In the midst of death life persists, in the midst of untruth truth persists, in the midst of darkness light persists.” – Mahatma Gandhi, during his famous Kingsley Hall, London address in October 1931. It is with these words that the Governor of the Reserve Bank of India Shaktikanta Das began his statement, wherein he announced a set of nine measures to revive the struggling domestic economy. This follows the earlier set of measures announced by RBI on March 27, 2020. Making the announcements through an online address, the Governor stated that the human spirit is ignited by the resolve to overcome the COVID-19 pandemic which has “gripped the world in its deadly embrace”.
The RBI Governor said that the additional measures are aimed to:
The Governor said that the central bank will use all its instruments to address the daunting challenges posed by the epidemic. He said that the overarching objective is to help ensure that finance keeps flowing to all stakeholders, especially those that are disadvantaged and vulnerable. He expressed the hope that together, the nation will cure and endure the situation.
Here is an overview of the nine announcements made today. The full statement by the Governor can be read here.
Liquidity Management
1) Targeted Long-Term Operations (TLTRO) 2.0
A second set of targeted long-term repo operations (TLTRO 2.0) for an initial aggregate amount of Rs. 50,000 crore will be conducted. This is being done to facilitate funds flow to small and mid-sized corporates, including NBFCs and MFIs, who have been more severely impacted by the disruptions due to COVID-19. The funds availed by banks under TLTRO 2.0 should be invested in investment grade bonds, commercial paper, and non-convertible debentures of non-banking financial companies (NBFCs), with at least 50 per cent of the total amount availed going to small and mid-sized NBFCs and micro finance institutions (MFIs).
2) Refinancing Facilities for All India Financial Institutions
Special refinance facilities for a total amount of Rs. 50,000 crore will be provided to National Bank for Agriculture and Rural Development (NABARD), the Small Industries Development Bank of India (SIDBI) and the National Housing Bank (NHB) to enable them to meet sectoral credit needs. This will comprise Rs. 25,000 crore to NABARD for refinancing regional rural banks (RRBs), cooperative banks and micro finance institutions (MFIs); Rs. 15,000 crore to SIDBI for on-lending / refinancing; and Rs. 10,000 crore to NHB for supporting housing finance companies (HFCs). These facilities are being provided since these institutions are facing difficulties in raising finances from the market, in view of the difficult financial conditions in view of COVID-19. The Governor said that advances under this facility will be charged at the RBI’s policy repo rate at the time of availment, in order to enable them to provide credit at rates affordable for their borrowers.
3) Reduction of Reverse Repo Rate under Liquidity Adjustment Facility
Reverse repo rate has been reduced by 25 basis points from 4.0% to 3.75% with immediate effect, in order to encourage banks to deploy surplus funds in investments and loans in productive sectors of the economy. The Governor explained that the surplus liquidity in the banking system, which has risen significantly due to sustained government spending and the various liquidity enhancing measures undertaken by the RBI, is the backdrop to this decision.
4) Raising Limit of Ways and Means Advances of states and UTs
Ways and Means Advances (WMAs) Limit of states and union territories has been increased by 60% over and above the limit as on March 31, 2020, in order to provide greater comfort to states for undertaking COVID-19 containment and mitigation efforts, and also to help them plan their market borrowing programmes better. WMAs are temporary loan facilities provided by RBI to help governments tide over temporary mismatches in receipts and expenditure. The increased limit will be available till September 30, 2020.
Regulatory Measures
In addition to the measures announced by RBI on March 27, 2020, the bank announced additional regulatory measures to lessen debtors’ burden in wake of the pandemic.
5) Asset Classification
With respect to recognition of Non-Performing Assets (NPAs), the central bank has decided that the payment moratorium period, which lending institutions have been permitted to grant as per RBI’s announcement on March 27, 2020, will not be considered while classifying assets as NPAs. i.e., the moratorium period will be excluded while considering 90-day NPA norm for those accounts for which lending institutions decide to grant moratorium or deferment and which were standard as on March 1, 2020. This means that there will be an asset classification standstill for such accounts from March 1 - May 31, 2020. NBFCs will have the flexibility under the prescribed accounting standards to provide such relief to their borrowers.
Simultaneously, banks have been asked to maintain higher provision of 10% on all accounts whose classification has been put on a standstill as above, so that banks maintain sufficient buffers.
6) Extension of Resolution Timeline
Recognizing challenges to resolution of stressed assets or accounts which are or are likely to become NPAs, the period for implementation of resolution plan has been extended by 90 days. Currently, scheduled commercial banks and other financial institutions are required to hold an additional provision of 20 per cent if a resolution plan has not been implemented within 210 days from the date of such default.
7) Distribution of Dividend
It has been decided that scheduled commercial banks and cooperative banks shall not make any further dividend pay-outs from profits pertaining to FY 2019-20; the decision will be reviewed based on the financial position of banks at the end of the second quarter of the financial year 2019-20. This has been done in order to enable banks to conserve capital so that they can retain their capacity to support the economy and absorb losses in an environment of heightened uncertainty.
8) Lowering of Liquidity Coverage Ratio requirement
To improve the liquidity position for individual institutions, Liquidity Coverage Ratio requirement for scheduled commercial banks has been brought down from 100% to 80% with immediate effect. This will be gradually restored in two phases - 90% by October 1, 2020 and 100% by April 1, 2021.
9) NBFC Loans to Commercial Real Estate Projects
The treatment available for loans to commercial real estate projects with respect to the date for commencement for commercial operations (DCCO) has been extended to NBFCs, in order to provide relief to both NBFCs and the real estate sector. As per the current guidelines, DCCO in respect of loans to commercial real estate projects delayed due to reasons beyond the control of promoters can be extended by an additional one year, over and above the one-year extension permitted in normal course, without treating the same as restructuring. Making an assessment of the current economic situation, the Governor informed that the macroeconomic and financial landscape has deteriorated, precipitously in some areas; but light still shines through bravely in some others. According to IMF’s global growth projections, in 2020, the global economy is expected to plunge into the worst recession since the Great Depression, far worse than the Global Financial Crisis. In this situation, India is among the handful of countries that is projected to cling on to positive growth (at 1.9%). He noted that this is the highest growth rate among the G-20 economies. Speaking on the RBI’s announcements, the Prime Minister Shri Narendra Modi has said that the measures will greatly enhance liquidity and improve credit supply. He said these steps will help small businesses, MSMEs, farmers and the poor and that it will also help all states due to the increase of WMA limits.
Source: PIB
The Ministry of Textiles has issued a notification extending the Scheme of Rebate of State and Central Taxes and Levies on Export of Garments and Made-ups (RoSCTL) which was in force up to March 31. Garment exporters will continue to get rebate on central and state taxes on their outward shipments as the government has decided to extend the RoSCTL scheme beyond March 2020 to enhance competitiveness of the labour-intensive textiles sector. The Ministry of Textiles has issued a notification extending the Scheme of Rebate of State and Central Taxes and Levies on Export of Garments and Made-ups (RoSCTL) which was in force up to March 31, 2020. The RoSCTL scheme provides rebate on all embedded taxes on exports. "The Government has decided to continue the said Scheme w.e.f. April 01, 2020 until such time that the RoSCTL Scheme is merged with Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme without any change in Scheme guidelines and rates as notified (earlier)," said the notification. Finance Minister Nirmala Sitharaman had in September last year approved the RoDTEP to incentivise exporters at an estimated cost of Rs 50,000 crore to the exchequer. She had said RoDTEP will replace the existing incentive schemes and "will more than adequately incentivise exporters than the existing schemes put together." "The textile and apparel industry was of the opinion that government should not withdraw RoSCTL till RoDTEP comes into force effectively, as it will hurt the cost competitiveness of Indian apparels and made-ups in the international market where Indian products have to compete with cheap products of China, Bangladesh, Vietnam, etc," Confederation of Indian Textile Industries Chairman T Rajkumar told PTI. "However, looking at the current pandemic of Covid-19, we request the government to extend support by covering the entire textile value chain under the RoSCTL scheme which will help in increasing the exports of entire textiles value chain," Rajkumar suggested. Under the RoSCTL scheme, maximum rate of rebate for apparel is 6.05 per cent, while for made-ups, this goes up to 8.2 per cent. The made-ups segment comprises home textiles products such as bed linen, curtains, pillows and carpets. Last month, the Union Cabinet had taken a decision regarding continuation of RoSCTL. While extending the scheme, the government had said the continuation of the RoSCTL scheme beyond March 31, 2020, is expected to make the textile sector competitive by rebating all taxes/levies which are currently not being rebated under any other mechanism. Exporters get rebate of state taxes and levies like VAT on fuel used in transportation, and embedded State Goods and Services Tax (SGST) paid on inputs such as pesticides and fertilisers. Central taxes and levies on which rebate is given include, central excise duty on fuel used in transportation, embedded CGST paid on inputs and embedded CGST and Compensation Cess on coal used in production of electricity. An exporter opting for the scheme makes claim for rebate on exports at item-level. Meanwhile, the textiles ministry has also decided to ease norms under Amended Technology Upgradation Fund Scheme (ATUFS) during post lockdown period of the COVID-19 outbreak. The government provides credit linked capital investment subsidy with aim of 'Make in India' and 'Zero Defect and Zero Effect' in manufacturing. Under ATUFS, capital investment subsidy (CIS) is provided to various segments of the textiles sector, including garmenting and technical textiles. Garmenting and technical textiles segments can get 15 per cent CIS, subject to an upper limit of Rs 30 crore.
Source: Business Today
The Ahmedabad Textile Industrys Research Association (ATIRA) in collaboration withthe Defence Research and Development Organisation has produced high quality cloth to make masks of 99 per cent filterefficiency, the highest among all kind of masks available inthe country. ATIRA is developing the cloth material for preparationof five lakh 'N-99 masks', which it says would be better inquality than the N-95 masks that have been in huge demand oflate in the fight against coronavirus. While the N-95 respirator is able to filter 95 percent of the very small airborne particles, the efficiency ofthe N-99 mask to filter such particles will be 99 per cent. The Ahmedabad-based textile research association claims it is the only facility in the country to producefilter cloth for N-99 masks. "Ninty nine per cent filtration is the highest amongall types of masks available in India. There were manychallenges initially, but with the untiring efforts of ourhighly competent scientists and research technicians, we wereable to successfully develop this cloth and produce it onlarge scale, ATIRA director Pragnesh Shah told . The N-99 mask has five layers out of which two are ofnano mesh which are inside and three outer layers are ofcloth, he said. "Currently, the filter cloth is manufactured at astate-of-the-art facility of ATIRA as per the WHO guidelines.The Government of India and the Defence Research andDevelopment Organisation (DRDO) have recognised the efficiencyof these masks, Shah said. The high quality cloth for over 3.5 lakh masks hasalready been handed over to DRDO, while production of moresuch material is going on, said ATIRA deputy director DeepaliPalawat, who is heading the project. "This project is the finest example of collaborationand coordination with the government. It was difficult toprocure raw materials during the lockdown. The government hasmoved mountains to help us procure the raw materials andprovided full support during the lockdown," she said. Palawat said it was difficult to convert the researchcentre into a production unit but a 15-member ATIRA staff,including scientific officers and technicians, are workinground-the-clock to fulfil DRDO's order of five lakh masks. "The DRDO is getting these masks ready for healthministry officials, doctors of the All India Institute ofMedical Sciences (AIIMS) and top defence cadre, she said. "We are happy that we are able to help the Indiangovernment and people during such unprecedented times. Ourpartnership with DRDO has yielded something noteworthy for the country," ATIRA council member Punit Lalbhai said. ATIRA is a renowned body set up here in 1947 bytextile mills as an autonomous non-profit R&D institution. Its activities cover various aspects, from fibre tofinished fabrics in traditional textiles as well as technicaltextiles in the arena of geo-textiles, nano web technologyand composites, as per the association's website.
Source: Business Insider
SURAT: When Surat is fast emerging as the coronavirus hotspot, the district administration has invited applications from the industrial units from the organised and unorganised sectors in and around the city for the resumption of industrial activity from April 20, strictly adhering to the Government of India guidelines on Saturday. District collector Dhaval Patel stated that the industrial units in the GIDCs, food parks, apparel parks, textile parks etc. will have to submit their details to the respective industrial association or estate. The industrial associations and estates will compile all the applications and send online at gm-dic-sur@gujarat.gov.in for the approval. Patel said, “The individual unit owners will have to directly send their applications by filling genuine details with the soft copy on gm-dic-sur@gujarat.gov.in. The application forms in the PDF format has been sent to all the respective industrial associations” Patel added, “A committee formed under the leadership of district collector will decide on providing the relaxation to the industrial and commercial activities after evaluating whether the industries are located near the hotspot or not”. The standard guidelines for the industries including thermal screening of the people at the establishments, compulsory masks, adequate facility for sanitisation and disinfection, social distancing etc. will have to be strictly implemented and followed, failing which legal action will be taken, stated Patel.
Source: Times of India
Seeking setting aside of the orders, the exporter said that directing private establishments to compulsorily pay 100% wages during lockdown is “illegal, unconstitutional” and violative of Articles 14 and 19 of the Constitution of India. These government orders are passed beyond the legislative competence of the Respondents (government) and, therefore, ultra vires the 2005 Act,” the petition stated. A Mumbai-based textile exporter has moved the Supreme Court seeking quashing of the government orders that mandated employers to pay full salary to their employees, workers, contract workers and casual workers without any deduction, during the lockdown. Nagreeka Exports has challenged the constitutional validity of the orders issued by the ministry of home affairs and the Maharashtra government on March 29 and March 31, respectively, on the grounds that neither the Central government nor the Maharashtra government is empowered to issue such directions to private establishments under the Disaster Management Act, 2005. Ajay Bhargava of Khaitan and Co, said the matter needs to be heard urgently by the SC as the issue will impact all the industries across all sectors. Seeking setting aside of the orders, the exporter said that directing private establishments to compulsorily pay 100% wages during lockdown is “illegal, unconstitutional” and violative of Articles 14 and 19 of the Constitution of India. The company also submitted that the Disaster Management Act, under which these notifications were issued, does not provide for continued payment of wages by employers during any disaster. “National Disaster Management Authority and National Executive Committee constituted under the Act have no power under Section 7 and 10, respectively, to direct the employers to make payment to their workers, without any deduction, during the period of lockdown. These government orders are passed beyond the legislative competence of the Respondents (government) and, therefore, ultra vires the 2005 Act,” the petition stated. Besides, the orders will have “more far reaching consequences, affecting the livelihood of more people,” the petition said. Instead of burdening the industries with the payment of wages during lockdown, the exporter said that “… GoI ought to have considered that Provident Fund Department has bounteous accumulation of over Rs 351 crore as unclaimed PF Deposits’ and this amount can be utilized” to financially support the workers in these unprecedented crisis, especially when this amount has “accumulated from the contribution of the industry and its workforce.” The company further contended that it has already paid Rs 1.75 crore towards salaries of its 1,500 workforce in March despite there being a shutdown in economic activity. Now it will be difficult to pay salaries in April due to the extension of the lockdown till May 3, Nagreeka Exports said, while requesting the SC to allow it to pay only 50% of the salaries to its workers till the disposal of its petition. Stating that its losses will multiply further since operations have stopped, Nagreeka Exports said that if it has to follow the government orders in entirety, its business will become unsustainable.
Source: Financial Express
Small businesses said though they welcomed the Reserve Bank of India’s (RBI’s) decision to address the liquidity crunch they were facing, they expected more in the way of support, considering the disruption in supply chains, lack of business, and short supply of labour, because of the nationwide lockdown. Under pressure to facilitate the flow of more money to micro, small and medium enterprises (MSMEs), the RBI on Friday announced a targeted long-term repo operation (TLTRO) of ~50,000 crore aimed at small and mid-sized non-banking financial companies (NBFCs) and micro finance institutions (MFIs). In a hint that the lockdown’s impact could worsen, Union Finance Minister Nirmala Sitharaman later said the amount could be increased if needed. “We are a bit disappointed. We expected more from the RBI on addressing the fact that banks are not respecting the latest changes in lending norms. They also continue to have significant flexibility in implementing the norms on non-performing assets (NPAs),” said Anil Bhardwaj, secretary general of Federation of Indian Micro and Small & Medium Enterprises. Banks need to be told strictly to pass on the benefits, he added. The RBI has mandated that funds availed by banks under TLTRO 2.0 should be invested in investment-grade bonds, commercial papers, and non-convertible debentures of NBFCs. “What is more welcome is the announcement that at least 50 per cent of this must go to mid- and small-sized NBFCs and MFIs. The special refinance facilities to NHB, SIDBI and NABARD would also play a constructive role,” said Niranjan Hiranandani, president of industry body Assocham. SIDBI will come out with a product based on terms and conditions that come with the refinancing facility from RBI, said Mohammad Mustafa, its chairman and managing director. The refinancing will reduce the cost of funds for SIDBI as money will come at policy repo rate, which remains at 4.4 per cent and it will pass on the benefit in the form of lower in-lending rate, he added. Industry insiders hope the impact of the measures would be felt soon. RBI has mandated that NBFCs have to invest the funds they receive within a month of availing the loan from RBI. “The reverse repo rate cut by 25 bps from 4 per cent to 3.75 per cent is appreciable as it will make it unattractive for banks to passively deposit funds with the RBI and instead lend it to productive sectors. But we urge the government to provide an increased stimulus relief package of ~16 trillion, which is around 7 per cent of GDP (gross domestic product) sooner than later to mitigate the impact of Covid-19 on economy, trade and Industry,” said D K Aggarwal, president of the PHD Chamber of Commerce and Industry. Exporters remain unhappy despite the latest measures. “The 90 days NPA norms to exclude moratorium or deferment period will give relief particularly to MSME units. But we again stress that government should immediately announce a comprehensive economic package for the industry to provide relief in payment of wages, statutory obligations, rental and utilities,” said Sharad Kumar Saraf, president of the Federation of Indian Export Organisations. Saddled with weak domestic demand and intense competition from major international rivals, exporters have sought extension of pre and post-shipment credit tenure, interest-free loan to cover forward losses and enhancement of export benefits. According to a report World Trade Organisation, quoted by the RBI Governor Shaktikanta Das, global trade is expected to decline up to 32 per cent in 2020. “With China recovering from the pandemic’s impact, it would flood global markets with essential supplies. India needs to have a specific strategy that should ride on empowering exporters to deal with this challenge,” said Ravi Sehgal, chairman of Engineering Exports Promotion Council India. Meanwhile, the Apparel Export Promotion Council on Friday requested the central bank to protect exporters from penalty on forward covers due to exchange rate fluctuations. Exporters are concerned about sharp fluctuations in currency in the past few weeks and the resultant penalty that banks charge on cancellations and exchange rate differential charges for the period for which the forward cover was booked, AEPC Chairman A Sakthivel said in a letter to the RBI governor.
Source: Business Standard
The Central Board of Indirect Taxes and Customs (CBIC) said that it had issued Rs 5,575 crore as refunds since March 30, by processing 12,923 applications. Of this, 7873 application claims worth Rs 3,854 crore have been processed in the last week, the Board said in a statement Friday. CBIC said that the trade and business friendly measure was taken with the GST Council’s approval in its 39th Meeting held on March 14, to facilitate early input tax credit (ITC) and to mitigate delays in ITC refunds faced by the taxpayers, besides ensuring that fake ITC claims are not processed. In order to save time and compliance cost for taxpayers, the Council had also agreed to enable codes that classify within the application whether the credit was availed on services and/or capital goods in certain categories, for the refund claims. Bunching of tax periods across financial years to facilitate claim of refund by exporters has also been allowed, for applications filed after March 31. Separately, the Central Board of Direct Taxes (CBDT) said that it had issued income tax refunds worth Rs 5,204 crore to nearly 8.2 lakh small businesses since April 8, bringing relief to MSMEs. “These income tax refunds would help MSMEs to carry on their business activities without pay cuts and layoffs in Covid-19 pandemic situations,” the Board said in a statement. It will further issue refunds of Rs 7,760 crore to proprietors, firms, corporate and trusts at the earliest possible. The government had announced that it will issue Rs 18,000 crore as income tax and GST refunds to taxpayers to tide over liquidity issues being faced during the Covid 19 pandemic crisis.
Source: Economic Times
The transition of Goods and Services Tax Network (GSTN) to a government owned entity could face a delay as some states remain lukewarm to purchasing shares owing to the additional expenditure on account of Covid-19. The GST Council had approved the change in ownership in its last meeting held on March 14. While the changeover was to take effect from April 1, some states have yet to buy shares of the company as they have refocused their resources to fight the spread of coronavirus, said people aware of the matter. “The proposal to make GSTN a fully government-owned company from April 1 was approved in the 39th GST Council meeting. Five-six states that were yet to buy shares by March 14 were supposed to have taken their shares by March 31, but they haven’t bought them till date,” said a senior government official, who did not wish to be identified. The Cabinet had approved the decision to convert GSTN, incorporated on March 28, 2013, into a fully government-owned entity in September 2018. The central government has bought its share and it is ready to own the company, but GSTN for now continues to be privately held,” said another senior official, also requesting anonymity. The official said that for states, the focus right now is completely on restarting economic activity amid the harvest season and ensuring the Covid-19 pandemic does not spread. Queries sent to the finance ministry and GSTN remained unanswered till press time on Friday. The Centre holds about 24.5% equity in GSTN, with an equal amount held by all states, union territories and the Empowered Committee of State Finance Ministers. The balance 51% — which the Centre and states are buying — is held by non-government financial institutions, including LIC Housing Finance, which owns 11%, and HDFC Bank, ICICI Bank, HDFC Ltd and NSE Strategic Investment Co, each owning about 10%. The council had decided in May 2018 to make GSTN a fully government-owned entity as all GST processes, including registration, filing of returns, payment of taxes and processing of refunds, is done on the platform. The network handles large-scale invoice level data of thousands of business entities, including data relating to exports and imports, akin to functions that are usually conducted by the government.
Source: Economic Times
The Prime Minister’s Office (PMO) has received an urgent call for help from medium and small industries who fear possible hostile takeovers from Chinese investors at a time when they are facing survival issues and their valuations have taken a beating amid the Covid crisis. In a recent letter to the government, small-sized industries want the Centre to temporarily halt FDI through automatic route, which is currently possible for over 1,000 industries, with just 16 sectors, including defence and telecom, requiring government scrutiny. We seek your kind guidance and support for protecting the Indian corporate sector from being sold in distress to the Chinese companies, on the prowl,” an industry body, Integrated Association of Micro, Small and Medium Enterprises of India, said in the letter dated April 12. The industry association claims membership of over 5,000 SMES including automotive part makers across Haryana, UP, Tamil Nadu and Karnataka with turnover of Rs 10 crore and above. “These companies want support from the government to ensure that they remain going concerns despite production and business taking a hit right now, and have warned that Chinese funds are on a shopping spree right now since asset values are depressed,” a senior government official said. The letter was written to the MSME minister on April 12 and was later sent to the PMO for consideration. The letter comes even as globally, some countries have made laws to protect weaker companies from being taken over by moneyed Chinese firms. In March last week, the Australian government tightened rules around foreign takeover and investment rules on growing concerns of predatory behaviour by Chinese companies.
Source: Economic Times
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
894.81 |
USD/Ton |
0% |
19-04-2020 |
|
VSF |
1283.55 |
USD/Ton |
0% |
19-04-2020 |
|
ASF |
1762.76 |
USD/Ton |
0% |
19-04-2020 |
|
Polyester POY |
685.60 |
USD/Ton |
-0.51% |
19-04-2020 |
|
Nylon FDY |
1908.36 |
USD/Ton |
1.50% |
19-04-2020 |
|
40D Spandex |
4028.76 |
USD/Ton |
0% |
19-04-2020 |
|
Nylon POY |
5202.05 |
USD/Ton |
0% |
19-04-2020 |
|
Acrylic Top 3D |
947.11 |
USD/Ton |
0% |
19-04-2020 |
|
Polyester FDY |
2021.45 |
USD/Ton |
2.14% |
19-04-2020 |
|
Nylon DTY |
2007.31 |
USD/Ton |
0% |
19-04-2020 |
|
Viscose Long Filament |
862.30 |
USD/Ton |
0% |
19-04-2020 |
|
Polyester DTY |
2473.80 |
USD/Ton |
1.16% |
19-04-2020 |
|
30S Spun Rayon Yarn |
1816.48 |
USD/Ton |
-0.39% |
19-04-2020 |
|
32S Polyester Yarn |
1399.46 |
USD/Ton |
0% |
19-04-2020 |
|
45S T/C Yarn |
2205.22 |
USD/Ton |
0% |
19-04-2020 |
|
40S Rayon Yarn |
1993.18 |
USD/Ton |
0% |
19-04-2020 |
|
T/R Yarn 65/35 32S |
1774.07 |
USD/Ton |
0% |
19-04-2020 |
|
45S Polyester Yarn |
1625.64 |
USD/Ton |
0% |
19-04-2020 |
|
T/C Yarn 65/35 32S |
2063.86 |
USD/Ton |
0% |
19-04-2020 |
|
10S Denim Fabric |
1.17 |
USD/Meter |
0% |
19-04-2020 |
|
32S Twill Fabric |
0.65 |
USD/Meter |
0% |
19-04-2020 |
|
40S Combed Poplin |
0.94 |
USD/Meter |
0% |
19-04-2020 |
|
30S Rayon Fabric |
0.50 |
USD/Meter |
-0.28% |
19-04-2020 |
|
45S T/C Fabric |
0.64 |
USD/Meter |
0% |
19-04-2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14136 USD dtd. 19/04/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Pakistan's exports for 9MFY20 grew by 2.2 percent year-on-year. Take screenshots. For it may be long before growth and exports are clubbed together in Pakistan's context. Stories of textile orders being either cancelled or put on hold are aplenty. The numbers for April will be low, but it won't be the bottom, as the true reflection of the pandemic on exports, will take another 2-3 months to reflect fully. All of this is happening, when exports had finally started to show signs of resurgence. The quantity and quality of exports growth was being flaunted as a major success – and rightly so. Pakistan had been able to grow in markets where demand had gone down. Pakistan's share in the major textile markets – EU and USA – had grown, both in quantity and value terms. Pakistan was making inroads in clinching better market shares, at the expense of China and even Vietnam. The market-based exchange rate regime was helping too. The almost unprecedented support package to the export sector was finally starting to make a difference. The utility prices were at a steep discount from a year ago, and at par with regional competitors such as Bangladesh, Cambodia and India. Rebates were being settled rather smoothly. GSP Plus was making more sense. The big players had even started building more capacity, as questions were raise on Pakistan's ability to meet the demand, as the exports became more competitive. And then came the virus. No one knows how long it will last. The quantum of impact it is going to have on people's purchasing power and more importantly consumption priorities remains unknown. But the direction is surely known. Even if the pandemic is nearing an end, it is believed to already have pushed the world into a great recession, and that will have consequences on consumption. Could Pakistan still fare better than others if it opens up faster is up for debate. There could be a possibility of Pakistan feasting on with a better market share in a smaller pie. The home textile segment of towels and bed sheets may be the worst hit as hospitality if widely believed to be the last sector to regain any sense of normalcy. Food consumption may still be the least impacted across the globe, but Pakistan's food exports have remained rather sticky – and with limited upside potential in the major categories. Things may not be all that bad in terms of balance of payment, as demand compression at home also means significantly lower imports. But this is some setback to exports. One hopes the big players come out of it stronger.
Source: B Recorder
The European Commission launched its Circular Economy Action Plan in March. It will be the new growth strategy and sooner than later it could be the global model to emulate. Watch the daily world news and you’ll see that Europe has evolved into a ‘soft power’ region. Don’t expect impactful military actions or bold global economic and trade initiatives from Europe. You could rather bet on Asia and America for technological breakthroughs and new disruptive business models. Still, Europe can devise and execute the best possible scenarios for a healthy future for ‘people’ and ‘planet’. The EU and Euratex want to fit the European textiles and apparel sector in such scenario. But then, can Europe succeed in rapidly transforming the existing highly unsustainable fibre, textiles and apparel value chain into a true green sector? Surely, if it would only depend on the support of the leading duo of European Commission President Ursula von der Leyen (Germany) and Vice-President Frans Timmermans (the Netherlands). For many progressive Europeans, von der Leyen, the first female president of the European Commission, is their “hope and pride” like evoked in the sweet Irish ballad ‘I dreamt I dwelt in Marble Halls’. Launching the European Green Deal on December 11, 2019, von der Leyen said: “I am convinced that the old growth-model that is based on fossil-fuels and pollution is out of date, and that it is out of touch with our planet. The European Green Deal is our new growth strategy. We want to really make things different. We want to be the frontrunners in climate friendly industries, in clean technologies, in green financing.” Frans Timmermans, whose principal responsibility is leading the Commission’s work on the European Green Deal, has a strong reputation as a tireless fighter. On March 11, 2020, the European Commission adopted a new Circular Economy Action Plan, one of the main blocks of the European Green Deal. The new plan announced initiatives along the entire lifecycle of products. It puts a focus on sectors that use the most resources and where the potential for circularity is high, such as textiles.
Fantastic opportunity
But how ambitious is the European textiles and apparel sector itself?
Mauro Scalia, director (Sustainable Businesses) of the umbrella association Euratex in Brussels, is aware that the needed transition of the sector to a circular economy can be seen in two ways: as a huge problem or as afantastic opportunity. After intense consultation with more than hundred enterprises and other stakeholders, Euratex produced a high-density document of 40 pages titled ‘Circular Textiles—Prospering in the circular economy’. Scalia also refers to fourty influential CEOs across the value chain who have subscribed to a ‘Voluntary Commitment’, stressing the current green acting of their own companies and the exploring of solutions. Lutz Walter, director (Innovation and Skills) at Euratex, has no doubts that Europe will lead the worldwide green revolution in textiles. He doesn’t look very impressed by the great number of Chinese textile universities, the abundance of textile engineers and the hypermodern labs and equipment at their disposal. He’s aware of the enormous quantity of Chinese textile patents and the unbelievable “speed of development” Chinese manufacturers demonstrate when they race from concept to a new product. “Look. What is the end result?,” Walter asks. “In spite of all their efforts, Chinese textile groups didn’t succeed in getting reasonable profit margins in Western markets. Look at the very big price gap per kilogram between for instance Italian and Chinese clothing fabrics. No wonder that Chinese manufacturers are now more happy in their local markets and in other Asian growth markers than in the Western markets.”
Advice from a Beautiful Mind
Applying a sector or company strategy is not a virtual game. The strategy has to prove its value in real world circumstances. And yet, it can be useful to examine a certain strategy from the point of view of game theorists. They can tell decision makers what to do in different game contexts. Europe is not alone to bet on a competitive green textiles strategy. The European Union has to take into account the strategies of big players like China, India, US and other countries. On the level of textiles and apparel companies, people have to decide if they want to be green pioneers or, rather, followers. Such decisions can’t be taken in a vacuum. They should be based on careful consideration of the company’s own strengths and weaknesses and those of relevant competitors. Fortunately, from a strategic point of view, the current situation in the global textiles and apparel industry, on its path to sustainability, looks less complicated than the situation in, for example, the energy industry or even the automobile industry. It actually looks as if in the textiles and apparel sector a so-called Nash Equilibrium has been attained. Most of us know the Nash Equilibrium thanks to the biographical drama film A Beautiful Mind (2001) about the brilliant American mathematician and Nobel Prize winner John Nash. In terms of game theory, if each player has chosen a strategy, and no player can benefit by changing strategies while the other players keep theirs unchanged, then the current set of strategy choices and their corresponding payoffs constitutes a Nash Equilibrium. Of course, it can’t be excluded that some “wild card” players will try to change the game, like the American president Donald Trump (who in June 2017 announced that the US would cease all participation in the 2015 Paris Agreement on climate change mitigation, declaring this Accord would undermine the US economy). Even green thinking textile leaders like the Belgian economist Fa Quix, general director of the association Fedustria, seem unhappy when they comment on the speed of transformation proposed by the Green Deal of the European Commission under von der Leyen. Quix explains: “What about the US, China and India? In terms of CO2 emissions, Europe is responsible for less than 9 per cent of global emissions. If we further reduce our CO2 emissions and the rest of the world does nothing, we don’t make a difference.” But ultimately, the best choice for most, if not all, textiles and apparel manufacturers is to stick to the Nash Equilibrium. So, they better don’t change their green strategy but diligently pursue their climb on the sustainability ladder.
Environmental Cost can Be Measured
Until recently, it was totally impossible for professional purchasers of textile products, let alone for consumers, to know how “green” a textile product was. However, this uneasy situation has dramatically changed. Peter Haenebalcke, a Belgian manufacturer of uniform shirts and blouses (company Elanco), who’s since 2011 has been the president of the association Creamoda, recalls with great pleasure the enthusiasm with which the innovative B-Awear project of Creamoda was met at the November 2019 G-STIC Conference in Brussels. G-STIC is the acronym of Global Sustainable Technology & Innovation Community. Haenebalcke says: “We actually didn’t expect much from the presentation of the B-Awear project at G-STIC. We were very wrong. Germans, Canadians, Italians, .... textile and clothing professionals from nearly the whole world inundated the booth of B-Awear. To their big surprise, they detected something they had not yet found in their own country: a reliable method to measure the total environmental cost of a textile product and the possibility to communicate about it in a simple way.” To their great frustration, until now, experienced buyers of textile products who were comparing two similar products, let’s say two shirts, couldn’t know which one of the two was the more sustainable. Maybe one of the products was made of bio-cotton and spun and woven in a French factory using mission-free nuclear power. Maybe the other one was produced in a Polish factory using dirty coal energy. Nobody could know. But today, the participants of the innovating B-Awear project make use of an environmental cost indicator (ECI) which summarises all environmental costs in one single score, expressed in euros. To get that far, Creamoda has been collaborating with two specialised Dutch companies. Thanks to B-Awear, Haenebalcke now knows precisely what is the total environmental cost of a bio-cotton uniform shirt made by his company Elanco: it’s €0.403, which is a lot less than that of a regular shirt, at €0.665. The president of Creamoda doesn’t agree with the American philosopher Ayn Rand on the role of governments. In her novel Atlas Shrugged (1957), according to some social scientists the most influential book in America after the Bible, Rand depicted a dystopian United States in which private businesses suffered under increasingly burdensome laws and regulations. Her advice was that governments should only play a minimal role in society. However, Haenebalcke is convinced that authorities at national and European level should actively support the companies’ march towards sustainability. Otherwise, efforts like those made by the participants of B-Awear can’t result in profits. Haenebalcke proposes that government tenders inviting bids for textile products should accept the ECI of these products as the most important criterion to define the winning bid. Alternatively, governments could put forward a maximum ECI under which a given textiles product even can’t compete in the tender.
Source: Fibre2Fashion
Mass manufacture of personal protective equipment (PPE) makes sense in light of the surge in demand for such wear for healthcare workers in the fight against Covid-19 in Malaysia, said Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid. According to reports, Malaysia requires 59 million units monthly and as of Monday, there were only two week’s worth of PPE supply left to be distributed to all hospitals in the country. Mohd Afzanizam said Malaysia has the economies of scale in respect of the textile industry and it is time the government had a look at the industry for its capability to produce PPE. “Anecdotally speaking, we have seen our local fashion designers volunteering themselves to prepare the PPE although safety standards have to be thoroughly checked as well. “Apart from that, the government has to look at tariff and non-tariff measures, which may need to be reviewed and reassessed during the public health crisis we are currently facing,” he told Bernama. He said re-looking at the existing structure of tariff and non tariff measures will also help facilitate the international trade for medical supplies, including PPE. A report by the Global Alert Team of the University of St Gallen, Switzerland, noted that as of March 21, 46 export curbs on medical supplies had been introduced by 54 governments since the start of 2020. Of those, 33 were announced in the month of March itself, indicating the rapid spread of new trade limits across the globe. “So it is also high time for our government to establish a more effective dialogue with the relevant countries in order to ensure medical supplies procurement related to Covid-19 can be expedited in the most efficient and timely manner,” he said. Citing a Khazanah Research Institute paper titled “Trade During A Pandemic”, Mohd Afzanizam said Malaysia imported US$2.4 billion, or RM9.5 billion, worth of medical supplies in 2018, which included face masks, disinfectants and medical devices used to diagnose and treat patients. As for protective garments and the like, he gave the breakdown of Malaysian imports in 2018, which included textile face masks (RM190.5 million), gas masks (RM40.35 million), protective spectacles and goggles (RM21.85 million), plastic face shields, plastic gloves, and protective garments made from plastic (RM58.6 million). Malaysia also imported surgical rubber gloves (RM75.41 million), other rubber gloves (RM168.67 million), knitted or crocheted gloves (RM57.51 million), textile gloves (RM21.31 million), disposable hair nets (RM71.04 million), protective garments for surgical/medical use made up of felt or non-wovens (RM28.99 million) and other protective garments (RM13.69 million). Meanwhile, the Federation of Malaysian Manufacturers (FMM) said some of its member companies are already in the process of modifying production or in the planning stages to diversify their operations to manufacture medical supplies, including PPE. Its president Tan Sri Soh Thian Lai said the move is part of efforts by manufacturers to meet the supply of medical equipment following the surge in demand due to the Covid-19 pandemic. “FMM has 39 member companies which are producing PPE and sanitisers, which include face masks, rubber gloves, protective wear, hand sanitisers and disinfectants,” he said. However, he highlighted that these manufacturers are now facing problems caused by insufficient supply of raw materials and parts and components to produce these medical supplies. Therefore, he said, the announcement by the Ministry of Finance (MOF) on March 28 to remove import duties and sales tax for denatured alcohol was timely as it has helped the Malaysian producers of sanitisers and disinfectants to increase capacity to meet huge demand. He noted that MOF last month announced the removal of duties and taxes for face masks. To ensure local face mask producers can compete with importers, FMM is also calling on the government to grant exemption on import duty and sales tax on all inputs for face mask, which include the PP non-woven materials for the three-ply mask, metal nose wire and elastic earloop, he said. These raw materials, on which a 20 per cent import duty and 10 per cent sales tax are imposed, are mainly imported from China, India, Ireland and the United Arab Emirates due to insufficient supply locally, he said. Soh added that FMM is also working closely with the International Trade and Industry Ministry through the Malaysian Investment Development Authority and Malaysia External Trade Development Corporation to facilitate its member companies into diversifying production and exports market to ensure they meet the growing demand for these essential goods.
Source: Malay Mail
Amid the COVID-19 outbreak worldwide, resulted in major disruptions in our lives as well as businesses and the global apparel supply chain. Against this mighty tide, some of the competing countries of Bangladesh (for example Cambodia and Sri Lanka) have decided to open their garments factories. Cambodia-Sri-Lanka-opening-garment-factoriesFigure: Cambodia and Sri Lankan government instruct RMG factories to resume operation. Courtesy: Manori Wijesekera, GPJ Sri Lanka. Cambodia government instructs RMG factories to resume operation through a circular from the ministry of labor. They also mentioned the necessary steps to follow under the health quarantine measure. Ministry of Commerce, Cambodia, urged retailers and fashion brands, partners – garment, footwear and travel goods buyers sourcing from Cambodia – to stay committed to Cambodia and especially to the workers. And abide by contracts and not to cancel orders that have been placed and goods have already been produced or are currently in production. This will ensure the contribution of the social development of millions of Cambodians who are depending on these sectors for their livelihood. Cambodia was the first country in the world that links trade with labor standards. Since 2001, it partnered with the International Labor Organization (ILO) to launch Better Factories Cambodia which required all exporting garment factories in Cambodia to be subjected to monitoring by the ILO to ensure compliance to national laws and international labor standards. “On behalf of the Royal Government of Cambodia and the workers in these sectors, I thank you for the support and confidence you have shown and given to us over the past 2 decades. I sincerely look forward too many more years of cooperation with you all,” said PAN Sorasak, Minister of Commerce, Cambodia. Cambodia is proud of this initiative and will continue to ensure that the labor and social rights of the garment workers are upheld while rebuilding a sustainable supply chain. While Sri Lanka Export Development Board (EDB) recently made a clarion call for the fast resumption of exports that have been suspended due to the partial shutdown for three weeks as part of stopping the spread of the novel Coronavirus (COPVID-19). The EDB is ready to support all exporters and a hotline is in place for any assistance that we can provide. We are from a nation where our unity is stronger than our individuality. When faced with times of difficulty, Sri Lankans will once again come together and rise. Export Development Board said in a statement, it is a difficult moment for the world. We are fighting the coronavirus pandemic whilst our nation’s exporters have been facing challenging times for the past two months. The EDB requests that now more than ever the time has come for us to prepare our businesses to stay up and running. Sri Lanka’s exports in January were downcast by 7.4% to US$961 million and in the first two months, down by 3.6% to US$1.93 billion from the previous year. We are confident that we will weather this storm and as we have done in the past, Sri Lanka will emerge stronger than ever and continue focusing on our main goal – recommencing exports, restoring them to their former level and increasing them, EDB added. EDB stressed it is of utmost importance, therefore, that all exporters commence operations after the New Year holidays. Factories will be permitted to operate outside the red zones and we must come together to fulfill our responsibility as Sri Lankans. “The EDB is ready to support all exporters and a hotline is in place for any assistance that we can provide. We are from a nation where our unity is stronger than our individuality. When faced with times of difficulty, Sri Lankans will once again come together and rise,” the statement concluded.
Source: Textile Today
