IBTEX-003 of 2013 JANUARY 04, 2013 NEWS CLIPPINGS. Page Topics No. Nos INTERNATIONAL NEWS. PTA will boost Pakistan s textile exports to Indonesia

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1 2 IBTEX-003 of 2013 JANUARY 04, 2013 NEWS CLIPPINGS Page Topics No Nos INTERNATIONAL NEWS 1 PTA will boost Pakistan s textile exports to Indonesia 2 2 Pakistan : 3.7 percent less cotton reaped this season 4 3 Ethiopian textile exports fetch $35mn in July-Nov Sri Lanka s textiles & apparel exports grow in Nov Bangladesh Garment Exports up 8.8% 9 NATIONAL NEWS Chairman, Texprocil welcomes the removal of 1 safeguard duty on import of cotton yarn in to 10 Turkey 2 Quality governance can uplift economic mood in 2013: Report 12 3 Arvind, Welspun to set up textile park, integrated plant in Gujarat 15 4 Power shortage forces Andhra cotton mills to cut operations 17 5 Government's cotton procurement gaining pace 19 6 Textile Ministry approves handloom clusters for Pulwama, Shopian 20 7 Govt may procure 38% of fresh cotton supplies in January to support farmers 21 given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 1

2 INTERNATIONAL NEWS PTA will boost Pakistan s textile exports to Indonesia The likely implementation of the Preferential Trade Agreement (PTA) between Pakistan and Indonesia from the current month would increase exports of textiles from Pakistan to Indonesia, according to Mr. Otto Rakhim Gani, Secretary for Economic and Trade Affairs at the Indonesian Embassy in Pakistan. Speaking to a delegation of Islamabad Women Chamber of Commerce and Industry (IWCCI), Mr. Gani said the Pakistan-Indonesia PTA will come into force this month, as both countries have completed the spade-work for the same. He said a new era of cooperation between the two countries would begin with the implementation of the PTA, which would, in turn, boost economic and trade ties between the two nations. Exports from Pakistan, including textile exports, to Indonesia, the largest economy in Southeast Asia, would get a boost following the coming into force of the PTA, he added. given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 2

3 Once the PTA is implemented, steps would be taken to initiate negotiations for a Free Trade Agreement (FTA) between the two countries, Mr. Gani said. Ms. Samina Fazil, founder president of IWCCI and Ms. Farida Rashid, current president of IWCCI, said the PTA would enhance exports of Pakistani goods to Indonesia, especially fabrics, carpets, value-added textiles like garments, and chemicals. The IWCCI representatives urged the Government to take steps, such as organizing single country expos and exchange of trade delegations, to increase cooperation between the business communities of both nations. Fibre2fashion January 04, 2013 ******************* given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 3

4 Pakistan : 3.7 percent less cotton reaped this season The domestic cotton production data released by the Pakistan Cotton Ginners Association (PCGA) here on Thursday shows that the country has reaped less cotton by now this season, as compared to last year. As per the statistics, ginners received around 11,586,730 bales of seed cotton (phutti) by January 1, which is 3.7 percent or 445,440 bales less than the cotton arrived by same time last season. Of the new arrival, textile mills have procured around 9,735,806 bales of cotton till January 1, while 1,86,865 bales have been exported, thus leaving an unsold stock of 1,664,059 bales with the ginneries, PCGA spokesman Shehzad Ali Khan says. State-wise, the report said seed cotton arrival in Punjab ginneries by January 1 this year reduced by percent to 8,351,797 bales. In other words the ginneries received 445,440 bales less than last year. Ginneries in the province of Sindh received 32,34,933 bales of seed cotton during the review period, which is percent excess or 8,29,820 bales more than crop received by ginners by January 1st, Pakistan Cotton Ginners Association (PCGA) has released the cotton arrival figures on January 3 to show the cotton arrival till January, given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 4

5 The PCGA fortnightly report shows that around million cotton bales were sourced to the country's ginners by January 1, which shows a decrease of 3.7 percent than last year. PCGA spokesman, while briefing the journalists about seed-cotton (phutti) arrivals, sales and unsold stock of cotton, said that 9,735,806 cotton bales were sold to the textile units and exporters bought 186,865 bales. Thus, overall 9,922,671 bales were traded without TCP participating in the trading activity so far. He said PCGA was expecting less crop than the target fixed by the government which might cross the figures of 12.5 million bales. Spokesman said total 882 out of 1,200 ginning factories were operational in Sindh and Punjab. The PCGA said Punjab contributed 8,351,797 bales which was percent less than last year when Punjab contributed 9,627,057 bales, Sindh contributed 3,234,933 bales, which 34.5 percent more than last year when it contributed 2,405,113 bales and Balochistan 51,325 bales. The textile industry purchased 9,735,806 bales and 1,664,059 bales were available with ginners as unsold stock. He said cotton trading remained firm amid strong physical price and higher cottonseed prices. District wise cotton arrival in Punjab: Multan 386,404 bales percent less than last year, Lodhran 239,993 bales percent less, Khanewal 859,092 showing a decrease of 9.85 percent, Muzaffargarh 311,802 bales percent less, Dera Ghazi Khan 309,795 showed a decrease of percent, Rajanpur 390,826 bales showing a decrease of 10.89, Layyah 210,759 bales percent less than last year, Vehari 738,375 bales percent short, Sahiwal 540,334 decreased 14 percent, Pakpattan given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 5

6 236,114 showing percent less than preceding year, Okara 55,223 showing an increase of 4.83 percent, Kasur 41,500, Toba Tek Singh, 254,399 bales, Faisalabad 58,661, Jhang 149,545, Mianwali 260,726 Bhakkar 176,800, Sargodha 28,250, Rahim Yar Khan 926,709, Bahawalpur 982,441 and Bahawalnagar 994,049 bales. District wise cotton arrival in Sindh: Hyderabad 243,784 bales showing an increase of percent, Mirpur Khas 395,452 bales showing bumper crop with percent increase. Sangarh 1,284,434, Nawabshah 228,105 Naushero Feroze 182,043, Khairpur 173,496, Ghotki 158,235, Sukkur 249,491, Dadu 28,500, Jamshoro 140,782, Badin 40,800 and Balochistan 50,925 bales. Ginneries received 1,186,301 bales during the fortnight of December 16 to January 1. Unsold stock is 1,664,059 which is less than last year when it swelled to 1,696,265 bales. Source: Business Recorder, Jan 03, 2013 Ethiopian textile exports fetch $35mn in July-Nov 12 Textile exports from Ethiopia earned US$ 35.6 million during the first five months of the ongoing fiscal year that started on July 8, 2012, according to the figures released by the Ethiopian Textile Industry Development Institute (ETIDI). given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 6

7 During the five-month period, Ethiopia exported yarn, fabric and readymade garments to the US as well as European, African and Asian countries. Austria, Canada, Japan, Australia, Israel, China and Germany turned out to be the key importers of Ethiopian textiles during the period, ETIDI said. ETIDI pegs Ethiopia s total exports during the current fiscal at US$ million. ETIDI has been set up to help investors willing to invest in the textile sector, and it is accountable for making provision for site for setting up factory, power supplies and financial assistance. At present, around 90 textile units are operational in Ethiopi Fibre2fashion January 04, 2013 ******************* given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 7

8 Sri Lanka s textiles & apparel exports grow in Nov 12 The exports of textiles and garments from Sri Lanka fetched US$ 364 million in November 2012, showing a year-on-year growth of 4.6 percent, according to the data released by the Central Bank. Despite the rise in earnings from textiles and clothing exports, Sri Lanka s total export earnings declined by 6.6 percent year-on-year to US$ million during the month. During the month under review, Sri Lanka imported goods worth US$ 1.8 billion, thus narrowing the trade gap to US$ 993 million. From January to November 2012, Sri Lanka s total exports fetched US$ 8.9 billion, registering a decline of 6.6 percent year-on-year, while imports were worth US$ 17.5 billion, down 4.5 percent year-on-year. Sri Lanka attracted US$ million worth of foreign direct investment (FDI) in the first eleven months of 2012, showing a dip of 9.4 percent year-onyear, compared to the Government s target of attracting US$ 1.75 billion in FDI during Fibre2fashion January 04, 2013 ******************* given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 8

9 Bangladesh Garment Exports up 8.8% The exports of garments from Bangladesh rose by 8.8 per cent year-on-year to 1.36 billion dollars (above Rs 7,000 crores) in November 2012, reveals the Export Promotion Bureau (EPB). Of these, woven garment exports fetched million dollars (Rs 3,895 crores), while knitwear earned million dollars (Rs 3,587 crores). Bangladesh posted positive growth in its garment exports in spite of the ongoing debt crisis in several European nations -- the traditional buyers of Bangladeshi clothing items. In the first four months of the current Bangladeshi fiscal , woven and knit apparel exports increased by 16 per cent year-on-year to over 6.6 billion dollars (Rs 36,200 crores). In comparison, India s apparel exports declined by 0.75 per cent year-on-year to 907 million dollars (Rs 4,975 crores) in October 2012, figures for which are available, according to the Apparel Export Promotion Council (AEPC). India s garment exports during the first seven months of the current fiscal year too declined by 9.1 per cent year-on-year to reach billion dollars (Rs 39,131 crores). Source: Fashion United, Jan 03, 2013 ******************* given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 9

10 NATIONAL NEWS Chairman, Texprocil welcomes the removal of safeguard duty on import of cotton yarn in to Turkey Turkey has repealed the safeguard duty imposed on import of cotton yarn with effect from 4th August 2011 for a period of 3 years on 31st December Welcoming this move, Shri Manikam Ramaswami, Chairman, Texprocil complimented the Government for its proactive efforts in ensuring that the unjustified measures imposed by Turkey were withdrawn well before their official expiry by August It may be recalled that these measures were an extension of an earlier safeguard measure imposed by Turkey against the import of cotton yarn for a period of 3 years from India had held consultations with Turkey on 12th and 13th March 2012 and impressed upon them the serious violations that had taken place while imposing safeguard duties on import of cotton yarn and that Turkey had breached safeguard provisions of GATT and WTO Agreement on Safeguard Measures by illegally extending the duties after t he original period for which the safeguard measure was put in place had expired as there was no such provision in the Agreement. given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 10

11 The withdrawal of the Safeguard Measures on imports of cotton yarn into Turkey augurs well for exports of cotton yarn from India which had declined from US $ 198 Million in 2007(prior to imposition of Safeguard Measures) to US $ Million in During January October 2012 imports declined to US $ million from US $ million i.e. by (-) 75%. In quantity terms imports declined to 4.20 million kgs from million kgs during this period. India also slipped to the 4th position in terms of supplier in 2012 from being the largest supplier in With Turkey being the gateway to Europe, removal of safeguard duties would enable India restore its exports to earlier levels and also increase its market share. The Council has already drawn up plans to participate in the Istanbul Yarn Fair in Turkey being organized from 29th May 2013 to 1st June Shri Manikam Ramaswami stated that the Government of India had an excellent record in defending the trade interests of exporters especially in the textile sector which is highly vulnerable to various trade defense measures like Anti Dumping and Safeguard Action due to its importance in the economies worldwide. ******************* given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 11

12 Quality governance can uplift economic mood in 2013: Report New Delhi, Jan 1 (IBNS) The quality of governance, inflation and the government s fiscal situation will remain the key differentiators in 2013 between India managing to cope up with the global slowdown and further erosion in the economic growth, an ASSOCHAM report said on Tuesday. The report based on inputs from economists and industry leaders, does not see turnaround in the economy in the short-term, as uncertainty in the US and Europe has only increased denting the investor confidence worldwide. While the ASSOCHAM report on the 2013 economic situation does not see India s growth exceeding six per cent in the current fiscal, it may not exceed per cent even in the FY 14. Despite some optimistic views on the downslide having bottomed out, Indian economy is still grappling with the key problems of high inflation and high interest rates, lack of investor confidence and a terrible situation for exporters, it said. Under these circumstances, it is the quality of governance and the political leadership which only can make a big difference, ASSOCHAM President Rajkumar Dhoot said. given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 12

13 The report lists the limitations of the government to do any pump-prime to boost the consumer demand in terms of reducing taxes on individuals or the industry. The fiscal situation is almost on the precipice leaving little room for Union Finance Minister P Chidambaram to revive the industrial and consumer demand in the coming budget. While the Reserve Bank of India (RBI) had given an indication of interest rates cut later this month, reining in inflation will continue a priority for the central bank, however much the industry demands for the rate cut, the ASSOCHAM report pointed out. We do not see rate of more than 100 basis points in 2013, it said. With the fiscal deficit crossing 80 per cent of the budgeted for the entire year in the first eight months of the current financial year and the current account deficit widening to 5.4 per cent of the GDP in July-September quarter, signals about the state of government finances are not quite comforting. However, the situation will only improve in the medium to long term as the savings and investments, still stay above 30 per cent of the Gross Domestic Product. given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 13

14 Emphasis on faster implementation of the infrastructure projects coupled with quick rollout of the reform measures like new banking licences can change the mood for better over a one year horizon. Moreover, to deal with a pathetic situation in Europe and uncertainty increasing in the US, India must look for extensive export market within Asia which is still growing at a respectable rate. The balance of trade with China, the Asian powerhouse, has to be corrected and our exports must equal or at least near equal to imports from China. Despite some slowdown the Chinese economy continues to grow raising the global demand for commodities, the report said. Back home, it would take at least another 18 months before we can expect a complete turnaround, that too if the global situation improves. However, on the positive side the mood in the stock market has improved in the last few weeks with the foreign institutional investors pouring in money. But the global factors like the US fiscal cliff can mar the story. We keep our fingers crossed, the report said. indiablooms.com January 02, 2013 ******************* given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 14

15 Arvind, Welspun to set up textile park, integrated plant in Gujarat In a further boost to the textile industry in Gujarat, two industry biggies Arvind Ltd and Welspun India Ltd. are set to invest in integrated textile parks and manufacturing facilities. For instance, after investing in its own denim, spinning, shirting, real estate and other business, Ahmedabad-based textile conglomerate Arvind Limited is now learnt to be investing around Rs 2,000 crore in an integrated textile park. On the other hand, Welspun India Ltd. is investing close to Rs 3,000 crore for an integrated manufacturing plant. "There have been companies from outside the state showing interest of investing in Gujarat. At the same time, there are existing players in the state like Arvind Ltd. and Welspun who are expanding their presence in the textile sector in Gujarat," said a senior state government official. As per the official, Arvind Ltd. will be setting up an integrated textile park that can house around 50 units near its existing plant at Santej, for which the company is scouting for a land of over 200 acres. When asked, an Arvind Ltd. spokesperson said, "There is nothing on drawing board as of now but we are always looking at options." On the other hand, it has been learnt that Welspun will be investing close to Rs 3,000 crore for an integrated textile manufacturing plant. given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 15

16 "The Welspun India plant will focus on almost the entire textile value chain, right from spinning, weaving, processing and manufacturing," the official stated, adding that it was unclear if the new plant would come up at the existing Welspun City in Anjar, Kutch. An query to Welspun India did not elicit any response at the time of writing this report. While Arvind has a shirting and knitting plant at its 450-acre Santej textile complex, Welspun India's Anjar complex, apart from manufacturing spiral arc welded (SAW) pipes, houses a textile mill that produces terry towels and bed linen. Moreover, according to government sources, both the companies would also be signing a memorandum of understanding (MoU) for the same at the upcoming Vibrant Gujarat Summit An Rs 5,000 crore textile conglomerate, Arvind Limited recently made some acquisitions to enhance its apparel brands and retail business. Meanwhile, the Rs 3,000 crore textile business of Welspun India expects to peg a CAGR of over 20 per cent for its topline and per cent for its bottomline for the fiscal year ending March 31, Business Standard - January 04, 2013 ******************* given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 16

17 Power shortage forces Andhra cotton mills to cut operations Costs have gone up 30% with addition of FSA at Rs 1.33/unit Cotton farmers in Andhra Pradesh are in a precarious situation, as the spinning mills are looking to cut down their operations due to power shortage. The rising power bills, with the addition of fuel surcharge adjustment (FSA) of Rs 1.33 per unit, are forcing the spinning mills to cut down operations. The crop this season is likely to be about 75 lakh bales, about 10 lakh bales more than the last season. Spinning mills are power, capital and labour intensive segment and any increase in the cost of any of these have to be passed on to the customers, which will result in the demand for cotton falling, said Sushil Sancheti, a member of the Andhra Pradesh Spinning Mills Association. Also, about 50 per cent of the cotton grown in Andhra Pradesh, the third biggest producer of cotton after Gujarat and Maharashtra, finds its way to Tamil Nadu, Maharashtra and Gujarat for processing. The mills in Andhra Pradesh are already short of capacity to process the cotton grown here. Now, the FSA and the shortage of power are forcing the mills to cut down operations and keep spindles idle. This will affect the spinning sectors ability to service the loans, he said. given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 17

18 According to industry estimates, the spinning mills in Andhra Pradesh have loans in excess of Rs 3,000 crore, mainly taken up for setting up new spindles. The state in all has about 150 mills and about 3.5 to four million spindles capacity. The spinning sector consumes about 500 mw on an annual basis. The FSA is resulting in the power bills going up by over 30 per cent. The average power bills for spinning mills with 50,000 spindles capacity was about Rs crore, and that has now gone up significantly and in some cases touching Rs crore, he said. The association is asking the government to levy FAS corresponding to the quantum of energy used by the sector. The cotton farmers last season realised between Rs 4,500 to Rs 5,000 a quintal. Now, the prevailing prices are about Rs 4,100 a quintal and the supply season is likely to last till April, mainly due to late monsoon. The sector provides direct employment to about 1,00,000 people. Business Standard - January 04, 2013 ******************* given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 18

19 Government's cotton procurement gaining pace AHMEDABADL Cotton procurement by various government agencies gains momentum in Andhra Pradesh, Maharashtra and Karnataka as farmers begin to bring cotton to mandis. The Cotton Corporation of India (CCI) has procured 12.5 lakh bales of cotton (a bale weighs 170 kg) whereas the National Agricultural Cooperative Marketing Federation of India (Nafed) has purchased 1.5 lakh bales till January 1 through its procurement centres across the country at the minimum support price (MSP). The sale of the cotton procured by CCI is under the consideration of the Union textiles ministry. According to sources, over 1.5 lakh bales will be sold under the first lot, which is likely to be announced soon. Nafed is also looking at the current scenario. Business Standard - January 04, 2013 ******************* given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 19

20 Textile Ministry approves handloom clusters for Pulwama, Shopian The Union Ministry of Textiles has approved two handloom clusters at Parigam in Pulwama and Saidpora in Shopian, a statement issued here said. Member Parliament G Nabi Ratanpuri had put certain demands before the Ministry including, in addition to two handloom clusters, the extension of Carpet Weaving Mass Training Programme, filling of vacant posts, increase in the monthly stipend of the trainees, creation of a directorate at Srinagar and geographical indication for Kashmir handicrafts. It said the Ministry has agreed to creation of Directorate at Srinagar and forwarded the proposal for financial concurrence to the Ministry of Finance. Although the Carpet Training programme has been wound up in India, it has been extended in J&K. The posts lying vacant for decades have been filled up to a great extent and many have been referred to Staff Selection Commission for recruitment, the statement read. It said the Ministry has also agreed to increase the stipend of trainees but the implementation of the decision has been delayed by the attitude of the officials of the J&K Govt. It is pertinent to mention here that the last time stipend of trainees was increased by the Central Government, the J&K Handlooms department had expressed concern that it had fuelled demands from trainees of the training centres run by the State Government. given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 20

21 GoI wants a NOC from State Handlooms Department before disbursing stipend at enhanced rates to its trainees but it has not come inspire of repeated reminders. (Source: RisingKashmir, Jan 03, 2013 ******************* Govt may procure 38% of fresh cotton supplies in January to support farmers The government expects to procure a massive 38% of cotton supplies from the fresh crop this month, as the Centre steps up efforts to provide relief to farmers following a drop in the fibre s prices below the state-fixed benchmark rates in many regions. The Cotton Corporation of India (CCI) is expected to purchase 1.9 million bales in January out of the crop arrival of 5 million bales, a senior government official told FE. While procurement in third-largest producer Andhra Pradesh, where prices are still ruling around 3% below the minimum support prices, will likely touch 1.5 million bales in January, purchases from Maharashtra may reach 4,00,000 bales, he said. given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 21

22 The total costs of procurement operations until end-january would be to the tune of R 8,100 crore, an all-time-high, despite a projected 5% drop in the country's cotton output in CCI procured 1.3 million bales, almost all from Andhra Prdesh, until December 31 since the marketing year started on October 1, out of the arrivals of 8 million bales. One bale equals 170 kg. Ginners have already procured 1.27 million bales and have ginned 8,00,000 bales out of the purchases, said the official. The government won t reduce procurement despite a looming storage crisis, a senior official said on Wednesday. Excess cotton stocks in Andhra Pradesh, where a storage crisis is fast approaching, will be kept in other states, especially Tamil Nadu, where the facility is available, he added. The CCI has projected cost of the procurement operation at R5,400 crore for January, on top of purchases worth R2,700 crore until December 31. CCI has also projected losses of R1,647 crore on its procurement operation during the entire marketing year through September Government agencies usually buy cotton at the minimum support price (MSP) and sell the stocks later at market rates. Losses on account of the procurement operations are reimbursed by the government. given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 22

23 A crisis is approaching in cotton storage as the government procured nearly 1.3 million bales in Andhra Pradesh until December 31 since the marketing year started on October 1, compared with its storage facility of around 1.7 million bales. Moreover, the CCI expects to purchase a record five million bales in Andhra Pradesh, out of the state s projected crop size of 7.2 million bales for , to prevent distress sales. COTTONYARNMARKET JAN 04, 2013 ******************* given nor endorsed by TEXPROCIL - The Cotton Textiles Export Promotion Council. Page 23