• CCI AD FROM 5th April 2021

MARKET WATCH 08TH MAY 2021

 

 

NATIONAL

INTERNATIONAL

 

Demand falls, dyestuff makers operate at low capacity

Ahmedabad: Dyes and dyestuff manufacturers across Gujarat have cut production following a significant reduction in demand from domestic and international markets. Most of the dye plants are, at present, operating at a lower capacity of 30-40%, say industry players. “Dyes and dyestuff industry is facing a tough time as the Covid-19 pandemic has disrupted the market. Majority of players have reduced the production and their units are operating at 30-40% capacity,” said Yogesh Parikh, immediate past president, Gujarat Dyestuff Manufacturers Association (GDMA). The textile sector consumes majority of the dyes and dyestuff produced in the state. With garments and apparels not being the priority of consumers, the demand from the sector has slumped substantially. As against the months of January and February, the current demand of dyes and dyestuff has plummeted to 60%,” Parikh added. Gujarat is a major hub of dyes and dyestuff production and houses about 1,500 dye manufacturing units. The total size of this industry in the state is estimated at Rs 25,000 crore per annum. “Dye-making plants are not operating continuously. Some operate for half a day, while many others run only one shift as against the usual three shifts,” he said. Exports have also declined due to the reduction in export orders from countries such as Turkey, Bangladesh, and Indonesia following lockdowns and restrictions to curb the spread of Covid-19 in these respective countries. Industry players opine that the demand took a beating in April and it is expected to remain sluggish even in May. Meanwhile, spiralling prices of raw materials have further added to the woes of the industry, say market players. “The price of basic raw materials such as benzene, acetic acid, aniline and acetic anhydride has almost doubled. As a result, the production cost has also gone up,” added Bhupendra Patel, former president, GDMA.

Source: Times of India

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Pakistan notifies customs duty exemption on cotton yarn import

The Federal Board of Revenue, under Pakistan's ministry of commerce, has notified the waiver of whole of customs duties on import of cotton yarn (other than sewing thread) up to June 30, 2021. The exemption is applicable to cotton yarn, irrespective of its cotton weight or it is meant for retail sale or not, the FBR said in is notification SRO 533(I)/2021. The FBR's notification follows the April 14 decision of the Economic Coordination Committee (ECC) of Pakistan’s cabinet to withdraw customs duty on the import of cotton yarn. "The withdrawal of customs duty is meant to ensure smooth supply of cotton and cotton yarn and bridge the gap between domestic production and overall demand for inputs," the ECC had said in its decision. Although yarn prices have been declining, textile exporters in Pakistan believe it is still quite high. Cotton production in Pakistan has been falling in recent times.

Source: Fibre2fashion

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Romanian recycler turning 2bn PET bottles into polyester fibre

Green Fiber, part of the Green Group family, has announced that the business is transforming over 2 billion polyethylene terephthalate (PET) bottles each year into sustainable polyester staple fibre products for various industries. Green Fiber’s 100 per cent recycled polyester fibres produce 50 per cent less C02 emissions than virgin fibre alternatives. Romania-based recycler and producer Green Fiber works in tandem with its sister company Green Tech, a prominent recycler in Europe, to recycle PET bottles, it said in a press release. With an increased focus worldwide by businesses on reducing their carbon footprint and promoting a more sustainable image, Green Fiber’s 100 per cent recycled products offer a diverse range of industries such as hygiene, home textiles and more, the opportunity to confidently state that they are seriously committed to reducing their carbon footprints. “As part of our regenerative role of both producer and recycler, we are proud to recycle over 2 billion PET bottles a year which are then transformed into sustainable fibres for an array of crucial industries. Furthermore, as we are the largest producer of 100 per cent PET recycled fibres in Europe with a range of products emitting 50 per cent less in C02 emissions compared to virgin fibre alternatives, we believe it’s now essential for sustainable businesses to use our fibres if they are serious in reducing their carbon footprints,” said Alina Elena Genes, general manager of Green Fiber. Green Group is an important player in the European recycling industry and ranks as the number one recycler in Romania. The company is owned by Abris Capital Partners, a leading private equity investor in Central Europe, since 2016.

Source: Fibre2fashion

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PTA futures close flat

ZHENGZHOU, PTA (purified terephthalic acid) futures closed flat Friday in daytime trading on the Zhengzhou Commodity Exchange (ZCE). The most active PTA contract for September 2021 delivery closed at 4,904 yuan (758.22 U.S. dollars) per tonne. On Friday, the total trading volume for 12 listed PTA futures contracts on the ZCE was 2,367,222.0 lots with a turnover of 58.23 billion yuan. As the world's largest producer and consumer of PTA, China listed PTA futures on the ZCE in 2006 and opened them to international investors in November 2018. PTA, a commodity chemical and textile raw material, is a downstream product of petroleum and one of the most important bulk organic raw materials in China.

Source: Bignews

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Reinvigorating Pakistan's 'Engage Africa Policy'

Modern day navies are instrument of achieving States’ foreign policy goals through overseas deployments, port calls, multilateral/bilateral engagements and exercises. In a nutshell, modern States utilize naval diplomacy to increase their outreach in far areas of the world, wherein at times regular engagements are otherwise constrained, by promoting common security and prosperity initiatives. Recently, Pakistan Navy (PN), being the custodian of rich international engagement, is once again demonstrating its outreach in promoting shared good of mankind through PNS NASR’s Humanitarian Assistance and Disaster Relief (HADR) mission to African continent.   Pakistan Navy is envisaged to protect maritime interests of Pakistan, deter aggression at and from sea, provide disaster relief and humanitarian assistance. Under these guidelines, Pakistan Navy has been engaged in regional task forces and providing humanitarian assistance to under-developed States of the world particularly the African continent. Keeping its traditions alive, Pakistan Navy Ships namely PNS MOAWIN and PNS ASLAT paid port visits to 8 African states including Morocco, Mauritania, Ghana, South Africa, Tanzania, Seychelles, Nigeria and Kenya from Nov, 2019 to Jan, 2020. These port visits and diplomatic engagements were accomplished alongside organizing free medical camps to help further Pakistan Navy’s determination to bridge the gaps with African nations and operate together in pursuance of shared objectives. 

Recently, Pakistan Navy sent its humanitarian aid ship, PNS NASR, to Africa in line with the government’s ‘Engage Africa’ policy that seeks to enhance bilateral relations and to explore new avenues of cooperation with African countries. PNS NASR is providing Humanitarian Relief Assistance to the visiting African countries including Djibouti, Sudan, Benin, and Niger. In its recent visit to Niger, Pakistan Navy Ship NASR, as a gesture of solidarity and friendship, delivered gift of food from the people of Pakistan to the people of Niger during the ceremony held at the Port Cotonou of Benin. Earlier, Pakistan Navy Ship NASR also handed over similar food assistance support for the people of Djibouti and Sudan. This ongoing deployment of Pakistan Navy Ship to African region is to further strengthen the bonds of friendship with African countries and hence, the continued PN’s engagements and HADR efforts are in a way contributing in Pakistan’s engage Africa foreign policy initiative. Benin, Niger and Pakistan share cordial and brotherly relations as the countries are members of common international forums including Organization of Islamic Cooperation (OIC) and Group of 77. Benin is bordered by the Niger to the north and both countries have an estimated population of 12 million and 23 million respectively. Importance of these two countries lie more in their transit position than direct market of goods. Some companies of Pakistan, dealing in food items, have recently established offices in Benin to coordinate exports from Pakistan to the region. Benin is a potential market for rice, pharmaceuticals, beauty care, textile, chemicals fisheries, confectionary, agaric machinery, chemicals etc. Benin imported goods worth $ 45.938 million from Pakistan in 2018-19. Major items were rice and pharmaceuticals.

In line with the importance of African continent, Foreign Office has developed a long-term policy focusing on economic diplomacy, regular engagements of envoys posted in the continent and digital diplomacy. Foreign Ministry Shah Mehmood Qureshi also emphasized it frequently that Pakistan aimed to engage Africa as a key part of its foreign policy. Underlining the shift from geo-politics to geo-economics, the Foreign Minister emphasized the importance of economic diplomacy as a key component of modern diplomatic practice. In response, Pakistan has increased resident missions from 13 countries to more than 15 countries in African region and also cemented a very encouraging 7 percent growth rate in Pakistan’s trade with Africa, despite the Covid-19 related challenges. In the aftermath of this policy, there was observable increase in bilateral engagements with the African countries in various domains. Similarly, Pakistan, Benin and Niger relations were also improved in this context as sessions of dialogues and bilateral engagements are held in recent times. It is pertinent to note that successful diplomacy is the continuous process and needs frequent reappraisal of the situation. To this extent, Pakistan’s Ministry of Foreign Affairs (MOFA) is synergizing its efforts directed towards enhancing bilateral trade and economic initiatives with African States while Pakistan Navy, through its successful port calls and HADR missions abroad, providing MOFA a supporting hand in this regard.

 

Source: Nation

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China Pakistan Free Trade Agreement Opening bigger and brighter opportunities

One of the major incentives to Pakistan in developing a Free Trade Agreement (FTA) with China was to have stronger bilateral economic ties and greater economic integration with a friendly country, with whom it is said to have an ‘all-weather friendship’. With this in mind, in April 2005, China and Pakistan announced the launch of negotiations on the free trade area during the former Premier Wen Jiabao’s visit to Pakistan. The two countries concluded the China Pakistan Free Trade Agreement (CPFTA) in November 2006, which went into effect in July 2007. As per the State Bank of Pakistan, in 2006, China accounted for 8 percent of Pakistan’s total imports, around $2 billion; by 2020, this was 22 percent and around $10 billion.  In 2006 bilateral trade volume between the two countries stood at approximately $2.5 billion; this had reached $12 billion in 2019 20, by then both countries had signed 51 new agreements and Memorandums of Understanding (MoUs) under CPEC for cooperation in different fields. However, whilst trade between the two countries increased significantly, the trade gap also appeared. This widening trade deficit between Pakistan and China became a challenge for both countries as the structure of the Pakistani economy did not adjust to avail the advantages of free trade. The problem for Pakistan was how to benefit from the FTA, it had to make its industry innovative enough and develop its agriculture to complement with the World’s No. 2 economy. Pakistani businesses needed time to diversify exports into non-traditional items and expand into semi-finished and finished products. As the tables also show, Pakistan has a very narrow base of exports to China. Almost around 80 percent of its exports consist of cotton yarn, basic fabric, and rice, and it imports higher value products such as machinery and machine parts, iron and steel manufactures, telecoms, and so on from China. This understanding of the structure of Pakistan’s Economy started discussions between the two countries to revise the original agreement, which was concluded in 2019. In April 2019, the Protocol to amend the Free Trade Agreement between Pakistan and China was formally signed at the Second “Belt and Road” Forum for International Cooperation held in Beijing, making substantial revisions to the original 2006 China Pakistan Free Trade Agreement (CPFTA). The Amending Protocol, known as Phase II of the CPFTA, is expected to deepen trade relations between China and Pakistan by slowly increasing trade liberalization and introducing protection mechanisms for their domestic industry, among other things.

 

Reduced tariffs, broader market access

Finally implemented on 1st January 2020, the agreement introduces a new tariff elimination schedule to increase mutual market access. Rules of origin and trade remedies provisions were amended, and it added a whole new chapter on customs cooperation.

 

The new FTA deal gives Pakistan market access, which is at par with ASEAN member countries something which had been a strong demand from the Pakistani private sector and chambers of commerce.The 2019 protocol stipulates that the number of tariff lines with zero tariff products between China and Pakistan will increase gradually from 35 percent to 75 percent in 10 years for China and in 15 years for Pakistan. Both parties will also implement a 20 percent partial tax reduction on other products that account for five percent of taxable items within the other country’s tariff lists. Pakistan also offered China increased market access to raw materials, intermediate goods, and machinery.

Protected tariff lines made clear

In addition, 25 percent of the tariff lines (1,760 items) have been placed on the protected list. The industries benefiting from this include textiles and clothing, iron and steel, auto, electrical equipment, and agriculture. Future is bright if the shutters are opened. These concessions hold ample benefits for China and Pakistan’s trade development; it grants China access to essential agriculture, textile, and engineering commodities to satisfy its growing middle class’s needs. It also enables Pakistan to improve its export competitiveness and upgrade its industrial production. However, proactive government policy needs to evaluate where Pakistan’s comparative advantage lies and encouragement for more exports in those areas where zero tariffs exist. A study earlier conducted by the Pakistan Business Council (PBC) showed that although 7,550 products (Eight  Digit HS Code) were covered under China Pakistan FTA for Pakistan’s export to China list, Pakistani exports were only concentrated in 350 product lines making it 4.6% of the total concessional products. By comparison, imports from China to Pakistan were recorded in 3800 products out of 6803 products, on which Pakistan offered concessions; hence China utilized 55.87 % out of the total products. Given these stats, it becomes clear that Pakistani businesses need to do effective market research in China and find spaces for their exports in that large global size market. Already one Pakistani bank, Habib Bank Ltd (HBL) has been able to set up two branches in China; one in Urumqi and another one in Beijing and has been allowed to deal in local currency, RMB. This is a big achievement given that hundreds of international banks had applied for this concession. GVS has spoken with insiders familiar with HBL’s decision making and it reveals that the bank’s top management had been researching the Chinese market, culture, local governments, and laws for more than 15 years. CPEC also offers a prospect of Chinese transfer of capital and knowledge base into Pakistan, and for the country to become part of Chinese companies’ Global Value chain hub. This introduction of Chinese companies especially into the Special Economic Zones (SEZ) like Rashakai and Allama Iqbal Industrial City offers Pakistan an opportunity to increase its exports.

Source: Global Village Space

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