The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 31 JULY, 2015

NATIONAL

INTERNATIONAL

 

Textile Raw Material Price 2015-07-30

Item

Price

Unit

Fluctuation

PSF

1137.99

USD/Ton

0%

VSF

2158.43

USD/Ton

0%

ASF

2510.28

USD/Ton

0%

Polyester POY

1102.07

USD/Ton

0%

Nylon FDY

2873.55

USD/Ton

0%

40D Spandex

6040.99

USD/Ton

0%

Nylon DTY

3102.13

USD/Ton

-1.55%

Viscose Long Filament

6032.83

USD/Ton

0%

Polyester DTY

1387.80

USD/Ton

0%

Nylon POY

2693.96

USD/Ton

0%

Acrylic Top 3D

2706.20

USD/Ton

0%

Polyester FDY

1338.81

USD/Ton

0%

30S Spun Rayon Yarn

2759.26

USD/Ton

0%

32S Polyester Yarn

1828.62

USD/Ton

0%

45S T/C Yarn

2938.86

USD/Ton

0%

45S Polyester Yarn

2024.55

USD/Ton

0%

T/C Yarn 65/35 32S

2465.38

USD/Ton

0%

40S Rayon Yarn

2906.21

USD/Ton

0%

T/R Yarn 65/35 32S

2661.30

USD/Ton

0%

10S Denim Fabric

1.14

USD/Meter

0%

32S Twill Fabric

0.96

USD/Meter

0%

40S Combed Poplin

1.06

USD/Meter

0%

30S Rayon Fabric

0.77

USD/Meter

0%

45S T/C Fabric

0.78

USD/Meter

0%

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.16327 USD dtd. 30/07/2015)

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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Trade body expects cotton stocks to swell

The Cotton Association of India expects India to pile up huge inventory of cotton just like China, if the Cotton Corporation of India (CCI) does not take measures to offload its stock swiftly. Maintaining the cotton output at the last estimated level of 38.27 million bales (a bale is 170 kg), Dhiren N Sheth, President, CAI, said the Corporation had procured about 8.7 million bales from farmers as part of the Government’s minimum support price commitment. Unfortunately, he said, looking at the pace at which CCI is selling the cotton, it is expected that it would be left with a sizeable quantity of cotton by the end of the season (in September). This does not augur well for the country with apprehension of a major support price operation looming large at the start of next cotton season, he added. India’s cotton inventory is expected to surge 25 per cent to 7.39 million bales by October from 5.89 million a year earlier. The faulty policy of China led to it holding huge cotton stockpile equivalent to its two year consumption. Though China has stopped procuring cotton from farmers and switched to distributing direct subsidy to farmers from this year, Sheth said it is still sitting on a huge stockpile which it finds hard to dispose. “India needs to learn a lesson from China’s mistake and dispose of the cotton lying with CCI quickly, to avoid getting into a China-like situation,” he said.

According to the latest Government data, the acreage under cotton is marginally lower at 9.9 million hectares against 10.05 million hectares in 2013-14 as farmers shifted to other remunerative crops due to low prices of the fibre. Though the demand for cotton has improved marginally, the prices are almost flat with occasional spurts. Going by trends in commodity futures markets, analysts expect cotton prices to range between ₹4,200 and ₹4,400 a quintal in the coming season. This is slightly higher than the minimum support price of ₹4,050 fixed by the Government.

SOURCE: The Hindu Business Line

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FinMin working for a reasonable GST rate: Revenue Secy

A day after the Cabinet approved changes in the landmark GST (goods and services tax) Bill as suggested by a Rajya Sabha select panel, the finance ministry on Thursday said it was working closely on a “reasonable” GST rate. “Working closely on GST rates. Reasonable rates are key to its success. Passage of Bill in Parliament to take us to next activities,” Revenue Secretary Shaktikanta Das said in a tweet. The Cabinet on Wednesday night approved amendments to the GST Constitutional amendment Bill to compensate states for revenue loss for five years on introduction of the uniform nationwide indirect tax regime, as suggested by the Rajya Sabha committee. The Bill would now be taken up for discussion in the Rajya Sabha, where the ruling coalition does not enjoy a majority, for passage in the ongoing session of Parliament. The government proposes to rollout the new indirect tax regime on April 1, 2016.

After the Bill is passed, the Centre will prepare GST laws, and a GST Council would be set up to decide on the rates as well as to decide on exemptions and thresholds. The Rajya Sabha committee has suggested the GST rate should not go beyond 20 per cent, as higher rates could fuel inflation and erode the confidence of consumers. Internationally, the GST rate ranges from 16-20 per cent. However, there are some exceptions like Japan, Australia and Germany, where the rates are 8 per cent, 10 per cent and 23 per cent, respectively. KPMG Partner Pratik Jain said: "One would hope that now opposition would support the Bill in the larger interest of the country to get it passed in the current session of Parliament so that April 1, 2016 deadline can be met. It would send a strong signal to the businesses that government is serious about this transformational change". A sub-committee of Empowered Committee of State Finance Ministers on GST had earlier suggested 27 per cent RNR. But the rate is being reworked by the sub-committee in view of taxation of petroleum products as also the 1 per cent additional tax which states can levy as part of the GST roll out. While liquor has been completely kept out of the GST, petroleum products like petrol and diesel will be part of the new regime from a date to be decided by the GST Council, which will have two-thirds of its members from states.

SOURCE: The Business Standard

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Rupee seen weakening further due to concerns of rate hike by US Fed

The rupee is seen weakening further next month on the back of concerns that the US Fed will soon start raising interest rates. The rupee breached the 64-mark on Thursday due to month-end dollar demand from corporates and oil importers.The rupee had opened at 63.95 and during intra-day trades it touched a low of 64.05 compared with its previous close of 63.91 a dollar. At the end of the two-day meeting, the US Federal Open Market Committee (FOMC) said the  economy and job market continue to strengthen, leaving the door open for a possible interest rate increase. The Street is anticipating the US Fed would start raising interest rates later this year. “There has been dollar buying by corporates and oil marketing companies due to which there is weakness in the rupee. The next level for weakening is seen towards 64.50. The market now awaits the outcome of the Reserve Bank of India (RBI)’s monetary policy,” said Sandeep Gonsalves, forex consultant and dealer, Mecklai & Mecklai.

RBI will review the monetary policy on August 4. The broad expectation is that the repo rate will be kept unchanged in the monetary policy. “The dollar is strengthening globally due to expectations that the US Fed may start hiking rates from September. But probably the hike will get postponed to December,” said Anindya Banerjee, currency analyst, Kotak Securities. In the past, the rupee has outperformed other emerging market currencies. It has been observed in the past that the rupee did not get impacted much due to the Greece debt crisis. Meanwhile, RBI’s foreign exchange reserves stood at $353.33 billion for the week ending July 17. RBI has been intervening in the foreign exchange market to arrest volatility in the rupee. According to currency dealers even on Thursday, RBI was seen selling dollars through state-run bank to arrest volatility in the rupee against the dollar.

SOURCE: The Business Standard

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Directorate of Revenue Intelligence detects 470 cases of misuse of export incentives

The Directorate of Revenue Intelligence (DRI) detected 470 cases involving Rs 4,087.12 crore in the last three fiscals related to misuse of export promotion incentives.  The CBI too has registered 16 cases worth Rs 78 crore during the last three years related to "misuse of customs and export promotion incentives", Commerce and Industry Minister Nirmala Sitharaman said in a written reply to Rajya Sabha.  There are reports that certain companies are indulging in fraudulent practices to capitalise on the customs and export promotion incentives as well as to bag special concessions given by the Directorate General of Foreign Trade (DGFT).  The minister also said that in special economic zones (SEZs), 13 units were found to be involved in fraudulent activities related to export and import in the last three years. "Various government regulatory agencies e.g CBI, DRI, Customs and Central Excise and DGFT keep a regular watch and closely monitor various activities related to export and import, in order to keep a check on fraudulent practices," she said.

In an another reply Sitharaman said that in 2014-15, exports from SEZs accounted for 16.29 per cent of the country's total exports.  Exports from SEZs declined to Rs 4.63 lakh crore in 2014-15 from Rs 4.94 lakh crore in the previous year. To another question, the minister said there is a proposal to re-visit the criteria for categorisation of industries in the country. "The government has, at present, proposed to revise the investment limit to classify Micro, small and medium Enterprises and have invited comments from stakeholders in this regard," she said. Bill for amendment in the Micro, small and medium Enterprises Development Act, 2006 has already been placed in Parliament, she added.

SOURCE: The Economic Times

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Import licensing regime is open, transparent: India to WTO

India has clarified to the WTO members that its import licensing regime is open and transparent and affects only a few restricted items. A WTO report, prepared as part of the trade policy review (TPR) of India held in June, has mentioned that India has a complex import regime. In response to these observations, it was informed in the TPR that the duties are imposed to equalise internal taxes such as central and state value added taxes and other taxes leviable under domestic production, consumption of sale of goods, Commerce and Industry Minister Nirmala Sitharaman has said in a written reply to the Rajya Sabha. These are not only WTO compatible but also commonly followed in most member countries, she said. "It was also clarified to the WTO that India's import licensing regime is open and transparent and affects only a few restricted items primarily on the grounds of need to protect human, animal and plant life and environment," she added. It was also mentioned that these differences would be further neutralised with the introduction of a more simplified Goods and Services Tax ( GST). In a separate reply, she said that India is working with WTO members to ensure permanent solution at the "earliest". It was agreed by the WTO members to find a permanent solution by December 31 on a best endeavour basis.

SOURCE: The Economic Times

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India should consider whole of Africa for investment, says Ghana High Commissioner

Indian investment in Africa should be considered for the entire continent rather than any individual country, High Commissioner of Ghana, Samuel Panyin Yalley has said. "India needs to look for strategic investment in Africa and consider the entire continent as a single market," Yalley said here at an event organised by CII. "Africa will be the next frontier in economy," the envoy said. He suggested that Indian companies can look at areas like infrastructure, manufacturing, technology, mining and other possible opportunities in the continent with a 200 million strong consumers. Yalley reasoned that land is readily available and cheap in the continent and the firms will not face challenges in sending profits back to the home country. "Profits can be sent back home without any concern. Investment are also safe," said Leluu O Abdallah, Counsellor, Tanzania High Commission. South Africa High Commission Counsellor (economic) Stefanus Botes is of the view that Airtel's plan for 'partial' asset sale in Africa won't lead to any negative investment outlook in the sub-continent. Meanwhile, an Indo-African business seminar has been scheduled for October this year to explore areas of cooperation between India and African countries.

SOURCE: The Economic Times

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Global crude oil price of Indian Basket was US$ 53.78 per bbl on 30.07.2015

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$ 53.78 per barrel (bbl) on 30.07.2015. This was higher than the price of US$ 53.17 per bbl on previous publishing day of 29.07.2015.

In rupee terms, the price of Indian Basket increased to Rs 3442.46 per bbl on 30.07.2015 as compared to Rs 3397.03 per bbl on 29.07.2015. Rupee closed weaker at Rs 64.01 per US$ on 30.07.2015 as against Rs 63.89 per US$ on 29.07.2015. The table below gives details in this regard: 

Particulars

Unit

Price on July 30, 2015 (Previous trading day i.e. 29.07.2015)

Pricing Fortnight for 16.07.2015

(June 27 to July 13, 2015)

Crude Oil (Indian Basket)

($/bbl)

53.78            (53.17)

58.69

(Rs/bbl

3442.46        (3397.03)

3730.34

Exchange Rate

(Rs/$)

64.01            (63.89)

63.56

SOURCE: PIB

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‘Pakistan’s share in global textile trade dropped to 2.2% from 1.9%’

Legislative body of Upper House on Thursday was informed that Pakistan share in global textile trade dropped from 2.2 percent to 1.8 percent during last five years. The share may further reduced to 1.5 percent by 2020 if the sector was not made competitive in the region in respect of power supply, reducing cost of doing business and giving relief in taxes. This was revealed in the Senate Standing Committee on Textile Industry met with Mohsin Aziz in the chair. The senators expressed serious concerns over the miserable situations of the textile sector. The Committee and Textile Ministry opposed the proposal of Pakistan Textile Mills Association (APTMA) to impose Regulatory Duty on cotton yarn import from India by saying that the matter may be resolved in consultation with value added sector. The committee also expressed serious concerns over the $4 billion disparity in China-Pakistan exports-imports figures and recommended that measures may be taken to discourage smuggling. The committee recommended that the government must immediately lift ban on the new gas and electricity connections for the textile industry besides provision of uninterrupted supply of gas and electricity. It further recommended for zero rating on exports, liquidation of pending refunds, strengthen domestic commerce, remove duties and Man Made Fiber (MMF) imports and introduce investment support schemes to the textile sector.

Chairman APTMA S M Tanveer said that the government has put a burden of Rs170 on the textile industry including Rs72 billion in the head of tariff rationalization surcharge, Rs38 billion Gas infrastructure Development Cess and Rs60 billion innovative taxes on consumption / production and export. He said that export oriented textile industry cannot sustain the burden of Rs170 billion in the form of taxes and surcharge. He mentioned that the country’s textile industry has a potential to double it export from $13 billion to $ 26 billion if its cost of doing business is reduced, which will further provide 3.5 million additional employment opportunities in the country. He mentioned that textile export has declined by 2.65 percent per month during the last financial year. He said that due to the high cost of business, 30 percent of our industry has been closed with value of $3.5 percent of total export. He said that the present export capacity of our industry is $17 billion, but we have exported only $13.5 due to high cost of doing business. “This industry is at the brink of total closure due unviable investment environment amid high cost of doing business”, said Tanveer. Due to the high cost of business, as many as 40 textile mills have been closed during the year and rendered 0.5 million workers jobless. “It is the government responsibility to protect the local industry”, he noted. Giving comparison to the cost of doing business, APTMA chairman mentioned that energy tariff in Pakistan is 14 cent as compared to 7.3 percent in Bangladesh, 8.5 cent in China and 9 cent in India. Interest policy rate is 5 percent in Bangladesh, 5.4 percent in China, 7.5 percent in India and 7 percent in Pakistan.

The APTMA noted that the energy tariff was 9 percent when the oil prices was $102 per barrel in the international market and when it came down to $50 per barrel, then the tariff was increased to 14 cent, which is beyond the understanding. The chairman committee senator Mohsin Aziz, who was also former chairman APTMA, said that textile industry is facing serious challenges and close to collapse due to high cost of business and government must seriously consider bailing out through rationalization of the policies and regulations. The committee was informed that annual textile export growth in Bangladesh is 20 percent, India 12 percent and China 12 percent whereas in Pakistan is 3 percent. With such speedy growth, Bangladesh has increased its share in global textile trade from 1.09 percent in 2006 to 3.3 percent in 2013. Similarly, India increased from 3.4 percent to 4.7 percent, China from 27 percent to 37 percent while Pakistan has dropped from 2.2 percent to 1.8 percent. APTMA officials said that if growth factors remain the same, Bangladesh’s share in world market in 2020 would be 6 percent, India’s 7 percent, China’s 56 percent and Pakistan will be limited to 1.5 percent. The major factor behind the declining trend is the erosion of textile industry’s competitiveness, particularly against the huge incentives being provided by the competing countries to their export sectors, APTMA officials informed. They further said that about Rs 100 billion of textile exporters are stuck up in sales tax, customs rebate and federal excise duty refund regimes creating severe financial crunch. However Federal Board of Revenue official confronted the figure by saying that it is no more than Rs 25 billion and would be cleared soon as committed by the government.

SOURCE: The Daily Times

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Singapore, Indonesian apex chambers sign agreement

Singapore Business Federation (SBF) and the Indonesian Chamber of Commerce and Industry (KADIN) have signed a Strategic Cooperation Agreement during the visit of Indonesian President Joko Widodo to the neighbouring city-state this week. The first such agreement between two apex chambers in ASEAN is expected to boost bilateral trade and investment relations between the two countries, SBF said on its website. The comprehensive agreement establishes a business-to-business platform for promoting Singapore investments into Indonesia. It will help Singapore companies take advantage of business opportunities in Indonesia to foster closer relationships between SMEs in both countries, and foster exchange of information regarding economic developments, good trade association management practices and capacity building programmes. The agreement also envisages establishment of appropriate conduits for feedback on the obstacles and challenges impacting the flow of trade and investment between Indonesia and Singapore.

Commenting on the agreement, SBF chairman SS Teo said, “With the world's fourth largest population and a rising middle class, Indonesia offers many opportunities for  businesses from both sides to explore, not only within the growing metropolitan areas, such as Bali, Jakarta, Makassar, Surabaya, but also in the other areas of the archipelago. We look forward to closer collaboration between businesses from both sides, particularly SMEs, in enhancing two-way trade and investment.” “The level of commitment of  both apex chambers are real and practical and we will work to enhance economic cooperation by forming a Joint Committee to implement the objectives of Strategic Cooperation to provide real supports to all businesses including SMEs,” said KADIN chairman Suryo Bambang Sulisto.

Further to the conclusion of the agreement, SBF will be organising several business missions to several Indonesian cities including Jakarta, Surabaya, Bintan and Batam, as well as thematic industry roundtables to raise the awareness of new and promising business opportunities in the vast Indonesian archipelago of 250 million people. The Indonesian government has set a target of achieving 7 per cent GDP growth by 2018, compared to the expected five per cent growth this year. Post his meeting with Widodo, Singapore Prime Minister Lee Hsien Loong told media persons that they have agreed to deepen bilateral economic cooperation. “We agreed to work together to make it even more attractive, so that Singapore companies can take advantage of opportunities in Indonesia,” said Loong. At present, Indonesia is Singapore's fourth largest trading partner, and it is also among the top five investors in Indonesia with last year's investments at $5.8 billion.

SOURCE: Fibre2fashion

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TPP world's biggest trade deal will have both winners and losers

Trade representatives kicked off talks on Trans Pacific Partnership (TPP) in Hawaii on Tuesday, with a July 31 deadline looming on the trade agreement that covers 12 countries and 40 percent of the global economy. The deal has been five years in the making but contrary to previous talks, optimism is high for an agreement this time around.  Tami Overby, senior vice-president for Asia at the U.S. Chamber of Commerce (USCC), told CNBC on Tuesday that sentiment is very positive. As he has spoken to negotiators from the U.S. and four other countries and people are excited, they really see the end in sight.  The biggest winner of this TPP will be Vietnam as foreign investors start to flood the country. Number two might be Malaysia and number three is Japan, said Deborah Elms, executive director at Asia Trade Centre.  The Peterson Institute of International Economics (PIIE) echoed Elms in a recent report, citing tariff-free access to U.S. markets for apparel and footwear, Vietnam's top exports, compared to the current 17-32 percent tax range.  That's expected to boost exports to the U.S—already Vietnam's largest export market—and dramatically increase foreign direct investment inflows in a country with the lowest per capita income among TPP members. PIIE also notes that Vietnam would see the largest percentage income gains and export increases out of all countries at 13.6 percent and 31.7 percent, respectively.

Malaysia does not yet have bilateral free-trade agreements (FTAs) in place with the U.S., Canada or Mexico, so it should be another key beneficiary of a TPP agreement. The TPP deal would provide Malaysian exporters with enhanced access to the entire North American market, and would also improve Malaysia's attractiveness as a hub for North American investment inflows, said Rajiv Biswas, Asia Pacific chief economist at IHS. For Japan, the opening of services markets is a major advantage, explained Elms of Asia Trade Centre. A TPP deal would open the services markets of each member nation to one another, and because Japan's services sector is relatively uncompetitive, it has a lot of room to grow, she said. That means all kinds of services markets that have been problematic for foreign investors to penetrate should be open, including logistics, distribution and warehousing, as well as travel, tourism, and food and beverage. Moreover, the combined impact of the TPP and a potential FTA with the European Union could substantially lift Japan's long-term growth rate, according to Biswas.

On the other hand Non-TPP members are expected to bear the brunt of losses due to the impact of trade diversion, where countries prefer to export to their FTA partners rather than non-participating countries. The trade diversion effect of the TPP fall mainly on China, PIEE said, adding that exports would be 1.2 percent lower in the case of a deal compared to without. As Vietnam benefits from increased market access to the U.S., other Asian exporters of textiles and clothing may hurt. Bangladesh, Cambodia, Pakistan, and Sri Lanka are also expected to suffer negative impact effects from trade and investment diversion in the textiles and clothing industry towards TPP members, notably Vietnam, Biswas added.

India is also expected to suffer as Vietnam gains. While New Delhi has a relatively well-diversified export sector, textiles and clothing industry still accounted for 13 percent of total merchandise exports in the 2014-15 financial year. However, the European Union isn't expected to be impacted greatly: It already boasts a number of FTAs with Asian economies and is currently negotiating one with the United States, PIIE said. But if no agreement is signed by this weekend, countries will have to wait until after the next U.S. presidential election in 2017. By then, who knows what will have happened? This deadline is truly a real deadline [compared to previous ones] because the window is essentially shut, Elms said.Previous TPP talks have been repeatedly stalled by sticky issues including generic drugs, agricultural subsidies and dairy exports, but experts say it's now or never for negotiators. However, there's always the possibility of negotiators inking an in-principle deal and then working out the details later, Overby added.

SOURCE: Yarns&Fibers

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New yarn created from gelatin from slaughterhouse waste

The idea of creating fibre from gelatine dates back more than one hundred years, a fibre with similar properties to merino wool has been created by a PHD student Stössel at the Federal Institute of Technology (ETH) Zurich from gelatine gathered from slaughterhouse waste which included skin, bone and tendons. Stössel discovered that adding an organic solvent to an aqueous gelatine solution resulted in a formless mass that he was able to press into an elastic thread. Working with the materials science laboratory EMPA in St Gallen, Stössel refined his method to a point where he was able to produce 200 metres of thread a minute, twisting 1,000 fibres into a yarn, from which he was able to knit a glove. The extremely fine fibres are half the thickness of a human hair, and microscope images show them to be filled with cavities, which researchers think may account for their good insulation properties, similar to merino wool. Stössel’s continuing research will examine how to make the fibre more water-resistant; at the moment sheep’s wool is still superior. But the Commercial production of the new fibre will only be possible if researchers can find partners and funding, said Stössel. In recent years there has been an increased demand for natural fibres made from renewable, biodegradable fibres.

SOURCE: Yarns&Fibers

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