MARKET WATCH 19 MARCH, 2020

NATIONAL

INTERNATIONAL

Surat's diamond and textile units to remain open amid coronavirus, slowdown

At a time when exports and domestic demand have taken a hit due to the coronavirus outbreak, Surat-based diamond and synthetic textile industries will remain open to sustain business. The two sectors in the city together employ 2 million workers in normal business environment. Industry stakeholders say closure of units due to reduced capacity utilisation would not only impact the health of the two industries but would also lead to widespread unemployment. The respective industry associations have therefore decided to keep the units open for the benefit of unit owners and workers, most of whom are migrants from other states such as Odisha, Bihar and Jharkhand. However, adequate precautions will be made to prevent spread of coronavirus. The Surat Diamond Association (SDA) has decided not to shut down units but ensure cleanliness and create awareness about the outbreak during operations. According to Babhubhai Kathiriya, president of SDA, among several decisions taken in a recent meeting of stakeholders, the industry body has decided that units would run between 11 am and 6 pm daily even as diamond traders are discouraged from entering markets outside of trading hours. "All units are required to measure temperature daily, arrange for hand sanitizers and masks for diamond polishing workers and provide basic health check-ups. On the other hand, the association will run an awareness campaign on safety measures to be taken to prevent spread of coronavirus. We will also collaborate with the local civic body and state government," said Kathiriya. The Surat diamond industry's decision has been echoed by the larger industry body, the Gems and Jewellery Export Promotion Council (GJEPC), with regional chairman Dinesh Navadia stating that the decision will not only ensure that workers remain employed but will also help limit the spread of the virus. According to Navadia, with the industry employing over 550,000 diamond workers, closure for even 15 days would result in large scale unemployment. The industry is already operating at less than 40 per cent capacity due to a major decline in export orders following the coronavirus outbreak. "In February alone, exports were down by $860 million on a year-on-year basis," he added. Similarly, the entire textile value chain, right from weaving to processing to trading, has also decided to continue operations despite facing slowdown. "As such, several workers haven't returned from their hometowns after the recent 'holi-dhuleti' holidays. Also, due to the impact on overseas and domestic demand, especially with major centres like Mumbai and Kolkata remaining closed, capacity utilisation has been hit. However, it is important that units remain open to sustain themselves and keep workers engaged," said Ashish Gujarati, president of Pandesara Weavers' Association, a leading powerloom hub in Surat. Industry players like Jitubhai Vakharia, president, South Gujarat Textile Processors' Association (SGTPA), are of the view that shutting down units would make it difficult to keep workers indoors, resulting in more social movement and increasing chances of the virus spread. "At least in textile units, workers are spread out beyond one metre and all safety precautions are being taken. This way, the virus spread can be contained at least for a month even though units are operating at below par capacity," said Vakharia. Employing over 1.5 million workers across the value chain, Surat's textile industry currently churns out 20-25 million metres a day as against a full capacity of 40 million metres.

Source: Business Standard

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Yarn makers sees ray of hope with fresh queries from China

In the overall gloomy situation due to the outbreak of coronavirus, Gujarat-based yarn manufacturers are seeing a ray of hope following fresh inquiries from Chinese importers. Over the past two months, nearly 120 spinning mills across Gujarat have been passing through a tough period in the wake of sluggish international as well as domestic demands, said Bharat Boghara, chairman of Spinners Association of Gujarat (SAG). “Of the total yarn manufactured in Gujarat, over 30% is being exported to different countries. China is one of the biggest buyers of cotton yarns from India. Due to the outbreak of coronavirus, Chinese traders have completely stopped buying from India as well as other countries,” said Boghara, adding that however, since last one week, there has been fresh inquires from Chinese traders. According to him, the price of 30 counts cotton yarn was around Rs 205 per kg a couple of months back, which has come down to almost Rs190 to Rs 195 in the export market. Ishwarbhai Ghelani, board member of SAG, said that not only Chinese inquiries but domestic demand has also spurred slightly, which is encouraging for yarn makers in Gujarat and other parts of the country. Hopefully, in the coming one or two months everything will be normalised as the magnitude of the pandemic has reportedly reduced in China, says Ghelani. As per an estimate, Gujarat’s spinning industry accounts for over Rs30,000 crore and more than 70,000 people are working in the spinning mills across the state.  The spinning industry was bullish following good rain and higher sowing of cotton in Gujarat. As a result, more than 100 lakh bales of crop has been estimated in the current season against the previous year’s 90 lakh bales. Compared to last season’s 23 lakh hectare sowing of cotton, in the current season sowing in Gujarat has gone up to 26 lakh hectare. Gujarat has a lion’s share of 30% in India’s total production of cotton.

Source: Financial Express

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Covid-19 impact: India Inc seeks moratorium on loans, waiver on levies

While the services sector — aviation, hospitality and retail — is the worst hit, manufacturing companies too are faced with stretched working capital cycles as their fixed costs remain even as demand has evaporated.Hit by near lockdown conditions across the country, Corporate India is expected to seek relief from the government. On a conference call on Tuesday, members of the Federation of Indian Chambers of Commerce and Industry (FICCI) decided to request the government for a moratorium on loans and waiver on GST payments. FICCI secretary-general Dilip Chenoy said: “We have inputs from members on different sectors and a lot of working capital is hit due to the lockdown, so we are looking at possibility of banks giving a moratorium or rescheduling loans. There are many levies that hospitality sector has to pay, so in the face of the lockdown we are saying if some of these can be waived for a certain duration.” Senior bankers told FE on Wednesday that they were in touch with their corporate borrowers, who had expressed concerns over a possible liquidity crunch that they could be faced with if the lockdown continued for a few more weeks. Given that almost every industry from metals, retail, aviation, hospitality to auto are going to be hit by the lockdown, India Inc has decided it is time to ask for a relief package from the government. While the services sector — aviation, hospitality and retail — is the worst hit, manufacturing companies too are faced with stretched working capital cycles as their fixed costs remain even as demand has evaporated. Moody’s has downgraded India’s growth forecast for 2020 to 5.3% on downside risks emanating from the spread of Covid-19 cases in the country. Industry, however, believes the cuts to economic growth could be much deeper as demand destruction seen in the last couple of weeks is unprecedented. Companies are also worried about raising capital, given that equity markets are in a freefall as panic stricken global investors have been selling heavily. With equity markets showing no signs of stabilising, some members of FICCI also are in favour of some steps to curb the volatility in the markets. Leading listed companies are in favour of a ban on short-selling. The recent carnage in the markets have also impacted plans of companies looking to raise capital from public markets. For instance, the initial public offering of Burger King, Rossari Biotech and Antony Waste Handling have been deferred. India’s fourth largest airline GoAir was expected to tap the markets to raise Rs 5,000 crore in 2020.

Source: Financial Express

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Corona: Govt allows board meetings via video conferencing till June 30

 “Now these meetings can be held via video conferencing or audio-visual means till June 30 by duly ensuring compliance of rule 3 of the  said rules. Necessary changes in the rules are expected to be notified soon,” the source said. With recent surge in the number of cases of COVID-19 across the globe, it would not be practical for companies to mandate physical presence of board members. In view of the threat of contamination due to the coronavirus outbreak, the Ministry of Corporate Affairs (MCA) has allowed companies to hold meetings of their board of directors through video conferencing till June 2020. An official source said in view of the need to take precautionary measures to check the outbreak of COVID-19, the MCA has in-principle agreed to relax the requirement of holding board meetings with physical presence of directors for approval of the annual financial statements, board’s report, etc.

Source: Financial Express

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Rupee pares gains to close marginally down on forex outflows

MUMBAI: The rupee pared initial gains to close marginally down by 2 paise at 74.26 against the US dollar on Wednesday amid sustained foreign fund outflows and heavy selling in domestic equities. Forex traders said the Indian rupee failed to find a foothold as there are still concerns over the impact of the coronavirus pandemic on the global as well as domestic economy. At the interbank foreign exchange market, the local currency opened higher at 73.98. During the day, it shuttled between a high of 73.92 and a low of 74.42 against the greenback. The domestic unit finally finished at 74.26, down 2 paise over its previous close. "Rupee fell against the US dollar amidst continued meltdown in the equity markets and sustained foreign fund outflows. Dollar showed some strength as investors pursued most liquid currency as concerns about economic shutdowns from the coronavirus continued to dent risk appetite," said Gaurang Somaiyaa, forex & bullion analyst, Motilal Oswal Financial Services. According to provisional market data, foreign investors pulled out Rs 5,085.35 crore on a net basis from capital markets on Wednesday. Somaiyaa further said that "continuous efforts by major central banks to provide liquidity in the system and stabilize the economy is increasing the volatility in the market. We expect the rupee (Spot) to trade in range of 74 and 74.60." Meanwhile, the dollar strengthened by 1 per cent against global peers in spot markets as investors look for safe investments amid growing fears of recession due to coronavirus outbreak. The British pound tanked 1.9 per cent to hit its lowest level since 1985 against the dollar as investors sold UK assets panicked by shutdowns due to the coronavirus outbreak. Crude oil prices also plunged due to energy demand woes. New York's WTI crude tanked 12 per cent to an 18-year low and Brent tumbled 6 per cent. Investor sentiment remained fragile amid concerns over the impact of coronavirus outbreak on the global economy, forex traders said. The number of deaths around the world linked to the new coronavirus has topped 8,000. "Rupee started with the gain of 0.4 per cent per dollar but failed to hold the gains along with domestic equities," said V K Sharma, head PCG & capital markets strategy, HDFC Securities. Sharma further said that rupee managed to cut losses, even after aggressive selling by foreign funds, mainly on back of the RBI's intervention. "The Reserve Bank of India has once again stepped in with interventions targeted at ensuring enough liquidity and stability in financial market, it has announced to conduct open market operation (OMO) of Rs 10,000 crore on March 20," he said. The 10-year government bond yield was at 6.30 per cent. On the domestic equity market front, the 30-share BSE sensex closed 1,709.58 points or 5.59 per cent lower at 28,869.51. On similar lines, the broader NSE Nifty plummeted 498.25 points, or 5.56 per cent, to end at 8,468.80. The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 74.0309 and for rupee/euro at 82.6585. The reference rate for rupee/British pound was fixed at 90.5368 and for rupee/100 Japanese yen at 69.50.

Source: Times of India

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Textile body seeks anti-dumping duty removal on raw material

Hit hard by the deadly pandemic Covid-19, the Confederation of Indian Textile Industry (CITI) has sought measures, including removal of anti-dumping duties and basis customs duties levied on the imports of raw material such as dyes & chemicals, intermediaries, spares and accessories. The industry body has also sought the exemption for cotton yarn and fabrics under RoSCTL, IES & MEIS benefits with immediate effect to prevent job losses of lakhs of people in the handloom, powerloom and spinning sectors. The demands also include extending soft loan equivalent to government dues pending in the books of individual textile units that could be adjusted soon as the government clears the dues (TUF subsidy, RoSCTL, MEIS, GST refund), enhancing IES benefit for all textiles and clothing exports to 5% and reducing the bank interest rate by 3%, CITI said in a press release here. The relief package is urgently required to ensure the survival of the textile and clothing industry that employs over 105 million people and also earn around $40 billion forex, apart from contributing substantial revenue in terms of GST and other taxes. T Rajkumar, chairman, CITI, observed that several countries across the world have extended liberal packages to mitigate the COVID-19 crisis. For instance, Germany has announced a financial package of half trillion euros for companies impacted by the crisis to boost their liquidity. Under this scheme, any German company hit during this crisis can borrow as much as necessary by them for a longer duration with zero interest rate till such time they completely recover; they do not have to pay back. According to him, the demand for the textile products and also the domestic sales have come down to a grinding halt due to the panic situation created by the outbreak of COVID-19 which was first reported in China and which later got spread to EU and the US as well, which are the final destinations for the textile products manufactured in India. CITI chairman further said that understanding the gravity of the pandemic and with a view to control the situation at an early stage, the Union government has issued directions to close all the malls and retail outlets so that people do not further get infected and this decision of the government has resulted in substantial reduction in the sales of the domestic textiles and clothing, he said. CITI chairman said that he has requested the prime minister to immediately announce a relief package to mitigate the crisis being faced by the highly-capital and labour-intensive textile industry which runs on wafer-thin margin.

Source: Financial Express

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Global Textile Raw Material Price 2020-03-19

Item

Price

Unit

Fluctuation

Date

PSF

866.12

USD/Ton

-0.16%

3/19/2020

VSF

1353.93

USD/Ton

-0.31%

3/19/2020

ASF

1998.19

USD/Ton

0%

3/19/2020

Polyester    POY

846.21

USD/Ton

-1.65%

3/19/2020

Nylon    FDY

2019.52

USD/Ton

0%

3/19/2020

40D    Spandex

4081.71

USD/Ton

0%

3/19/2020

Nylon    POY

5333.25

USD/Ton

0%

3/19/2020

Acrylic    Top 3D

1137.76

USD/Ton

-0.62%

3/19/2020

Polyester    FDY

1848.86

USD/Ton

0%

3/19/2020

Nylon    DTY

2175.97

USD/Ton

0%

3/19/2020

Viscose    Long Filament

1016.87

USD/Ton

-0.69%

3/19/2020

Polyester    DTY

2289.74

USD/Ton

0%

3/19/2020

30S    Spun Rayon Yarn

1976.86

USD/Ton

0%

3/19/2020

32S Polyester    Yarn

1571.53

USD/Ton

0%

3/19/2020

45S    T/C Yarn

2346.63

USD/Ton

0%

3/19/2020

40S    Rayon Yarn

2161.74

USD/Ton

0%

3/19/2020

T/R    Yarn 65/35 32S

1891.53

USD/Ton

0%

3/19/2020

45S    Polyester Yarn

1720.86

USD/Ton

0%

3/19/2020

T/C    Yarn 65/35 32S

2204.41

USD/Ton

0%

3/19/2020

10S    Denim Fabric

1.26

USD/Meter

0%

3/19/2020

32S    Twill Fabric

0.68

USD/Meter

0%

3/19/2020

40S    Combed Poplin

0.97

USD/Meter

0%

3/19/2020

30S    Rayon Fabric

0.53

USD/Meter

0%

3/19/2020

45S    T/C Fabric

0.66

USD/Meter

0%

3/19/2020

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14222 USD dtd. 19/03/2020). 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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Peruvian Connection expands into sustainable home décor

New York – Luxury clothing and accessory brand Peruvian Connection is expanding its lifestyle offering this fall to add original print bedding. Designed in-house, the inaugural luxury linens collection features new and archival prints from the brand’s storied history. The Andean weavings and ethnographic textiles of Peru that first inspired Peruvian Connection founder Annie Hurlbut Zander and led her to launch the apparel brand in 1976, continue to tell the brand story in this 15-piece bedding collection. Aside from a passion for apparel, Hurlbut said she has always “had an obsession with old textiles” – and her house is proof of that, as it is filled with antique rugs, tapestries and quilts that she graphically displays on the walls as examples from her extensive collection of Andean weavings. When Peruvian Connection ventured into brick-and-mortar retail in 2008, Hurlbut personally sourced every piece for each of the eight stores. Her mission was to create an authentic context for the brand’s artisan-made apparel collections. Details incorporated into the store interiors included 19th century Peruvian photographs, smoke-stained Victorian wallpaper, vintage cash wraps, and Andean textiles— all reminiscent of the way Hurlbut’s own home has evolved over the years. A launch into lifestyle seemed a natural extension that was further amplified when Hurlbut began looking into the brand’s archive of original prints. Prints developed over the decades for the apparel collections form the basis for the premier bedding collection. “For years I’ve daydreamed about a Peruvian Connection home collection,” said Hurlbut. “When I fall in love with a print, I want to live with it, not just look at it in my closet. Since many of our original prints lend themselves beautifully to home textiles like bedding, tablecloths and napkins—not to mention wallpaper, gift wrap and paper goods—it seemed like an obvious extension for the brand.” A “key inspirational moment” for Hurlbut, she explained, was in the 1980s when she paid a visit to the bedding department of Ralph Lauren’s Madison Avenue flagship store. She said she was “struck by the breathtaking range of patterned sheets and duvets, and the endless possibilities that came with mixing and matching them.” In creating Peruvian Connection’s bedding line, she sought guidance from two former, long-term contributors to the Ralph Lauren Home Collection. The 15-piece bedding collection includes two mixed print sets of cotton sateen sheets and duvets, woven and knit alpaca throws and pillows, printed velvet pillows, a matelassé cotton coverlet with shams. The full program is scheduled to roll out at Peruvian Connection retail stores and online in July.

Source: Home Textiles Today

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‘Made in Turkey’ home textiles sold to 165 countries as exports surge 

Turkish-made home textiles were exported to 165 countries in the first two months, as overseas sales surged, according to Uludağ Exporters' Associations (UİB) data Wednesday. Sales in January and February surged by 5.76% year-on-year to hit nearly $415 million, up from $392.2 million in the same period of 2019. Germany, one of the country’s top export markets, took the lead in sales, seeing an increase of 9.2% from $65.2 million to $71.2 million. Coming in second, the U.S. saw a 17.5% decrease. Having received $43.9 million worth of products in the first two months of last year, the U.S. customers were sent $36.2 million worth of products in the same period of this year. Italy, on the other hand, came in third with a rise of 8.27% from $21.8 million to $23.6 million. Exporters also achieved $20.9 million in exports to the U.K., $18.2 million to France, $14.9 million to Belarus, $14.5 million to Bulgaria, $13.6 million to the Netherlands, $11.5 million to Spain and $11.3 million to Poland. Elsewhere, sales to India in the said period skyrocketed by 350% year-on-year. Exports to the country jumped from $264,000 to $1.2 million in January and February. Ireland received some $616,000 worth of Turkish home textiles, up from last year’s $303,000, a 103% year-on-year increase. The volume of exports to Singapore jumped by 190% from $174,000 to $506,000.

Source: Daily Sabah

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PRGMEA seeks govt’s help for textile industry

Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has appealed to the Prime Minister of Pakistan Imran Khan for immediate steps to support the textile industry as under the current circumstances of global challenge of Coronavirus Pandemic, readymade garments manufacturers and exporters are facing the greater challenge of raw material procurement. Shaikh Shafiq Jhokwala Chairman Central and Amir Amin Kothawala Chairman South Zone has said that massive break down in supply chain of raw material and exports to buyers across the globe is anticipating and it will directly hit Pakistan's textile exports particularly readymade garments. “In this crucial time, being an effective business community of Pakistan, readymade garment and textile sector are standing with the government, however, severe liquidity issue needs a prompt support from the government", they added. They emphasized for issuance of all outstanding refund payment of textile exporters pending with Sales Tax, Custom Duty Drawback, Income Tax, Income Tax Credit (Under Section 65B&E) regime along with textile policy incentives such as Duty Drawback of Taxes, Technology Up-gradation Fund (TUF) and mark-up support subsidy to run the industries. Moreover, State Bank of Pakistan and Federal Board of Revenue (FBR) should accept all the time barred cases of DLTL cases and immediately release the funds to the exporters. They have requested the ministry of finance to immediate issue directives to SBP and FBR in this regard. This will support the exporters to carry out the production and keep the momentum of exports in this difficult prevailing situation. Otherwise, the crisis may lead towards a huge unemployment level may increase due to the liquidity issue, they warned. They said that recent reduction of 75 basis points in key policy rate is not supportive therefore there is need to further cut the interest rate. The recent rate cut only a joke to deal with economic crisis, it should be bringing towards the single digit, they added.

Source: Brecorder

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Pakistan: Textile exports increase by 5.30pc FY 2019-20

ISLAMABAD: Textile exports of the country during first eight months of current financial year (2019-20) grew by 5.30 per cent as compared to the corresponding period of last year. During the period from July- February 2019-20, textile products worth US $  9,373,400 million were exported against US $ 8,901,495 million during the same period of last year. According to the data released by Pakistan Bureau of Statistics, the exports of raw cotton increased by 9.94 per cent to about 9,392 metric tons valuing  US $16,801 million during the period under review as compared to 34.38  metric tons worth US $ 15,282  million last year. Similarly, 283,860 metric tons yarn other than the cotton yarn worth US $737,418 million was exported during the first eight months of current financial year against 6.70 metric tons valuing US $ 743,799 million last year. Likewise, the knitwear exports also recorded positive growth of 7.79 per cent during the period under review. Knitwear products worth US $ 2,090,275 million were exported as compared to US $ 1,939,134   million last year.

Source: B Recorder

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