INTERNATIONAL
Textile Raw Material Price 2015-06-04
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1280.10 |
USD/Ton |
0% |
6/4/2015 |
|
VSF |
2031.85 |
USD/Ton |
0% |
6/4/2015 |
|
ASF |
2490.89 |
USD/Ton |
0% |
6/4/2015 |
|
Polyester POY |
1235.26 |
USD/Ton |
0% |
6/4/2015 |
|
Nylon FDY |
3098.33 |
USD/Ton |
0% |
6/4/2015 |
|
40D Spandex |
6392.34 |
USD/Ton |
0% |
6/4/2015 |
|
Nylon DTY |
5943.90 |
USD/Ton |
0% |
6/4/2015 |
|
Viscose Long Filament |
1495.35 |
USD/Ton |
0% |
6/4/2015 |
|
Polyester DTY |
2935.26 |
USD/Ton |
0% |
6/4/2015 |
|
Nylon POY |
2685.76 |
USD/Ton |
0% |
6/4/2015 |
|
Acrylic Top 3D |
1443.17 |
USD/Ton |
0% |
6/4/2015 |
|
Polyester FDY |
3375.55 |
USD/Ton |
0% |
6/4/2015 |
|
30S Spun Rayon Yarn |
2723.27 |
USD/Ton |
0% |
6/4/2015 |
|
32S Polyester Yarn |
2005.76 |
USD/Ton |
0% |
6/4/2015 |
|
45S T/C Yarn |
2984.18 |
USD/Ton |
0% |
6/4/2015 |
|
45S Polyester Yarn |
2886.34 |
USD/Ton |
0% |
6/4/2015 |
|
T/C Yarn 65/35 32S |
2739.58 |
USD/Ton |
0% |
6/4/2015 |
|
40S Rayon Yarn |
2185.14 |
USD/Ton |
0% |
6/4/2015 |
|
T/R Yarn 65/35 32S |
2511.28 |
USD/Ton |
0% |
6/4/2015 |
|
10S Denim Fabric |
1.14 |
USD/Meter |
0% |
6/4/2015 |
|
32S Twill Fabric |
0.99 |
USD/Meter |
0% |
6/4/2015 |
|
40S Combed Poplin |
1.35 |
USD/Meter |
0% |
6/4/2015 |
|
30S Rayon Fabric |
0.77 |
USD/Meter |
0% |
6/4/2015 |
|
45S T/C Fabric |
0.78 |
USD/Meter |
0% |
6/4/2015 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.16307 USD dtd. 04/06/2015)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The industry body for synthetic textiles has requested the Textiles Ministry for a break from excise duty on domestically-produced synthetic yarn, which it says is losing market share to cheaper imported yarn from China, Vietnam and Bangladesh. Anil Rajvanshi, Chairman, Synthetic and Rayon Textiles Export Promotion Council, met Union Textile Minister Santosh Kumar Gangwar earlier this week to make a case for scrapping the excise duty. In a letter later submitted to the Ministry, Rajvanshi said that the Indian “manmade fibre industry is passing through a tough phase as the substantially high excise duty provides edge to Chinese producers to dump polyester fibres in India.” According to him, imports of fibres, filament yarn and spun yarns of polyester increased over 18 per cent in 2014-15 compared to the previous year, to $825 million from $698 million in 2013-14. These imports, predominantly from China, amounted to over Rs. 5,000 crore. The excise duty, the council said, is unfair discrimination between cotton and synthetic fibre and is distorting the textile market in favour of cotton, which is the opposite of the global trend.
SOURCE: The Hindu Business Line
Many states, half of which have to be on the side of the proposed constitutional amendment on a national goods and services tax (GST) to enable its roll-out from next April, demanded on Thursday its modification to ensure full compensation for five years in the event of a revenue loss due to the switch. Besides, there were differences between states over the one per cent tax provided in the Bill to help manufacturing states such as Maharashtra, Gujarat and Tamil Nadu. Also, some states raised the issue of subsuming the purchase tax into the proposed GST, and a tax on tobacco, K M Mani, head of the Empowered Committee (EC) of State Finance Ministers told reporters here. Some also demanded empowering of local bodies to tax some advertisements, taken away by the Bill, sources said.
Despite all this, Mani was hopeful that GST would still be on from April 2016, a point concurred by independent experts. He said he’d meet the Rajya Sabha panel examining the proposal on June 16 to present states' demands. Before that, the EC would try to formulate a view on differences between states on the one per cent tax for manufacturing ones, Mani said. At present, the Bill provides for the tapering of compensation for revenue loss from the fourth year. For the first three, states would be given full compensation. This would reduce to 75 per cent in the fourth year and 50 per cent in the fifth year. “States want full compensation for five years, not in this phased manner,” Mani said. Before drafting of the Bill by the central government, states had pressed for inclusion of the compensation for five years in the Bill. The Centre had agreed to this demand but did not agree to full compensation for the fourth and the fifth years. States also want a change in the wording. The Bill says “compensation may extend to five years”. States want a change to “compensation shall extend to five years”, sources said.
The Bill needs assent of at least 15 of the 29 states. The ruling National Democratic Alliance has 11 with it. However, every state would also have to prepare its own GST Bill in line with the Centre, to enable pan-India roll-out. So, a consensus is key. Prashant Deshpande, senior director at Deloitte India, said: "More than states' demand, the more crucial issue is whether all bureacuratic and administriative systems like a GST Network would be in place by then." The Centre's move to woo manufacturing states by providing for one per cent additional tax on inter-state sale of goods for two years has divided states. Consuming states want this tax dropped or its cascading effect be removed. Earlier, chief economic adviser Arvind Subramanian had also criticised the proposed levy, saying it would harm the 'Make in India' campaign. Asked whether this demand would be put forward as the EC's view to the Rajya Sabha panel, Mani said the committee was yet to take a view. Sources said along with the committee demand, specific states' demands could be given as annexures to the parliamentary panel.
A few states pressed for exclusion of purchase tax from GST. In case the Centre does not agree, they put a further ambitious demand to compensate them for 15 years. Purchase tax is levied by only a few, such as Punjab and Haryana. Some other states wanted powers to levy additional sales tax over GST on tobacco and its products, Mani said. Sources said states demanded they get the power to decide the rate of this extra tax. The constitutional bill has already been passed by the Lok Sabha. It was then introduced in the Rajya Sabha, but was referred to a panel. If the House passes it with modifications as recommended by the panel, the Lok Sabha will have to re-consider the bill with the changes.
SOURCE: The Business Standard
Government today notified a framework for revival and rehabilitation of MSMEs, which mandates banks to form a panel to chalk out a corrective action plan to be adopted for units having stressed accounts. "It is expected that above Framework help the lenders and debtors in revival and rehabilitation of enterprises and shall unlock the potential of MSMEs," the MSME Ministry said. The salient features of the framework are identification of incipient stress; formation of committees for distressed micro, small & medium enterprises (MSMEs); and a Corrective Action Plan by the Committee. "Pending a detailed revision of the legal framework for resolving insolvency/bankruptcy, there is a felt need for special dispensation for revival and exit of MSMEs. "The MSMEs facing insolvency/bankruptcy need to be provided legal opportunities to revive their units. This could be through a scheme for re-organisation and rehabilitation, which balances the interests of the creditors and debtors," the Ministry said.
Under the framework, before a loan account of an MSME turns into a Non Performing Asset (NPA), banks/creditors are required to identify incipient stress in the account. Any MSME may also voluntarily initiate proceedings if enterprise reasonably apprehends failure of its business or its inability or likely inability to pay debts and before the accumulated losses of the enterprise equals to half or more of its entire net worth. Moreover, banks shall constitute one or more Committees at such locations as may be considered necessary by the board of directors to provide reasonable access to all eligible MSMEs which have availed credit facilities from such bank. The panel shall comprise of representatives of the bank, independent expert and representative of the state Government.
Under the Corrective Action Plan, the Committee may explore various options to resolve the stress in the account. "The intention is to arrive at an early and feasible solution to preserve the economic value of the underlying assets as well as the lenders' loans and also to allow the enterprise to continue with its business. "During the period of operation of Corrective Action Plan (CAP), the enterprise shall be allowed to avail both secured and unsecured credit for its business operations," the MSME Ministry said. The options under CAP may include: rectification - regularize the account so that the account does not slip into the non-performing asset (NPA) category; restructuring the account if it is prima facie viable and the borrower is not a willful defaulter; and recovery. Once the first two options are seen as not feasible, recovery process may be resorted to.
SOURCE: The Business Standard
West Bengal Chief Minister Mamata Banerjee today said that her government had initiated a plan to invest over Rs 26,000 crore for the development of MSME and Textile sector. She also said that a separate textile policy of state was being formulated by the government. Replying to a question in the state Assembly, Banerjee said that under the plan MSME projects would be set up in joint ventures or through PPP model creating employment opportunities for six lakh people in the state. The state government had earlier generated employment of 4.56 lakh people in the MSME sector in the last four years. With this initiative there would be a massive improvement in the MSME sector and definitely the units like handloom, hosiery, zari and many other units, she said.
Replying to a supplementary, Banerjee said that since 2006 the previous Left-led regime had been able to set up only 49 MSME clusters with an investment of Rs 16,764 crore, but in the last four years her government set up 180 MSME units covering many districts with an investment of Rs 55,740 crore. Describing development as a continuing process, the chief minister said that the state government has established synergies and offered comprehensive package to the investors in the MSME and textile sector. With the setting up of new textile policy, the sector would also improve much faster. The state government is committed to promote MSMEs in the state by creating a sustainable financial ecosystem for the sector. Considering the rapid growth of MSMEs in the state, the MSME & Textiles Department has already launched a Rs 200-crore Venture Capital Fund. Replying to another supplementary, Banerjee said that many more MSME clusters would come up in the state covering several districts to boost the sector.
SOURCE: The Economic Times
Delhi Exporters Association today requested the government to formulate a "clear cut" policy for MSMEs and the cottage industry to help boost exports. The micro, small and medium enterprises (MSME) sector, which provides bulk of employment and contributes about 45 per cent in the country's total exports, is going through difficult times, the association said in a statement. "Government should come out with a clear-cut policy to encourage exports, especially for MSME, tiny and cottage industry sector," it said. It said that domestic factors are mainly responsible for dip in exports. "Main cause for export decline is the lack of confidence amongst foreign buyers in India's ability to supply products on time and at proper quality and price," it said.
High transaction cost and interest rates for exporters too are responsible for declining exports, it added. Going by the trend, it will be difficult to achieve the USD 900 billion exports target by 2019-2020, it said. "Government needs to look seriously at the problems of the MSME, tiny and cottage sector. A mere lip service is not enough," it said. It also said India's manufacturing base is getting eroded due to complexities in the sector. "Unless, India's manufacturing exports increase every year by 10-15 per cent, it will be difficult to generate more employment," it said. India's exports shrank by about 14 per cent in April to USD 22 billion, registering a contraction for fifth straight month.
SOURCE: The Business Standard
India is in a position to grant greater market access to Bangladesh and the two countries can forge collaboration to tap the global textile market, industry body Assocham said today ahead of Prime Minister Narendra Modi's visit to the neighbouring country. The industry body said the Prime Minister's two-day visit is likely to see bold moves take economic relations much beyond the thread of cotton and textiles industry, which dominates bilateral trade. The Prime Minister will embark on a two-day visit to Bangladesh beginning June 6 with an aim to inject new momentum in the bilateral relationship by enhancing cooperation in connectivity, economic and other areas. "With such a huge trade surplus in our favour, India can afford to be much more liberal towards its neighbour in granting market access."In fact, while a fair competition is welcome, India and Bangladesh can get together in jointly tapping the global textiles market with advantage of cost effective Bangladeshi workforce, while India can provide support in technology, branding, scale etc," Assocham President Rana Kapoor said.
India-Bangladesh trade has increased over the years but the share of Bangladesh in India's total imports remains minuscule. Share of Bangladesh in India's exports has remained around 2 per cent in recent years. India has consistently maintained a trade surplus with Bangladesh, Assocham noted. "Of the total bilateral trade of USD 6.65 billion, India's exports comprised USD 6.16 billion while imports were less than USD 500 million, leaving a large trade surplus of USD 5.68 billion," the industry body pointed out. India's imports from Bangladesh consist of primary products like betel nuts, jute fibre/yarn, oil cakes, fish etc. On a holistic level, as India, Thailand or Sri Lanka climb up the ladder of their dynamic comparative advantage, more labour-intensive industries can potentially move to lower wage countries such as Bangladesh and Myanmar, Assocham said.
SOURCE: The Economic Times
Indian and Australian negotiators were working overtime for the proposed free trade agreement, Australian High Commissioner to India Patrick Michael Suckling said here on Thursday. After an event at the Calcutta Chamber of Commerce, Suckling said that two major rounds of negotiations have already taken place so far this year. “The third round is slated for July. However, negotiators remained engaged between the major rounds – almost on a weekly basis,” the diplomat said. Though negotiations have been on for some years, now both the Governments are planning to wrap up the agreement by the end of this year.
In the eastern hemisphere, Australia has concluded FTAs with China and Japan. For Australia, the proposed FTA with India will help advance its trading influence among top Asian economies. India has FTAs with Japan and South East Asian nations. An FTA with Australia would lead to extension of bilateral ties to the most resource-rich part of the region. The Australian Envoy said that he met the West Bengal Finance Minister Amit Mitra here during his visit and discussed possible cooperation in mutually exclusive interest areas such as mining, deep sea fishing, food processing and agriculture.
SOURCE: The Hindu Business Line
India and The Netherlands will be looking to further strengthen political and economic ties, when the Dutch Prime Minister Mark Rutte meets Prime Minister Narendra Modi here. The Prime Minister of Netherlands begins a two-day visit here on June 5. In a statement, the Netherlands Embassy in India said that Rutte will be accompanied by Minister for Foreign Trade Lilianne Ploumen and Minister for Agriculture Sharon Dijksma along with a trade delegation. The statement adds that the Agriculture Minister is accompanied by a delegation of more than 80 Dutch companies and research institutes, headed by the chairman of the Confederation of the Netherlands’ Industry and Employers (VNO-NCW) Hans de Boer. The Netherlands is India’s fourth largest trading partner within the EU and it is among the top five investors in India. The trade volume between India and The Netherlands has increased over the last couple of years to almost €6 billion.There are large opportunities for Dutch companies in India, in particular in agriculture and horticulture, water management, life sciences and healthcare, and sports infrastructure.
SOURCE: The Hindu Business Line
The 161-member World Trade Organization (WTO) on Thursday urged India to undertake greater tax reform and liberalise the country’s Foreign Direct Investment (FDI) policy. Concluding the country’s sixth trade policy review, the WTO stated India needed greater tax reforms to increase investment in infrastructure. Members also stated effort by the government to introduce a goods and services tax (GST) was a welcome step. “Members urged India in particular to pursue further tax reforms, which may increase government revenues, as well as investment in infrastructure. They welcomed its steps to introduce a nationwide goods and services tax,” the WTO said in a report concluding India's trade policy review conducted over June 2-4. Trade policy reviews are a mandatory WTO exercise to examine policies of its member countries. India’s trade policy review was previously conducted in 2011. The review took place at the WTO headquarters in Geneva and the Indian delegation was led by Commerce Secretary Rajeev Kher. Lauding the government’s initiative to increase FDI limits in insurance and railways, the WTO stated there was scope for further improvement. The members also applauded the Make In India programme to transform India into a manufacturing hub and the setting up of a portal to facilitate business.
The WTO also patted India on the back for taking steps to facilitate trade under the Trade Facilitation Agreement (TFA) signed last November, which is yet to be ratified. “While some members commended India’s recent initiatives to improve the transparency and predictability of its trade and related policies, such as inviting public comments on new legislation, members urged India to provide timely public consultations on draft regulations, submit notifications on a regular basis to the WTO, and provide a reasonable period between the announcement of new regulations and their entering into force,” the report stated. However, the WTO expressed concerns of over the “complexity and uncertainty” in the country’s tariff structure, including an additional duty and a special additional duty, and the large difference between applied and bound rates. Some of the members also complained against India’s customs valuation and import licensing requirements on particular products, although they noted India had not introduced any new trade barriers to safeguard its agriculture or manufacturing sectors.
SOURCE: The Business Standard
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 63.61 per barrel (bbl) on 02.06.2015. This was higher than the price of US$ 61.84 per bbl on previous publishing day of 01.06.2015.
In rupee terms, the price of Indian Basket increased to Rs 4060.23 per bbl on 02.06.2015 as compared to Rs 3933.64 per bbl on 01.06.2015. Rupee closed weaker at Rs 63.83 per US$ on 02.06.2015 as against Rs 63.61 per US$ on 01.06.2015. The table below gives details in this regard:
|
Particulars |
Unit |
Price on June 02, 2015 (Previous trading day i.e. 01.06.2015) |
Pricing Fortnight for 01.06.2015 (May 14 to May 27, 2015) |
|
Crude Oil (Indian Basket) |
($/bbl) |
63.61 (61.84) |
63.49 |
|
(Rs/bbl |
4060.23 (3933.64) |
4045.58 |
|
|
Exchange Rate |
(Rs/$) |
63.83 (63.61) |
63.72 |
SOURCE: PIB
Last week the Haiti’s Center for the Facilitation of Investments (CFI) and Association of Industries of Haiti signed a Memorandum of Understanding with the Inter-American Development Bank to ensure support in renewing the existing duty-free trade agreement with the United States. The clothing industry plays a critical role in Haiti’s economy, with garments accounting for 90 percent of the country’s exports to the United States. In 2014, $854.3 million worth of textiles and apparel were shipped to the U.S. “The apparel and productive sector is a key provider of employment in the Haitian economy and as this government seeks to increase employment, we are happy to be able to continue pursuing the critical investments the sector needs,” said CFI Director General Norma Powell in a statement to Haiti Libre. The current duty-free status exists under the Caribbean Basin Trade Partnership Act, the 2008 Haitian Hemispheric Opportunity Through Partnership Encouragement (HOPE II) and the 2010 Haiti Economic Lift Program.
Last month in the African Growth and Opportunity Act (AGOA) Extension and Enhancement Act of 2015, an addendum was added to AGOA, which allows the extension into 2025. The long-term renewal of the program will improve the environment for investment and assist in creating new jobs. “The AGOA Bill contains a fundamental provision which extends the HOPE/HELP Program for 10 years until September 30, 2025” ADIH Executive Director Marie-Louise Augustin Russo stated in a recent press release. Since the 2010 earthquake, Haiti’s garment industry has grown an impressive 52 percent with employment rising from 17,000 to nearly 35,000 workers. Many North American companies such as Gildan (Under Armour), Hanes, Target and Walmart rely on Haiti for their apparel. Hanes ships cotton grown in the United States to the Dominican Republic for processing. It is then shipped to Haiti and is manufactured into underwear and T-shirts before continuing to the U.S and other countries. In order to qualify as duty-free apparel the garments must be wholly assembled, sewn, or knit-to-shape, in Haiti from any combination of fabrics.
SOURCE: The Haitian Times
The National Union of Textile Garment and Tailoring Workers of Nigeria (NUTGTWN) has lauded the renewed efforts of the Nigeria Customs Service (NCS) in the fight against smuggling. “We are impressed by the recent discovery of 75 illegal warehouses in Kano where contraband textile materials worth about Naira 319.9 billion were stored. We commend the customs for the reported seizure of the smuggled textile materials. We hope that this development is not another passing fad in line with the mood of the country for change but an enduring commitment of Nigeria Customs Service to do its job to protect local producers and help the country to ensure sustainable jobs,” Issa Aremu, the union’s general secretary said on its website. Aremu said the major threat to the realization of the great potential of Nigeria in textile production is high influx of counterfeit and smuggled goods. Over 90 per cent of Nigeria’s huge market size is dominated by smuggled and counterfeit goods, killing local companies in Kano, Kaduna, Lagos, Guzau, Aba and Port Harcourt, and millions of direct and indirect associated local jobs. The union has been reassured by the Comptroller General of Customs’ resolve to prosecute the smugglers including four Chinese nationals linked with the seized contraband textile materials in Kano. But Aremu insisted that the anti-smuggling efforts will be in vain unless the seized contraband textile materials are burnt in public like seized drugs. He also requested President Muhammadu Buhari to reconstitute Presidential Task Force on destruction of seized textile materials. The task force should include all critical stakeholders including labour. This is necessary in order to protect and strengthen our domestic textile industries and save Nigerians’ job, Aremu said in the statement.
SOURCE: Fibre2fashion
The new conductive yarns created in collaboration with Google's industrial partners enable the Project Jacquard to weave touch and gesture interactivity into any textile using standard, industrial looms. Jacquard yarn structures combine thin, metallic alloys with natural and synthetic yarns like cotton, polyester, or silk, making the yarn strong enough to be woven on any industrial loom. Using conductive yarns, bespoke touch and gesture-sensitive areas can be woven at precise locations, anywhere on the textile; even everyday objects such as clothes and furniture can be transformed into interactive surfaces. Alternatively, sensor grids can be woven throughout the textile, creating large, interactive surfaces. The complementary components are engineered to be as discreet as possible. We developed google_jacquard.jpginnovative techniques to attach the conductive yarns to connectors and tiny circuits, no larger than the button on a jacket. These miniaturized electronics capture touch interactions, and various gestures can be inferred using machine-learning algorithms. Captured touch and gesture data is wirelessly transmitted to mobile phones or other devices to control a wide range of functions, connecting the user to online services, apps, or phone features. LEDs, haptics, and other embedded outputs provide feedback to the user, seamlessly connecting them to the digital world.
Producing at scale
Jacquard components are cost-efficient to produce, and the yarns and fabrics can be manufactured with standard equipment used in mills around the world. One loom can generate as many different textile designs as there are people on the planet. Now that same loom can also weave in interactivity.
Making connected clothing
Connected clothes offer new possibilities for interacting with services, devices, and environments. These interactions can be reconfigured at any time. Jacquard is a blank canvas for the fashion industry. Designers can use it as they would any fabric, adding new layers of functionality to their designs, without having to learn about electronics. Developers will be able to connect existing apps and services to Jacquard-enabled clothes and create new features specifically for the platform. We are also developing custom connectors, electronic components, communication protocols, and an ecosystem of simple applications and cloud services.
SOURCE: The IConnect 007
The All Pakistan Textile Mills Association (APTMA) has urged the government to bring down import duty on polyester staple fibre (PSF) to zero, according to reports in the Pakistani media. In a press release, APTMA acting chairman Wisal Monnoo said that all imports of specialty fibres including acrylic be allowed at zero per cent import duty enabling the industry to diversify its product base. He further said that imports of viscose staple fibre, which is not being manufactured locally, should also be allowed at zero per cent customs duty. “The country’s textile industry is unable to compete in man-made fibre (MMF) textile and clothing products owing to the protection extended to local PSF,” Monnoo said. “Presently, 6 per cent customs duty and import incidental together with local PSF manufacturers’ margin make PSF available at around 20 per cent price differential,” he added.
The textile industry is predominately cotton based with an odd fibre mix, i.e. 80 per cent cotton and 20 per cent MMF being used as against the global trend of 70 per cent MMF and 30 per cent cotton. This inhibits the textile industry to diversify its products and markets, APTMA maintains. “The textile industry is still unable to produce exportable surplus, in particular MMF-based textile products, to benefit from enormous opportunities under GSP+ of export of synthetic based textile products,” Monnoo said. He said the proposal to increase custom duty on PSF import would not only make export-led textile goods more unviable but also PSF-based textile goods for domestic consumption unaffordable. He warned that cheaper import and smuggling of fabric and synthetic yarn have made inroads into the domestic market due to present high polyester tariff.
SOURCE: Fibre2fashion
The International Monetary Fund on Thursday cut its 2015 growth forecast for the United States and called on the Federal Reserve to put off a rate hike until conditions are stronger. In an annual report of the world's largest economy, the Fund said growth would reach only 2.5 percent this year due to the unexpected first quarter contraction, compared to the previous forecast of 3.1 percent in April. It said growth is already rebounding from the stall. But it nevertheless strongly recommended that the Fed hold off on its planned interest rate hike until more resilience is shown, likely only in early 2016. It said growth momentum this year had been sapped by "a series of negative shocks", pointing to extremely harsh winter weather in parts of the country, the three-month West Coast ports slowdown that locked up trade, the sharp rise of the dollar and the downturn in the oil industry. Still, the IMF said, "These developments represent a temporary drag but not a long-lasting brake on growth." "A solid labor market, accommodative financial conditions, and cheaper oil should support a more dynamic path for the remainder of the year."
IMF chief Christine Lagarde said at a press conference on the report that the Fund sees US growth resuming a 3.0 percent pace over the rest of the year, and achieving that for the whole of 2016. "We still believe that the underpinnings for continued expansion are in place." But she pushed for the Fed to hold off on a rate hike, which has been anticipated for as early as July, saying growth conditions are not yet firm enough for it. The Fed has locked its benchmark federal funds rate at zero since 2008, and has been waiting for proof from a tightening jobs market and rising inflation that the economy is locked into higher gear to make its first increase toward a more "normal" monetary policy.
Without those signs, the IMF report warned, raising rates too soon could result in tighter financial conditions and even financial instability, that could then force the Fed to cut rates again. That could both stir damaging volatility in world markets, and undermine the Fed's credibility. The Fed "should remain data-dependent and defer its first increase in policy rates until there are greater signs of wage or price inflation than are currently evident," it said. "Barring upside surprises to growth and inflation, this would put lift-off into the first half of 2016." While the IMF picture for the US economy was generally positive, it noted a few weaknesses or danger points that raise risks that would have impacts far beyond US borders. "There is a risk that a further marked appreciation of the dollar -- particularly one that takes place in an environment where policies to address growth deficiencies languish both in the US and abroad -- would be harmful."
The IMF review also included a new analysis of financial system stability which warned that the US needs to put more effort into monitoring and regulating non-bank financial institutions. Investors' search for yield in the current easy-money environment has increased the position in financial markets of lightly-regulated non-banks like insurance companies, investment funds and others, which are leveraging more and taking more risks, it noted. This is pushing up asset valuations to what could be excessive levels, the IMF suggests, and yet for non-banks, "there is less visibility on the size and nature of the embedded risks and fewer regulatory and supervisory levers to manage those risks."
SOURCE: Yahoo News
The Economic Survey 2014-15 released by Finance Minster on Thursday termed weak export yarn, gas shortage and substitution of domestic edible oil with imports as key reasons for lower growth of Large Scale Manufacturing (LSM). According to the document, LSM during July-March 2014-15 registered a growth of 2.5 percent as compared to 4.6 percent in the same period last year. The production data of Large Scale Manufacturing (LSM) received from the Oil Companies Advisory Committee (OCAC) comprising 11 items, Ministry of Industries and Production 36 items and Provincial Bureau of Statistics 65 items have contributed in LSM growth as 0.15 percent, 1.02 percent and 1.31 percent, respectively. The industry specific data shows that sub sectors recorded negative growth during the period July-March FY 2014-15 over corresponding period of last year ie Wood Product declined by 78.46 percent (as compared to -8.91 percent last year), Engineering Products 10.68 percent (as compared to -20.15 percent last year), Paper and Board 7.26 percent (as compared to 9.30 last year), Food Beverage and Tobacco 1.03 percent (as compared to 8.24 percent last year) and Rubber products 0.56 percent (as compared to 9.41 percent last year).The sector showing growth during July-March 2014-15 such as iron and steel products 35.63 percent (as compared to 3.38 percent last year), Automobiles 17.02 percent (as compared to 0.35 percent last year), leather products 9.62 percent (as compared to 12.70 percent last year), electronics 8.21 percent (as compared to 7.02 percent last year), pharmaceuticals 6.38 percent (as compared to -0.37 percent last year), chemicals 5.94 percent (as compared to 6.74 percent last year), non metallic mineral products 2.56 percent ( as compared to 0.19 percent last year), coke & petroleum products 4.73 percent (as compared to 7.49 percent last year), fertilizers 0.95 percent (as compared to 21.64 percent last year) and textile 0.50 percent (as compared to 1.45 percent last year).
LSM growth was hampered by a broad range of issues that include weak export of cotton yarn, gas shortages in number of industries and sector specific factors like closure of large chip board plant and substitution of domestic production of edible oil with imports. Cotton yarn production witnessed both demand and supply issues. On demand side, export demand for cotton yarn has remained low since last year especially after the reversal of cotton policy by China. China has been building cotton stocks since 2011 by offering higher than competitive prices to local farmers. The consequent widening of the gap between international and local cotton prices encouraged Chinese manufacturers to increase their imports of cotton yarn and its bi products. In March 2014, the Chinese Government introduced a major shift and would pay the price differential to farmers if market price falls from a target level, which was significantly smaller than the price at which the government was earlier buying from the market. On supply side, gas shortage was another drag in yarn manufacturing.
The textiles sector in Pakistan has remained stagnant over the last decade due to a number of exogenous and indigenous factors such as subsidies given to cotton farmers and other textiles products by several countries which distorted prices, marketing constraints, global recession, and increasingly stringent buyers conditionality. On the domestic side, cotton production has remained stagnant at about 13 million bales per annum and the resistance to grading and standardization of cotton bales by ginners and spinners alike has consistently lowered the value of Pakistani cotton by around 10 cents per pound in the international market. On the other hand, the value-added garments sector has grown marginally due to its limited product range, low usage of manmade fibers and inability of manufacturing units to restructure in order to meet changing international requirements.
Federal government has announced textile policy 2014-19. The package carries special duty-drawback rates, duty exemption on plants and machinery, subsidy on long-term loans and development subsidies. The Policy offered about Rs 64.15 billion cash subsidy to the textile and clothing sector to boost exports to $26 billion by 2019 from $13 billion. Finance Division will provide Rs 40.6 billion over five years for duty drawback, technology up-gradation and brand development etc., while another Rs 23.5 billion will be provided for skill development, dedicated textile exhibitions, establishment of world textile centre, weaving city, incubators, apparel house, and mega textile awards.
SOURCE: The Business Recorder
