The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 4 FEB, 2015

NATIONAL

INTERNATIONAL

INTERNATIONAL TEXTILE RAW MATERIAL PRICES 2/3/2015

Textile Raw Material Price 2015-02-03

Item

Price

Unit

Fluctuation Compared to previous Day

Date

PSF

7000

RMB/Ton

0.86%

2/3/2015

VSF

11280

RMB/Ton

0.00%

2/3/2015

ASF

15975

RMB/Ton

0.00%

2/3/2015

Polyester POY

7200

RMB/Ton

0.00%

2/3/2015

Nylon FDY

18300

RMB/Ton

-1.08%

2/3/2015

40D Spandex

46000

RMB/Ton

0.00%

2/3/2015

Nylon DTY

20200

RMB/Ton

-0.49%

2/3/2015

Viscose Long Filament

35200

RMB/Ton

0.00%

2/3/2015

Polyester DTY

8900

RMB/Ton

0.00%

2/3/2015

Nylon POY

16500

RMB/Ton

-0.60%

2/3/2015

Acrylic Top 3D

16900

RMB/Ton

0.00%

2/3/2015

Polyester FDY

8550

RMB/Ton

0.00%

2/3/2015

30S Spun Rayon Yarn

15600

RMB/Ton

0.00%

2/3/2015

32S Polyester Yarn

11300

RMB/Ton

0.00%

2/3/2015

45S T/C Yarn

17700

RMB/Ton

0.00%

2/3/2015

45S Polyester Yarn

12300

RMB/Ton

0.00%

2/3/2015

T/C Yarn 65/35 32S

15300

RMB/Ton

0.00%

2/3/2015

40S Rayon Yarn

16600

RMB/Ton

0.00%

2/3/2015

T/R Yarn 65/35 32S

16000

RMB/Ton

0.00%

2/3/2015

10S Denim Fabric

9.75

RMB/Meter

0.00%

2/3/2015

32S Twill Fabric

6.12

RMB/Meter

0.00%

2/3/2015

40S Combed Poplin

8.3

RMB/Meter

0.00%

2/3/2015

30S Rayon Fabric

4.46

RMB/Meter

0.00%

42038

45S T/C Fabric

4.84

RMB/Meter

0.00%

42038

SOURCE: Global Textiles

Note: The above prices are Chinese Price (1US$=0.16180 CNY dtd. 02/03/2015)

New draft textile policy of Maharashtra proposes to improve efficiency like China

The Suresh Halwankar Committee formed to review the existing textile policy of Maharashtra taking into consideration that India are losing out the market to China mainly because it takes nine months for Indian cotton to become a garment. While in China, it takes just two months because of full-fledged textile hubs and hence recommended establishment of mega-textile hubs spread over 1,000 hectares as against allowing garment factories to come up in a scattered manner.

Halwankar Committee suggested setting up of mega composite hubs which will offer spinning, weaving, processing, designing and garmenting units to cut down on cost and time. The area should have common effluent treatment plants and water recycling plants to minimise damage to the environment. It policy also seeks to reduce power tariff for the sector. The draft of the new policy which was submitted to chief minister Devendra Fadnavis on January 30 talks of adopting a 'Fibre to Fashion' approach to turn around the textile sector, which was once blooming in the state. The draft policy will now be sent to the cabinet for approval.

It has recommended disinvestment of sick cooperative mills and development of five mega-textile hubs, while stressing the need for foreign direct investment (FDI) to take global players head on. Amravati must be developed as spinning, Nagpur as knitting, Solapur teri-towel and Ichalkaranji for suiting-shirting-denim mega composite textile hubs with complete set-up of related facilities including world-class designing and skill development centres. Three process parks at Ichalkaranji-Solapur-Malegaon is must, outlines the proposed policy which is drafted in accordance with the central government's vision, strategy and action plan for Indian Textile sector 2020-2025" and after studying policies of eight states.

At present, over 30 lakh people are directly employed by the garment industry and its ancillary units provide jobs to about 2 crore people. This makes the sector second only agriculture in terms employment generation. Maharashtra is India's second largest cotton producer – 81 lakh bales from over 38.7 hectare. Of this, only 25 lakh bales are consumed by the spinning mills in the state. According to the Committee's report, Maharashtra will need over 50 lakh spindles to utilize all the cotton grown in the state. To achieve this, the sector will need an investment of about Rs50,000 crore. Since the state earns over Rs1,000 crore revenue from selling yarn worth 40,000 crore, increasing spinning capacity would help generating more revenue.

SOURCE: YarnsandFibers

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Cotton cultivation in next kharif may dip 15% if prices remain low

After witnessing a year of record production, cultivation of cotton in 2015-16 is projected to fall 20 per cent in India. According to cotton traders and mill owners, on the one hand, while global demand for cotton and cotton yarn dropped in recent months, cotton prices also fell owing to lack of good quality cotton in the market.

Arun Dalal, a leading cotton trader and exporter, estimated that low prices and lower demand may discourage farmers leading to reduced cotton cultivation in 2015-16 by 15-20 per cent. “Prices fell due to several reasons, including oversupply and reduced demand. Add to that, prices also fell due to non-availability of good quality cotton. This has discouraged farmers heavily. If the situation remains more or less the same till April, cotton cultivation for 2015-16 in India could fall by 15-20 per cent,” said Dalal. In 2014-15, cotton area was in around 13 million hectares in India for 2014-15, about 1.5 million hectares higher than previous year.

Global factors like decline in cotton yarn exports and overall global demand for cotton being low, cotton prices took a hit globally. From an average 90 cents per pound, cotton prices globally ranged between 50 cents and 60 cents per pound in some cases. “China also stopped importing cotton that impacted global cotton markets. Also, demand from mills also came down drastically due to reduced exports. All these factors led to fall in cotton prices. If prices do not improve much or global as well as domestic markets do not improve, then there could be fall in cotton cultivation by at least 10 per cent,” said K Selvaraju of South Indian Mills Association. This year, cotton yarn exports too have come down, from 140 million kg last year to about 100 million kg this year.

Globally also, cotton cultivation is projected to be down by six per cent in 2015-16. “Low cotton prices are expected to persist through the rest of 2014-15 when farmers in the northern hemisphere make their planting decisions. As a result, world cotton area in 2015-16 is projected down six per cent to 31.6 million hectares. Assuming a world average yield of 777 kg/ha, world cotton production is forecast to fall six per cent to 24.6 million tonnes, which is the lowest volume since 2009-10,” said the International Cotton Advisory Committee (ICAC).

At the same time, ICAC expects world cotton consumption to increase by two per cent to 24.7 million tonnes, making 2015/16 the first time in five seasons where consumption overtakes production. "Although consumption could surpass production by about 100,000 tons, this would only be a small dent in the large stockpile of cotton," the global body further stated.

SOURCE: The Business Standard

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Government to issue Importer Exporter Code online

Exporters and importers will now be able to apply online for their new Importer Exporter Codes (IEC) instead of physically submitting papers and making payments at various offices. IEC is a unique 10-digit code given to exporters and importers by the DGFT without which they are not allowed to carry out international trade unless given special exemption. The Directorate General of Foreign Trade (DGFT) has started the process of online filing and processing of applications and issuing of codes in a digital format, an official release said.

The required documents for getting the IEC can be uploaded by the applicants online and the required fee can be paid through net banking. Processing of such applications by regional authority of DGFT would also be done online and the digitally signed e-IEC would be issued/e-mailed to the applicants within two working days, the release added. In case the application is incomplete or otherwise ineligible, the same shall be rejected and an auto generated rejection letter/e-mail (with reasons for rejection) would be sent to the applicant within two working days.

The DGFT is also working on enabling payment of fee through debit/credit cards, which would further facilitate this process. Once implemented the Online system would be made mandatory. Till that happens, the existing offline/manual system has also been allowed side by side, in order to facilitate those applicants who do not have net banking facility, the release added.

Efforts are also on for message exchange/integration of the DGFT’s system with Income Tax department and Ministry of Corporate Affairs for verification of PAN and other details. Once implemented, this would further reduce the processing time of e-IEC applications to possibly one day, the release said.

SOURCE: The Hindu Business Line

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SLR reduction: Exporters expect banks to cut interest rates

Tirupur Exporters’ Association expressed hope that reduction of Statutory Liquidity Ratio by 50 basis points by the Reserve Bank of India (RBI) would lead to banks increasing lending and also reducing their interest rates. TEA president, A Shaktivel in a statement welcomed RBI’s decision to reduce the SLR by 50 basis points from 22 per cent to 21.50 per cent with effect from the fortnight beginning February 7 and expected banks would increase their lending and also reduce their interest rates to be competitive among the banks.

He was reacting to the sixth Bi-monthly Monetary Policy statement for the year 2014-15 announced by RBI Governor Raghuram Rajan today. Shaktivel said he was anticipating a reduction in repo rate by at least 0.25 per cent in tune with surprise cut made on Jan 15, as inflation has come down and oil prices also coming down significantly.

Banks should come forward to support knitwear exporting units so as to maintain the growth rate and make investment in the facilities, since exports from Tirupur have recorded Rs 15,000 crore in the first nine months of this fiscal, he said. Commenting on replacing Export Credit Refinance (ECR) facility with provision of system level liquidity, Sakthivel said with removal of ECR, it should not affect credit to the exporting units, particularly SME units.

SOURCE: The Financial Express

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Government assures full support to French companies to invest in India

The government has assured full support to address the challenges of French companies wanting to invest and manufacture in India.  Addressing a seminar organised by The Indo-French Chamber of Commerce and Industry ( IFCCI), Secretary in the Department of Industrial Policy and Promotion (DIPP) Amitabh Kant said that the government is working alongside companies to ensure that there is an ease in doing business in India.  The DIPP assured it will "extend all possible support to address the challenges of French companies wanting to invest and manufacture in India," Kant said.

France is one of the top foreign investors in India. India has received $ 4.4 billion FDI from the European nation during April 2000 and November 2014.  Firms that participated in the event include Airbus Group, Danone Nutricia, Safran India, Sanofi India, Schneider Electric India and Renault India.  The discussions mainly revolved around French companies that are already making in India, their India strategy, growth stories, and challenges and how they foresee India as a potential manufacturing hub.  Currently, 950 French companies (350 firms, 400 subsidiaries and 200 entrepreneurs) are established in India. These companies employ more than 3,00,000 skilled staff in India.

SOURCE: The Economic Times

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Ease of doing business: Exporters can use credit cards to pay fee

To further improve the ease of doing business in India, the Commerce Ministry is taking steps that include allowing exporters and importers to make the payment of fee through debit or credit cards. Currently, traders can pay fees only manually or through net banking.  "Efforts are underway to allow/enable payment of fee through debit/credit cards, which would further facilitate this process. Once implemented the online system would be made mandatory," an official statement said.

The ministry has also operationalised online filing of Importer Exporter Code (IEC) number applications and online processing and issue of e-IECs in digital format.  Now new entrepreneurs, exporters and importers can apply online for issue of new IEC online with no more visits to the Regional Authority`s office required and upload the documents and pay the required fee through net banking, it said.  "However, till such time payment through debit/credit cards is enabled, the exist ..

"However, till such time payment through debit/credit cards is enabled, the existing offline/manual system has also been allowed side by side, in order to facilitate those applicants who do not have net banking facility," it said.  It said that efforts are also underway for message exchange and integration of DGFT's system with income tax department and Ministry of Corporate Affair for verification of PAN and DIN/CIN details respectively.  "Once implemented, this would further reduce the processing time of e-IEC applications at regional authority level (possibly one day only)," it added.  "This is an important and path breaking initiative by Department of Commerce/DGFT (directorate general of foreign trade) towards 'Digital India' vision of Prime Minister of India and 'Ease of Doing Business'," it said.

The ministry is engaged with different departments, including revenue and shipping, to reduce paper work in a bid to cut transaction cost for exporters and improve ease of doing business.  The government is aiming to improve India's overall ranking in ease of doing business index to 50th position in the next two years from the current 142nd.

SOURCE: The Economic Times

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Andhra handloom sector to get loan waiver

The globalisation and liberalisation has impacted the handloom sector badly and those who depend on it for livelihood need to be protected. Andhra Pradesh Chief Minister N Chandra Babu Naidu attending a handloom workers convention yesterday announced that loans of all the handloom units in the state would be waived, this came in on the lines of waiver for farm loans. He also announced that the state government would purchase the unsold stocks of handloom workers and handloom co-operative societies.

The government would release Rs 10 crore for APCO (apex body of weavers societies) to purchase the stocks from weavers and societies and sell these stocks in the market at a concession. Naidu also announced 20 percent subsidy on the purchase of yarn for handloom sector. The Handloom is the largest cottage industry with a position next only to Agriculture in providing employment to rural artisans.

Andhra Pradesh is one of the leading States in the Country having large traditional base of Handloom Industry and produces most exotic items of Handloom fabric with traditional designs and techniques passed down from generation to generation. Government is taking various steps for the promotion of the socio-economic well being of the Handloom weavers, by implementing various welfare and developmental schemes.

SOURCE: YarnsandFibers

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Modi invites economists for interaction on economy, Budget

In probably his first meeting with economists after taking charge, Prime Minister Narendra Modi will seek their views on the Budget at NITI Aayog on February 6. On February 8, Modi has also convened the first meeting of the NITI’s Governing Council, which consists of State Chief Ministers and Lieutenant Governors of Unions Territories. The Aayog came into being on January 1, replacing the Planning Commission.

A Government statement said Prime Minister Narendra Modi, who is also the Chairman of the National Institution for Transforming India (NITI), has convened a meeting of eminent experts for an interaction on the state of economy and for inviting suggestions on the forthcoming Budget.  Finance Minister Arun Jaitley will conduct the meeting. The experts and economists invited for the meeting include Ashok Gulati,  Bimal Jalan, GN Bajpai, Mukesh Butani, Nitin Desai, Parthasarathi Shome, Pulapare Balakrishnan, Rajiv Lall, R Vaidyanathan, Rajiv Kumar, Shankar Acharya, Subir Gokarn, Swaminathan Aiyer, TN Ninan,  Vijay Kelkar and YV Reddy. The meeting will also be attended by Arvind Panagariya, Vice-Chairman of NITI, along with full-time members – Bibek Debroy and VK Saraswat – besides Rao Inderjit Singh, Minister of State for Planning, and Jayant Sinha, Minister of State for Finance.

Chief Economic Adviser Arvind Subramanian will also be present in the meeting. The first meeting of NITI’s Governing Council is expected to give suggestions on setting up efficient processes and mechanisms for interaction between the Centre and States and also between NITI and other stakeholders to ensure synergy between the efforts of different levels of government.

States have also been requested to give suggestions to make the Centre’s new initiatives, which includes Swachh Bharat, Make in India, Beti Bachao Beti Padhao, Smart Cities, Housing for All by 2022, Digital India, Skill India, and Pradhan Mantri Krishi Sinchayee Yojana a success. The Centre reiterated that the core objective of NITI is to strengthen cooperative federalism. The consultative meeting with CMs and Lt. Governors convened by the Prime Minister on December 7, 2014 played an important role in shaping NITI’s objectives, functions and structure.

SOURCE: The Hindu Business Line

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Man-Made Fibers Continue To Grow

The origins of the man-made fiber (MMF) industry are found in the first commercial production of artificial silk using cellulosics by De Chardonnet in France in 1892. Regrettably the business declared bankruptcy in 1894! However, not to be discouraged, the industry continued to develop other cellulosics and acetates until the arrival of nylon, which was discovered by Wallace Carothers at DuPont in the 1930s. His discovery brought the first truly MMF to the market. Initial applications including military uses during World War II and replacing silk in women’s hosiery. Nylon was followed by the ICI development of polyester, discovered in the early 1940s by two British scientists working for Calico Printers.

From these early beginnings the MMF industry was born, and through continuous development it recorded demand in 2014 of 55.2 million tons (122 billion pounds) of synthetic fiber, in addition to man-made cellulosic fiber demand of 5.2 million tons. The natural fiber industry, including cotton and wool, has a demand of 25.4 million tons.

Figure 1 shows the history of fiber demand in millions of tons, and demonstrates the dominant role that polyester has had in fiber demand growth. The graph also shows the continuing dominance of polyester going forward, as calculated by England-based PCI Fibres in its forecast out to 2030. Polyester demand passed that of cotton in 2002, and has continued to grow at a significantly faster rate than all other fiber types.

In 1980, polyester demand was only 5.2 million tons globally and by 2000, it had reached 19.2 million tons. In 2014, demand is put at 46.1 million tons. Looking at the period from 1980-2014, total fiber demand growth has been 55.7 million tons — 73.4 percent of which is down to polyester. The message is clear that polyester has gained significant share from all other fibers, both man-made and natural, and that anyone in the fiber business has to be aware that polyester producers are constantly looking at other fibers and their markets to determine if polyester can take further market share.

A very large part of the growth in polyester has come from China with India and Southeast Asia also contributing. In the case of China, both polyester production and apparent domestic demand for the fiber have been very strong. China accounts for 69 percent of all polyester fiber production globally, and if India and Southeast Asia are added, these three regions represent 86 percent of global production.

Polyester is dominant, but nylon, the oldest MMF, still plays an important role in the fiber business with 4 million tons of global production in 2014. Production is more broadly based by regions than for polyester, and the China, India, Southeast Asia group accounts only for 52 percent of total nylon fiber, with the Americas contributing 20 percent. Nylon has developed into a niche fiber, in that it is focused on a limited number of end uses, but some of these are quite large markets. Carpet is a significant application for nylon and accounts for 17.5 percent of total usage globally and 72 percent of North American nylon production. Other applications where nylon is very successful include airbags, heavy-duty tires, cap ply for radial tires, intimate apparel, sheer hosiery and swimwear. However, the nylon industry has to be aware that polyester is threatening a number of these markets. There has been remarkable growth in polyester bulk continuous filament (BCF) for carpet in North America. Polyester also is now making inroads into the airbag market — particularly for the larger curtain air bags.

Cellulosics have been a surprising success story over the past 10 years, primarily through gains in usage of viscose rayon staple fiber as both spinning fiber for apparel and in nonwoven end uses. Following a steady decline in market share and volume from 1980 to 2000, cellulosics made a remarkable recovery doubling consumption in the last 10 years to 5.2 million tons. Much of this increased demand has come from China where cellulosic staple mill consumption in 2000 totaled 0.6 million tons, and in 2014 totaled 3.0 million tons. Rayon staple received a significant boost in demand in 2010-11 as a result of the high price of cotton. Rayon provided a lower cost substitute for higher-priced cotton and the fiber has held on to its market share gain.

Forecasting

PCI Fibres provides forecasts of production and mill consumption in its annual World Synthetic Fibres Supply/Demand Report (Red Book). In developing these forecasts it is important to look at regional patterns of consumption at the final consumer level. Consumer demand ultimately drives production and mill consumption. In the 2013 Red Book, it was determined that in 2014 the world final consumer demand for all fibers averages 11.4 kilograms per capita (kg/capita) (See Figure 2). Volumes vary from North America with a high of 37 kg/capita; to Africa, the Middle East and India at 5 kg/capita. In taking the data forward as a forecast to 2030, it is necessary to look at global demographics where there is a significant shift taking place in the relatively near future. China has been the most populous country in the world, but following the single child policy introduced in the 1970s the rate of population growth has contracted significantly, and even as China relaxes its policy, it can be seen that the growing middle class generation is not returning to the multi-children family structure of previous generations. As a result, in the next 12 years India will overtake China as the largest population country in the world. This shift in demographics also is significant because as the average age of the Chinese population increases dramatically, buying patterns are changing. In 2000, the 15-34 year old demographic represented 35 percent of the population, whereas in 2030, the same demographic is forecast to represent 23 percent of the population. The 65 plus group represented 7 percent in 2000 and is forecast to represent 17 percent in 2030. Buying patterns could well shift from fast fashion to comfort and senior care.

In contrast, the Indian demographic changes only slightly with the 30 and under group growing in absolute numbers, but losing share of the total population as life expectancy increases.

North America

MMF mill consumption in North America — the United States and Canada — peaked in 1999 at a total of 4.7 million tons. The acceptance of China into the World Trade Organization in 2001 and the increased global structure of the supply chain using MMF led to a severe decline in mill consumption in North America, which reached a low in the recession year 2009 at 3 million tons. Slow recovery from this point has seen growth to an estimated 3.25 million tons in 2014, according to the latest PCI Fibres Red Book.

The dominant application for MMF in the region is carpet and rugs. Nylon, polyester and polypropylene all see significant volumes consumed in this sector. It is also an industry sector which, as carpet rather than rugs, is relatively unaffected by import competition. In 2005, the carpet and rug industry in the United States reached a MMF consumption peak level of 1.62 million tons. It is reckoned that total MMF consumption into this sector in 2014 will slightly exceed 1 million tons. The potential for solid growth has been expected over the past three years as the economy has generally improved, but the housing market remains stubbornly depressed. The carpet industry has anticipated a return to better times and invested heavily in changing its product mix, with an increasing focus on filament yarns, polyester seeing most of the investment. Capacity for BCF in polyester, including polytrimethylene terephthalate (PTT), has grown from 85,000 tons in 2008 to a forecast 400,000 tons in 2015. As polyester BCF has gained market share, nylon and polyester staple as well as polypropylene BCF have all lost market share. Since 2005, the share of nylon staple into carpet has dropped from 16 percent to less than 1 percent, and polypropylene BCF has dropped from 24 to 10 percent, while polyester BCF has increased from 3 to 36 percent.

 Carpet is not the only sector that has made investments. There are a number of nonwoven expansions and investments, as well as announcements of increases in polyester staple capacity. Perhaps the most surprising development is the level of investment in cotton and blended fiber spinning with eight new or expanded plants with a total investment of more than $800 million. At the time of the TW Innovation Forum, the potential impact of increased oil production from innovative drilling techniques was discussed with the possibility of lower oil prices and therefore cheaper raw materials for MMFs. The speed and the scale of price reductions has taken the industry by surprise, and 2015 holds the promise that MMFs will be at a lower average price level than in 2014.

SOURCE: The Textile World

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Value-added textile sector facing serious financial crisis : Pakistan

Despite several requests from Ministry of Textiles to Federal Board of Revenue, the value-added textile sector is still facing serious financial crisis, as more than Rs.200 billion of value-added textile chain has been stuck up with the government.

According to officials, millions of rupees refunds of Sales Tax and Customs rebates payable to the exporters have been held up despite government assurances that all refunds of the exporters would be cleared by September 2014. The textile industry representatives have been pleading to the government to issue instructions to FBR for speedily releasing cheques against all the pending Sales Tax refunds and Customs rebate claims. They have been suggesting the government to apply no payment no refund, policy, for value-added textile sector because collection of 2 per cent Sales Tax and then refunding was not only an exercise in futility but involved a large number of FBR personnel and precious time of FBR.

According to textile representatives, Federal Board of Revenue (FBR) still withheld more than Rs 13 billion under Drawback on Local Taxes and Levies (DLTL) claims and about Rs 17 billion sales tax under refund claims, causing immense problems to cash-starved industry. They claim that delay in payments is one of the major reasons Pakistan has failed to improve its textile exports despite getting Generalised System of Preferences plus status from European Union. FBR says it is working to clear up outstanding claims. According to FBR officials, RPOs worth 8 billion have already been issued for the period July, August and September. Claims worth 14 billion are classified as deferred payments on account of some deficiencies, whereas claims worth 8.2 billion have been freshly filed.  Further, they state that from July 2014 to January 2015, 14 billion refund claims of the textile sector have already been paid against Rs. 8 billion in corresponding period of last year.  The officials claim that all the deferred claims would be disposed off before 28th Feb, 2015. The February has started but viewing the speed of work, experts believe FBR need to expedite the process, otherwise the textile sector would continue to suffer.

SOURCE: The Nation

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Sri Lankan garment exporters poised to achieve target of USD5bn export revenue this year

Sri Lanka Chamber of Garment Exporters (SLCGE) and its partner Sri Lanka Apparel Sourcing Association (SLASA) expressed confidence of achieving this year’s government target of USD five billion in export revenue.

According to Sri Lanka garment exporters, they can easily achieve the export target of USD 8.5 B in 2020 if the country is able to sign the agreement with China and tap the Japanese market. The Chinese market is at present catered to by Vietnam, and Sri Lanka has all the opportunities to penetrate the Chinese market though better quality products though the Chinese were not keen on garments.

SLCGE Manager, Administration, Rohan de Silva told that the apparel sector is keen on signing a Free Trade Agreement with China and at least a Memorandum of Understanding with Japan. If they could get back the GSP Plus facility, their target would be much easier adding that even without GSP Plus, the sector achieved a target of USD 4.8 bn last November.The loss of GSP Plus status was a big blow to the country’s economic development as the EU countries account for about 60 percent of the country’s export market. The American and European markets are the main buyers with the latter superseding the former in recent years.

The hope and expectation are that the Sri Lankan government would give certain assurances that would enable the EU to continue with the GSP Plus concession without compromising the conditions that are laid down by the EU. May be guarantees of future compliance is the way forward for the Sri Lankan government. Economic interests of the country must be foremost in the country’s international relations and international diplomacy.

Speaking about the partnership, SLCGE president, Bandula Fernando said that the bi-annual programme which took place for the third time mainly focuses on facilitating their members to meet the key buyers operating in Sri Lanka and to prove their capability of producing high quality garments for export purpose.Big players in the trade have direct links with these buyers and even operate their own offices overseas. Thus, they are conducting this event to provide ' members this opportunity with minimum cost.'The Chamber works mainly on behalf of the Small and Medium sector, for their rights and benefits.

It was solely due to the representations made by the Chamber that the government introduced provisions in the rules for the allocation of textile quotas.Chamber’s vice president A P C Mendis said that they are expecting more investment opportunities especially from US and U K buyers. He strongly believes that the country with a new government with a better think-tank could do much more in the future. Also if corruption is eliminated the country could achieve much more.

An Export Development Board official said that with an impressive partnership portfolio Sri Lanka showcases the best of technology in the garment industry, including the world’s first eco-friendly Green Garment Factory.She said that buyers placing orders have the choice of selecting fabric and accessories from any part of the world to be brought to Sri Lanka for conversion into finished apparel. There is also an advantage in sourcing from Sri Lanka due to its central location, which provides the shortest shipping times to Europe. For those who are concerned not only with the quality of the product but also the values of the manufacturers, Sri Lanka will definitely be the ultimate choice.

The Sri Lanka Apparel Sourcing Association was formed in 1993 with the main objective of promoting and fostering the growth of the garment industry in Sri Lanka. A majority of the Association’s membership has been carrying out operations in Sri Lanka for more than 15 years, marketing the country and its merchandise effectively. The Association is also a strong lobby for the industry. The members of the Sri Lanka Apparel Sourcing Association also represent international prestigious brand names and are responsible for the generation of approximately 70% of Sri Lanka’s exports of textiles and apparels. Their membership represents all major global importers and retailers from the USA, EU, Australia and Japan.

SOURCE: YarnsandFibers

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Thailand sees Bangladesh as next attractive investment destination

Bangladesh has numerous promising sectors for investment due to its cost competitiveness, strategic location and the incentive packages offered by the government. This has attracted Thai entrepreneurs to invest in the country and exploit its colossal business potential for which Thai entrepreneurs are in talks with some of the Bangladeshi businessmen.

Chokedee Kaewsang, deputy secretary general of Thailand Board of Investment said that as part of the efforts, they held a discussion with the leaders of the Metropolitan Chamber of Commerce and Industry (MCCI) in Dhaka.Thailand has been keeping up good relations with Bangladesh over the years and more collaboration between the private companies of the two countries will indubitably boost bilateral trade.

The 17-member Thai business delegation that is now visiting Bangladesh expressed their interest to invest in a number of sectors, including textiles and garments, agri-machinery, pharmaceutical and cold storage, to grab local and global markets. According to Phasit Chudabuddhi, counsellor of the Thai embassy in Dhaka, Bangladesh needs to take more promotional activities to attract foreign investment. Many Thai companies will set up businesses in the country if Bangladesh can present it as an attractive investment destination.

Syed Nasim Manzur, president of MCCI, urged the Thai companies to establish factories in Bangladesh to make most use of the duty- and quota-free market access that the country now enjoys as a least-developed country. Bangladesh mainly imports textile, vegetables, mineral, plastic, rubber, paper board from Thailand and exports jute goods, woven and knit garments, frozen foods and agro-products.

MCCI also urged the Thai government to offer duty- and quota-free market access for Bangladeshi products. If the country allows duty- and quota-free facility for the products to its market, Bangladesh's exports to the country will increase significantly. Presently, the Bangladeshi exporters pay on an average 30 percent to 45 percent duty on export of woven and knitwear products to Thailand and export duties for other products are also high, ranging from 5 percent to 45 percent, the chamber said in a statement.

Dhaka has recently sought duty- and quota-free market access for 24 products, mainly garments, to Bangkok in a bid to boost exports to Thailand and increase bilateral trade.Bangladesh has the potential to become an investment destination for Thai investors, especially in the textile, agro-processing, leather, energy and tourism sectors. Thai investors can utilize the low infrastructure cost and cheap labour in Bangladesh, said Anis A Khan, vice president of the chamber.

Bilateral trade amounted to $780.61 million in 2013-14 with only $39.61 million of exports to Thailand from Bangladesh. During July-September period of the current fiscal year, Bangladesh's exports were amounted to $7.74 million. The preferential access is likely to facilitate the two countries to reach the target to double the bilateral trade by 2016, set by the prime ministers of the two countries.

SOURCE: YarnsandFibers

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High Hopes, Low Expectations For U.S. Textile Trade Agenda

In his 2015 State of the Union address, President Obama made clear his intention to work with Republicans in Congress on trade legislation. Republicans trounced the Democrats in the 2014 midterms.  They won the greatest number House seats since World War II, and the largest Senate majority since 2004. What these Republican majorities accomplish with a Democrat in the White House remains to be seen. But both parties and the Obama administration are poised to consider matters of interest in the textile and apparel business, including the Trans-Pacific Partnership (TPP), Trade Promotion Authority (TPA), the Generalized System of Preferences (GSP), the African Growth and Opportunity Act (AGOA) and the Nicaragua Tariff Preference Level (TPL).

 Ongoing TPP Negotiations

The TPP is a free trade agreement (FTA) — generally modeled after a series of such agreements dating back to the North American Free Trade Agreement (NAFTA) — still being negotiated by the parties expected to sign it. Besides the United States, parties involved in the TPP are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The Obama administration calls it a comprehensive, ambitious agreement, representing a shift in U.S. trade focus towards Asia. The TPP countries are said to represent 40 percent of U.S. international trade.

Whatever its final terms, the TPP will be anticlimactic in some respects; the United States doesn’t have significant trade with some of the parties, like Brunei, and already has free trade agreements with others, like Mexico. The TPP will nevertheless have great significance in selected areas. American farmers, for example, will gain unprecedented access to Japanese market for their exports. The U.S. textile and apparel industry and its counterparts in Central America will be most affected by imports into the United States of apparel produced in Vietnam, which is already the second largest source, after China, of U.S. apparel imports. Indeed, U.S. apparel imports from Vietnam have increased 40 percent since TPP talks began, likely spurred by the prospect of the TPP’s passage.

The origin rule for most apparel under the TPP will almost certainly be “yarn forward.” Yarn forward is the standard for apparel under all of the FTAs signed by the United States since NAFTA. Preferential treatment will be allowed if the component determining apparel tariff classification is knitted or woven in TPP countries from yarn spun or extruded in TPP countries and the apparel is cut or knit to shape and assembled in TPP countries.

Unlike many FTAs, the TPP probably will not provide duty-free treatment for all originating apparel immediately after it goes into effect. Instead, the United States has proposed three “baskets” of apparel classifications with different provisions for preferential treatment. The first basket would include classifications for non-sensitive apparel, which would be duty-free right away after the TPP effective date. The second basket would be for relatively more sensitive apparel. Duties would be reduced linearly in stages of 20 percent each year until they became free in the fifth year. The third basket, sometimes called the “X” basket, would be treated specially. Duty rates would immediately be cut by some percentage, perhaps 35 or 50 percent. But then they would remain unchanged for some length of time, perhaps 10 or 15 years, after which they would be changed to free. The sensitive X basket would likely include shirts, sweaters and trousers of cotton and man-made fibers.

The TPP will include a so-called “short supply” feature, but it will not be as flexible as short supply under the Central America Free Trade Agreement (CAFTA). It will be more like short supply under NAFTA, without NAFTA’s cumbersome, little-used feature that theoretically allows new short supply designations. In anticipation of the TPP, the office of the United States Trade Representative (USTR) and the Department of Commerce’s Office of Textiles and Apparel (OTEXA) invited interested persons to suggest, or oppose, short supply fabrics and yarns on a website. After considering this input, the United States is proposing that certain classifications of non-sensitive apparel will be either temporarily — probably for three years — or permanently duty-free if made in TPP countries with nonoriginating short supply fabrics or yarns. The list of short supply fabrics and yarns and the apparel for which they can be used will be incorporated in the text of the TPP. Interested persons will not be allowed to request that fabrics and yarns be added to or removed from the list after the TPP is signed and in effect.

Negotiations over the TPP are continuing and many of its provisions are far from final. Vietnam opposes short supply and, in league with many U.S. retailers, but over the opposition of U.S. and Central American textile and apparel producers, prefers a more liberal origin rule that would allow it to make qualifying apparel with nonoriginating fabrics from China or elsewhere. Mexico seeks a shortened short supply list to protect its access to the U.S. market. These and many other issues affecting many different interests must be resolved before a final version of the TPP is signed and can be considered for approval in the 114th Congress. The USTR hopes to conclude TPP negotiations sometime in mid-2015.

TPP negotiations continue, but the U.S. textile and apparel industry and its counterparts in Central America already have been impacted by a 40-percent increase in U.S. apparel imports from Vietnam since TPP talks began.

TPA Not A Foregone Conclusion

TPA legislation would give the U.S. president “fast track” authority to negotiate the TPP — and theoretically other free trade agreements — under terms that would require Congress either to approve or to disapprove FTAs, under expedited procedures, without adding amendments and without the opportunity to filibuster the approval legislation. Without TPA legislation, other countries might be reluctant to sign a FTA with the United States. The last TPA legislation expired in 2007. Conventional wisdom says that the administration cannot sign the TPP, and President Obama cannot present it to Congress for approval, without TPA legislation in place.

Interestingly, President Obama has negotiated the TPP as though TPA legislation existed, gambling that the momentum of the TPP negotiations would make TPA legislation a foregone conclusion. But the divided 213th Congress, which passed fewer bills than any Congress since records were first kept in 1947, proved that no legislation was certain. Bipartisan TPA legislation was proposed in early 2014; but even members of the president’s party complained that it did not allow sufficient Congressional oversight of the TPP’s terms and support for the legislation fell apart when a key cosponsor, Senator Max Baucus, D-Mont., left the Senate to become ambassador to China. More ominously, from the point of view of TPP supporters, many senators and House members wanted TPA legislation to address currency manipulation, requiring the United States to invoke trade remedies against countries found to be manipulating their currency exchange unfairly to affect trade. Such a feature, with its threat of U.S. sanctions, could give other TPP parties second thoughts about signing the TPP itself.

GSP Renewal Overdue

The GSP expired last July without renewal by Congress. With some exceptions, the GSP ordinarily affords duty-free treatment for imports from more than 100 designated beneficiary developing countries. Historically, the GSP has been renewed every three years by unanimous vote without delay or controversy; but recent renewals have been delayed and the current renewal is now long overdue. Most textiles and apparel are excluded from GSP preferential treatment; but lawmakers’ failure to renew the GSP in the 113th Congress is an indicator that no trade legislation, including TPA and TPP approval, is certain to make it through the 114th.

The Nicaragua TPL under CAFTA also expired at the end of 2014 without renewal. Unlike the GSP, however, there was no intention, at least at the time CAFTA was adopted, to extend it. The Nicaragua TPL allowed duty-free treatment in the United States of limited quantities of cotton, man-made fiber and certain wool apparel made in Nicaragua from foreign, non-CAFTA fabric and yarn. The TPL was limited to 100 million square meter equivalents (SMEs) per year, with a special sublimit of 1.5 million SMEs for certain men’s wool sport coats. For woven trousers under the TPL, Nicaragua had to export an equal quantity of originating trousers to the United States, up to a cap of 50 million SMEs.

In the last Congress, Senators Dianne Feinstein, D-Calif., and Kay Hagan, D-N.C., introduced separate bills to extend the Nicaragua TPL. One bill would have extended it for ten years without change. The other would also have extended it for ten years, but only for trousers and subject to an “earned import allowance” program similar to a program in effect for trousers from the Dominican Republic. Neither bill was passed, and prospects for introduction or passage in the current Congress are uncertain, especially because the administration has expressed no interest in renewal on any terms.

AGOA Renewal Uncertain

AGOA will expire in September 2015. Its most important feature allows lesser developed AGOA countries to produce a limited annual quantity of apparel with third-country fabric for duty-free importation into the United States. The administration and many members of Congress support renewal; but, like prospects for renewal of the lapsed GSP, prospects for AGOA renewal are not certain.

Will Things Move Forward In The 114th Congress?

Political commentators say that trade is an issue, like tax reform, about which Republicans and Democrats should be able to find bipartisan common ground, suggesting that all of the trade agenda items — TPA, TPP, GSP, Nicaragua TPL and AGOA — could be addressed with legislation in the current Congress. But predictions of such an outcome could be overly optimistic. President Obama’s aggressive immigration initiative, his evident opposition to the Keystone pipeline, his proposal to tie tax reform to increased taxes on wealthy individuals and his plan to offer free community college to all applicants have arguably made him even more unpopular with Republican leaders than before. Indeed, his alleged overreaching in immigration and environmental matters without Congressional backing is perceived by some more conservative Republicans as reason not to give him fast track authority under TPA legislation. Some Republicans may be reluctant to align themselves with any legislation supported by President Obama, especially since many more Republican than Democratic seats in the Senate will be up for election in 2016. Some members of the president’s party, concerned about maintaining U.S. jobs, are less than enthusiastic about the trade agenda. And of course the year 2016, corresponding with the second session of the 114th Congress, is a presidential election year, when attention may turn away from trade and focus on the candidates. It is entirely possible, in this political environment, that none of the agenda items will get attention until sometime after the inauguration of the country’s next president in 2017.

SOURCE: The Textile World

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US factory orders fall sharply, order books shrinking

New orders for US factory goods fell for a fifth straight month in December, but a smaller-than-previously reported drop in business spending plans supported views of a rebound in the months ahead. The Commerce Department said on Tuesday new orders for manufactured goods declined 3.4 per cent as demand fell across a broad sector of industries. That followed a 1.7 per cent decrease in November.

Economists polled by Reuters had forecast new orders received by factories sliding 2.2 per cent. US financial markets were little moved by the data. Manufacturing is slowing, constrained by weak global demand and falling crude oil prices, which have caused some companies in the energy sector to either delay or cut back on capital expenditure projects.

Business spending on equipment in the fourth quarter was the weakest since mid-2009. The soft trend in business investment likely persisted early into the first quarter, with a report on Monday showing a manufacturing sector gauge falling in January. Factory activity has also been hampered by an ongoing labour dispute at the nation's West Coast ports, which has caused shipment delays. But there is cautious optimism that firming domestic demand will limit the slowdown in manufacturing.

In December, factory orders excluding the volatile transportation category fell 2.3 per cent, the biggest drop since March 2013, after declining 1.3 per cent in November. In a sign of weakness, unfilled orders at factories slipped 0.8 per cent, the first fall in 10 months. The Commerce Department also said orders for non-defence capital goods excluding aircraft - seen as a measure of business confidence and spending plans - slipped 0.1 per cent instead of the 0.6 per cent drop reported last month.

Shipments of these so-called core capital goods orders, which are used to calculate equipment spending in gross domestic product rose 0.2 percent in December instead of the previously reported 0.2 percent fall. Manufacturing inventories fell 0.3 percent after 18 straight months of increases. That could have an impact on the fourth-quarter's gross domestic product estimate, which was published last week. Shipments of manufactured goods fell again in December, likely reflecting delays moving goods at the West Coast ports. The inventories-to-shipments ratio was 1.34, up from 1.33 in November.

SOURCE: The Business Standard

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China's preliminary fourth quarter current account surplus at $61.1 bn

China posted a current account surplus of $61.1 billion and a $91.2-billion deficit on its capital and financial account in the fourth quarter of 2014, preliminary data from the country's foreign exchange regulator showed on Tuesday. The figures, published by the State Administration of Foreign Exchange (SAFE) on its website, are subject to revisions. For the whole of 2014, China had a current account surplus of $213.8 billion and a $96-billion deficit on its capital and financial account, the SAFE said.

SOURCE: The Business Standard

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China, Sri Lanka traditionally friendly neighbours: Xi Jinping

Chinese President Xi Jinping Wednesday congratulated his Sri Lankan counterpart Maithripala Sirisena on the latter's 67th National Day and said the countries were traditionally friendly neighbours.  Chinese Premier Li Keqiang also sent a message to his Sri Lankan counterpart Ranil Wickremesinghe to express his congratulations, Xinhua reported.

In his message, Xi said China and Sri Lanka are traditionally friendly neighbours, and relations between the two countries have remained unshakable and become even firmer as time goes by.  Recalling his successful state visit to Sri Lanka in September 2014, Xi said he was deeply touched by the Sri Lankan people's profound sentiments and friendship towards the Chinese people.

China attaches great importance to its ties with Sri Lanka and stands ready to work with the South Asian country to promote development of a strategic cooperative partnership between the two, said the Chinese president.  The Chinese premier in his congratulatory message said that since the establishment of diplomatic relations between China and Sri Lanka in 1957, bilateral ties have always undergone healthy and stable development, turning out to be a paradigm for friendly coexistence and mutually beneficial cooperation between the two countries.  The Chinese side is ready to work with Sri Lanka in deepening the traditional friendship and expanding pragmatic cooperation, he said.

SOURCE: The Economic Times

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Colombiatex wrap up with high level of business for Latin America       

Colombiatex, a leading international fair for apparel and textile industry held in Medellin closes its doors with a high level of business for Latin America, estimated over 300 million dollars, stated the organizers of the exhibition. According to Inexmoda, organizer of Colombiatex, the fair is becoming a major center of business opportunities in the sector for Latin America.

Botero, CEO of Inexmoda, organizer of Colombiatex, reported that 482 exhibitors participated at the fair, 60 percent from Colombian and the rest coming from Spain, India, Brazil, Italy, Mexico, Peru, Ecuador and the United States.

In general 10 thousand national buyers attended the event, as well as from other 50 countries, among which Ecuador with 459 businessmen, Venezuela (271), Peru (196), United States (156) and Mexico (138) stood out for their nourished representations.

In total, a thousand 704 foreign traders participated in the fair, two percent less than in the exhibition last year; however, 400 new buyers visited Colombiatex, mostly from South Korea. This annual exhibition in the capital of the Andean department of Antioquia has become a great attraction for the textile business industry internationally.

Profile for exhibit included Fibre preparation machines, knitting machines, spinning machines, testing equipment & gage, weaving machines, non-woven and industrial machines, chemical blended textile, fabrics, mercerized and reflective fabrics, jeans cloth, fibre, lining and lacing, Fancy yarn, wool,fibers, threads and yarns, buttons, buckles, zippers, ribbons, interlinings, labels, tags, knitted necks.

SOURCE: YarnsandFibers

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