NATIONAL

• Indian companies at biggest risk due to rupee fall
• RCEP negotiations: India faces flak for tariff cuts
• CEA Arvind Subramanian to look into country's FTAs, suggest areas for renegotiation
• Taiwan to participate in Make In India campaign
• 'Shaan-e-Pakistan' a three day exhibition coming up soon
• Global crude oil price of Indian Basket was US$ 56.29 per bbl on 16.07.2015

INTERNATIONAL

• Synthetics fibers dominates cotton demand on the global front
• Vietnam's Eximbank to handle India's $300 million textile loan
• Malaysian textile exports set to benefit from MTFTA
• Pakistan forms committee to arrest falling textile exports

Textile Raw Material Price 2015-07-16

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.16316 USD dtd.16/07/2015)

The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

Indian companies at biggest risk due to rupee fall

Having borrowed through foreign exchange loans in a big way besides having overseas operations, top Indian companies are highly vulnerable to rupee depreciation despite a slight improvement in their sensitivity to the exchange rate, said India Ratings. The rating agency estimates that a 1% depreciation of the rupee would shave off 0.19% of the absolute EBITDA of 234 companies out of the top 500 listed corporate borrwers. Within these companies, fertiliser companies would see their EBITDA reducing by 2% and consumer durables would also be affected more than any other sector, the rating agency said. Further, the worry escalates as 32 corporates out of these 234 companies will see their operating profits falling by 1-3% for every 1% depreciation of the rupee. These corporates belong to the metals & mining, fertiliser, textile, sugar, gems & jewellery and IT sector.

SOURCE: The Financial Express

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RCEP negotiations: India faces flak for tariff cuts

India has got “singled out’’ for offering the lowest market openings in goods at the recent ministerial meeting of the 16 countries negotiating a regional comprehensive economic partnership (RCEP) pact. It is under pressure to improve its offers substantially. New Delhi also conceded to the demand of RCEP members, including the 10-member Asean countries, China, South Korea, Japan, Australia and New Zealand, to agree to a separate group on e-commerce that will hold its meeting early next month, a Government official told BusinessLine  However, it got itself a breather as the ‘e-commerce’ group is one on cooperation and is not yet a negotiating one. “India need not take any commitment immediately as the committee will have to meet to decide its agenda. It will first start with exchange of information. We have some breathing space,” a government official said. Members are trying to wrap up the negotiations for RCEP — which will result in the largest regional trading bloc in the world — by the end of this year. RCEP countries account for 45 per cent of the world’s population with a combined gross domestic product of $21.4 trillion. In the negotiations on goods, India faced flak from all for offering low market openings. “Even China and South Korea, which initially supported India’s low ambitions, found its offers too low,” the official added.

Commerce and industry Minister Nirmala Sitharaman, who represented India at the meeting in Kuala Lumpur, did not give any concrete assurance of better offers on tariff cuts, but pressure will mount in the next negotiating round beginning August 3 in Nay Pyi Taw. New Delhi wants to commit to tariff cuts on less than half the goods it trades. Members such as Australia, New Zealand and Japan want India to more than double its offer, while China and South Korea want a middle ground.

China factor

India is reluctant as it would mean giving greater access to goods from China — something that the Indian industry is totally against. “Although there would most likely be a mechanism where members would offer different levels of concessions to different countries, the lowest levels cannot be too different from the highest ones,” the official said. In the area of services, while most members have agreed to India’s condition of a positive list (only those sectors included that are mentioned in the list), many are insisting that whatever is offered on a most favoured nation (MFN) basis to all trade partners at the moment, should be woven into the commitments. “India does not want that as the openings in services offered on an MFN basis can be withdrawn when required, but once commitments are taken, it is difficult to do so,” the official added. Rules on investments and government procurement would also be part of the pact.

SOURCE: The Hindu Business Line

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CEA Arvind Subramanian to look into country's FTAs, suggest areas for renegotiation

The government has asked chief economic advisor Arvind Subramanian to look into the country's trade agreements and suggest areas that need a review and renegotiation, a senior official said. There is a feeling that the India has given away too much in bilateral and multilateral trade agreements negotiated over the years, leading to a flood of manufacturing imports that are hurting the domestic industry.  Subramanian, who has seen world trade from close quarter during his stint at GATT, the multilateral trade organisation that preceded the WTO, will now pore over these agreements. "The study would focus on what tangible benefits country has secured and in what sectors," said the official privy to the development.  Within the government, the departments of economic affairs (DEA) and revenue in the finance ministry have in the past expressed concerns over the trading arrangements giving away too much on the goods side in return for too little.

The DEA had even commissioned a study by the Indian Institute of Management on FTAs after high imports pushed up country's current account deficit, posing risk to its currency in early 2013. The department of revenue has time and again raised concerns over rise in third country goods entering into India as imports from trading partners under these formal arrangements. "There are issues over goods from third countries finding their way into India....a close examination are needed," said a finance ministry official.

In 2013, New Delhi even suspended gold jewellery under the India-Thailand early harvest scheme following alerts of third party goods finding entry into India at lower duty in alleged violation of the rules of origin under the agreement. The move to comprehensively study trading arrangements comes at a time when India is in talks with some key countries and groupings for pacts including the Regional Comprehensive Economic Partnership (RCEP) and the European Union. The Narendra Modi-led government wants to carry forward its trade engagement with ample caution to ensure they bring tangible benefits for domestic industry, particularly in the manufacturing sector. Earlier, a high-level panel set up by the cabinet secretary to look into the woes of medium and small enterprises had said that concerned ministries and departments should be consulted extensively before entering into talks for a trading arrangement. The government is already revisiting the bilateral investment promotion agreement model draft after many foreign investors invoked international arbitration after their investments ran into trouble or faced adverse policy action.

SOURCE: The Economic Times

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Taiwan to participate in Make In India campaign

Taiwan is exploring investment opportunities in India in a big way, said its trade envoy here. Guann Jyh Lee, head of their missions' economic centre in India, told Business Standard: “For the past decades, Taiwanese investors contributed a lot in China's growth story and they were also the largest FDI (foreign direct investment) contributor. Despite present trends, China will still grow but how fast it will continue the growth needs to be seen.  However, India  is expected to be the second largest and the world’s fastest growing economy in the next five years. Taiwan is looking at the global supply chain and, therefore, in addition to China, it is targeting some potential destinations, including India, for increasing the presence of Taiwanese companies.” Lee said the Chinese government continues to provide incentives to attract investment. However, the Modi government here shows more determination and energy in the development of markets. Lee, here at a function to showcase new products, cited some hurdles -- infrastructure bottlenecks, consistency in regulations and cultural barriers — which needed to be removed. “There should be consistent implementation and interpretation about regulations,” he opined. Further, Lee said Taiwanese investors had concerns over the ease of doing business in India. They want the government to be a facilitator and a simplification of procedures.

SOURCE: The Business Standard

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'Shaan-e-Pakistan' a three day exhibition coming up soon.

Shaan-e-Pakistan', a three-day exhibition will not just offer a glimpse of Pakistani fashion, the event is about empowerment too which has been conceptualized by popular Pakistani designer Huma Nassr in association with entrepreneur and Indian co-host Sangeeta Das will begin on September 10, at The Grand Hotel, New Delhi. The event will witness over 150 exhibitors from India and Pakistan offering premium fashion in the capital. But a high point of the event will be the display of work by women weavers, says an organizer as Women weavers and craftsmen rarely realize the worth of their exquisite handwork. Since most designers use hand embroidery, this will prove to be a good opportunity for these artisans to get the exposure they deserve, Nassr, who made India her second home seven years back and retails under the brand name Braahtii, said in a statement.

Das feels that with a trade potential of billions of dollars between the two countries, the event will not only offer a unique opportunity to Indian fashionistas to interact with their Pakistani counterparts, but also offer a firsthand opportunity to customers to feel and own the best quality products India and Pakistan have to offer. The event will see the participation of different brands that deal in fashion, textiles, jewellery, accessories and furniture including some of the fashion’s celebrated names from Pakistan like HSY and Umar Sayeed. The exhibition will also showcase the ensembles of prominent designers who will feature in the grand fashion show. On the finale day, there will be a fashion show comprising popular designers from the two countries.

SOURCE: Yarns&Fibers

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Global crude oil price of Indian Basket was US$ 56.29 per bbl on 16.07.2015

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$ 56.29 per barrel (bbl) on 16.07.2015. This was lower than the price of US$ 57.08 per bbl on previous publishing day of 15.07.2015.

In rupee terms, the price of Indian Basket decreased to Rs 3574.42 per bbl on 16.07.2015 as compared to Rs 3617.73 per bbl on 15.07.2015. Rupee closed weaker at Rs 63.50 per US$ on 16.07.2015 as against Rs 63.38 per US$ on 15.07.2015. The table below gives details in this regard:

SOURCE: PIB

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Synthetics fibers dominates cotton demand on the global front

Cotton Incorporated aims to improve the demand profitability of cotton through research and marketing as cotton continues to face unremitting competition from synthetic fibers. The organization is funded by U.S. upland cotton growers and importers of cotton and cotton textile products, is trying to increase market shares in traditional markets, while looking to other markets where cotton is usually not the first fiber of choice. The Cotton Board, which administers the cotton research and program on June 14 conducted its inaugural Women in Agriculture Tour where women who work in the cotton industry toured Cotton Incorporated’s Cary, N.C. research facility and heard presentations by Cotton Incorporated officials on the continuing challenges facing cotton in the textile industry and steps the company is taking to ensure upland cotton remains competitive. Cotton Incorporated vice president of corporate strategy and program metrics, Kim Kitchings addressing 64 women from 16 of the 17 cotton producing states said that cotton has seen a significant drop of 10 percent in the apparel market over the past few years. This represents about 30 million bales over a decade. Kitchings said that it is important and they must take it very seriously. The board are working to regain share but the trend to leisure wear, or the use of athletic wear in every day wear, is a challenge for cotton. Now, consumers, instead of wearing khakis or Dockers, are wearing yoga pants. Some of this is friendly to cotton and some of it is not. But they want to make sure it becomes friendly to cotton.

Another big challenge for cotton was the collapse in oil prices last year which also meant that polyester prices dropped since polyester is derived from oil. While cotton prices have fallen, polyester prices has fallen even more and synthetic fibers continue to be less expensive than cotton. That’s not good when retailers and brands are looking at their margins. They tend to make more money when they substitute polyester for cotton. The Board want to give them every reason, every advantage not to do that and they are continuing to show that consumers demand cotton in the marketplace. Mark Messura, Cotton Incorporated senior vice president of global supply chain marketing, said that the challenge for cotton in the textile business is that cotton is a natural fiber but not a natural choice for manufacturers. In manufacturing, consistent ingredient are required. Cotton is not that, Messura explained. Cotton is great for a whole lot of reasons, primarily because consumers who wear it know it and love it, and that’s a message they keep promoting. But from the manufacturing side, when it comes to making clothes or towels or bedding sheets or other types of products, cotton is not the first choice.

Even the best textile mills in the world throw away three to eight percent of a bale of cotton even when they paid for a full bale due to short fibers and other defects, while every single fiber in a bale of polyester or nylon is used with zero waste. He said that they grow a great product, but they have to work hard to sell that product and influence more manufacturers to use cotton. In its work with manufacturers and retailers, Cotton Incorporated demonstrates how they can do something different with cotton. For example, trans dry technology allows moisture to move away from the body in clothing, which ensures greater comfort. Cotton Incorporated licenses manufacturers to use trans dry technology for free, but they have to agree to use cotton, Messura said.

Denim remains one of the most important markets for cotton, representing one out of every five pounds sold at retail. To continue to develop the denim market, Cotton Incorporated has adapted water repellent denim that allows denim to both breathe and be water repellent. This allows cotton to stay competitive in this category by offering something new, Messura said. Another market where cotton’s share is low but the potential is huge is non-wovens, which includes diapers, disposable cleaning wipes and feminine hygiene products. The Seal of Cotton is very important for these products. The Seal is well recognized by consumes and they transfer that over to these products as a positive perception for cotton. Through it all, efforts must continue to build cotton’s market share in both traditional and non-traditional markets, Messura stressed.

Cotton needs to strategically diversify. They need to get cotton in a whole range of products, not just denim, not just menswear but in a lot of different things so that when the market goes up or down, they are protected and have diverse demand for cotton. Agricultural research is also a critical part of Cotton Incorporated’s work with the company seeking ways to help cotton farmers with profitability squeezes, said Kater Hake, vice president of agricultural research. There are three agricultural commodities that have a petroleum alternative, corn ethanol, soy biodiesel and cotton, with polyester, Hake said. That means they are particularly vulnerable to consumer whims. The cotton farmers need to stress on quality to remain competitive to synthetics as textile companies can do a lot more if given high quality of cotton. Also consumers need to understand that modern cotton production is sustainable and Cotton Incorporated continues to educate them on this.

SOURCE: Yarns&Fibers

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Vietnam's Eximbank to handle India's $300 million textile loan

Vietnam's Eximbank will disburse any loans under India's $300 million credit for projects which use Indian-made equipment with value of up to 75% of the project's total investment, the Vietnamese government's website reported. Each loan carries a 10-year span and an interest rate of 2% per annum, the website cited a Vietnam Textile and Apparel Association report as saying. Textile and garment exports are Vietnam's second-biggest cash earner after phones and accessories. The credit comes ahead the Trans-Pacific Partnership (TPP) free trade pact being negotiated among 12 countries - including Vietnam but not India - which requires raw materials to be made locally or sourced from 12 TPP members.

SOURCE: The Business Standard

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Malaysian textile exports set to benefit from MTFTA

Textile and apparel exports from the Southeast Asian nation of Malaysia are set to benefit as the Malaysia-Turkey Free Trade Agreement (MTFTA) will come into effect on August 1, 2015, according to Malaysian media reports. The MTFTA signed in April 2014 envisages an increase in bilateral trade from $969 million in 2013 to $5 billion by 2020. Upon its entry into force on August 1, duties on 70 per cent of tariff lines will come down to zero, and after a period of eight years, duties will be reduced/eliminated for almost 86 per cent of tariff lines, Malaysian minister of international trade and industry Seri Mustapa Mohamed said in a statement.

Textiles and apparel, which make up Malaysia’s largest export item to Turkey, are among the products that will benefit from immediate duty-free treatment in Turkey, said Mohamed and urged businesses to increase their exports to Turkey. From August 1, Turkey will also eliminate all existing additional duties (ranging from 20 per cent to 30 per cent) on textiles; apparel and footwear, which currently affect more than a thousand tariff lines.

“Turkey, with a population of 74 million people, holds vast market potential. I urge the Malaysian business community to take full advantage of the opportunities offered under this FTA, which can also help strengthen bilateral trade and economic linkages on a long-term basis,” Mustapa said in the statement. Malaysia already has FTAs in place with member countries of ASEAN, and with India, Australia, China, Pakistan, Japan, Chile and New Zealand.

SOURCE: Fibre2fashion

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Pakistan forms committee to arrest falling textile exports

The Pakistani government has constituted a high level committee to bring about a ‘Policy Action Plan’ to redress the impediments confronted by the textile industry in increasing its exports, the media has reported. The committee will present its recommendations in the next month which will be forwarded to the Prime Minister for swift decisions in order to reverse the declining trend in the country’s exports. Commerce minister Khurram Dastgir Khan ordered the formation of the committee during a meeting with representatives of All Pakistan Textile Mills Association (APTMA), Trade Development Authority of Pakistan (TDAP) chairman S M Muneer and Federation of Pakistan Chambers of Commerce and Industry (FPCCI) president Mian Muhammad Adrees. The minister directed the committee to hold negotiations with all 14 associations of the textile sector and bring about viable proposals keeping view the constraints faced by the government. Representatives of APTMA demanded government’s support as international competitors in the textile sector are eroding Pakistan’s preferences. The association proposed to bring about a level playing field for Pakistani textile producers to take on regional competitors who are heavily subsidized and supported by their governments. Pakistani textile exporters have been complaining about the lack of ease of doing business, chronic power shortage, high gas prices and cumbersome taxation policies that have been hurting export earnings. “The government should also take stern and swift steps in case where dumping and smuggling of goods is reported,” they said.

SOURCE: Fibre2fashion

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