The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 19 FEB, 2015

NATIONAL

INTERNATIONAL

Cotton body exceeds procurement target, eyes 80 lakh bales this year

Cotton Corporation of India (CCI) has crossed its revised procurement target of 75 lakh bales and hopes to obtain another 5 lakh bales in the next 10 days this season. The sale operations, however, have not been going too well with just about 1.35 lakh bales being sold since the operations began on January 27.

According to BK Mishra, MD, CCI, procurement has not been stopped at any centres and arrivals in Maharashtra have been improving over the past week. “There is no such thing as a target. It all depends on the market arrivals and the market price. Last week the market has improved and procurement was reduced to an extent. But going by the current trend, CCI could procure another 5 lakh bales in the next 10 days,” Mishra told FE.

The Maharashtra State Cotton Growers Federation (MSCGF), however, stopped procurement of cotton in some centres owing to rain and even pushed back plans for sale after recieving a poor response. The Federation, which has put up some 10,000 bales for sale, managed to find buyers for about 800 bales, NP Hirani, chairman, MSCGF, said. “The Federation is a sub-agent of CCI and has to sell at the base reserve price fixed by the corporation. However, the market does not seem to be ready for this yet and there have been losses. Further sales will depend on the market,” Hirani said.

Mishra agreed that losses in sales operations were inevitable since the CCI procures cotton at higher MSP and the sale price is also 5-10% higher than the market. ” Sales have been picking up. Prices were less and in the last three days lesser quantity has been sold. The purpose here is not to create further pressure on an already depressed market,” Mishra said, justifying the meagre quantities kept for sale. Sales will improve when the arrivals become lean. CCI began sales gradually with 5,000 bales increasing this to 10,000 bales a day.

SOURCE: The Financial Express

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Global crude oil price of Indian Basket was US$ 59.90 per bbl on 18.02.2015

In rupee terms, the price of Indian Basket increased to Rs 3728.78 per bbl on 18.02.2015 as compared to Rs 3687.22 per bbl on 17.02.2015. Rupee closed weaker at 62.25 per US$ on 18.02.2015 as against Rs 62.20 per US$ on 16.02.2015.

Particulars

Unit

Price on Feb 18, 2015 (Previous trading day i.e. 17.02.2015)

Pricing Fortnight for 16.02.2015

(Jan 29 to 11 Feb, 2015)

Crude Oil

(Indian Basket)

($/bbl)

59.90              (59.28)

52.70

(Rs/bbl)

3728.78           (3687.22)

3258.97

Exchange Rate

(Rs/$)

62.25             (62.20)

 

61.84

MJPS/Rk/Daily Crude oil price- 19.02.2015     

SOURCE: PIB

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Kick-start likely for finance SEZs in Budget

The Union Budget for 2015-16 is likely to kick-start finance special economic zones (SEZs), the first of which is to come up in the Gujarat International Finance Tec-City (GIFT) in Ahmedabad. With only 10 days remaining for the Budget to be presented in Parliament, the finance ministry has sought public comments on far-reaching recommendations, such as tax breaks and lenient regulations for financial firms in these SEZs, made by the National Institute of Public Finance and Policy (NIPFP).

The work on drafting regulations for finance SEZs has already started with consultation with regulators including Securities and Exchange Board of India (Sebi), Reserve Bank of India (RBI) and Forward Markets Commission (FMC).

LEG-UP FOR FINANCE

National Institute of Public Finance and Policy committee’s recommendations for finance SEZs

Give finance firms in these SEZs tax breaks

Exempt them from securities transaction tax, commodities transaction tax and service tax

Set up a separate arbitration system, for dispute resolution with expertise to solve contractual disputes

Review trade regulations between finance SEZs and mainland

Make contracts in these zones free from capital control

Allow complete capital account convertibility in these zones

"To draft the final regulations for financial SEZs, the finance ministry-commissioned concept note would be taken into consideration after feedback from the stakeholders," said a person close to the development. The ministry posted the NIPFP concept note on Tuesday evening.

In the note, submitted to the ministry on February 6, the think tank recommended full capital convertibility for the rupee and tax breaks for financial firms that set up offices in these zones. "Free trade zones like Kandla or Seepz (Santacruz Electronics Export Processing Zone) played a role in improving India's engagement with globalisation at a time when there were many restrictions on the current account. There is a possibility that finance SEZs could play a similar role in improving India's engagement with globalisation," said Ajay Shah, member of NIPFP. So far, regulators of equity, commodities, bond and currency derivative markets have had two consultations to draft regulations for Ahmedabad's GIFT. Foreign banks, stock exchanges and investment managers also took part in these consultations.

Sources indicated firms in these zones could be allowed to set up international exchanges for trading in equities and currencies, and bullion or commodity exchanges; engage in brokerage, investment management, merchant banking, custodian services; and establish clearing and settlement facilities.

The NIPFP report recommends only foreign banks be allowed to set up branches in these zones, not new banks. "It is difficult to have [domestic] banks in finance SEZs as these would not have access to lender of last resort facilities from RBI," said the concept note. The note lists three key enablers - law and regulation, dispute resolution, and capital control issues. Regulators are working on a tax structure for financial transactions comparable to international finance centres. These would require doing away with securities transaction tax (STT) and commodities transaction tax (CTT) in these zones. "Regulations should be principle-based and should be consistent," another source said.

Finance SEZs would help both Indian and foreign companies raise funds. Laws for these, including for litigation, would be separate from those outside these zones. The recommendation is to exempt these from foreign exchange controls. The report also suggests a separate regulator for these. NIPFP has suggested regulations for finance SEZs be based on the Indian Financial Code (IFC) as suggested by the Financial Sector Legislative Reforms Commission (FSLRC), on a pilot basis. As IFC is yet to be prepared, the committee has recommended enacting finance SEZ Act.

"The components out of the overall IFC relevant to finance SEZs are: micro-prudential regulation, resolution and trading. This will require implementation work by the Ministry of Finance in setting up a specialised regulator for finance SEZs which will enforce the finance SEZ Act, setting up a bench of the Financial Sector Appellate Tribunal (FSAT) and setting up operations of the Financial Data Management Centre (FDMC)," the report said.

The committee has urged the finance ministry to expand the terms of reference for the task forces on FSAT and FDMC, so that they can have a provision for finance SEZs, too. Financial services are considered the next driver of economic growth. Even though India has not been able to tap the sector fully because of inadequate norms, advance estimates suggest growth in these services to jump to 13.7 per cent in 2014-15 - the highest among all services - from 7.9 per cent in the previous year.

SOURCE: The Business Standard

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EU keen to restart FTA negotiations with India

The European Union (EU) on Wednesday said it wanted to restart negotiations on a proposed free trade agreement (FTA) with India, even as it awaited the release of a new Foreign Trade Policy to understand India’s stand.

India and the EU have been negotiating a trade pact, also known as the Broad-based Trade and Investment Agreement (BTIA), for about eight years. However, this couldn’t be finalised because the EU has demanded a substantial tariff cut and the elimination of duties on European vehicles, auto components and wines & spirits. India, on the other hand, has sought more access to European markets, primarily the UK and Germany, for its professionals, under a relaxed Schengen visa regime.

“Unfortunately, we are not in a very different position from where we were a year ago. There had been no negotiations (on the BTIA) and we are waiting for the government to release the new Foreign Trade Policy, in terms of the direction and the government’s intent… We hope under the new government, circumstances exist to push it through. We are ready to talk,” Joao Cravinho, EU Ambassador to India, said here on Wednesday.

Since the National Democratic Alliance government came to power at the Centre in May last year, it has been moving slowly on clinching bilateral trade deals. It was more focused on attracting foreign investment than slashing tariffs under mutual trade agreements, officials told Business Standard. There have been sharp differences over the EU insisting on a stricter intellectual property regime. The European Commission has also been negotiating a trade deal with the US, through which a lot of emphasis is being given on product and data protection standards.

“There are no new impediments…We still have the same issue of automobiles, where there has to be more movement. On wines & spirits, our demand is very clear and I find it difficult to believe that we cannot conclude the deal due to this. Also, there are issues on services and procurement,” Cravinho said. So far, there have been 15 rounds of talks on the BTIA, with the last round being held in 2013. Apart from the EU, Canada, the Netherlands, Australia and Israel have also urged the government to restart negotiations or finalize bilateral trade deals.

SOURCE: The Business Standard

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Chinese textile industry struggles over slow moving global market conditions

Slow moving global market conditions have hit China's labor-intensive industries, especially garment and textile production. As the textile industry struggles, cotton imports declined 44.9 percent year-on-year to 161,200 metric tons in January. This draws attentions to the challenges that domestic textile manufacturers face in a weak world market, according He Jingtong, a professor of international trade at Nankai University in Tianjin.

According to the General Administration of Customs, the nation's fast-fading advantage in some of the sectors it once dominated are exports of garment and yarn products declined 12.4 and 7.6 percent to 96.86 billion yuan ($15.5 billion) and 59.47 billion yuan, respectively. Shoe exports dropped by 10.8 percent to 34.88 billion yuan, Even though the US economy stabilized, it could not compensate for the lethargic demand from the European Union, Japan and many emerging economies, he said.

Orders for garment and yarn products from developed markets have been dwindling since mid-2011. Though many Chinese manufacturers are now less dependent on developed markets, exports are still the mainstay of their businesses, which are dominated by original equipment manufacturing.

Ding Lixin, a researcher at the Chinese Academy of Agricultural Sciences in Beijing, said that another factor behind falling cotton imports was the country's huge inventories. Fast-growing domestic cotton output and the policy of paying a floor price for certain agricultural products have forced the government to spend more on storing domestic cotton, Ding said. To reduce that burden, the government has pushed domestic textile enterprises to use more homegrown cotton in recent years. Cotton reserves rose to 11 million tons last year, half of the global total.

China pledged in September that the nation will not increase its cotton import quota this year beyond 894,000 tons. Unlike China, prices of farm products in the United States, the EU and Japan are more market-driven, partly because of supply-demand relationships and the function of commodity markets such as the Chicago Board of Trade and Tokyo Commodity Exchange Inc.

According to Ding, China still relies on stockpiling and floor purchase prices that are supported by government subsidies to regulate prices. But the nation's minimum cotton purchase prices have remained above world levels in recent years, which prompted more imports from the US, India and Brazil in 2014. As per the data from the Zhengzhou Commodity Exchange, the domestic cotton price is about 13,955 yuan a ton, while the landed price for cotton of a similar quality from India is 11,460 yuan. It is this price different that prones Chinese garment or yarn factories to buy cheaper foreign cotton to make up for the rising costs of labor, energy and logistics.

According to Zhao Ying, a researcher at the institute of industrial economics of the Chinese Academy of Social Sciences, the chief government think tank, growing uncertainties in the world market will spur Chinese garment and yarn producers to move up the value chain. Moreover, to expand their market the Chinese garment and yarn producers will have to offer high-end products and devise new strategies while the small, obsolete factories will be weeded out through competition over the next five years.

SOURCE: Yarns&Fibers

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Global fabric production rises 1.3% in Q3/2014: ITMF

Worldwide fabric production increased by 1.3 per cent year-on-year in Q3/2014 due to improved output in Asia and Europe, the International Textile Manufacturers Federation (ITMF) said in its ‘State of Trade Report Q3/2014’. In Asia, fabric output increased by 2 per cent year-on-year in Q3/2014, while it increased by 2.9 per cent in Europe. In South America, however, fabric production fell by 11.4 per cent annually.

However, compared to the previous quarter, global fabric production fell by 1.3 per cent in Q3/2014, with all regions showing declines. The strongest decline was recorded in South America with 8.3 per cent followed by Europe with 7.6 per cent. In Asia fabric output fell moderately by 0.4 per cent. World fabric stocks were reduced by 1.9 per cent year-on-year in Q3/2014. While fabric stocks were raised by 0.8 per cent in Asia and 1.8 per cent in North America, they fell by 0.7 per cent and 9.8 per cent in Europe and in South America respectively.

 On quarter-on-quarter basis, world fabric stocks increased by 1.4 per cent, with all regions supporting this development. Stocks in Europe rose the strongest by 4.8 per cent, followed by gains of 4 per cent in South America, 0.4 per cent in North America and 0.2 per cent in Asia. In Q3/2014, fabric orders climbed by 12 per cent in Brazil on an annual basis whereas they declined by 3.6 per cent in Europe. Compared to the previous quarter, fabric orders in Q3/2014 rose by 5.7 per cent in Brazil, while they fell by 3.4 per cent in Europe. Estimates for fabric production for Q4/2014 are positive in Asia and Europe. However, in South America they are negative. The same pattern applies to the outlook for fabric production for Q1/2015, which is positive in Europe and unchanged in Asia.

SOURCE: Yarns&Fibers

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Japan’s cotton yarn imports grow 11.9 % in 2014

The imports of pure cotton yarn by Japan increased by 11.9 per cent year-on-year to 314,440 bales of 181.436 kg each, according to the data from the Japan Spinners’ Association. Of this, the share of combed yarn imports grew by 15.3 per cent to 163,141 bales, which show that demand is recovering for manufacture of high value-added items.

Indonesia was the largest supplier of cotton yarn to Japan during the year with 113,142 bales, up 6.3 per cent year-on-year. Japan’s cotton yarn imports from Pakistan fell 4.6 per cent to 58,137 bales, while its imports from India and Thailand increased surged by 21.4 per cent and 38.4 per cent respectively to 53,927 bales and 34,945 bales. Combed yarn imports from both India and Thailand increased at quick pace during the year. In 2014, Japan’s imports of blended yarn were down by 7.2 per cent to 30,599 bales.

SOURCE: Fibre2fashion

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Textile industry of Scotland to set up new textiles centre in Galiashiels

LOCAL MP Michael Moore ever since learnt about the possibility of setting up a Scottish Centre of Textiles has been campaigning to ensure that it is located in the Borders where 80% of the textile industry of Scotland is based. In the Borders they have a world-class textiles industry and this Centre has the potential to further enhance its reputation as well as boost local tourism. Mrs. Moore said that the Scottish Centre of Textiles project is a step closer as a meeting with stakeholders confirmed that the Centre would be based in Galashiels, a major commercial centre for the Borders region. The town is known for textile making.

Last year a feasibility study by Jura Consultants concluded that siting the proposed £5million development in Galashiels would be the best option. Mrs Moore has been working closely with local textiles producers, Borders College, Heriot Watt University and project leaders, Hamish Carruthers and Alisdaire Lockhart to bring the SCOT project to the Borders. They will now work with Heriot Watt University on the first stage of the SCOT project to establish a Scottish National Textile Archive. It is hoped that the archive will further enhance the reputation Scottish Textiles and add to the tourist and professional footfall to the Borders with all the added financial benefits that this would bring.

According to Mrs Moore, choosing where to locate the project in the Borders has been a difficult process but with the railway and other attractions such as Abbotsford, it was decided y that it would be based in Galashiels. Mrs Moore is now look forward to working with the project leaders, their local textile industry and Heriot Watt University to put in place the first stage of project to establish a Scottish National Textile Archive. The project is likely will bring together historic and contemporary textile collections produced in Scotland, for the public and global researchers to benefit from it.

From the Scottish Borders to the Highlands & Islands, there are a great variety of attractions in Scotland related to textiles. The Scottish textile industry has a rich and established heritage, creating many of world’s iconic textile products – from tartan to cashmere and to tweed. The quality has put Scottish textiles on the world map.

SOURCE: Yarns&Fibers

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PERAGA Expo to hold INATEX, INDO INTERTEX and TECHNITEX 2015 exhibitions in April

This year, PERAGA Expo will hold INATEX, INDO INTERTEX and TECHNITEX 2015, from 23 – 25 April 2015 at the Jakarta International Expo (JIEXPO) Jakarta – Indonesia. These three binding exhibitions, with theme, “The Only Trade Platform to Meet ASEAN Garment Industry”, will set as an exclusive business platform for domestic and international quality supplier of Textile and Garment Industries.

More than 380 exhibiting companies from 20 countries all over the world will participate in these events which will spread over more than 11,200 sqm of the JIEXPO exhibition ground consist of Hall A ( A1, A2 and A3) and Hall D (Hall D1).

Paul Kingsen, Exhibition Project Director stated: “This year we will launch new chapter under the name TECHNITEX 2015 which is special exhibition performing all vertical aspect of the raw material, product and equipment of nonwoven industry. Since Indonesia has a growing nonwovens and technical textile sector, there would be smooth transition of many producers willing to diversify from traditional textile production.”

He further added that, “INATEX 2015 will show all range of products and accessories from textile and textile product (TPT) industries. INDO INTERTEX 2015 will show new machinery and technology on textile and garment industry. These three exhibitions are also expected to attract more than 8,000 visitors from local and international business-owners and professionals who are constantly exploring option to improve their productivity and to respond promptly to customers’ demands.”

Supported by Indonesia Ministry of Industry, Indonesian Textile Association, Indonesian Chamber of Commerce and Industry, Indonesia Exhibition Companies Association as well as other strategic partners, these exhibitions will give you opportunity to meet the international decision makers, developers and buyer of entire value-creation chain.

SOURCE: Yarns&Fibers

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Cotton trading improves as textile mill owners resumed buying: Pakistan

As several textile mill owners have resumed buying cotton on conflicting reports that the supply of the commodity remained low during the last two weeks. According to cotton dealers, trade turnover of cotton spiked four-fold to 15,800 bales (of 155 kilogram each).

According to Naseem Usman, a broker at Karachi Cotton Exchange, the next fortnightly production report, which is scheduled to be unveiled tomorrow {Wednesday}, may reveal lower production in the last two weeks. Also the country may face shortage of prime quality cotton, if not of poor qualities.

The Karachi Cotton Association (KCA) kept its official rate unchanged for the third working day at Rs4900/maund. KCA reported traders bought 15,830 bales at Rs4,200 to Rs5,100/maund as compared to 4,700 bales bought at Rs4,500 to Rs5,150/maund a day ago. The local cotton markets likely to run on their own perimeters, as the world benchmark cotton market (New York) will remain close due to holiday season.

SOURCE: Yarns&Fibers

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Liepaja textiles industry is in serious standby mode due to lack of work: Latvia

The Leipaja clothing and textiles industry historically have been one of the most developed industry that operated more than 80 companies, of which most are lingerie producers. The textile industry is in a very serious standby mode at the moment as more than 500 workers in the textiles industry in Liepaja have been asked to go on annual leave due to lack of work according to Girts Kronbergs, head of the Latvian Chamber of Commerce and Industry branch in Liepaja.

Small textile companies that fully depend on their exports to Russian market were affected already in the latter half of 2014. Now it is the large companies, too, that are beginning to feel the impact of the Russian crisis. The companies are not laying workers off, but workloads are decreasing and workers are being told to take vacation. That is not a bad solution. The large companies, if they have to cut output, can count on their workers when demand rises again, explained Kronbergs.

The fact that there are no massive layoffs proves that companies are finding a way to solve their problems. But according to approximate estimates, over 500 workers are on annual leave, said Kronbergs. The larger textile companies – Lauma Fabrics, Lauma Lingerie, V.O.V.A – also market their products in other countries, therefore the crisis in Russia is having a less serious impact on them. The small companies, however, are going through hard times.

According to Liepaja branch of the State Employment Agency, 125 seamstresses registered with the agency from last June to February 5 this year. As of February 16, there were 4,312 unemployed persons in Liepaja, and the unemployment rate was at 12.9%. Most of the production by the seventy to eighty textile companies in Liepaja is being exported, majority to the CIS and the EU countries. A year ago, more than 3,000 people were hired in Liepaja textiles industry. The textile industry hires qualified labor and uses modern production technologies, thereby stands out with high quality production and global competitiveness. Liepaja is the 3rd largest city in Latvia and 10th largest one in the Baltic States, located on a stretch of land between the Baltic Sea and the Liepāja Lake, which are connected by the Trade Canal and hence Liepaja has very favourable environment for business.

SOURCE: Yarns&Fibers

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Propylene prices up in US; ACN down in Asia

In S E Asian countries, Propylene prices stayed stable at US$ 845/ton. In Korea and Japan, prices remained steady at US$ 855/ton and US$ 845/ton respectively. In the Chinese market, prices were quoted at US$ 915/ton.

In Western markets, Propylene prices stayed steady. In the N W European domestic market, prices were offered at € 785/ton, and deals were mainly offered in the range of € 775/ton to € 795/ton. In the US market, selling offers went up to 43.15 cents/pound. Acrylonitrile prices went down by US$ 80/ton in Asian markets. In S E and F E Asian countries, prices were assessed at US$ 1520/ton and US$ 1550/ton respectively. In the Chinese domestic market, prices of ASF and Acrylic Tops were stable at RMB 16050/ton and RMB 17300/ton respectively.

SOURCE: Fibre2fashion

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