azam said the FCCI is the 3rd largest chamber of Pakistan. He said it is known for its iconic textile sector but other segments of economy are also contributing there due role in the overall exports and uplift of the country. He underlined the need to enhance exports and said in this connection the private sector should work in close liaison with Pakistani diplomats stationed in different countries. He also mentioned the threats of coronavirus and said it will be difficult for fragile economy of Pakistan to bear it. He hoped that the designated ambassador will point out various measures to save Pakistani exports from its negative impacts. He said the FCCI is making serious efforts to enhance Pakistani exports and in this connection six delegations had already visited different countries. He said the FCCI also contemplating to send a trade delegation to Denmark so that our members could personally explore the business opportunities in that country. He also requested Ahmad Farooq to identify the serious and reliable textile importers of Denmark so that Pakistani exporters could have detailed meetings with them. He also offered to organize a “Made in Pakistan Exhibition” in Copenhagen. A documentary on Faisalabad and Faisalabad Chamber of Commerce & Industry also screened while a question-answer session was held that was attended by Shabbir Hussain Chawala, Arif Ehsan Malik, Engineer Ahmad Hassan, Mian Zahid Aslam, Mirza Shafiq, Mian Abdul Waheed, Engineer Babar Shehzad, Dr. Fazal Ullah and Amjad Khawaja. Later, Rana Sikandar presented the FCCI shield and a bilateral trade report on Pakistan & Denmark to Ahmad Farooq while Bilal Waheed Sheikh offered vote of thanks. Dr Sajjad Arshad, Mian Gulzar Ahmad, Haji Abid, Chaudhry Muzammal, Capt Farooq, Mian Nadeem, Mian Tanveer Ahmad, Ismail Soharwardi, Mian Amir, Chaudhry Amanat, Rana Ikram Ullah, Rana Shabbir Hussain and Rana Saeed also attended the meeting.

Source: The PK News

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Pakistan: Textile group exports increases 3.68pc in 7 months of FY 2019-20

ISLAMABAD: Textile exports from the country during first seven months of current financial year grew by 3.68 per cent as compared to exports of the corresponding period last year. During the period from July-January (2019-20), textile worth US $ 8,099,885 million was exported as compared to the exports of US $ 7,812,418 million during same period last year. According to the data released by Pakistan Bureau of Statistics, the exports of raw cotton increased by 9.99 per cent, while about 11,920 metric tons of raw cotton valuing US $15,889 million was exported as compared to the 8,910 metric tons worth US $ 14,446 million last year. Meanwhile, 262,513 metric tons of yarn other than cotton yarn worth US $640.001 million were also exported in first seven months of current financial year as compared to the exports of 241,036 metric tons valuing US $ 635,040 million last year. During the period under review, knitwear exports of the country also recorded positive growth of 6.27 per cent. Knitwear worth US $ 1,832,486 million was exported as compared to the exports of US $ 1,724,361 million last year.

Source: B Recorder

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Indonesia to relax trade rules to tackle COVID-19 impact

Indonesia plans to relax restrictions on importing goods as part of its fiscal measures to tackle the negative economic impact of the COVID-19 coronavirus outbreak, according to finance minister Sri Mulyani Indrawati, who recently said the number of restricted import goods may be reduced by up to half to spur business activity hurt by the pandemic. As many as 749 harmonised system codes are to be scrapped, she was quoted as saying by Indonesian media reports after attending a ministerial meeting. Items include textiles and textile products, ceramics, soybeans, corn, vaccines, health equipment, telecommunication tools and equipment, footwear and food supplements, according to the customs and excise office website. The government will also relax regulations related to the food and drug monitoring agency, the minister said without disclosing details. Coordinating Economic Minister Airlangga Hartarto said the government also plans to integrate the online Indonesia National Single Window system using Inaportnet to make logistical systems more efficient. Manufacturing industries have complained of disruptions to their raw material supply, crippling factories across the country . Twenty to 50 per cent of raw materials for the country’s industries are usually sourced from China, Indonesia’s biggest trading partner. The government is preparing several stimulus packages, including one that would expedite the import process for 500 importers with good reputations and another to reduce logistics costs in ports across the country. The Asian Development Bank (ADB) previously said Indonesia might not be affected severely by the global health emergency, thanks to its minimal exposure to global trade and its wide room to maneuver in monetary policy. Indonesia is heavily dependent on domestic demand, with household consumption growing 4.97 per cent year-on-year in the fourth quarter of 2019 to account for more than 50 per cent of gross domestic product. The government unveiled a $717.87 million fiscal stimulus package to support the tourism industry and boost consumer spending to counter the economic impact of the coronavirus outbreak. At least 34 individuals in Indonesia have tested positive for COVID-19 and one has died.

Source: Fibre2fashion

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