The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 27 JULY, 2020

NATIONAL

INTERNATIONAL

Textiles Minister Smriti Irani asks textiles sector to 'commercialise opportunities'
 

KOLKATA: Textiles Minister Smriti Irani on Saturday said that the COVID-19 pandemic has thrown up opportunities and the sector should commercialise this scope. She said that the textiles sector is always looking for subsidy but one should keep in mind that subsidy is taxpayers' money. "There is a need to see opportunities and not wait for another crisis," Irani said at a webinar organised by ICC. Citing an example, she said that the personal protective equipment (PPE) category is a case in point. "India has become a new player in the PPE category after the pandemic surfaced," she added. Regarding textile parks, the minister said that during the UPA rule, no role was envisaged for state governments. "State governments need to oversee the functioning of these parks if employment opportunities are to be raised," she added. She ruled that many promoters of these parks have run away after availing of the subsidy. Irani also said that the carpet industry will be aided as India is emerging as a key player in the international market.  "If the export promotion council of the carpet industry takes up the matter, it will help the textiles department," she said.

Source: Financial Express

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CBIC invites suggestions on reviewing customs laws for ease of doing biz

Kick-starting the process to review existing exemptions and laws of Customs, the Central Board of Indirect Taxes (CBIC) has invited suggestions from stakeholders on aligning the rules with the needs of changing times and ease of doing business. The CBIC has invited comments on the same by August 21. A comprehensive review would be undertaken by September. Finance Minister Normal in the Budget for 2020-21 had announced that a review of existing Customs exemption notifications would be undertaken to identify those notifications which may have outlived their utility or have become outdated. "In this context, suggestions are invited in respect of review of existing Customs exemption notifications in prescribed format below. The suggestions may include the need for review of a particular notification, Amendment in the wording of the notification for bringing clarity, Consolidation of similar entries and Extent of use of the notification," the CBIC said. It, however, said that duty rate changes are considered usually as part of the Budget proposals and hence this review would not cover this. Sitharaman in her Budget had announced that suggestions would be invited for review of the Customs laws and procedures for aligning them with the needs of changing times and ease of doing business. Sitharaman in her Budget speech said that exemptions from customs duty have been given in public interest from time to time and the government will comprehensively review these exemptions by September for taking a view on their relevance.

Source: Business Standard

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India best destination for foreign investment with high returns: Nitin Gadkari to EU investors

New Delhi: Terming India as the best destination for foreign investment with high returns, Union Minister Nitin Gadkari on Friday urged European investors to invest in India. He also said that the government is promoting clean fuel and working towards running long-distance buses and trucks on LNG, Gadkari said. Apart from LNG, the government's focus is to take ethanol economy from the present Rs 20,000 crore to Rs 1 lakh crore, Road Transport, Highways and MSME Minister Gadkari said while addressing the members from European Economic Group on 'Sustainable Transport and MSMEs' through video conference.  "Government is looking at LNG as fuel for trucks and buses in transport on long routes of more than 700 to 800 km. In addition, it is promoting ethanol to reduce Rs 7 lakh crore annual import of crude. The volume of the ethanol industry is Rs 20,000 crore which we want to take to Rs one lakh crore," the minister said. He said plans are afoot also to develop industrial clusters, including leather, plastic, chemical, furniture and others, along with the Rs one lakh crore Delhi-Mumbai Expressway on the pattern of clusters in China, and it was opportune time for investors particularly from Europe to invest in India to get high and safe returns under the present circumstances when the world is battling COVID-19. Developing such clusters would reduce logistics costs and bring good returns, he said.  India is the best destination for foreign investment with high returns, Gadkari said, adding that the government is trying to tap investment from different sources, including from the pension fund, insurance fund and stock market, besides the World Bank and ADB. He also said apart from being one of the fastest growing economies, India is making things digital for transparency and urged investors to invest in infrastructure, MSMEs, banks, NBFCs and other areas."It is a golden opportunity for you. Your investment will be safe and you will get very good returns," the minister said, adding that COVID-19-hit Indian economy needs liquidity. "Invest in India including through JV. It will be secured here as India has strength. India needs liquidity. It has big market, skilled manpower and is focussing on increasing exports and reducing imports," the minster noted. Urging players to invest in the highways sector, the minister said that 22 green expressways were on the anvil and work has already started on seven of them. He said that talks were also on with a Swedish firm for electric highway stretch on Delhi-Mumbai ..

Source: Economic Times

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Special resolution framework for MSMEs soon, to have ‘better acceptance’ of genuine failures: IBBI chief

Ease of Doing Business for MSMEs: MSMEs are soon likely to have a special insolvency resolution framework, currently at an advanced stage of preparation, under section 240A of the Insolvency and Bankruptcy Code (IBC) while a pre-pack (pre-packaged) resolution framework is also being worked upon, according to Insolvency and Bankruptcy Board of India chairperson M S Sahoo. The market participants and the ecosystem would be nimbler and they would find innovative ways of implementing innovative resolution mechanisms, PTI reported citing Sahoo. “There would be better acceptance of genuine business failures and consequently, entrepreneurship would flourish. IBC would emerge stronger,” he added. IBBI chief Sahoo told the news agency in an email interview that the focus is on a swift response as Covid’s situation evolves ahead and recalibration of the ecosystem in sync with the all ”new normal”. The efforts are being made to speed up the processing of cases under IBC by having a provision for the pre-pack plan. Here, the company and its creditors will agree upon a resolution plan in advance.   Sahoo said that the Code would consolidate good behaviour through its features that seek promoters and external resolution applicants to compete for a firm’s insolvency resolution. This would be different from all previous ways wherein creditors were allowed to look for a resolution only from existing promoters. However, Sahoo added that the timeline is a key issue that is not resolved yet. “The market performs better where there is little time between the execution of the transaction and its consummation. Hopefully, a special framework for MSMEs and prepack resolution would be faster,” he said. Finance Minister Nirmala Sitharaman in order to help Covid-hit MSMEs had raised the default threshold sharply from Rs 1 lakh to Rs 1 crore under section 4 of IBC. “This will by and large prevent triggering of insolvency proceedings against MSMEs,” said a press note issued by the Finance Ministry. Recently, the Cabinet had promulgated an ordinance to suspend the insolvency proceedings for at least six months from starting from March 25 amid the Corona pandemic.

Source: Financial Express

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India extends $ 400 mn currency swap facility to Colombo to address economic slowdown

New Delhi: The Reserve Bank of India in a significant move has signed necessary documents for extending $ 400 million currency swap facility to the Central Bank of Sri Lanka. This currency swap arrangement will remain available till November 2022 will help Colombo address the economic hardships caused due by pandemic.
The Indian High Commission in Colombo has earlier conveyed this information to senior officials in the Government of Sri Lanka and the Central Bank of Sri Lanka. It would be recalled that on July 22, the High Commission facilitated constructive technical discussions on rescheduling of bilateral debt repayment by Sri Lanka, according to a High Commission statement. Based on the request from the Sri Lankan side for a currency swap facility under the SAARC Currency Swap Framework, India extended a $ 400 million currency swap under the SAARC framework.  During the telephone conversation between PM Narendra Modi and President of Sri Lanka, Gotabaya Rajapaksa on 23 May, the President sought assistance of India for currency swap of $ 400 million under SAARC arrangements and an additional $ 1.1 billion currency swap, bilaterally.  Modi conveyed India’s support to Sri Lanka in dealing with pandemic and economic impact. While the Agreement for USD 400 million currency swap under the SAARC framework is concluded, the bilateral swap request for USD 1.1 billion is being considered. The request from Sri Lanka came in the backdrop of Sri Lankan economy, like many other countries, slowing down due to the Covd 19 pandemic, informed sources told ET. The increasing foreign exchange outflows in Sri Lanka has been resulting in loss of USD reserves and adding pressure on the Sri Lankan Rupee.  The signing of the currency swap agreement with Sri Lanka illustrates India’s commitment to assist its friendly neighbour on its economic revival during the time of Covid-19 pandemic, sources said, adding, India will continue to support Sri Lanka on its efforts for economic revival. Earlier, India assisted Sri Lanka by sending four consignments of essential medicines and equipment in the months of April and May 2020 to fight the Covid-19 pandemic.

Source: Economic Times

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Govt amends certain Indian Accounting Standards

NEW DELHI: The government has amended certain Indian Accounting Standards (Ind-AS), including the standard relating to leases amid the coronavirus pandemic. Ind-AS 103, 116 and some other standards have been amended by the Corporate Affairs Ministry. While Ind-AS 103 pertains to business combinations, Ind-AS 116 relates to principles for recognition, presentation and disclosure of leases. In the wake of the pandemic, many lessors have extended rent concessions to lessees. However, applying the Ind-AS 116 requirements for changes to lease payments could have posed practical difficulties in the current situation. Against this backdrop, the ministry has amended the  rules whereby entities would get relief from lease modification accounting due to Covid-19 related rent concessions. The amendments can be followed by lessees for annual reporting periods beginning on or after April 1, 2020. Leading consultancy EY India's Partner and National Leader (Financial Accounting Advisory Services) Sandip Khetan said the amendment was keenly awaited by Indian companies who were gearing up for their quarterly results."Lease modification requires re-computation of lease liability using discount rate on the date of modification. This would have posed significant challenge to company whose volume of leases is very high. "The amendment to Ind-AS 116 will provide significant relief to such lessees for accounting for rent concessions from lessors specifically arising from the Covid-19 pandemic," he noted. Jigar Parikh, Partner (Financial Accounting Advisory Services) at EY India said that while lessees that elect to apply the practical expedient do not need to assess whether a concession constitutes a modification, they still need to evaluate the appropriate accounting for each concession as the terms of the concession granted may vary. As an example, he noted that there are interpretational issues with respect to whether benefit of rent concession should be accounted for in profit and loss account or adjusted against right of use asset. Among others, the ministry has also amended rules regarding Ind-AS 103. These are aimed at helping entities to determine whether a transaction needs to be accounted as a business combination or as an asset acquisition. Sandip Khetan said determining whether an acquired set of activities and assets is a business or not, could result in significantly different accounting outcomes. "The previous guidance on the definition of a business created some diversity in practice. Therefore, we welcome the amendment to Ind-AS 103 and additional guidance on the definition of a business in Ind-AS 103. Fair value concentration test is likely to simplify the assessment of business considerably," he said. A notification was issued on Friday to amend the Companies (Indian Accounting Standards) Rules, 2015 and the amended rules were finalised by the ministry in consultation with the National Financial Reporting Authority (NFRA). Ind-AS are converged with International Financial Reporting Standards (IFRS).

Source: Times of India

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DPIIT-led panel to vet GeM vendors from neighbouring countries, restrict Chinese suppliers

NEW DELHI: All vendors registered on the government e-Marketplace (GeM) will now have to furnish a certificate declaring their compliance with the new procurement norms that seek to restrict suppliers of Chinese origin. The Department for Promotion of Industry and Internal Trade (DPIIT) will soon set up a committee to vet all applications from countries that India shares a border with for prior registration and security clearance. “Vendors and suppliers registered on GEMs will need to ensure they are in compliance wih the new norms,” said an official.  The move aimed at keeping Chinese companies out could hit sectors with heavy import content and dependence on supplies from China.  Infrastructure sectors such as power sector — particularly solar, telecom, highways — are likely to get impacted at different levels as the new rules apply to supply of goods and services, work contracts as also public-private partnership projects, say officials and experts. If Indian companies are to benefit, the government will have to clarify that only Indian companies owned by Indians will be allowed to participate in government tenders, experts said. The committee, comprising senior officials from ministries of home, external affairs and other departments concerned, will draw up a framework to vet applications. “A registration committee under a joint secretary will be set up," a government official said.  DPIIT will lay down the application and format for such bidders. However, registrations will not be given unless political and security clearances are granted. The ministries of home and external affairs will work on the procedure for scrutiny of such applications. The department of expenditure on Thursday amended its General Financial Rules, 2017, requiring prior registration from bidders from a country sharing land borders with India in order to be eligible to bid in public procurement.

Sectoral impact

A highways ministry official ET spoke with, said that while the dependence of the highways sector on Chinese companies is minimal, the government has now brought security clearance of projects to the forefront, which was so far being done after a bidder had submitted proposals. “Now, any entity before they are eligible to bid, they have to register with DPIIT, which will register companies at its own discretion," the official said. Another market watcher said that the renewables sector, which imports around 80% of its solar panels from China, is likely to be impacted. “Construction equipment in the roads sector comes from China, but we have alternatives easily available,” the person said, requesting anonymity. With respect to railway projects, competition in the metro rail segment is likely to decrease, since it is considerably dominated by Chinese companies, the person said.   The Indian Electrical & Electronics Manufacturers' Association (IEEMA) said the Indian electrical equipment industry has the capacity, ability and cost competitiveness to effectively service and meet the need of not only Indian industry but also enhance its exports but cautioned about higher costs in the short run.

Source: Economic Times

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India must try for Quadrilateral FTA after closing US trade deal, suggests USISPF
 

NEW DELHI: A key cross-national industry body has pitched for an economic partnership deal between India, the United States, Japan and Australia – an informal security forum commonly known as the Quad, for Quadrilateral Security Dialogue.   New Delhi should look at closing a small trade deal with the United States before the US Presidential elections in November – which would build confidence between the two countries – followed by a Free Trade Agreement and then a larger trade deal, said Mukesh Aghi, president of the US-India Strategic Partnership Forum (USISPF).
“We have a quad…which is geopolitically aligned... we should look at beyond a trade agreement or FTA between India and the US; we should look at an FTA between the Quad,” Aghi told ET.   Aghi said American companies were evincing keen interest in investing in India as a manufacturing alternative to China, but said roadblocks such as policy unpredictability, lack of infrastructure and unwarranted litigation should be removed to ensure ease of doing business while managing global supply chains in a federal environment.“As the stress deepens between US and China, US companies are under a lot of pressure to look at their investment strategy. The interest (for India) is very strong… the momentum with India is still building up,” Aghi said. Earlier this week, the United States asked China to shut its consulate in Texas. In retaliation, Bejing asked Washington to close its consulate in Chengdu, in fresh tensions between the two countries.

Source: Economic Times

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Fraudulent IGST refunds: Exporters to face stern action, say reports

Finance ministry sources said on Sunday that stern action would be taken against the exporters who fraudulently claimed integrated goods and services tax (IGST) refunds totalling Rs 2,020 crore. Sources in the Central Board of Indirect Tax and Customs (CBIC) said that after feeling the heat, some 'fake', 'risky' exporters were lobbying with some prominent trade associations to allege that genuine exporters were being harassed by being asked for over 1,500 documents each for verification purposes. However, this is not true. CBIC verifies each exporter in a two-stage verification process with hardly three to four documents, in line with the requirements, the sources added. Exporters are identified as 'risky' on the basis of specific risk indicators based on customs, GST, income tax and data from the Directorate General of Foreign Trade (DGFT). They said that IGST refunds had been suspended in all such cases where there was adverse report post verification about the exporter or his suppliers. However, Customs officials have been sensitized to expedite refunds to genuine exporters in these difficult times, they said. Finance ministry sources said that so far, IGST refunds of more than Rs 1.37 trillion had been disbursed and only about Rs 2,026 crore were pending, which were being processed.

Source: Business Standard

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RBI may go for further 25 bps rate cut in August policy meeting: Experts

The Reserve Bank is likely to go for a minimum 25 basis points cut in key lending rate in the forthcoming monetary policy review in view of the pressing need to revive the coronavirus-hit economy, feel experts. The Monetary Policy Committee (MPC), headed by RBI Governor, is scheduled to meet for three days beginning August 4 and will announce its decision on August 6. The central bank has been taking steps proactively to limit the damage to the economy caused by the outbreak of Covid-19 pandemic and subsequent lockdowns to prevent the spread of the disease. A fast-changing macroeconomic environment and deteriorating outlook for growth necessitated off-cycle meetings of the MPC, first in March and then again in May 2020. The MPC cumulatively cut the policy repo rate by 115 basis points over these two meetings. Higher prices of food items especially meat, fish, cereals and pulses pushed the retail inflation based on Consumer Price Index (CPI) to 6.09 per cent in June. The government has tasked the RBI to keep inflation at 4 per cent (+, - 2 per cent).  The central bank mainly factors in CPI while arriving at its monetary policy. "We anticipate a further asymmetric cut of 25 basis points in the Repo Rate and 35 basis points in the Reverse Repo Rate, in a split decision from the MPC, opined Aditi Nayar, Principal Economist, ICRA. Expressing similar views, Union Bank of India managing director and CEO Rajkiran Rai said, "There is a possibility of a 25 basis points cut or they may hold on (the rate)." Nayar further said although the retail (CPI) inflation has exceeded the MPC's target range of 2-6 per cent for three consecutive months in the lockdown and initial unlock period, it is expected to recede within this range by August 2020. Industry chamber Assocham, however, wants the RBI to focus more on loan restructuring given the problems being faced by the industry. "Industry requires an urgent restructuring of loans across all the sectors to avert large scale defaults. As is clear from the latest RBI report, restructuring is imperative both for the banks and borrowers. "The restructuring of the loan should be amongst the main priority of the monetary policy committee, said Assocham Secretary General Deepak Sood. A treasurer with a state-run bank was of the view that the RBI is likely to keep the accommodative stance and they may not cut the rate this time. "Right now, there is an ample liquidity in the system and transmission of rates is happening. Reduction of rate at this time may not serve any purpose," the treasurer remarked. The monetary policy was already in an accommodative mode before the outbreak of Covid-19, with a cumulative repo rate cut of 135 basis points between February 2019 and the onset of the pandemic. Siddhartha Sanyal, Chief Economist and Head Research, Bandhan Bank said the RBI "looks set to continue" with its 'accommodative' monetary policy stance, targeted infusion of liquidity and further calibrated lowering of interest rates," he said. Aarti Khanna, the founder and CEO of credit helpline 'AskCred' said the RBI should take steps to allow banks to restructure debt in the stressed sectors of the economy such as tourism, entertainment, and travel. "So, while rate cuts are welcome, they would serve little purpose unless steps are taken to revive demand (expansionary fiscal policy by the government) and proactive steps are taken by RBI to address the looming bad debt issue," she said. Tanuj Shori, the founder and CEO of Square Yards, said given that economic activities are still struggling to gain strength, the MPC should consider further relaxation in policy rates. "However, besides lower interest rate, the government should also consider reducing stamp duty, to boost the real estate sector which employs more than 50 million people in India and is a major contributor to the country's GDP," he said. Meanwhile, Rumki Majumdar, Economist, Deloitte India do not expect any rate cut this time. "Despite low interest rates, there is low demand for credit as evident from rising bank deposits. Consumers are wary of spending on big ticket items and will likely prefer to save more instead, as they are concerned about the uncertainties. Businesses are unlikely to borrow for investments because of excess capacity," she said. On expectations from the next MPC, Abhishek A Rastogi, Partner at Khaitan & Co remarked that with the objective of bringing the economy to the normal growth trajectory, the RBI is expected to take measures so that interest rates are kept low and this could be achieved by further reducing the repo and reverse repo rate.

Source: Business Standard

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Hyderabad: Mega industrial park to come up in city soon

Hyderabad: Telangana Industry and IT Minister KT Rama Rao has announced that the government will set up a mega industrial park on a sprawling 3,600 acres at Chandanavelli in Greater Hyderabad limits and also develop a 4-lane highway between Shamshabad and the proposed industrial park soon. KTR on Saturday laid foundation stone for Welspun Textile industry and also inaugurated Welspun flooring company established at upcoming Chandanavalli Industrial park.

Source: The Hans India

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First container train from India reaches Bangladesh

The first container train carrying FMCG products and other items arrived at the Benapole railways station of Bangladesh today. It had started from Majerhat station near Kolkata on Friday with a consignment of soaps, shampoos, other FMCG items and textile fabric in 50 containers. The Railway Advisor in the High Commission of India Anita Barik told AIR Special Correspondent at Dhaka that the Container Train Service is going to be a regular service connecting various terminals of Indian Railways network to Bangladesh. It will connect nominated terminals of Concor India to various stations in Bangladesh such as Benapole, Jessore, Singia, Noapara and Bangabandhu Setu West railway stations. The arrival of the container train is the culmination of the process that started in 2017 when an MoU was signed between Container Corporation of India and the Bangladesh Container Company Ltd. The trial run of the first container train from Kolkata to Bangabandhusetu West station (BBW) took place in April 2018. India and Bangladesh have been upgrading the cooperation in railways over the years. However, during the last few months when the Corona pandemic had affected the supply chain between the two countries, several new initiatives have been taken up to maintain the supply chain between the two countries unhindered. Earlier, on 13 July a parcel train carrying chilli from Andhra Pradesh had arrived in Bangladesh. In June, a record number of over 100 freight trains were run between the two countries carrying essential items like sugar, maize, spices and finished products. Railway Minister Piyush Goyal tweeted today that a consignment of 51 trucks has been exported from Bareilly in India to Bangladesh using the Indian Railways services. AIR Correspondent reports, Indian Railways has taken several significant steps recently to maintain the supply chain between India and Bangladesh despite the Corona pandemic. Starting the container train services is another step in this direction. The continuous upgrading of the rail link will significantly boost the bilateral trade and mutual ties between India and Bangladesh.

Source: News on Air

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Welspun launches Rs 1100 crore manufacturing facility in Telangana

Welspun Flooring Limited, a fully integrated and independent flooring vertical of the USD 2.7 billion Welspun Group, has launched its Rs 1,100 crore manufacturing facility at nearby Chandanvelly. Telangana minister for IT and Industries KT Rama Rao inaugurated the facility, a company press release said. Spread across 200 acres, the state-of-the-art facility which employs 1600 people, will have a production capacity of40 million square metres annually. Adjacent to this facility, Welspun Group is also establishing a manufacturing plant for its emerging business Advanced Textiles. The minister laid the foundation stone for the-unit, which will commence its functioning soon. The company will invest Rs 400 crore over a span of two financial years, it said. Commenting on the launch, B K Goenka, Chairman, Welspun Group said, "We are now entering another exciting phase of our growth with foraying into the flooring segment. This emerging business is poised to benefit from the synergies with our existing businesses and large customer base, thereby creating a strong domestic as well as global growth opportunity. I am confident that through our new innovative product offerings in flooring, we will create a differentiation for ourselves to drive the next phase of our growth and further consolidate our global leadership position."

Source: Money Control

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Global Textile Raw Material Price 26-07-2020

Item

Price

Unit

Fluctuation

Date

PSF

750.92

USD/Ton

0%

26-07-2020

VSF

1189.79

USD/Ton

-0.36%

26-07-2020

ASF

1682.81

USD/Ton

0%

26-07-2020

Polyester    POY

705.33

USD/Ton

0.30%

26-07-2020

Nylon    FDY

1959.24

USD/Ton

-0.72%

26-07-2020

40D    Spandex

3989.72

USD/Ton

0%

26-07-2020

Nylon    POY

1852.37

USD/Ton

0%

26-07-2020

Acrylic    Top 3D

883.44

USD/Ton

0%

26-07-2020

Polyester    FDY

2187.22

USD/Ton

-0.32%

26-07-2020

Nylon    DTY

5129.64

USD/Ton

0%

26-07-2020

Viscose    Long Filament

919.06

USD/Ton

0%

26-07-2020

Polyester    DTY

1802.50

USD/Ton

-0.39%

26-07-2020

30S    Spun Rayon Yarn

1688.51

USD/Ton

-0.42%

26-07-2020

32S    Polyester Yarn

1325.16

USD/Ton

0%

26-07-2020

45S    T/C Yarn

2151.60

USD/Ton

0%

26-07-2020

40S    Rayon Yarn

1496.15

USD/Ton

0%

26-07-2020

T/R    Yarn 65/35 32S

2023.36

USD/Ton

0%

26-07-2020

45S    Polyester Yarn

1852.37

USD/Ton

0%

26-07-2020

T/C    Yarn 65/35 32S

1660.01

USD/Ton

0%

26-07-2020

10S    Denim Fabric

1.13

USD/Meter

0%

26-07-2020

32S    Twill Fabric

0.64

USD/Meter

0%

26-07-2020

40S    Combed Poplin

0.93

USD/Meter

0%

26-07-2020

30S    Rayon Fabric

0.47

USD/Meter

-0.30%

26-07-2020

45S    T/C Fabric

0.64

USD/Meter

0%

26-07-2020

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14249 USD dtd. 26/07/2020). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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Exports picking up: Pakistan

That one of Pakistan’s largest and most prominent textile companies is operating at full capacity in its hosiery division and half capacity at its denim manufacturing unit, is welcome news and hopefully an indication of better export numbers in the coming months. With the global pandemic still raging on in the USA, the European market has started to open up where the coronavirus has died down after wreaking significant havoc. This has translated into orders coming in to Pakistani textile exporters that had either had to shut down their activities due to the initial countrywide lockdown, the lack of international orders or both. A 6 percent contraction was witnessed in the sector due to Covid-19 that reversed in June when almost half a dozen textile segments showed some recovery. The textile sector is after all the biggest export earner for Pakistan with a share of around 60 ercent, contributing $12.53 billion to total exports of $21.39 billion in the last fiscal year. South Asian countries are currently at an advantage given how the US-China spat and the resulting drop in trade between the countries has forced US importers to turn towards countries like Vietnam, Bangladesh, India and Pakistan. In fact, Vietnam, for the first time in history, became the top apparel supplier to the US in March 2020, overtaking China.

Had Pakistan successfully addressed some of the systemic issues that the textile industry has faced for decades, perhaps it would have been better positioned to take full advantage of Western importers’ tilt towards the region. Pakistan’s textile industry is predominantly focused on the production of fabric, that is, spinning, weaving and processing of cotton and other synthetic fibres. There has hardly been any investment in infrastructure by the sector to diversify units into value added products such as ready-made garments (RMG). This is exactly why Bangladesh, a country that was severely handicapped when it came to competing with regional players once it separated from Pakistan, now is the second largest exporter of RMG in the world, after China. With government handouts abounding for the textile exporters of the country and powerful lobbies able to secure the sort of relief and concessions from the government that other industries can only dream of, it is no wonder why no need has been felt by this crucial sector to attempt to compete with neighbouring countries. Business as usual is evidently good business for the textile exporters of Pakistan.

Source: Pakistan Times

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Mali qualifies for AGOA benefits, USTR notifies

The Office of the United States Trade Representative (USTR) recently notified that imports of eligible products from Mali qualify for the textile and apparel benefits under the African Growth Opportunity Act (AGOA) beginning August 4 as Mali has adopted an effective visa system and related procedures to prevent the unlawful trans-shipment of textile and apparel articles. Mali has also taken steps to prevent the use of counterfeit documents in connection with the shipment of such articles, and has implemented and follows, or is making substantial progress towards implementing and following, the custom procedures required by the AGOA, the July 21 notification said. Mali is the 175th largest goods trading partner of the United States with $84 million in total two way goods trade during 2018. Goods exports totalled $79 million; goods imports totalled $5 million; and the US goods trade surplus with Mali was $74 million in 2018, USTR data showed.

Source: Fibre2fashion

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NCTO testifies at House Ways & Means Trade Subcommittee

National Council of Textile Organisations (NCTO) president and chief executive officer Kim Glas recently testified at the House Ways and Means Trade Subcommittee hearing on ‘Manufacturing and Critical Supply Chains: Lessons From COVID-19’. She outlined policy recommendations and steps the government should take to address the long-term and short-term needs of frontline health care workers, patients and the general public. “While domestic textile manufacturers have undertaken heroic efforts to confront the ongoing crisis, the on shoring of a permanent PPE industry will only materialize if proper government policies and other actions are put in place to help domestic manufacturers survive the current economic crisis and to incentivise the long-term investment needed to fully bring PPE [personal protective equipment] production back to the United States,” Glas said in testimony submitted to the subcommittee. “The time is ripe for a revival of American PPE textile manufacturing. It has already begun, but we are at a pivotal point. Without the necessary policy response and support, our recent progress will be undone just as quickly, and the China stranglehold over global medical textile supply will be locked in for the foreseeable future with no reason to invest here,” Glas said. “The U.S. textile and apparel industry is ready, willing, and able to supply our country’s PPE needs now and for what lies ahead,” she added.

Source: Fibre2fashion

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