Friday, December 3, 2010
Govt caps yarn exports to cool cotton prices
Dilip Kumar Jha / Mumbai December 2, 2010, 0:53 IST
The Union textile ministry has put a 720-million-kg cap on cotton yarn exports for the current financial year. The move could help soften prices of yarn and cotton.
The ministry said the quota would not be extended under any circumstances. With this, the propensity for further exports to cash in on higher global prices came to an end. Industry sources said the textile ministry had already taken a decision in this regard, while the notification was expected on Thursday.
“The industry has already achieved the quota so far this year and hence there is no further room for exports,” said Sunil Khandelwal, chief financial officer of Alok Industries, a Mumbai-based garment exporter.
The move would also soften cotton and polyester yarn prices in the domestic market due to excess availability, which in turn would cool cotton prices, he added.
While cotton prices have been revised from Rs 2,700 to Rs 4,400 per maund this year (now Rs 4,200 per maund), polyester prices have been revised even sharply; from Rs 63 a kg in September to Rs 110 a kg in November.
Cotton yarn prices have touched an all-time high of over Rs 240 per kg (40s), an increase of over 80 per cent in the last one year.
As a result, fabric prices have also shot up by 38-90 per cent for various counts. Price of cotton has doubled from Rs 23,000 a candy to Rs 46,000 over the past one year despite higher production.
Cotton yarn exports surged 35 per cent in the first half of the current financial year and are expected to surpass 800 million kg this year as against 589 million kg last year.
“Our demand is that the government should keep cotton yarn export quota at 650 million kg like last year. The decision, although late, is a welcome move which will certainly benefit the textile industry,” said Premal Udani, chairman of Apparel Export Promotion Council (AEPC).
AEPC had earlier convened a one-day nation-wide strike to draw the Centre’s attention to the ever rising raw material prices.
While the cost of raw material has increased exorbitantly, final products prices have not surged proportionately. If the government allows exports of only final products, the realisation of such products increases, the benefit will be automatically passed on to downstream players including farmers.
D K Nair, secretary general of Confederation of Indian Textile Industry (CITI), however, said he would suggest the government to allow exports in the future for higher realisation for cotton yarn from the overseas markets.
Source: http://www.business-standard.
Yarn exports cap a blow to sector, says industry body
BS Reporter / Ahmedabad December 03, 2010, 0:40 IST
The quantitative ceiling of 720 million kg that the Ministry of Textiles has imposed on the export of cotton yarn during 2010-11 will have far reaching adverse consequences for all segments in the textile industry of India, the Confederation of Indian Textile Industry (CITI) said on Thursday.
According to a statement issued by CITI, the export authorisation registration certificates have already been issued for the entire quantity with a maximum period of 45 days for shipment. “This decision would push up yarn exports during the next 45 days considerably, since exports that would have normally taken place during four months up to March 2011 will now have to be made during the next 45 days. Mills will be forced to divert supplies from domestic market to export markets during this period, reducing availability for domestic consumers of yarn," said Shishir Jaipuria, chairman CITI.
The textile industry body stated that there was no shortage of cotton yarn in the domestic market so far, though there were complaints of inadequate availability from certain sections of the industry. But now there may be actual shortage for domestic consumers, though for a limited period, CITI stated.
"Following the restriction on cotton yarn exports from India, international prices for cotton yarn will shoot up, since India is currently the largest supplier of cotton yarn in the global markets. The other major cotton yarn exporting countries such as Pakistan, Turkey and Indonesia will be the major beneficiaries of this price increase," said Jaipuria.
For the spinning industry of India, the restriction will be a hard blow in many ways. “In the first place, they will find it difficult to honour some of the commitments made to their domestic customers, for the next 45 days. And after that, there may be a glut of cotton yarn in the country, since the domestic consumption can not match the increasing production of cotton yarn. During January-March 2011, cotton yarn exporters of the country will not be able to supply any yarn to their overseas customers who have been importing regularly from them for decades. This will affect their individual reputation as well as that of India as a reliable supplier of cotton yarn," Jaipuria stated.
Meanwhile, CITI has requested government to reconsider the decision to cap cotton yarn exports, in view of issues the decision would create. The government has also been asked to clear the pending quantity of around 60 million kg for which applications had already been accepted by Textile Commissioner before the ceiling of 720 million kg was announced, since it would be unreasonable to apply the quantitative ceiling retrospectively.
Textile experts question investment in Sri Lanka mills
By: Dilshani Samaraweera | 2 December 2010
Sri Lankan garment makers import around half of their fabric requirements
Plans just announced by the Sri Lankan government to develop the country's textile sector have been questioned by industry specialists who doubt the viability of more textile mills.
Sri Lanka currently has only six textile mills to supply the apparel export sector. As a result, garment makers still import around half of their fabric requirements.
This week, though, the government, in its national budget for 2011, announced incentives for the textile and apparel sector - aimed at increasing domestic value addition.
Sri Lanka currently has only six textile mills to supply the apparel export sector. As a result, garment makers still import around half of their fabric requirements.
This week, though, the government, in its national budget for 2011, announced incentives for the textile and apparel sector - aimed at increasing domestic value addition.
These include removing import duties and VAT for machinery to manufacture textiles, and slashing income tax from 15% to 10% for companies that show domestic value addition in excess of 65%. Exporters with lower value addition will get a smaller income tax reduction from 15% to 12%.
Nevertheless, despite government aims for more domestic value addition, textile industry specialists say the local cost structure does not favour more textile mills.
"Textile mills are very much more capital intensive than garment factories. Also Sri Lanka's energy costs are comparatively higher than many competitor countries," one textile industry specialist told just-style.
"Water, water treatment and energy are the second biggest cost for textile mills, behind the cost of raw material. Given the costs in Sri Lanka, in many cases, it would be cheaper to import fabric than to manufacture in Sri Lanka."
Another textile expert said shifting existing factories to a higher value rung might be a better option than introducing more textile producers into Sri Lanka's limited market.
"We cannot compete at the lower end with countries like India, China and Bangladesh. So shifting our existing mills into producing higher value outputs, while retaining economies of scale, might be more feasible than getting more new players in," says Mr Shehan Witharana a director at Textured Jersey, a local producer of knit fabric.
The government is trying to attract investment to support the apparel industry in many areas of value addition, including textiles, as the island nation recovers from a decades-long civil war that ended earlier this year.
Nevertheless, despite government aims for more domestic value addition, textile industry specialists say the local cost structure does not favour more textile mills.
"Textile mills are very much more capital intensive than garment factories. Also Sri Lanka's energy costs are comparatively higher than many competitor countries," one textile industry specialist told just-style.
"Water, water treatment and energy are the second biggest cost for textile mills, behind the cost of raw material. Given the costs in Sri Lanka, in many cases, it would be cheaper to import fabric than to manufacture in Sri Lanka."
Another textile expert said shifting existing factories to a higher value rung might be a better option than introducing more textile producers into Sri Lanka's limited market.
"We cannot compete at the lower end with countries like India, China and Bangladesh. So shifting our existing mills into producing higher value outputs, while retaining economies of scale, might be more feasible than getting more new players in," says Mr Shehan Witharana a director at Textured Jersey, a local producer of knit fabric.
The government is trying to attract investment to support the apparel industry in many areas of value addition, including textiles, as the island nation recovers from a decades-long civil war that ended earlier this year.
But whether the local apparel export industry can absorb more textile investments remains questionable.
Competitiveness of Indian Textiles
With a view to enhance India’s share of the global trade in Textiles & Clothing, the Government has embarked upon an ambitious plan involving all the textiles Export Promotion Councils (EPCs) for mounting Mega Textiles Shows in India and abroad, particularly in Focus Countries, as well as enhanced participation in all major Textiles & Clothing Fairs of exhibitions abroad. Indian Textiles exports have increased from USD 22147 Million to USD 22419 Million under the 11th Five Year Plan. This apart, various schemes are operational under the Foreign Trade Policy (2009-14) for incentivisation of export of Textiles & Clothing. This information was given by the Minister of State for Textiles, Smt. Panabaaka Lakshmi in a written reply in the Lok Sabha today to a question raised by Shri Dharmendra Yadav, Shri Pradeep Majhi, Shri Nityananda Pradhan, Shri Baijayant Jay Panda, Shri Yogi Aditya Nath, Shri Dushyant Singh, Shri Hamdullah Sayeed and Shri Kishnbhai V. Patel.
The Minister further stated that the percentage-wise position of India’s exports of textiles and clothing of the global exports, as per latest available statistics of the World Trade Organisation is given below:-
Textiles
Year %age of India’s share
2006 4.30
2007 4.00
2008 4.10
In response to industry demands, Government has implemented Technology Upgradation Fund Scheme, Schemes for Integrated Textiles Parks and Integrated Skill Development Scheme under the 11th Five Year Plan.
Cotton Sales Depot
Thursday, December 02, 2010
Ministry of Textiles 13:59 IST
Cotton Corporation of India (CCI) had opened Sales Depots for cotton in Coimbatore and Rajapalayam in the State of Tamil Nadu with effect from 8th February 2010. The Government of Tamil Nadu has exempted levy of 4% VAT on cotton bales sold from such sales depots. The Scheme extends various benefits to the textile mills which include inter-alia availability of quality cotton at the door steps of the mills; saving in costs due to reduced need to maintain large inventories; savings in lead time, interest and carrying charges etc. Opening of sales depots at Baddi (Himachal Pradesh) and Ludhiana (Punjab), has been approved, subject to the exemption of 4% VAT from the respective State Governments. This information was given by the Minister of State for Textiles, Smt. Panabaaka Lakshmi in a written reply in the Lok Sabha today to a question raised by Shri P. Viswanathan.
The Minister further stated that the benefits under the Technology Upgradation Fund Scheme are available to the small and medium spinning mills in the country.
Suspend cotton exports, cap yarn exports: Karunanidi
2010-12-02 21:10:00
Chennai, Dec 2 (IANS) Citing the upward trend in cotton and yarn prices, Tamil Nadu Chief Minister M. Karunanidhi Thursday urged Prime Minister Manmohan Singh to suspend cotton exports and cap cotton yarn exports as well as levy an export duty on it with immediate effect.
In a letter to Manmohan Singh, a copy of which was released to the media, Karunanidhi - referring to the central government's permission to export 55 lakh bales from November onwards - said: 'Between last week of September 2010 and the last week of November 2010, cotton prices have increased almost by 20 percent. Further hectic buying indulged in by the exporters of cotton has resulted in arrivals to the market being woefully inadequate to meet the domestic consumption.'
'Normally the period of 4-5 months after October witness a dip in cotton prices owing to fresh arrivals in the market. However, this year, the clearance given for exporting 55 lakh bales of cotton has resulted in a hand to mouth situation by which virtually no cotton is available in the market to build up cotton stocks,' he said.
According to him, competing countries like China maintain a stock to use ratio of about 33 percent as against India's 17 percent.
Referring to the rise in cotton yarn prices due to increase in cotton exports, Karunanidhi has said yarn exports should be moderated so that value addition is possible downstream, '...so as to enable higher production of powerloom cloth, knitwear, handloom cloth, garments etc.'
Global cotton prices to cool down in 2011-12 : ICAC
Published on: December 02 2010 12:05 GMT
LONDON (Commodity Online) : The International Cotton Advisory Committee in its first forecast for 2011-12 said high prices will come down then as production to hit record highs and consumers may switch to cheaper artificial fibres.
The ICAC pegged cotton inventories ending the season at 11.2m tonnes (52m bales), their highest for three years.
The ICAC however said consumption will grow by just 1.2%, as high prices feed a trend which has already resulted in some shifts in fibre blends at the spinning level, to the benefit of polyester.
While failing to give detailed reasoning behind its forecasts, the intergovernmental group predicted a rebound in world production to 27.3m tonnes, surpassing by more than 600,000 tonnes the record set four years ago.
"The share of cotton in global fibre use, estimated at 36.5% in 2009, will likely continue to decline in 2010 and 2011."
The estimates imply a stocks-to-use ratio – an important gauge of a commodity's supply, and therefore of the price it can command – of 44% in 2011-12, higher figure than the current season's 38%, and approaching the 10-year average of 48%.
The last time the ratio was at 44%, six years ago, the benchmark Cotlook A price index averaged 52.2 cents a pound, less than half its levels so far in 2010-11.
However, the committee stopped short of making a price forecast for 2011-12, and indeed restated doubts over its estimate of 95 cents a pound for the current season, given futures which in both New York and Zhengzhou in China have begun a habit of moving the maximum allowed by exchange limits.
"The ICAC Secretariat acknowledges that in the current environment of volatility, the ICAC price model may be less relevant than in other seasons," the committee said.
For 2010-11, the committee lowered its estimate of world cotton consumption by 400,000 tonnes, flagging "limited available supplies and high prices".
Indeed, the output forecast was lowered too, by 300,000 tonnes to 25.0m tonnes, reflecting setbacks to some northern hemisphere crops, with southern hemisphere producers set for "bumper" harvests.
The ICAC pegged cotton inventories ending the season at 11.2m tonnes (52m bales), their highest for three years.
The ICAC however said consumption will grow by just 1.2%, as high prices feed a trend which has already resulted in some shifts in fibre blends at the spinning level, to the benefit of polyester.
While failing to give detailed reasoning behind its forecasts, the intergovernmental group predicted a rebound in world production to 27.3m tonnes, surpassing by more than 600,000 tonnes the record set four years ago.
"The share of cotton in global fibre use, estimated at 36.5% in 2009, will likely continue to decline in 2010 and 2011."
The estimates imply a stocks-to-use ratio – an important gauge of a commodity's supply, and therefore of the price it can command – of 44% in 2011-12, higher figure than the current season's 38%, and approaching the 10-year average of 48%.
The last time the ratio was at 44%, six years ago, the benchmark Cotlook A price index averaged 52.2 cents a pound, less than half its levels so far in 2010-11.
However, the committee stopped short of making a price forecast for 2011-12, and indeed restated doubts over its estimate of 95 cents a pound for the current season, given futures which in both New York and Zhengzhou in China have begun a habit of moving the maximum allowed by exchange limits.
"The ICAC Secretariat acknowledges that in the current environment of volatility, the ICAC price model may be less relevant than in other seasons," the committee said.
For 2010-11, the committee lowered its estimate of world cotton consumption by 400,000 tonnes, flagging "limited available supplies and high prices".
Indeed, the output forecast was lowered too, by 300,000 tonnes to 25.0m tonnes, reflecting setbacks to some northern hemisphere crops, with southern hemisphere producers set for "bumper" harvests.
Major Revisions in USDA Income and Export Forecasts
12/01/2010
by Andy Eubank
ShareThis
When farmers close the books on 2010, many of them will see a big improvement in receipts and possibly record incomes. Those are indicators from the just released USDA income forecast, and the department’s analysts acknowledge they were off on their February forecasts for this calendar year’s farm income. The forecast jump is $7 billion higher than the August number, and the total comes in at $92.5 billion.
Joe Glauber, USDA Chief Economist says that figure is “almost a third higher than what the net cash income level was in 2009.”
That would also be a new record high. “The previous record was back in 2008 at $90.4 billion. So that’s almost $2 billion higher.”
In February forecasters said crop producers might end up getting lower cash receipts this year, but Glauber says “it looks like they’ll be almost $10 billion higher.”
The reason for the rosier picture is higher grain prices, oil seeds and cotton prices.
And USDA has raised their fiscal year 2011 export forecast dramatically. The forecast has the U.S. doing record exports and Glauber says the biggest gains are in grains, soybeans, and cotton.
The new export number is $126.5 billion, 13.5 billion more than USDA forecast in August, and an increase of $17 billion over 2010. The forecast is also for a record ag trade surplus of $41 billion.
Joe Glauber, USDA Chief Economist says that figure is “almost a third higher than what the net cash income level was in 2009.”
That would also be a new record high. “The previous record was back in 2008 at $90.4 billion. So that’s almost $2 billion higher.”
In February forecasters said crop producers might end up getting lower cash receipts this year, but Glauber says “it looks like they’ll be almost $10 billion higher.”
The reason for the rosier picture is higher grain prices, oil seeds and cotton prices.
And USDA has raised their fiscal year 2011 export forecast dramatically. The forecast has the U.S. doing record exports and Glauber says the biggest gains are in grains, soybeans, and cotton.
The new export number is $126.5 billion, 13.5 billion more than USDA forecast in August, and an increase of $17 billion over 2010. The forecast is also for a record ag trade surplus of $41 billion.
Export of Cotton Yarn not entitled to DEPB benefit under the DEPB Rate Schedule
POLICY CIR NO. 04/2010, DT. 29/11/2010
It was stated in the DGFT Public Notice No. 57 dated 21.4.2010, that Export of “Cotton yarn including Melange Yarn” appearing at DEPB entry Sl. No. 78 of the Product Group “Textiles” shall not be entitled for DEPB benefit from immediate effect. Thereafter references have been received from Trade and Industry and Regional Authorities of DGFT seeking to know whether export of cotton yarn shall be entitled for DEPB benefit @ 1.5% under DEPB entry Sl. No. 22D of the Misc. Products (Product code 90).
2. Benefit of DEPB under Sl. No. 22D of the Misc. products is available only when, Standard Input Output Norms (SION) exist for a product, but no DEPB rate has been notified. In the case of Cotton Yarn, it is not that DEPB Rate has not been notified but actually, the notified specific DEPB benefit has been suspended as per Public Notice of 21.4.10, as described in para 1 above.
3. Accordingly, it is clarified that exports of “Cotton Yarn” is not entitled for any DEPB benefit either under entry 78 of Product Group Textiles (as was notified already on 21.4.10), or even under the residual entry at Sl. No. 22D of the Product Group “Misc. products” of the DEPB rate schedule.
This issues with the approval of DGFT.
(Rita Mahna)
Deputy Director General of Foreign Trade
Tel. 011-23061562 /Ext. 288
E-mail: r.mahna@nic.in
Deputy Director General of Foreign Trade
Tel. 011-23061562 /Ext. 288
E-mail: r.mahna@nic.in
[Issued from F. No. 01/94/180/002/AM 11/PC 4(B) ]
Presented by eximkey.com
Firm export data help cotton soar limit up again
2nd December 2010, by Agrimoney.com
Cotton futures set course for a second successive limit up close after strong US export data stoked concerns of tight supplies, as analysts warned of the risk of the fibre being elbowed out of farmers' sowings plans next year.
New York cotton stood at 126.34 cents a pound in late deals, up the maximum 5.0 cents allowed by exchange rules, and a ceiling widened after Wednesday's limit-up close.
The rally, maintaining a strong rebound after the fibre's collapse last month from record highs, reflected in part data showing weekly US export sales of 323,000 running bales, of 500 pounds each, up 21% on the previous week, and keeping the pace of shipments well ahead of historical rates.
Buyers were led by China, where measures to tighten monetary policy have raised fears of weaker demand in many markets, including cotton, of which the country is the top importer.
"Cumulative cotton sales stand at 85% of the US Department of Agriculture forecast for the 2010-11 marketing year versus a five-year average of 50%," the Hightower Report said.
Sales of just 61,000 running bales a week are now needed to reach the USDA forecast for the full crop year, the analysis group added.
The USDA expects America, the world's top cotton exporter, to ship 15.8m 480-pound bales in 2010-11.
Acreage war
The jump in cotton futures also followed a caution from Goldman Sachs that higher cotton prices were needed for the fibre to secure sowings next year, against competition from high-priced corn and soybeans.
"The market cannot afford large production declines in the US," the bank said, forecasting a cotton price of 125 cents a pound in 2011.
"Strong emerging market demand has put the global cotton market in a deficit for the fourth consecutive year."
The near-term December contract, for which the expiry process has liberated it from exchange trading limits, stood 7.9% higher at 139.82 cents a pound.
The rise took the contract's recovery from a low two weeks ago to 26%, but left it short of the record 157.23 cents a pound set earlier in November.
Record cotton output to replenish depleted stocks
2nd December 2010,
The squeeze in world cotton supplies, which has driven prices of the fibre to an all-time peak, will relax markedly next season as production hits a record high and consumers switch to cheaper artificial fibres.
The International Cotton Advisory Committee, publishing its first forecasts for 2011-12, pegged cotton inventories ending the season at 11.2m tonnes (52m bales), their highest for three years.
While failing to give detailed reasoning behind its forecasts, the intergovernmental group predicted a rebound in world production to 27.3m tonnes, surpassing by more than 600,000 tonnes the record set four years ago.
Consumption, however, will grow by just 1.2%, as high prices feed a trend which "has already resulted in some shifts in fibre blends at the spinning level, to the benefit of polyester", the committee said.
"The share of cotton in global fibre use, estimated at 36.5% in 2009, will likely continue to decline in 2010 and 2011."
Squeeze to relax?
The estimates imply a stocks-to-use ratio – an important gauge of a commodity's supply, and therefore of the price it can command – of 44% in 2011-12, higher figure than the current season's 38%, and approaching the 10-year average of 48%.
The last time the ratio was at 44%, six years ago, the benchmark Cotlook A price index averaged 52.2 cents a pound, less than half its levels so far in 2010-11.
However, the committee stopped short of making a price forecast for 2011-12, and indeed restated doubts over its estimate of 95 cents a pound for the current season, given futures which in both New York and Zhengzhou in China have begun a habit of moving the maximum allowed by exchange limits.
"The ICAC Secretariat acknowledges that in the current environment of volatility, the ICAC price model may be less relevant than in other seasons," the committee said.
'Limited supplies'
For 2010-11, the committee lowered its estimate of world cotton consumption by 400,000 tonnes, flagging "limited available supplies and high prices".
Indeed, the output forecast was lowered too, by 300,000 tonnes to 25.0m tonnes, reflecting setbacks to some northern hemisphere crops, with southern hemisphere producers set for "bumper" harvests.
Cotton yarn export ceiling to hit textile sector
Short supply
Mills will be forced to divert supplies from domestic market to export markets during this period, reducing availability for domestic consumers of yarn.
Our Bureau
New Delhi, Dec. 2
The quantitative ceiling of 720 million kg that the Ministry of Textiles has imposed on December 1, 2010 on export of cotton yarn during 2010-11 will have adverse consequences for the textile industry, according to Confederation of Indian Textile Industry (CITI).
Export Authorisation Registration Certificates have already been issued for the entire quantity with a maximum period of 45 days for shipment.
In a statement issued here, Mr Shishir Jaipuria, Chairman, CITI, said that this decision would push up yarn exports over the next 45 days, since exports that would have normally taken place during four months up to end March 2011 will now have to be made during the next 45 days.
Mills will be forced to divert supplies from domestic market to export markets during this period, reducing availability for domestic consumers of yarn, CITI said in a statement.
“There was no shortage of cotton yarn in the domestic market so far, though there were complaints of inadequate availability from certain sections of the industry. But now there may be actual shortage for domestic consumers, though for a limited period,” Mr Jaipuria said.
Following the restriction on cotton yarn exports from India, international prices for cotton yarn are slated to shoot up, since India is currently the largest supplier of cotton yarn in the global markets.
The other major cotton yarn exporting countries such as Pakistan, Turkey and Indonesia will be the major beneficiaries of this price increase, the statement said.
The CITI Chairman asked the Government to reconsider the decision to cap cotton yarn exports, in view of the problems that the decision would create.
Thursday, December 2, 2010
Govt puts a ceiling on cotton yarn exports
New Delhi, Dec 1 (PTI)
The government today said it has imposed a limit of 72 crore kg on cotton yarn exports for this fiscal to help the domestic textiles industry in view of rising prices in the global market.
"There shall be no further registration of cotton yarn exports beyond 72 crore kg. The Textiles Commissioner has been instructed not to receive applications beyond this limit,"Textiles Minister Dayanidhi Maran told reporters here.
The total cotton yarn production is estimated at 346 crore kg for 2010-11, while the domestic demand is pegged at 265 crore kg.
"So, it was decided that only 21 per cent of the total production will be exported and rest of it will be sold in domestic market,"the minister said.
Earlier, the government had placed a ceiling of 55 lakh bales (170 kg each) on raw cotton exports in the current crop year, which runs from October to September.
The textiles industry has been clamouring for imposing restrictions on exports of cotton and cotton yarn, arguing that high prices are making their operations unviable.
According to industry sources, the prices of cotton yarn have increased by about 85 per cent in the last nine months."The step will be a big help for the textiles industry,"said A Sakthivel, who heads the Tirupur Exporters Association.
Sakthivel, who also heads exporters apex body Federation of Indian Export Organisations (FIEO) said the industry was badly hit due to rising cotton yarn prices and needed the government's intervention.
The apparel units particularly in Tirupur in Tamil Nadu and other production centres went on a day long strike in November, demanding ban on exports.
Cotton futures hit 7-day high amid concerns over global supplies
2010-12-01 11:45:19 GMT (Futures Pros)
Futures Pros – Cotton futures were up for the third consecutive day on Wednesday, rising to hit a 7-day high, amid concerns over tightening global supplies, while prices were also supported by a weaker U.S. dollar.
On the ICE Futures U.S. Exchange, cotton futures for March delivery traded at USD 1.1889 a pound during European morning trade, jumping 1.46%.
It earlier rose to USD 1.1911 a pound, its highest price since November 22.
Cotton prices were boosted after Indian Agricultural Minister Sharad Pawar said earlier in the day that the country would decide by December 3 if to continue its restriction on cotton exports. In September, the country restricted exports until the end of the year to 5.5 million bales.
Last week, the Confederation of Indian Textile Industry urged the country to extend its cotton export restriction into 2011, as the country faced a shortage in cotton supplies.
Elsewhere, the U.S. Department of Agriculture said in its weekly cotton inventory report that U.S. stockpiles in the week ended November 28 stood at 92,747 bales, down 91% from the 2010 high in June.
India is the world’s second-largest cotton grower, while the U.S. is the world’s third-largest producer and the world’s largest exporter of the fiber.
Meanwhile, the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, declined 0.59% during European morning trade.
A weaker dollar enhances the appeal of U.S. crops to overseas buyers and makes commodities more attractive as an alternative investment.
Elsewhere, coffee futures for March delivery gained 0.36% to trade at USD 2.0148 a pound, wheat futures for March delivery rallied 3.48% to trade at USD 7.1375 a bushel, while corn futures for March Delivery jumped 1.29% to trade at USD 5.5112 a bushel during European morning trade.
New York cotton settles higher
NEW YORK (December 01, 2010) : The US cotton market closed higher Tuesday on end-of-the-month investor short-covering as the market ended November well below the all-time highs hit earlier in the month, although analysts said market fundamentals remained bullish. The key March cotton contract rose 1.58 cents to end at $1.1734 per lb, dealing from $1.1376 to $1.189. The contract was down 2.58 percent on the month, its biggest monthly decline since May, Thomson Reuters preliminary data showed.
Spot December rose 3.72 cents to close at $1.2623, and ended the month up 0.77 percent. The price of cotton on ICE Futures US stormed to an all-time peak of $1.5723 per lb on November 10, up more than 115 percent since July as strong mill demand from China, tight stocks and insatiable fund buying powered fiber contracts to their highest level since the US Civil War. "We were parabolic going up and parabolic going down," said Mike Stevens, an independent cotton analyst in Mandeville, Louisiana. At the height of the rally, cotton was up 95 percent year to date during the session on November 10, for the biggest gain of any commodity in the Reuters-Jefferies commodity index.
Since then, silver has moved ahead of cotton as the strongest gainer in the index, up almost 66 percent in the year to date versus cotton's 55 percent. (Graph: http://link.reuters.com/kew48n ) Cotton volume on Tuesday was light, with dealings of about 16,100 lots - nearly 60 percent below the 30-day average above 37,500 lots, Thomson Reuters data showed.
Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia, said fiber contracts moved up Tuesday mainly due to "end-of-the-month short-covering." "In the near-term, we may be choppy. In the longer-term, we may move higher," he said, predicting tight cotton supplies in the first quarter of 2011 while mill demand from countries like China remains strong. Evidence of liquidation by investors this month could be seen in the open interest in the cotton market, which dropped to near a four-month low at 194,507 lots.
Stevens said he did not expect the investment funds who stoked the rally to return to the market immediately. "They had a good quarter. The money managers don't want to expose themselves (to a market like cotton) with the Korea thing and the eurozone on the horizon," he said, alluding to tensions on the Korean peninsula and fears of an economic contagion from eurozone debt woes.
The market may have also received a boost from steadier Chinese cotton futures. The May cotton contract on the Zengzhou Commodity Exchange was last done on Tuesday at 25,375 yuan per tonne, up 585 yuan on the day. Industry analysts said that with most of the northern hemisphere cotton already harvested, the focus will gradually turn after the New Year to possible cotton spring plantings, especially in the United States. Analytical firm Informa Economics has already raised its US cotton plantings forecast in 2011 to 12.2 million acres, which would be a 4-year high and up nearly 12 percent from 2010 cotton sowings of 10.909 million acres.
Spot December rose 3.72 cents to close at $1.2623, and ended the month up 0.77 percent. The price of cotton on ICE Futures US stormed to an all-time peak of $1.5723 per lb on November 10, up more than 115 percent since July as strong mill demand from China, tight stocks and insatiable fund buying powered fiber contracts to their highest level since the US Civil War. "We were parabolic going up and parabolic going down," said Mike Stevens, an independent cotton analyst in Mandeville, Louisiana. At the height of the rally, cotton was up 95 percent year to date during the session on November 10, for the biggest gain of any commodity in the Reuters-Jefferies commodity index.
Since then, silver has moved ahead of cotton as the strongest gainer in the index, up almost 66 percent in the year to date versus cotton's 55 percent. (Graph: http://link.reuters.com/kew48n ) Cotton volume on Tuesday was light, with dealings of about 16,100 lots - nearly 60 percent below the 30-day average above 37,500 lots, Thomson Reuters data showed.
Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia, said fiber contracts moved up Tuesday mainly due to "end-of-the-month short-covering." "In the near-term, we may be choppy. In the longer-term, we may move higher," he said, predicting tight cotton supplies in the first quarter of 2011 while mill demand from countries like China remains strong. Evidence of liquidation by investors this month could be seen in the open interest in the cotton market, which dropped to near a four-month low at 194,507 lots.
Stevens said he did not expect the investment funds who stoked the rally to return to the market immediately. "They had a good quarter. The money managers don't want to expose themselves (to a market like cotton) with the Korea thing and the eurozone on the horizon," he said, alluding to tensions on the Korean peninsula and fears of an economic contagion from eurozone debt woes.
The market may have also received a boost from steadier Chinese cotton futures. The May cotton contract on the Zengzhou Commodity Exchange was last done on Tuesday at 25,375 yuan per tonne, up 585 yuan on the day. Industry analysts said that with most of the northern hemisphere cotton already harvested, the focus will gradually turn after the New Year to possible cotton spring plantings, especially in the United States. Analytical firm Informa Economics has already raised its US cotton plantings forecast in 2011 to 12.2 million acres, which would be a 4-year high and up nearly 12 percent from 2010 cotton sowings of 10.909 million acres.
Cotton Gains on India Yarn-Export Cap;
December 01, 2010, 4:13 PM EST
By Debarati Roy
Dec. 1 (Bloomberg) -- Cotton climbed the most allowed by ICE Futures U.S. after India, the world’s second-largest grower, announced yarn-export limits and China’s manufacturing expanded.
India will cap shipments of cotton yarn at 720,000 metric tons in the year started Oct. 1 to bolster domestic supplies, the Textiles Ministry said. China’s manufacturing expanded at the fastest pace in seven months in November, government data show. The fiber has surged 61 percent this year as Chinese demand surged.
“News from India about capping yarn exports is bullish for the market,” said Sharon Johnson, a senior analyst at Penson Futures in Atlanta. “Also, manufacturing numbers out of China are supporting the commodities market overall.”
Cotton futures for March delivery gained by the exchange limit of 4 cents, or 3.4 percent, to settle at $1.2134 a pound at 2:44 p.m. in New York. The price added 5 percent in the previous two days.
India will decide by Dec. 3 whether it will ease restrictions on cotton exports, Farm Minister Sharad Pawar told reporters in New Delhi yesterday. The nation said in September that it would cap shipments at 5.5 million bales in a bid to meet domestic demand. An Indian bale weighs 375 pounds, or 170 kilograms.
Cotton Record
Prices touched a record $1.5195 on Nov. 10 as inventories plunged and growers struggled to meet rising demand in China, the world’s biggest consumer.
Textile sector unanimously reject withdrawal of zero rate regime under RGST
December 01, 2010 (Pakistan)
Leading textile associations have rejected unanimously withdrawal of zero rating regime for textile industry under the Reformed General Sales Tax (RGST). Prominent sitting and former Chairmen from APTMA, Pakistan Cotton Forum, All Pakistan Bedwear Manufactures & Exporters Association, Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA), Pakistan Hosiery Manufacturers Association (PHMA), Towel Manufacturers Association (TMA), Karachi Cotton Association (KCA), Silk Manufacturers Association (SMA) and All Pakistan Textile Processing Mills association (APTMA) backed each other at a meeting held at the APTMA offices on pursuing the government not withdraw zero rating regime from export-oriented textile industry.
Chairman APTMA Gohar Ejaz briefed media about the meeting deliberations. He said he would convey to the National Assembly Standing Committee on Finance Chairperson Fauzia Wahab in his December 1 meeting in Islamabad that textile industry was not against the RGST but to the mechanism of tax collection, resulting adverse implications.
He said the government was set to build refunds stuck up to the tune of Rs400 billion from spinners, weaver, processors and value added exporters in order to collect an estimated Rs25 billion consumption tax.
He said textile industry was not opposing tax collection under the RGST but the mechanism, which is likely to disturb $12 billion textile industry altogether. He said the zero rating regime must be maintained until the finished textile goods and consumption tax should be imposed only on domestic sales.
Former Chairman PHMA Shehzad Azam said the government was simply trying to make its balance sheet attractive through collecting RGST from export-laden textile industry. According to him, the World Bank officials had stated that the FBR would ensure refund in four weeks, which the department has failed to prove till date. He said any tax dictation from the IMF and the World Bank is unacceptable, especially when such experience has already failed.
Chairman TMA Tahir Jehangir said such exercise has already resulted into massive corruption therefore they declared textile as zero rating. He feared opening up of another door to corruption with resumption of GST from textile industry.
He said sales tax should be levied only on goods cleared for local sales for end consumption and exporting units and its supply chain be given exemption from 15 percent GST, as financial crunch is already in place and it is difficult to sustain further liquidity crunch. It would be a crippling blow to the textile industry, he added.
Seth Akber, Chairman PCF said cotton farmers would be likely to get hurt with the withdrawal of this regime from the textile industry.
He said the growers have for the first time got beyond imagination prices for their cotton crop but any revision of already experienced system would lead to abyss. He termed the RGST asold wine in new bottle and added that it wouldn't work at all. He feared the grower will be discouraged to grow more cotton under the RGST regime.
Zulfiqar Ch from All Pakistan Textile Processing Mills Association said no mechanism of local sales is defined and also it is not clear how refunds would be paid.
Shabbir Ahmed from Bedwear Association said industry should go for legal remedy well before the imposition of the RGST.
Akber Sh from APTMA said RGST would add to inflation, Rs500 billion will stuck up and about 100 mills are likely to close down because of liquidity constraints. He said government should declare cotton as agriculture product, otherwise RGST will create distortions, flying invoices, leasing arrangements besides encourage smuggling Pervez Hanif from PRGMEA said the government has already tested GST on industry and no need to repeat it.
The participants said the RGST may be imposed on the retail consumption of textile goods instead of its manufacturing value chain, which is mainly fragmanted, independent of each other and multi-activity till the final produce. They said 80 percent of which is exported in one form or the other.
All Pakistan Textile Processing Mills association (APTMA)
Spinning industry cries foul over ceiling in cotton yarn export
By Yogima Seth Sharma Dec 01 2010
The spinning industry is up in arms against the government’s decision to curb export of cotton yarn beyond 720 million kg this financial year. Spinners contend that it would have to resort to distress sale in the domestic market.
The total cotton yarn production in India is estimated at 3,460 million kg while domestic demand is pegged at 2,650 million kg during 2010-11.
“It has been decided that only 21 per cent of the total production will be exported and the rest will be sold in domestic market. Hence, there will be no further registration of cotton yarn exports beyond 720 million kg. No export applications will be received beyond this limit,” textiles minister Dayanidhi Maran said.
The spinning industry is crying foul over this decision. “The centre has put us in a very difficult situation. On one hand, they are allowing export of raw cotton leading to a spurt in cotton prices in the domestic market. Now, with restriction on export of cotton yarn, there is a possibility that the spinning industry will close down as they will have to sell their produce at lower rates in the domestic market,” Sushil Patwari, managing director of Kolkata-based Nagreeka Exports, said.
Earlier, the government had placed a ceiling of 55 lakh bales (170 kg each) on raw cotton exports in the current crop year that runs from October 2010 to September 2011.
The move has come as a relief to the domestic textile industry. For long, the textiles industry has been clamouring for imposing restrictions on exports of cotton and cotton yarn, arguing that high prices are making their operations unviable.
Wednesday, December 1, 2010
An Outlook on Indian Textile Sector
Posted by admin on November 30th, 2010
Indian textiles marketplace is usually a well-established with showing powerful capabilities as well as a excellent future. In fact, the country is a next biggest textiles manufacturer worldwide, appropriate using China. Similar pressure is demonstrated in the cotton manufacturing and intake trend where by in india ranks just using China and USA. The textiles manufacturing small business is usually a pioneer action in the Indian manufacturing industry and it includes a primordial significance in the financial presence because of this country, which may be nevertheless predominantly dependent covering the agro-alimentary sector.
Employing around 35 million people, textiles marketplace stages as a key international fx income generator and further proves it in its 14% share of industrial manufacturing and the 16% of export revenues it generated.Textiles marketplace is not limited to produce and export of garments. The success of Indian textiles lies in effective vertical integrations guidelines which have served operators in taming the processes which while lying over and above simple manufacturing workout do use a serious effect on it, for example, raw material treatment. Thus, cotton, jute, silk or wool and even artificial material may be also produced by this marketplace to complement and strengthen the garments manufacturing industry. Almost one quarter because of this world’s spindle measures is hosted in India, once again positioning itself just using China.
Looming is an additional important element that records for considerable action in this industry; in fact, it requires an impressive 61% share including handlooms. The country is also considerable textiles fiber and yarn manufacturer covering the planet scene, having on its own a 12% share because of this world’s manufacturing volume. in india ranks covering another place as regards in manufacturing of silk and cellulose fiber and yarn whilst standing covering the fifth position when it arrives to artificial fiber and yarn.Indians have properly understood the significance of staying one step forward of improvements in the planet financial environment. The marketplace is now preparing itself to consider share of options anticipated to occur out because of this market freed from quota limits along with other buy and sell barriers. marketplace operators are progressively relocating in the direction of modernization and expansion as encouraged by the so-designated Textile Upgradation Fund structure implemented by Government.
The neighborhood textile industry is now with a critical point where by it should get ready itself to go up and grab the options which have been covering the marketplace because of this of liberalization because of this international market. Manufacturers however, were caught in inadvertence as new players commenced to creep covering the marketplace with a time when most operators had consideration on imminent options coming from the quota-free market. ways and guidelines were mainly targeted in the direction of expansion and modernization leaving further space to domestic players. Now it certainly show up that the latter have had ample freedom to strengthen them and so they are now further ready than export-oriented companies.Lack of opposition is eroding enthusiasm, impacting on action covering the European and us markets. while using removal of quotas and similar buy and sell barriers, observers anticipate the marketplace to provide new options with evaluations reaching S$1.4bn for towels and US$1.8 during sex linen.
China’s impressive manufacturing capacity and its raising power compelled Europe and us markets to some serious reflections. To provide a halt to enormous invasion of their products, EU and us have imposed buy and sell restrictions, which also inspire sellers to examine their sourcing approach because of this of diversification out of China. Now, undoubtedly in india has great bank cards to play. With traders realizing the hazard of relying over a single manufacturing source such as China, in india could do properly in proposing a valuable choice to purchasers covering the international scene, but this tends to be only possible because of this of the adequate and appropriate development approach and macro-economic policy.In that view, many manufacturing companies in in india are rushing in the direction of expansion and modernization options. Manufacturers are having recourse to fund raising programmes pushing EPS to greater growth, dissolving equity on its way. small business collaborations with international players, creation of buying offices and Government’s energy to enhance high-quality manufacturing and export are many notable indications of Indians coming into pressure covering the global market.
Geared with expanded capacitiesThe new options have carried together Indian home-textiles manufacturers in the expansion approach direction. The Textile upgradation fund has served many such operators to improve capacity all through the final three fiscal years. Such expansion ways have not only had an effect on manufacturing volume, also assisted companies in better providing customized products.Value add-on – route to greater offering price realizationsTerry towels coming from your Indian factories accounted for almost 21% because of this planet market. With an additional 19% share in the bed linen market, in india stages as a high-quality provider to the USA.
Indian products and solutions are further focused in the direction of innovation and quality. notable efforts in high-quality improvement, innovations because of this of R&D programmes, along with other value-added capabilities provide a whole new dimension to the Indian products. In change this resulted in greater income as in comparability to other regional producers.Customized and high-value added products and solutions are generally not impacted by change in market parameters. As such, there were no excellent offering price fluctuations on Indian markets all through quota removal period. But such wasn’t the circumstance with other regional competitors’ products, such as China, where by prices were reduce down extensively favoring buyers.Higher opposition with neighboring countryChina reacted to quota removals by invading the US market with its textiles production. The US had no other choice than to re-introduce buy and sell barriers to calm down the situation encouraging traders to diversify purchasing options and as a result giving in india an unexpected push covering the global market.
The situation is not completely in the wallet for India, however. It should remain on its guards as its neighbors start out to embark on similar global adventure with an enthusiasm and motivation loaded attitude. Pakistan and Bangladesh are raising at rapidly pace, shortening the gap with in india within an impressive manner. In the final three years Pakistan exported 4 times further pillowcases to us than India! Pakistan, to note, is among one of the most critical cotton producers worldwide and has been blessed by preference agreements with EU and US even all through the quota-imposed periods. Pakistani Government has understood the experience and is encouraging development because of this of implementation of a 6% R&D help programs. Others, like Turkey may be also in the race.Budget MeasuresTechnology Upgradation Fund (TUF) increased toRs5.4bn from its earlier Rs4.4 bnInterest subsidy provision on phrase lending products covering the marketplace for those in the handloom industry has been increased from Rs2.0bn to Rs2.4bnExcise duty has been lowered by fifty percent on all artificial fiber yarn and is now at 8%Import duty lowered from 15% to 10% on all artificial fiber yarnImpact of Budget reduce in excise duty on artificial fibre has been implemented to favor cheaper manufacturing expenses and ensure competitiveness on export market.
SSIs are anticipated to mature further with consideration subsidy on handloom industry loans.The TUF, with its consideration subsidy, capabilities textiles operators with interesting funding plan for their expansion and development strategies.Textiles parks creations will undeniably aid in boosting the overall industry. ten committed areas have currently been identified and 7 of them currently sanctioned. A special structure for Integrated Textiles Parks is designed to aid in realization of such objectives.Sector OutlookThe future because of this textiles marketplace looks to be excellent in all aspects. As such Government places all its confidence and relies industry for its powerful ‘employment creation’ capability, further exactly in the garments manufacturing side. Lowering tax burdens on companies will participate within a major part in slicing down manufacturing expenses and boosting competitiveness, raising potential to tap high-volume orders from your global market. Modernization would enable companies provide high-quality and volume solutions which may be in constant need by international buyers.Industry Wish List A reduction of 5% in the customs duty on manufacturing inputs for textiles machines. the cost is currently among 10% and 15%.Textiles products and solutions would still carry the precise duty imposition, which may likely be prolonged to other SAFTA fellow member countries.Reduction from 15% to 10% on customs duty imposed on artificial fiber.Apparel Export advertising Council (AEPC) is targeting elimination at 100% of all taxes on clothing exports.Positives AspectsThe technological know-how Upgradation Fund structure (TUFS) pushed an supplemental 10% capital subsidy in acquisition of processing machines; with a view to aid in expansion plans. Processing industries are anticipated to reap the benefits of such a measure in the long term.Union textiles has exposed a bright paper, named eyesight 2010 where by it capabilities obvious indications as regards its goals and targets concerning the US bn export market.Operators are progressively considering consolidation ways to strengthen manufacturing capacity, which would put them in better position covering the global and free market. As such, mergers and takeovers are currently very frequent with companies tying up with scaled-down one to tackle global challenges.However, continuing TUFS transpire to be stopped using March 31, 2007 by the Textiles Ministry. The ministry has requested the TUFS nodal agencies and banks to not method further new lending products with instant effect.As per the sources, the estimated budget provision arranged for reimbursing the consideration subsidy for the TUFS lending products for the fiscal 2006-07 was only Rs 535 crore, however the essential funds for the subsidy is all about Rs 1,515 crore, which arrives to three times greater than the arranged provision.
Negative AspectsIndia is fairly lagging at the rear of technological know-how in the garments manufacturing industry this also critically hinders improve in exportable production. Shuttleless looms in in india accounted for 9.3% of complete looms in 2003. us demonstrates 94.8% in the identical category whilst Austria reveals 95.2%. appears in india is properly at the rear of with only Pakistan showing up at 7.6%.Labor regulations really are a key concern in in india causing great harms to the marketplace at various levels. with no obvious legislations, strikes and similar issues often provide small business to full halts. Obviously, finding solutions such conditions is usually a time and energy wasting enterprise, greatly to the dismay because of this marketplace as well as the entire economy because of this country.
The geographical location of in india as in comparability to its competition is usually a instead uncomfortable but natural disadvantage. Producers like Mexico, Brazil as well as China use a great proximity with Europe and US markets this also pays covering the global buy and sell market. Impacts are mainly felt on transport cost, delivery times, etc.Handloom Reservation Order and the Hank Yarn Obligation order are examples of obsolete and unnecessary regulations that indulge operators in a time-wasting and complicated maze of procedures. This mainly impacts neighborhood operators, giving impression that the domestic markets is going opposite solution to international market whereby liberalization is usually a key element.ConclusionThe home textile industry is in a great position to activate and inspire improvements in the overall domestic textile industry. With further emphasis on item having longer operatons than those average apparels, the property textiles manufacturing is further protected than its clothing counterparts. Those wishing to reap the benefits of options have to show great preparatory dispositions as well as willingness to remain covering the forefront because of this global opposition game – not having these; we could see regional opposition grabbing most because of this market share.
Source: http://freebusinesscardholder.com/2010/11/an-outlook-on-indian-textile-sector/
Indian textiles marketplace is usually a well-established with showing powerful capabilities as well as a excellent future. In fact, the country is a next biggest textiles manufacturer worldwide, appropriate using China. Similar pressure is demonstrated in the cotton manufacturing and intake trend where by in india ranks just using China and USA. The textiles manufacturing small business is usually a pioneer action in the Indian manufacturing industry and it includes a primordial significance in the financial presence because of this country, which may be nevertheless predominantly dependent covering the agro-alimentary sector.
Employing around 35 million people, textiles marketplace stages as a key international fx income generator and further proves it in its 14% share of industrial manufacturing and the 16% of export revenues it generated.Textiles marketplace is not limited to produce and export of garments. The success of Indian textiles lies in effective vertical integrations guidelines which have served operators in taming the processes which while lying over and above simple manufacturing workout do use a serious effect on it, for example, raw material treatment. Thus, cotton, jute, silk or wool and even artificial material may be also produced by this marketplace to complement and strengthen the garments manufacturing industry. Almost one quarter because of this world’s spindle measures is hosted in India, once again positioning itself just using China.
Looming is an additional important element that records for considerable action in this industry; in fact, it requires an impressive 61% share including handlooms. The country is also considerable textiles fiber and yarn manufacturer covering the planet scene, having on its own a 12% share because of this world’s manufacturing volume. in india ranks covering another place as regards in manufacturing of silk and cellulose fiber and yarn whilst standing covering the fifth position when it arrives to artificial fiber and yarn.Indians have properly understood the significance of staying one step forward of improvements in the planet financial environment. The marketplace is now preparing itself to consider share of options anticipated to occur out because of this market freed from quota limits along with other buy and sell barriers. marketplace operators are progressively relocating in the direction of modernization and expansion as encouraged by the so-designated Textile Upgradation Fund structure implemented by Government.
The neighborhood textile industry is now with a critical point where by it should get ready itself to go up and grab the options which have been covering the marketplace because of this of liberalization because of this international market. Manufacturers however, were caught in inadvertence as new players commenced to creep covering the marketplace with a time when most operators had consideration on imminent options coming from the quota-free market. ways and guidelines were mainly targeted in the direction of expansion and modernization leaving further space to domestic players. Now it certainly show up that the latter have had ample freedom to strengthen them and so they are now further ready than export-oriented companies.Lack of opposition is eroding enthusiasm, impacting on action covering the European and us markets. while using removal of quotas and similar buy and sell barriers, observers anticipate the marketplace to provide new options with evaluations reaching S$1.4bn for towels and US$1.8 during sex linen.
China’s impressive manufacturing capacity and its raising power compelled Europe and us markets to some serious reflections. To provide a halt to enormous invasion of their products, EU and us have imposed buy and sell restrictions, which also inspire sellers to examine their sourcing approach because of this of diversification out of China. Now, undoubtedly in india has great bank cards to play. With traders realizing the hazard of relying over a single manufacturing source such as China, in india could do properly in proposing a valuable choice to purchasers covering the international scene, but this tends to be only possible because of this of the adequate and appropriate development approach and macro-economic policy.In that view, many manufacturing companies in in india are rushing in the direction of expansion and modernization options. Manufacturers are having recourse to fund raising programmes pushing EPS to greater growth, dissolving equity on its way. small business collaborations with international players, creation of buying offices and Government’s energy to enhance high-quality manufacturing and export are many notable indications of Indians coming into pressure covering the global market.
Geared with expanded capacitiesThe new options have carried together Indian home-textiles manufacturers in the expansion approach direction. The Textile upgradation fund has served many such operators to improve capacity all through the final three fiscal years. Such expansion ways have not only had an effect on manufacturing volume, also assisted companies in better providing customized products.Value add-on – route to greater offering price realizationsTerry towels coming from your Indian factories accounted for almost 21% because of this planet market. With an additional 19% share in the bed linen market, in india stages as a high-quality provider to the USA.
Indian products and solutions are further focused in the direction of innovation and quality. notable efforts in high-quality improvement, innovations because of this of R&D programmes, along with other value-added capabilities provide a whole new dimension to the Indian products. In change this resulted in greater income as in comparability to other regional producers.Customized and high-value added products and solutions are generally not impacted by change in market parameters. As such, there were no excellent offering price fluctuations on Indian markets all through quota removal period. But such wasn’t the circumstance with other regional competitors’ products, such as China, where by prices were reduce down extensively favoring buyers.Higher opposition with neighboring countryChina reacted to quota removals by invading the US market with its textiles production. The US had no other choice than to re-introduce buy and sell barriers to calm down the situation encouraging traders to diversify purchasing options and as a result giving in india an unexpected push covering the global market.
The situation is not completely in the wallet for India, however. It should remain on its guards as its neighbors start out to embark on similar global adventure with an enthusiasm and motivation loaded attitude. Pakistan and Bangladesh are raising at rapidly pace, shortening the gap with in india within an impressive manner. In the final three years Pakistan exported 4 times further pillowcases to us than India! Pakistan, to note, is among one of the most critical cotton producers worldwide and has been blessed by preference agreements with EU and US even all through the quota-imposed periods. Pakistani Government has understood the experience and is encouraging development because of this of implementation of a 6% R&D help programs. Others, like Turkey may be also in the race.Budget MeasuresTechnology Upgradation Fund (TUF) increased toRs5.4bn from its earlier Rs4.4 bnInterest subsidy provision on phrase lending products covering the marketplace for those in the handloom industry has been increased from Rs2.0bn to Rs2.4bnExcise duty has been lowered by fifty percent on all artificial fiber yarn and is now at 8%Import duty lowered from 15% to 10% on all artificial fiber yarnImpact of Budget reduce in excise duty on artificial fibre has been implemented to favor cheaper manufacturing expenses and ensure competitiveness on export market.
SSIs are anticipated to mature further with consideration subsidy on handloom industry loans.The TUF, with its consideration subsidy, capabilities textiles operators with interesting funding plan for their expansion and development strategies.Textiles parks creations will undeniably aid in boosting the overall industry. ten committed areas have currently been identified and 7 of them currently sanctioned. A special structure for Integrated Textiles Parks is designed to aid in realization of such objectives.Sector OutlookThe future because of this textiles marketplace looks to be excellent in all aspects. As such Government places all its confidence and relies industry for its powerful ‘employment creation’ capability, further exactly in the garments manufacturing side. Lowering tax burdens on companies will participate within a major part in slicing down manufacturing expenses and boosting competitiveness, raising potential to tap high-volume orders from your global market. Modernization would enable companies provide high-quality and volume solutions which may be in constant need by international buyers.Industry Wish List A reduction of 5% in the customs duty on manufacturing inputs for textiles machines. the cost is currently among 10% and 15%.Textiles products and solutions would still carry the precise duty imposition, which may likely be prolonged to other SAFTA fellow member countries.Reduction from 15% to 10% on customs duty imposed on artificial fiber.Apparel Export advertising Council (AEPC) is targeting elimination at 100% of all taxes on clothing exports.Positives AspectsThe technological know-how Upgradation Fund structure (TUFS) pushed an supplemental 10% capital subsidy in acquisition of processing machines; with a view to aid in expansion plans. Processing industries are anticipated to reap the benefits of such a measure in the long term.Union textiles has exposed a bright paper, named eyesight 2010 where by it capabilities obvious indications as regards its goals and targets concerning the US bn export market.Operators are progressively considering consolidation ways to strengthen manufacturing capacity, which would put them in better position covering the global and free market. As such, mergers and takeovers are currently very frequent with companies tying up with scaled-down one to tackle global challenges.However, continuing TUFS transpire to be stopped using March 31, 2007 by the Textiles Ministry. The ministry has requested the TUFS nodal agencies and banks to not method further new lending products with instant effect.As per the sources, the estimated budget provision arranged for reimbursing the consideration subsidy for the TUFS lending products for the fiscal 2006-07 was only Rs 535 crore, however the essential funds for the subsidy is all about Rs 1,515 crore, which arrives to three times greater than the arranged provision.
Negative AspectsIndia is fairly lagging at the rear of technological know-how in the garments manufacturing industry this also critically hinders improve in exportable production. Shuttleless looms in in india accounted for 9.3% of complete looms in 2003. us demonstrates 94.8% in the identical category whilst Austria reveals 95.2%. appears in india is properly at the rear of with only Pakistan showing up at 7.6%.Labor regulations really are a key concern in in india causing great harms to the marketplace at various levels. with no obvious legislations, strikes and similar issues often provide small business to full halts. Obviously, finding solutions such conditions is usually a time and energy wasting enterprise, greatly to the dismay because of this marketplace as well as the entire economy because of this country.
The geographical location of in india as in comparability to its competition is usually a instead uncomfortable but natural disadvantage. Producers like Mexico, Brazil as well as China use a great proximity with Europe and US markets this also pays covering the global buy and sell market. Impacts are mainly felt on transport cost, delivery times, etc.Handloom Reservation Order and the Hank Yarn Obligation order are examples of obsolete and unnecessary regulations that indulge operators in a time-wasting and complicated maze of procedures. This mainly impacts neighborhood operators, giving impression that the domestic markets is going opposite solution to international market whereby liberalization is usually a key element.ConclusionThe home textile industry is in a great position to activate and inspire improvements in the overall domestic textile industry. With further emphasis on item having longer operatons than those average apparels, the property textiles manufacturing is further protected than its clothing counterparts. Those wishing to reap the benefits of options have to show great preparatory dispositions as well as willingness to remain covering the forefront because of this global opposition game – not having these; we could see regional opposition grabbing most because of this market share.
Source: http://freebusinesscardholder.com/2010/11/an-outlook-on-indian-textile-sector/
Cotton prices cast shadow on polyester
Dilip Kumar Jha & Komal Amit Gera / Mumbai December 1, 2010, 3:37 IST
Skewed demand for synthetic yarn by textile producers, following a dramatic escalation in cotton prices, has opened opportunities for man-made fibre producers. India’s largest corporate Reliance Industries Ltd (RIL) will benefit most from the trend.
Faced with enormous demand from both domestic and overseas markets, RIL, which currently monopolises the fibre market, has raised prices by over Rs 3 per kg across all products effective Tuesday.
With the revision, the benchmark 115/34 semidull variety of partially oriented yarn (poy), used to produce polyester yarn, shot up to Rs 96.49 per kg from Rs 93.11 per kg a week ago. The prices of polyester staple fibre has been revised upwards by Rs 6 per kg to Rs 93 per kg.
The biggest problem for domestic synthetic yarn manufacturers is that RIL, according to market sources, do not entertain them as it prefers the more remunerative export market. According to industry sources, RIL has signed huge supply orders with buyers in China and Pakistan — the two countries that remained short supplied of cotton and, most importantly, compete with India in the global markets.
“Many south-based synthetic yarn manufacturers met RIL officials late last week, seeking supply of poy from the company but, their requests were turned down,” said a senior industry executive who was involved in the discussion.
Prices of man-made fibre which ideally should be linked with the movement of crude oil prices, have abnormally gone up in tandem with cotton yarn prices in the last one year.
While cotton prices have been revised from Rs 2,700 to Rs 4,400 per mound this year (now Rs 4,200 per mound), polyester prices have risen sharply — from Rs 63 per kilogram in September to Rs 110 per kilogram in November.
However, cotton prices are softening due to higher availability with ginners. Owing to unseasonal rainfalls last week, many ginners could not process and transport cotton. This lead to a huge stock, which will start rolling out in the market by January. By January-end, the industry will see a price decline of nearly 20 per cent, said Sunil Khandelwal, chief financial officer, Alok Industries Ltd.
“Due to pressure on margins, quite a few players have partially diversified their capacities for polyester cotton blended yarns. Spinners have been replacing cotton with polyester and viscose for manufacturing cotton-blended yarn. The manmade fibre was cheaper than cotton. But the consistent increase in demand for the manmade fibre across the world pushed up the cumulative demand and drove up the prices,” said Sanjay Nayyar CEO of Confederation of Indian Textiles Industry.
The sudden jump in the demand for man made fibre is not supported by the increase in production of raw materials for the man-made fibre and resulted in a disequilibrium in demand and supply.
V K Ladhiya, the chairman of Indian Spinners Association, told Business Standard that the availability of PTA and MEG (raw material for polyester) is limited. The global capacities are limited but the demand has gone up.
He also said that manufacturers lost money in investments for producing the raw material for the man-made fibre in the past. As a consequence, they recalled some of the investments. Now that consumption has increased, the prices have gone through the roof. The price of inputs for polyester have been revised by 20 per cent to 30 per cent.
The total annual consumption of fibre in India is about seven million tonnes. The largest chunk of this consumption is of cotton (about 3.2 million tonnes) followed by polyester (2.5 million tonnes), 0.5 million tonnes of rayon and about 80,000 tonnes of acrylic.
The man-made fibre could have provided some cushion to the spinners while the cotton prices were high. But the incredible increase in price of polyester fibre has put the textile industry in a tizzy.
Source:http://www.business-standard.com/india/news/cotton-prices-cast-shadowpolyester/416666/
Skewed demand for synthetic yarn by textile producers, following a dramatic escalation in cotton prices, has opened opportunities for man-made fibre producers. India’s largest corporate Reliance Industries Ltd (RIL) will benefit most from the trend.
Faced with enormous demand from both domestic and overseas markets, RIL, which currently monopolises the fibre market, has raised prices by over Rs 3 per kg across all products effective Tuesday.
With the revision, the benchmark 115/34 semidull variety of partially oriented yarn (poy), used to produce polyester yarn, shot up to Rs 96.49 per kg from Rs 93.11 per kg a week ago. The prices of polyester staple fibre has been revised upwards by Rs 6 per kg to Rs 93 per kg.
The biggest problem for domestic synthetic yarn manufacturers is that RIL, according to market sources, do not entertain them as it prefers the more remunerative export market. According to industry sources, RIL has signed huge supply orders with buyers in China and Pakistan — the two countries that remained short supplied of cotton and, most importantly, compete with India in the global markets.
“Many south-based synthetic yarn manufacturers met RIL officials late last week, seeking supply of poy from the company but, their requests were turned down,” said a senior industry executive who was involved in the discussion.
Prices of man-made fibre which ideally should be linked with the movement of crude oil prices, have abnormally gone up in tandem with cotton yarn prices in the last one year.
While cotton prices have been revised from Rs 2,700 to Rs 4,400 per mound this year (now Rs 4,200 per mound), polyester prices have risen sharply — from Rs 63 per kilogram in September to Rs 110 per kilogram in November.
However, cotton prices are softening due to higher availability with ginners. Owing to unseasonal rainfalls last week, many ginners could not process and transport cotton. This lead to a huge stock, which will start rolling out in the market by January. By January-end, the industry will see a price decline of nearly 20 per cent, said Sunil Khandelwal, chief financial officer, Alok Industries Ltd.
“Due to pressure on margins, quite a few players have partially diversified their capacities for polyester cotton blended yarns. Spinners have been replacing cotton with polyester and viscose for manufacturing cotton-blended yarn. The manmade fibre was cheaper than cotton. But the consistent increase in demand for the manmade fibre across the world pushed up the cumulative demand and drove up the prices,” said Sanjay Nayyar CEO of Confederation of Indian Textiles Industry.
The sudden jump in the demand for man made fibre is not supported by the increase in production of raw materials for the man-made fibre and resulted in a disequilibrium in demand and supply.
V K Ladhiya, the chairman of Indian Spinners Association, told Business Standard that the availability of PTA and MEG (raw material for polyester) is limited. The global capacities are limited but the demand has gone up.
He also said that manufacturers lost money in investments for producing the raw material for the man-made fibre in the past. As a consequence, they recalled some of the investments. Now that consumption has increased, the prices have gone through the roof. The price of inputs for polyester have been revised by 20 per cent to 30 per cent.
The total annual consumption of fibre in India is about seven million tonnes. The largest chunk of this consumption is of cotton (about 3.2 million tonnes) followed by polyester (2.5 million tonnes), 0.5 million tonnes of rayon and about 80,000 tonnes of acrylic.
The man-made fibre could have provided some cushion to the spinners while the cotton prices were high. But the incredible increase in price of polyester fibre has put the textile industry in a tizzy.
Source:http://www.business-standard.com/india/news/cotton-prices-cast-shadowpolyester/416666/
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