MARKET WATCH 10 APRIL, 2020

NATIONAL

INTERNATIONAL

Synthetic, rayon cos give ₹1,000 cr to PM Cares, seek sops to boost exports

Unemployment a serious concern in man-made fibre textile segment.

 The man-made fibre textile industry has contributed ₹1,016 crore towards PM Cares Fund and those of chief ministers of various States, besides providing hospital facilities, food and personal protective equipment (PPE). While contributing to the relief fund, the Synthetic and Rayon Textiles Export Promotion Council has sought a special economic package to make up for the huge losses incurred due to the cancellation of orders. Ronak Rughani, Chairman, SRTEPC, said unemployment is a serious concern in the man-made fibre textile segment, which requires policy initiatives to resume production and bring stability after the havoc unleashed by Covid-19. The industry needs special export incentive of 3 per cent on fibre and yarn, 4 per cent on fabric, 5 per cent on made-ups for at least six months or till the impact of the coronavirus subsides and global markets stabilise, he said.

Immediate needs

Madhu Sudhan Bhageria, Chairman and Managing Director, Filatex India, said the immediate requirement is to allow the manufacturing facilities to function with 50 per cent capacity, gradually lift the restrictions, and create an environment for hassle-free export of produce by different departments involved in the system. Ensuring good banking system support by providing moratoriums, enhanced working capital facilities and ensuring all duty refunds from the government would go a long way to ease the life of man-made fibre players, he said. The SRTEPC urged the government to correct the inverted duty structure under GST and include the entire man-made fibre textile value chain such as fibres, yarns, fabrics and made-ups under RoSCTL, MEIS and RoDTEP schemes. It wants the government to extend one-year moratorium till next March 31 for repayment of loans to banks and NBFCs. It also also sought online processing of all documents needed for export shipments besides providing compensation for cancelled export orders.

Bangladesh model

Seeking relief like the one provided by Bangladesh, SRTEPC said the Bangladesh government is transferring three months’ salary directly to employees’ account through banks and the said amount is to be repaid by the companies at 2 per cent interest in 18 instalments in two years. In view of force majeure situation, it said customs should authorise shipping lines to load export containers on the basis of verification of LEO (let export order) against specific shipping bill in the ICEGATE (Indian Customs Electronic Gateway) after CHA (customs house agent) gives required details through e-mail. The period of export payment realisation should be increased, from 270 to 365 days, freight charges should be reduced to the pre-coronavirus level and availability of containers for export shipments should be ensured, it said. Further, all pending dues under export promotion schemes should be released on an urgent basis or soft loan equivalent to the dues extended. Textile companies should be allowed to restructure loans for one year without any additional charges by banks for provisioning and the RBI should relax NPA norms for six months so that no default will be termed as an NPA account, it said.

Source: The Hindu Business Line

Back to top

Goyal assures exporters of release of important export orders stuck for any reason

Calling on exporters to not take support of government ''crutches'', Commerce and Industry Minister Piyush Goyal on Wednesday assured that the ministry will make efforts for release of ''urgent and important'' export orders which are stuck for some reasons. He said the ministry is working aggressively to revitalize exports, and looking for export opportunities to expand. Taking example of IT industry, the minister called upon exporters to not take support of government "crutches".The issues were discussed during a discussion between the minister and various export promotion councils of the country through video conference. The meeting was aimed at assessing the ground situation and problems being faced by exporters in the wake of COVID-19 pandemic and subsequent lockdown. This was the third such meeting since the lockdown in the country. "He assured that efforts will be made to ensure that urgent and important export orders, stuck for any reason, fructify at the earliest. The ministry is working it aggressively so as to get the exports revitalized, looking for export opportunities to expand," the ministry said in a statement. Calling upon exporters to be ready to harness the opportunities in the post-COVID-19 era, Goyal said that improvement in quality, capacity building, and price competitiveness would help in harnessing the potential. Noting that many geographies are becoming a matter of concern, he said that even in these challenging times "we have to keep our priority to keep exports open, so that we don''t lose our export market permanently"."There cannot be a better time for export and manufacturing business to bring about change in their thinking. You can focus on areas of your core competency. We should also look at areas where we are strong but our global share is very small. We can continue to improve on such areas," he added. Further, he said India will ramp up its pharma sector for global needs as "we have a lot of spare pharma products".He said there is a need to bring the economy back on track, without compromising the health of the people. Goyal urged exporters to install Aarogya Setu app on their mobiles and popularize among others and called upon them to contribute towards PM CARES Fund. The meeting was attended by office bearers of FIEO, councils of gem and jewellery, leather, electronics & software, synthetics & rayon, handicrafts, project exports, telecom, textiles, cashew, plastics, sports goods, woollen, oilseeds & produce, silk, engineering exports, services, pharma, chemicals and dyes, forest produce, carpet, allied chemicals. Exporters sought immediate roll out of support measures, adequate cash flow and permission for opening up their factories with 50 per cent of workforce. FIEO President S Saraf said that problems related with cash flow will severely hit exporters. "As part of a support package, the government should give loans to companies to pay wages, salaries, rent and power bills for six months," he said. Export promotion Council for SEZs and EOUs Vice-Chairman Bhuvnesh Seth said countries like the US, UK, Bangladesh, and Sri Lanka have announced packages, and to compete with these countries "we need level playing field and for that we need incentive package".He also demanded that courier services should be included in essential items as huge documents are lying in offices. Sharing similar views, Export Promotion Council for Handicrafts (EPCH) Director General Rakesh Kumar said that liquidity related issues should be addressed immediately. Currently, manufacturing, transportation and trade of essential goods are allowed without any interruption during the lockdown.

Source: Outlook India

Back to top

Commerce and Industry Minister meets the Industry and traders Association;Assures them that the Ministry is working to solve their problems

Ministry of Commerce and Industry today held interaction, through Video conferencing, with various Industry and Trade associations of the country to assess the ground situation and problems being faced by them in the wake of Covid-19 and subsequent lockdown. Union Commerce and Industry & Railways Minister Shri Piyush Goyal, MoS Shri Som Parkash, and officers of the Ministry of Commerce and Industry were present in the meeting. The industry associations appraised the status and progress made in the last few days, since the announcement of the lockdown and similar meetings held since then. They raised the issues of liquidity crunch, orders cancellation, labour scarcity, different interpretation of the central Government’s orders by the state and district authorities, Trucks being stranded, difficulty in getting the spare parts, etc. At the same time, they informed that the situation has improved considerably in last fortnight, so much so that IT industry has been able to cover upto 95% of the ground. They also informed about their CSR activities, best practices and Community kitchens, being undertaken by the industries and traders. Speaking on the occasion, Shri Piyush Goyal said that stress on economy and livelihood has to be protected but saving the lives of the people of the country is of prime importance. The decision on lockdown will be taken at appropriate time, after making due assessment, but gains made during the period can’t be lost, through a hurried approach. He drew their attention to certain states planning extension of the lockdown. Shri Goyal called upon the industry to have a calibrated and rational approach to the problem, by evolving protocols and procedures, which will help them in improving their productivity and efficiency, without compromising on the health security of their employees and other stakeholders. ”I think we should start talking more practical instead of making wish lists.”, he said. Shri Goyal said that the Ministry is already working to solve the logistics and export-import related problems, and is also taking up other concerns of the industry and traders with various ministries. The Minister said that the labour, which had migrated recently, will return after the COVID cases start declining. On the demand of certain participants for early announcement of the relief package for the industry, the Minister said that the feedback received is being forwarded to the Finance Ministry for consideration, which is likely to take a balanced, nuanced approach. Shri Goyal appreciated the humanitarian activities undertaken by the Associations’ members. He called upon the associations to motivate their members and others to download the Aarogya Setu App, which he described as an effective technological tool to fight Covid-19. The meeting was attended by Office bearers of CII, FICCI, ASSOCHAM, ICC, Laghu Udyog Bharati, FISME, NASSCOM, PHD Chamber of Commerce and Industry, SIAM, ACMA, IMTMA, IEEMA, CAIT and FAME.

Source: PIB

Back to top

Industrial production grows to 4.5 percent in February

India's industrial production grew at the fastest pace in seven months at 4.5 per cent during February, mainly on account of uptick in mining and manufacturing activity as well as power generation, official data showed on Thursday. Factory output, as measured in terms of the Index of Industrial Production (IIP), had recorded a growth of 0.2 per cent in February 2019. It had registered a growth of 4.9 per cent in July 2019. The production contracted by 1.4 per cent in August, 4.6 in September and 6.6 per cent in October last year. It grew 2.1 per cent in November and 0.1 per cent in December 2019 and 2.1 per cent in January 2020. Last month, provisional data showed IIP growth of 2 per cent in January, 2020. According to a data by the National Statistical Office (NSO), the manufacturing sector output grew at a rate of 3.2 per cent in February compared to a contraction of 0.3 per cent in the same month a year ago. Electricity generation increased by 8.1 per cent as against a growth of 1.3 per cent in February 2019. Mining sector output surged by 10 per cent compared to a growth of 2.2 per cent earlier. The IIP growth during April- February period of the last fiscal decelerated to 0.9 per cent from 4 per cent expansion in the same period of 2018-19. The data for February showed that production of capital goods, a barometer of investment, shrunk by 9.7 per cent as compared to a contraction of 9.3 per cent in the corresponding month of the previous year. As per use-based classification, primary good registered a growth of 7.4 per cent, intermediate goods 22.4 per cent, and infrastructure/construction goods 0.1 per cent in February 2020 as against the same period a year ago. The consumer durables output fell 6.4 per cent, while non-durables remained flat. In terms of industries, 13 out of 23 industry groups in the manufacturing sector have shown positive growth in February 2020. The industry group 'Manufacture of basic metals' has shown the highest positive growth of 18.2 per cent followed by 8.0 per cent in 'Manufacture of chemicals and chemical products' and in 'Manufacture of other non-metallic mineral products', as per the data. On the other hand, the industry group 'Manufacture of motor vehicles, trailers and semi-trailers' has shown the highest negative growth of (-) 15.6 per cent followed by (-) 14.8 per cent in ‘Manufacture of computer, electronic and optical products', and (-) 9.9 per cent in Manufacture of fabricated metal products, except machinery and equipment.

Source: Economic Times

Back to top

 

Textile associations seek extended moratorium to repay loans

Textile associations have appealed to the government to extend the moratorium for repayment of term loans and support to pay wages. Chairman of Confederation of Indian Textile Industry, T. Rajkumar, said textile and clothing manufacturing units need one year moratorium to repay loans. In the case of interest repayment, the units need at least three months time. The government should also disburse all the pending incentives under its schemes. It should also look at measures to support those who had taken loans in foreign currencies, face delays in LC payments, and those who have gone in for forward contract. Bangladesh has given a special loan package to textile sector. Banks in India should also have a similar package for the sector. Apparel Export Promotion Council chairman A. Sakthivel said China has opened industrial operations and Indian garment exporters need permission to at least start making samples. The units can start operating only with the workers who are staying in hostels. The exporters also need relief under ESI scheme and support to pay wages. The Commerce and Textile ministry officials have been constantly in touch with the stakeholders through video calls, he said.

Source: The Hindu

Back to top

Smriti Irani thanks Fashion Design Council of India for setting up Covid-19 fund

Smriti Irani expressed her gratitude to the Fashion Design Council of India for setting up a Covid-19 fund to help designers and craftsmen in challenging times. The Fashion Design Council of India has started a support fund to provide financial assistance to small businesses and young designers in need amid the novel coronavirus pandemic. The Covid-19 Support Fund is an initiative by the council to aid individuals and craftspersons among others in these difficult times. FDCI chairman Sunil Sethi said in a statement on the council's official website, "Unfortunately, not everyone is left with ample reserves to wade through this period of crisis. Smaller businesses (with tremendous potential) are run like a one-person-army; one individual taking care of a team of craftsmen, playing the role of a manufacturer, sales person, accountant, promoting and providing for his/her little family and bursting with ideas. A lot of them are not in a position (or have the luxury of time) to process formal paper-works to seek support from banks/financial institutions." We, as a fraternity, are what we are because of each one of our designers; their passion is our driving force and with a little support we can lend them some strength to spring back on their feet sooner than later," he added. Minister of Textiles, Smriti Irani also expressed her gratitude to FDCI for the initiative through a video message. "The Indian fashion industry is the pride of the Indian textile industry. Today those who weave dreams onto a cloth are weaving together a support group. My gratitude to the Fashion Design Council of India, ably led by Sunil Sethi, for coming up with a COVID-19 fund," she said. "I'm hopeful that the fund which will come together with the assistance of designers, design houses and other organisations affiliated to them will help us tide through these challenging times," Irani said. "My belief is together we can and we will meet all these challenges head on. As the minister of textiles, I can only say this that you will find us standing shoulder-to-shoulder through your challenges so that together we can work towards a solution," the minister added.

Source: India Today

Back to top

Can't miss peak April-June season due to coronavirus: Exporters to Centre

National-level exporters' bodies representing engineering goods, apparel, and electronics, among others, have written to the commerce department over the past two days. Industry bodies have unanimously cautioned against extending the lockdown owing to coronavirus, arguing that without adequate relief, exports will exponentially accumulate losses and cede market share to others. National-level exporters’ bodies representing engineering goods, apparel, and electronics, among others, have written to the commerce department over the past two days. They stressed manufacturing units needed to be quickly reopened so that the crucial April-June export season could be taken advantage of, sources said. “At a time when China is restarting factories and is eager to clear excess inventories, Indian exports need to be able to fulfil foreign orders that haven’t yet been cancelled or postponed,” said a senior functionary of the Confederation of Indian Industry (CII). The industry body has supported creating and maintaining quarantined zones in key industrial areas and special economic zones to keep manufacturing going. “This is the peak time for global trade and whereas domestic markets do have some protection, the world markets are open for domination by other countries. India cannot lose out on that,” said Engineering Export Promotion Council (EEPC) India Chairman Ravi Sehgal. Engineering products account for 25 per cent of India’s merchandise exports. Of the top 25 markets, accounting for over 75 per cent of Indian engineering exports, most of the major destinations are in a state of lockdown or stringent restrictions, the EEPC India has pointed out. These include the top three destinations — the US, the UAE, and Germany — apart from the UK, Bangladesh, Mexico, and Singapore, the body said. “March shipments have all been disrupted. Buyers overseas can be convinced and held back for a month or so but not beyond that. In case India is out of production for the world market this month, it will be out of the overseas buyer’s plans for the whole of 2020,” Sehgal added. “We expect contraction in March. With major economies continuing to see sharp rise in corona cases, the cumulative fall in demand would spill over into April, causing a bigger contraction,” said Ajay Sahai, director general of the Federation of Indian Export Organisations (FIEO). According to the FIEO, more than 30 per cent of the export orders are stuck.

Few financing options

According to ratings agency ICRA, apparel exports are witnessing significant turbulence and vast shipments set to hit European and US markets for the ongoing Spring-Summer Season 2020 are likely to suffer a major setback. Overall, the industry is facing a major liquidity squeeze with few financing options left and dues from buyers accumulating. To reduce the cost of imports, Confederation of Indian Textiles Industry Chairman T Rajkumar has suggested all raw materials, dyes and chemicals, intermediaries, spares, and accessories be exempted from anti-dumping duty and basic customs duty. In a letter to Prime Minister Narendra Modi, Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said the industry, employing 12.9 million, would face a disaster if the government immediately did not announce a targeted economic package. “Apparel exports are a seasonal industry and the products are similar to perishable commodities because they are tailor-made, design-specific, fashion-specific exports and any cancellation this year may have little or no salvage value next year,” he added. According to industry estimates, about 70 per cent of the apparel units are in the micro, small, and medium sector. Labour costs form the single-largest component of the product cost at a typical 25-30 per cent, against the norm of 7-8 per cent for overall domestic industry.

Orders cancelled

The Electronic Industries Association of India has also said India’s hard-fought competency in global trade would be at stake if exports are not able to leave factory gates. “With the help of comprehensive government support, hardware and component manufacturing had slowly gone up over the past three years. It is no secret that Chinese suppliers are waiting to cut Indian players out as soon as they get the chance to do so,” said a senior functionary. It has been reported that relatively small sectors that are battling volatility have also not been spared cancellation. These include carpet exports, worth Rs 2,000 crore, being stuck and leather exports, worth Rs 7,600 crore, that have been cancelled. Over 15 per cent of the orders have been held over while almost 55 per cent have been cancelled in the previous two months, said K R Vijayan, chairman, Indian Finished Leather Manufacturers and Exporters Association.

Source: Business Standard

Back to top

Countering Covid-19 crisis: Govt mulls increase in export benefits for garment sector

Garment exports have witnessed a roller-coaster ride in recent years, despite the announcement of a Rs 6,000-crore package in 2016, as the labour-intensive sector was hit by demonetisation and the GST in quick succession. The government is considering a proposal to offer higher incentives to garment and made-up exporters under a scheme that is meant to reimburse them for various state and Central government imposts, as it mulls ways to soften the Covid-19 blows to key employment-intensive industries. The government may raise the incentive level by 2-4 percentage points under the Rebate of State and Central Taxes & Levies (RoSCTL) scheme from the current 4-6% of the freight-on-board value of shipments, depending on the types of garments, a source told FE. “A final decision on this issue will soon be made,” said the source. This will also be in sync with the exporters’ demand that certain embedded taxes are currently not reimbursed under the RoSCTL, and that exports must be zero-rated, in accordance with global best practices. The garments sector has been hit hard due to a massive cancellation of export orders and an exodus of migrant labourers in some states. Exporters in the country’s largest garment hub in Tirupur, which is estimated to have shipped out apparel worth Rs 26,000 crore in FY20, have already warned of a 50-60% slide in FY21. Since 80% of the garment exporters are MSMEs, with very limited resources, the sector is reeling under an unprecedented liquidity crisis. Many units will have to be shut, leading to massive job losses, if the government doesn’t step in swiftly with some succour, exporters say. In such a scenario, global orders will increasingly go to new competitors like Vietnam, Cambodia, Bangladesh and Poland, etc, they warn. The Cabinet has already approved the extension of the RoSCTL for garment and made-up exports beyond March 31 until a proposed, and more WTO-compatible, scheme — Remission of Duties and Taxes on Exported Products (RoDTEP) — is implemented. However, in case, the new scheme is implemented later this fiscal, the higher benefits under the RoSCTL will likely continue. As such, the pandemic has only accentuated a slowdown in the outbound shipments of textiles and garments, which, in turn, aided a 1.5% year-on-year contraction in overall exports to $293 billion in the April-February period. The fall in garments exports would be sharper in March, as the pandemic spread and led to the lockdown. Garment exports have witnessed a roller-coaster ride in recent years, despite the announcement of a Rs 6,000-crore package in 2016, as the labour-intensive sector was hit by demonetisation and the GST in quick succession. In the April-January period of this fiscal, while exports of cotton garments rose just 4.4% year-on-year, those of man-made fibres dropped by 3.9%.

Source: Financial Express

Back to top

To help small firms, India seen unveiling second coronavirus stimulus worth $13 billion

A second stimulus package India is poised to announce in coming days will be worth around Rs 1 lakh crore ($13 billion) and focus on help for small and medium businesses weathering the coronavirus outbreak, two senior officials said on Wednesday. Last month, India outlined a Rs-1.7-lakh-crore($22.6-billion) economic stimulus plan providing direct cash transfers and food security measures to give relief to millions of poor hit by an ongoing 21-day nationwide lockdown. "The second package could be focused largely on MSMEs," one of the senior government officials, with direct knowledge of the plan told Reuters, using an acronym for micro, small and medium enterprises. The official said a separate package could be announced for bigger companies after assessing the extent of the hit they have faced due to the lockdown imposed to fight the outbreak. Small businesses account for nearly one-quarter of India's $2.9 trillion economy and employ more than 500 million workers, according to government estimates. India has so far recorded 5274 cases of the coronavirus, which has also killed 149 people in the country. The country is now considering narrowing its lockdown to coronavirus hotspots after the nationwide lockdown ends on April 14. Indian media have been speculating that the government would soon announce more relief to help the struggling economy. The new package aimed at MSMEs could include increases in the limits of bank loans for working capital needs, hiking threshold limits for availing tax exemptions and relaxing rules for deposits of income tax and other dues, the sources said. A finance ministry spokesman declined to comment. The second government source said that the government was also planning to partially clear tax refunds owed to small businesses within one month to provide some immediate relief. The Indian government on Wednesday said it will also release Rs 18,000 crores in tax refunds to small businesses and individuals immediately and impose expenditure curbs on a host of departments for the April-June period. K.E. Raghunathan, former president of All India Manufacturers Association (AIMO), said the government should also clear long-pending dues for the sale of their products to federal and state governments, as well as state-run firms. Federal and state governments and state-owned companies owe more than $66 billion to small businesses, the government told parliament last month. "We do not know how long we will be able to survive if our dues are not cleared," said Raghunathan, a small-time manufacturer of solar parts in the Southern Indian city of Chennai. Hundreds of thousands of cash-starved Indian small businesses have either deferred or cut their workers' wages this month while trade union leaders said more than five million workers, mainly on contract, have suffered wage losses. Industry body AIMO, which represents some 100,000 small manufacturers, has said more than two-thirds of its members faced problems in paying salaries.

Source: Economic Times

Back to top

Coronavirus lockdown: Textile industry stares at Rs 12,000 crore loss

While the Covid-19 pandemic has completely halted production and new orders, exporters say that payments have also been delayed for the shipments sent before the lockdown. The busy roads of Tirupur, one of the largest textile hubs in the country, look deserted. Gone is the hum of the 10,000 factories — mainly small and medium enterprises — where over 600,000 people worked. The city used to do around Rs 25,000 crore worth of exports and around the same amount in the domestic market. Now the town expects a Rs 10,000-12,000 crore loss in just three months. Tirupur’s fate has been replicated across other major textile hubs ever since the lockdown was announced. The textile industry, the second largest employer after agriculture, may lose 25 per cent of its jobs. Around 129 lakh people’s livelihoods depend on the industry and nearly 70 per cent of them are women. While the Covid-19 pandemic has completely halted production and new orders, exporters say that payments have also been delayed for the shipments sent before the lockdown. Exporters say some customers are not taking delivery of the shipments because they have shut shop. Ready-made garment players had been hoping for a revival in demand in China but with the virus spreading to Europe, the US and other major markets, there are no orders coming from the major retailers. It’s true that the government has extended the rebate on state and centre taxes from 1 April to boost the liquidity and competitiveness of these players but this will not help many buyers who are going bankrupt because the lockdown and concomitant closure of stores has resulted in a fall in exports. For FY20, the margins are likely to be impacted by 120-150bp and credit metrics to moderate with pressure on liquidity and higher working capital utilisations, according to India Ratings and Research. The agency assumes that India’s exports — already reduced by more than 40 per cent till January 2020 owing to the US-China trade war —will be substantially hit till H1FY21. The agency assumes Ebitda will drop at least 15 per cent in FY21 across its textile portfolio. The home textile industry has seen shipments being held up and faces bleak uncertainty about operations being resumed in the short term. A handful of larger players have sufficient liquidity to manage the tough times but if the impact of the coronavirus is larger or longer than expected, the outcome will be grim for the smaller companies. With malls and shopping centres closed, movement restricted, and mass transport unavailable, domestic sales have withered. India exported $16.2 billion worth of garments in 2018-19. The apparel sector accounts for 43 per cent of India’s textiles exports in value terms and for 5 per cent of overall exports.From manufacturing through to retail, the garment industry employs close to 25 million people. If the current situation continues beyond a month from now, nearly a quarter of the jobs in the industry will be lost, according to the Clothing Manufacturers’ Association of India (CMAI). Recovery, the CMAI predicts, will take at least 10 months to a year. Without government support, it adds, the industry cannot survive this unprecedented crisis. Bhilwara in Rajasthan was known as a centre for pv suitings and dyed yarn worth Rs 25,000 crore. Now it is known as a coronavirus hot spot. S N Modani, chairman, Rajasthan Textile Mills Association and managing director, Sangam in Bhilwara, said the textile industry in the town is worth around Rs 35,000 crore, including exports. Since the night of March 21, Bhilwara has been locked down. If the industry can resume operations after April 14 when the lockdown is scheduled to be lifted, a 15-20 per cent annual basis loss is expected on the topline. The bottomline will be even worse because of fixed expenses. If the lockdown is extended, the losses will rise as vertically as the virus curve. Exports from Rajasthan total around Rs 10,000 crore. With no clearance from the ports, borders sealed and customers cancelling orders, 25 per cent of business has already been lost.“European buyers, particularly from Italy and Spain, have already asked our members not to export garments to them and wait for a minimum of one or two months till the situation improves and shops are reopened. Some buyers are cancelling orders outright,” said Tirupur Exporters’ Association President Raja M Shanmugham. He said that small and medium enterprises will not be able to repay bank loans. “We apprehend that due to non-clearance of dues, the banks may classify such units as non-performing assets as per BASEL norms,” said Shanmugham. Even those who manage to resume operations will have to face having to pay 30 per cent more for dyes and chemicals which will impact their cost of production. Some in the industry are pinning their hopes on demand reviving once the virus settles down. Others are focused on getting financial support from the government along the lines offered by many developed countries hoping to limit the damage caused by Covid-19’s disruption of economic activity. The CMAI has asked the government to consider postponing income tax, advance tax, and GST, give a minimum 180-day moratorium on repayment of all bank loans, and provide a disbursement of 25 per cent additional working capital loans on zero interest to tide over the current liquidity shortfall. It has also asked for a wage subsidy to avoid job losses, the creation of a special Factor Fund for small and medium companies to discount their bills immediately, urged that banks should not treat a failure to repay loans as a non-performing asset, and provide a one year moratorium on repayment so that smaller players can avoid going under. It is only such a package, says the CMAI, that will allow the industry to see the other side of the lockdown.

Source: Business Standard

Back to top

Global Textile Raw Material Price 10-04-2020

Item

Price

Unit

Fluctuation

Date

PSF

829.12

USD/Ton

12.50%

10-04-2020

VSF

1289.74

USD/Ton

0%

10-04-2020

ASF

1767.37

USD/Ton

0%

10-04-2020

Polyester    POY

740.54

USD/Ton

0%

10-04-2020

Nylon    FDY

1757.45

USD/Ton

0%

10-04-2020

40D    Spandex

4039.31

USD/Ton

0%

10-04-2020

Nylon    POY

2083.43

USD/Ton

0%

10-04-2020

Acrylic    Top 3D

5215.66

USD/Ton

0%

10-04-2020

Polyester    FDY

992.11

USD/Ton

0%

10-04-2020

Nylon    DTY

1672.41

USD/Ton

0%

10-04-2020

Viscose    Long Filament

2182.64

USD/Ton

0%

10-04-2020

Polyester    DTY

907.07

USD/Ton

0%

10-04-2020

30S    Spun Rayon Yarn

1863.75

USD/Ton

0%

10-04-2020

32S    Polyester Yarn

1417.30

USD/Ton

0%

10-04-2020

45S    T/C Yarn

2225.16

USD/Ton

0%

10-04-2020

40S    Rayon Yarn

1615.72

USD/Ton

0.88%

10-04-2020

T/R    Yarn 65/35 32S

2069.26

USD/Ton

0%

10-04-2020

45S    Polyester Yarn

2012.57

USD/Ton

-0.70%

10-04-2020

T/C    Yarn 65/35 32S

1757.45

USD/Ton

0%

10-04-2020

10S    Denim Fabric

1.19

USD/Meter

0%

10-04-2020

32S    Twill Fabric

0.65

USD/Meter

0%

10-04-2020

40S    Combed Poplin

0.94

USD/Meter

0%

10-04-2020

30S    Rayon Fabric

0.51

USD/Meter

0%

10-04-2020

45S    T/C Fabric

0.65

USD/Meter

0%

10-04-2020

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14173 USD dtd. 10/04/2020). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

Back to top

WTO Warns Apparel Trade to Plummet in 2020

The World Trade Organization said overall global trade could drop between 13 and 32 percent due to the crisis. World trade volume in goods, including apparel and textiles, is forecast to drop between 13 and 32 percent this year due to the coronavirus pandemic, the World Trade Organization said Wednesday. “We project that trade in 2020 will fall steeply in every region of the world and across all sectors of the economy,” said Roberto Azevêdo, WTO director-general. Global trade last year contracted by 0.1 percent.  Asked about the severity of the downturn for apparel, Coleman Nee, senior WTO economist, told WWD, “Our forecast required assumptions about the impact of the virus that imply a difficult time for the clothing sector, including a 20 percent decline in retail trade for three to nine months. “This is better than tourism and recreation, which is expected to fall 80 percent, but it is still quite a hit,” he said. In view of the uncertainty about the pandemic’s duration and economic impact, Azevêdo said, WTO economists developed two plausible scenarios. Under the optimistic scenario, global trade volume is projected to decline 13 percent — with a sharp drop followed by a recovery starting in the second half of 2020. The pessimistic scenario of a 32 percent or more drop assumes a steeper initial decline and a more prolonged and incomplete recovery. Regarding global trade in goods last year, the value fell by 3 percent to $18.88 trillion, with the world’s top exporter, China, registering no growth at $2.49 trillion, followed by the U.S. with a 1 percent contraction to $1.64 trillion and Germany with a 5 percent fall to $1.48 trillion. In apparel, preliminary estimates by WTO economists indicate the value of exports stagnated in 2019, with almost zero growth from the $494 billion notched in 2018. In 2019, WTO data show, China, the world’s biggest apparel exporter, registered a 4 percent decline to $151.5 billion. In the first two months of 2020, China’s exports of apparel (according to customs data) were down around 20 percent year-on-year, the WTO said. Neighboring Vietnam posted a 9 percent increase in 2019 to $30.8 billion, it said. Other emerging economy apparel exporters that posted gains last year included India, up 3 percent to $17.1 billion; Turkey, up 2 percent to $15.8 billion; Cambodia, up 5 percent to $8.5 billion, and Myanmar, up 23 percent to $5 billion. Traditional European apparel-exporting nations that also posted gains, the WTO said, included Italy, which managed a 2 percent increase to $26.3 billion; Germany, up 2 percent to $25.2 billion; Spain, up also 2 percent to $15.4 billion, and France, up 1 percent to $13.5 billion. In 2019, apparel exporters that posted declines included the United Kingdom, with a drop of 11 percent to $9 billion; Indonesia, down 4 percent to $8.6 billion, and the U.S., with shipments declining 1 percent to $5.9 billion.

Source: WWD

Back to top

Pakistan: Businessmen call for revised strategy during lockdown

Business leaders representing different sectors of economy, and while supporting federal and provincial governments’ efforts to contain the spread of Covid-19 pandemic, have called for drafting a revised strategy for lockdown, and allowing limited and well-monitored industrial and trade activities. That would provide space for continuing sources of livelihood for workers and averting loss of exports, they said. Mismanaged and unsystematic lockdown in Karachi may lead to starvation of a big number of industrial workers as industrialists would not be able to further support their workers without industrial and trade activity, the business leaders said. Responding to queries of APP, they underlined the need for utilising funds collected by the Sindh Employees Social Security Institution (SESSI), Employees Old-Age Benefits Institution (EOBI) and Workers Welfare Fund in order to support registered workers in the difficult situation facing the country. They emphasised that the industrialists and exporters would abide by all safety measures recommended by the World Health Organisation (WHO) to control the spread of Covid-19 and would implement the Standard Operating Procedure (SOP) being devised by the Sindh government for industries and other businesses. They claimed that the Sindh government was taking Covid-19-related decisions on its own without taking input of the industrial and trade community, which created serious economic problems including the threat to sustainability of workers’ livelihood and cancellation of export orders due to delay in shipment of goods. “After cancelling their orders, foreign buyers will shift to other countries. And, it will take a lot of time for Pakistan to recapture the lost export markets and will make a big dent in the economy,” remarked Muhammad Jawed Bilwani, a textile exporter and Chief Coordinator of the Council of Textile Associations of Pakistan. He voiced fear that the country would face a shortfall in export proceeds if shipments did not immediately resume. SITE Association of Industry Patron-in-Chief and Karachi Chamber of Commerce and Industry former president Muhammad Zubair Motiwala alleged that the Sindh government while deciding to go for the lockdown did not take the business community into confidence. “At least, we should have been informed about the lockdown three or four days ago so that we could take certain steps to prevent ourselves from loss to the best possible extent,” he said, adding that due to the sudden lockdown, a big inventory of raw material, especially for wet processing in textile units, and of semi-finished goods vanished. Furthermore, finished goods could not be shipped to the exporters. SITE Association of Industry President Suleman Chawla called for utilising the funds of SESSI, EOBI and Workers Welfare Fund on the industrial workers in a bid to save them from starvation. He pointed out that 16,000 to 17,000 industrial units of Karachi had contributed billions of rupees to SESSI, EOBI and Workers Welfare Fund and the money had piled up in banks. “This is the right time to utilise these funds to support industrial workers,” he remarked. Chawla added that the SITE Association had set up a rapid response team to provide ration and medical facilities for the industrial workers at their doorsteps.

Source: The Tribune

Back to top

Global partners urged to honour terms of RMG purchasing contracts

Bangladesh, along with five other garment manufacturing countries, has urged global brands, retailers and traders to consider all potential impacts on workers and small businesses in supply chains while taking purchasing decisions. Nine textile and garment trade associations of STAR Network (Sustainable Textile of Asian Region) from these garment exporting countries also called on their global partners to honour the terms of purchasing contracts, fulfil obligations, and not re-negotiate prices or payment terms. Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), China National Textile and Apparel Council (CNTAC), Garment Manufacturers Association in Cambodia (GMAC), Myanmar Garment Manufacturers Association (MGMA), Pakistan Hosiery Manufacturers and Exporters Association (PHMA), Pakistan Textile Exporters Association (PTEA), Towel Manufacturers Association of Pakistan (TMA) and Vietnam Textile and Garment Association (VITAS) made the joint statement on Wednesday. They called on the brands to take delivery or shipment and proceed with payment as agreed upon for goods already produced and currently in production with materials ready and not to cancel orders that are already in production. "Responsible business has become more important than ever for the whole world to survive and recover from the crisis," said the joint statement. Especially, responsible purchasing practices of brand companies, retailers and traders of the global textile and apparel supply chains will bring enormous impacts on the fundamental rights of millions of workers and the livelihood of their families on the suppliers' end, the statement reads. "It is time for global businesses to uphold and honour their commitment to labour rights, social responsibility and sustainable supply chains," the trade bodies added. They called for putting no responsibility on suppliers for any delay of delivery or shipment, and for claiming no compensation for any such delay and no further improper pressure on suppliers with additional costs, rushing orders or unnecessary visits and audits. They sought all efforts and engagement with local stakeholders for a better understanding of the local situation and contexts. Underscoring the need for dialogue and collaborative settlement to ensure mutually acceptable solutions to disputes, they sought support for business partners on supply chains as much as possible, and aimed at a long-term strategy of business continuity, supply chain unity and social sustainability. "We appreciate the understanding, collaboration and support of our business partners and other stakeholders, and we are ready to work and walk with all responsible buyers globally to get through this crisis, towards a shared bright future," said the joint statement.

Source: The Financial Express

Back to top

NRF: March retail imports plummet to five-year low

Estimates show that imports at major U.S. retail container ports dropped in March to their lowest level in five years. And as the coronavirus pandemic persists, imports are projected to remain significantly below normal levels through early summer. This is according to the Global Port Tracker report released Tuesday by the National Retail Federation (NRF). “Even as factories in China have begun to get back to work, we are seeing far fewer imports coming into the United States than previously expected,” noted Jonathan Gold, NRF vice president for supply chain and customs policy. “Many stores are closed, and consumer demand has been impacted with millions of Americans out of work. However, there are still many essential items that are badly needed and because of store closures cargo may sit longer than usual and cause other supply chain impacts.” Global Port Tracker, which is produced monthly for NRF by the consulting firm Hackett Associates, covers the U.S. ports of: Los Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Port of Virginia, Charleston, Savannah, Port Everglades, Miami and Jacksonville on the East Coast; and Houston on the Gulf Coast. Together, they handled 1.51 million Twenty-Foot Equivalent Units (TEU). In February, the latest month for which after-the-fact numbers are available. That was down 17% from January and down 6.8% year-over-year. A TEU is one 20-foot-long cargo container or its equivalent. February numbers are normally lower than January because of annual factory shutdowns in China for Lunar New Year celebrations. But the shutdowns lasted longer than usual and continued into March because of the coronavirus outbreak, NRF explained. While actual numbers for March are not yet available, estimates show that imports plunged to 1.27 million TEU, down 21.3% year-over-year and the lowest level seen since 1.21 million TEU in February 2015 during a labor dispute that caused slowdowns at West Coast ports that winter. April is forecast at 1.44 million TEU, down 17.6% year-over-year; May at 1.48 million TEU, down 20.1%; June at 1.41 million TEU, down 21.4%; July at 1.61 million TEU, down 18.2%, and August at 1.72 million TEU, down 12.5%. Before the coronavirus began to affect imports, February through May had been forecast at a total of 6.9 million TEU. That rate is now expected to total 5.7 million TEU, a drop of 17.3%. As recently as last month, monthly numbers had been expected to hit the 2 million TEU mark beginning in May. The last time monthly totals fell below 1.5 million TEU was in February 2017. The first half of 2020 is forecast to total 8.93 million TEU, down 15.1% from the same period last year. Before the extent of the pandemic was known, the first half of the year was forecast at 10.47 million TEU. Imports during 2019 totaled 21.6 million TEU, a 0.8% decrease from 2018 amid the trade war with China but still the second-highest year on record. “The COVID-19 pandemic is unraveling the economy nationally and globally as most of the world moves toward a lockdown that entails the closure of significant portions of both the service and manufacturing industries,” said Ben Hackett, founder of Hackett Associates. “The largest drop is forecast for the first half of this year but with uncertainty about the length of the lockdown and extent of the pandemic, the second half may not be in better shape.”

Source: Home Textiles

Back to top

 

 

 

Subscribe to SRTEPC mailing list

Exchange Rates