IBTEX No. 8 of 2016 January 12, 2016

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The Cotton Textiles Export Promotion Council. Page 1

USD 65.74 | EUR 73.47 | GBP 100.03| JPY 0.54

Spot Prices of Overseas Ring Spun Yarn in Chinese Market

Date: 8-Jan-2015 FOB Price (Pre-Tax)

Country Prices (USD/Kg.)

20S Carded

30S Carded

India 2.10 2.40

Indonesia 2.81 3.28

Pakistan 2.22 2.60

Turkey 2.60 2.80 Source CCF Group

Indicative Prices of Cotton Grey Fabrics in China

Date: 8-Jan-2015 Price (Post-Tax)

Description Prices

(Domestic Production) (Yuan/Meter)

C32Sx32S 130x70 63” 2/1 fine twill

7.20

C40Sx40S 133X72 63” 1/1 poplin 6.50

C40Sx40S 128X68 67” 2/1 twill 6.00-6.10

24Sx24S 72x60 54” 1/1 batik dyeing

4.60

20Sx20S 60x60 63” 1/1 plain cloth 6.20

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NEWS CLIPPINGS

INTERNATIONAL NEWS

No Topics

1 World Bank: Vietnam and Malaysia to Win Biggest With TPP

2 Primark and DFID to Improve Factory Conditions in Bangladesh and Pakistan

3 'Chinese fabric suppliers ready for new challenges'

4 1,500 exhibitors partake in Hong Kong Fashion Week

5 Bangladesh: Reducing dependency on RMG and remittance

6 Japan: Shima Seiki exhibits Wholegarment machine at ISPO

7 Blended yarn price falls in China and Pakistan

NATIONAL NEWS

1 Steel Sector Seeks Government Support on Lines of Textiles, Sugar

2 Birla Cellulose plans global marketing drive

3 Hosiery owners ask unions to scale down wage hike demand

4 Cotton shrinks on weak demand

5 No Maharashtra govt compensation for cotton crop damage

6 Warm winter melts millions from winter gear market

7 The bad and the good for India behind China's slowdown

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INTERNATIONAL NEWS World Bank: Vietnam and Malaysia to Win Biggest With TPP If the hotly contested Trans-Pacific Partnership (TPP) takes effect in due course, Vietnam and Malaysia will see the biggest benefit, while shifts would be more slight for the North American members. The World Bank released a detailed study on the potential impacts of the trade pact just one month before the 12 member countries are scheduled to formally sign the deal after agreeing on its contents in October. But once they sign it, TPP will still face a battle for approval in a split U.S. Congress. TPP, the largest and potentially most comprehensive trade deal that has members making up roughly 40 percent of the global economy, will eliminate most tariffs over time as well as remove other trade barriers between the undersigned nations. A fair amount of TPP trade is already covered under existing trade agreements like NAFTA, the ASEAN Free Trade Area and the free trade agreement between ASEAN, Australia and New Zealand, among others. Under those agreements, average intra-TPP tariffs have more than halved since 1996 to 2.7% as of 2014, according to the World Bank. With TPP, many of the high tariff barriers on individual goods not reflected in the aforementioned tariff averages, will be eliminated. Of the 12 nations involved, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam, the smallest, more open member economies—namely Vietnam and Malaysia—are going to benefit the most. Vietnam in particular will see the biggest percentage boost to its economy by 2030 at 10 percent, and Malaysia will likely see an 8 percent gain as exporters there would gain an advantage over regional competitors like Korea and Thailand, which aren’t part of TPP.

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“While the adverse effects of TPP on Korea could be attributed mostly to preference erosion (due to its existing FTA with the United States), losses for Thailand and other Asian countries could be mainly due to trade diversion,” the World Bank noted. Other neighboring countries with advantages in apparel and textile manufacturing like Bangladesh and Cambodia could face greater competition by Vietnam in TPP member markets. The U.S., Canada and Mexico will see smaller gains of 0.6% on average, mostly because existing trade barriers are low thanks to already in place agreements like NAFTA. By 2030, TPP is expected to raise member country GDP 1.1% on average. It could also lift trade among member countries by 11 percent in that period. The benefits will likely materialize slowly, according to the report, and pick up toward the end of the period. “The TPP stands out among FTAs for its size, diversity and rulemaking. Its ultimate implications, however, remain unclear,” the World Bank concluded. “Much will depend on whether the TPP is quickly adopted and effectively implemented, and whether it triggers productive reforms in developing and developed countries.” On Feb. 4 in New Zealand, the 12 nations will formally sign the TPP agreement, but much of the work will come after that as countries look to their national parliaments and governing bodies for ratification of the deal. Source: sourcingjournalonline.com– Jan 08, 2016

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Primark and DFID to Improve Factory Conditions in Bangladesh and Pakistan Irish fast-fashion retailer Primark has partnered with the U.K.’s Department for International Development (DFID) in a bid to better working conditions for garment workers in developing markets. The news came a few weeks after shoppers came forward to say they had found notes allegedly written by Chinese slave workers in pairs of socks sold by the chain. China, however, isn’t on the list of countries set to benefit from this pairing. Primark, an Ethical Trading Initiative board member, said it will work with DFID to improve the health and wellbeing of local laborers, bolster national economic development and help alleviate poverty in Bangladesh, Pakistan, Myanmar, Ethiopia and India. A launch date has yet to be announced but a large part of the program will support the empowerment of women workers through gender equality training in garment factories, while Primark and DFID will train female nurses in Bangladesh through the HerHealth organization. The partnership also aims to develop ethical and sustainable garment sectors in existing and emerging markets, such as Myanmar and East Africa, and both parties will share lessons learned from the Rana Plaza disaster in Bangladesh, including Primark’s work with local partners to provide short- and long-term support to the victims and their families. “At Primark, we are committed to ensuring that the people who make our products work in good conditions, are treated properly and paid a fair wage. That’s why we now have more than 60 people working for our ethical trade team across our supply chain to ensure our high standards are met,” said Paul Lister, who is responsible for this team. “We know that as well as ensuring worker rights are protected within the factories we work with, we can positively impact lives outside of the factory too.

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Whether it’s financial literacy, health education or helping workers understand their rights, we’ve seen that simple initiatives with local partners can make a huge difference.” Source: sourcingjournalonline.com– Jan 08, 2016

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'Chinese fabric suppliers ready for new challenges' Fabric suppliers of China are ready to face new challenges arising due to recent developments in China and in global market; this mood was reflected during the one day workshop for fabrics suppliers jointly organised by Fibre2Fashion.com and PDS Multinational Group at Shanghai, China. The workshop held at Wu Zhong Road at Shanghai was attended by more than 50 leading suppliers of fabrics with brands, retailers and buyers represented by PDS Multinational Group in China. The event started with a presentation by Fibre2Fashion.com and PDS Multinational Group's partnership alliance and its plan to facilitate the business opportunities for fabrics and garment suppliers from China. Fabrics manufacturers and suppliers showcased their samples and products in the presence of representatives from buyer companies like H&M, Zara, Sainsbury's, Next, Primark and several others. Despite current challenges posed due to downward trends in economic growth, rising cost, and competition from South East Asian manufacturers, Chinese manufacturers and suppliers have shown resilience to face the challenging times ahead. The one day event has generated good response and instilled a confidence among companies. There were suggestions that Fibre2Fashion.com and PDS Multinational group should continue to organise such events to facilitate fabrics and garment suppliers of China. Source: fibre2fashion.com– Jan 11, 2016

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1,500 exhibitors partake in Hong Kong Fashion Week Around 1,500 exhibitors from 19 countries will partake in the 47th Hong Kong Fashion Week for Fall/Winter which runs from January 18-21, 2016 at the Hong Kong Convention and Exhibition Centre (HKCEC). “Organised by the Hong Kong Trade Development Council (HKTDC), the event will showcase the latest fashion designs, collections from international brands, fabrics and accessories,” a HKTDC press release said. With this year's theme being 'Fashion of Music', HKTDC has created a fashion avenue for the fair, which blends different musical genres in ways that complement various styles of fashion and accessories. Additionally, around 30 fashion events, including fashion shows, fashion parades, seminars, forums, and a networking reception are organised to present the latest fashion collections and market intelligence. This year, companies from Myanmar, Romania, and Uzbekistan join the Hong Kong Fashion Week for the first time and the fair also features 11 overseas pavilions, including from China, India, Indonesia, and Japan. According to HKDTC, multiple zones will be set up to help buyers find sought-after products and providers, including four new zones; Women's Wear, Knitwear, International Fashion Designers' Showcase, and Fashion Tech. “Other zones include Emporium De Mode featuring top brands, Fashion Gallery showcasing mid- to high-end fashion, Men in Style, Activewear & Swim Wear, and Denim Arcade,” it added. During fair, more than 10 fashion, designer and brand collection shows will be organised, while fashion website Fashionally will present two fashion shows for upcoming local talents. Fashionally Collection #5 Menswear will display menswear for the 2016 F/W season from designers like Derek Chan, Kenax Leung, Kurt Ho and Modement.

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Fashionally Collection #6 will also release a collection of women's wear for the 2016 F/W season from designers including Mountain Yam, Walter Kong and Jessica Lau, Effie Hung, Shirley Wong, etc. The Hong Kong Fashion Week also features Hong Kong Brand Management Association, presenting the American diva Taylor Swift's own brand. Kate Liegey, who is responsible for tailoring Swift's clothing, will bring the latest Taylor Swift collection on show together with the singer's single Wildest Dreams from her latest album. Also, Fortuna Tokyo from Japan, known for using the traditional textile nishijin-ori in their designs, will showcase their high-quality fashion products. The EcoChic Design 2015/16 Grand Final Fashion Show by Redress will be another highlight of the fair. Source: fibre2fashion .com– Jan 11, 2016

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Bangladesh: Reducing dependency on RMG and remittance The economy of Bangladesh is highly dependent on readymade garment (RMG) export and inward remittance. More than 9 million Bangladeshi nationals are now living all over the world. They are mostly labourers and sending billions of dollars to the country each year. Similarly, almost three million workers, mostly women, are contributing to buoyant growth of the RMG industry through their hard labour. It is also a fact that huge population of the country has made it possible to earn billions of dollars from these two sources. Consequently the problem of overpopulation is largely being mitigated. But it is not wise to keep all the eggs in a single basket for a long period as these two sectors are vulnerable. Geopolitics and high competitiveness could bring overnight collapse of these sectors. Moreover, almost 80 per cent remittances are used in non-productive investment.

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Therefore, we have to look for many other alternate sources of income. Through diversified industrialisation and giving preference to the thrust and promising sectors, the government should patronise and all financial institutions must make investment in SME and some other selected big projects on a priority basis. The contribution of RMG to the GDP of Bangladesh is more than 70 per cent. The industry started in the late 1970s. Within a few years, it became one of the major economic strengths of Bangladesh. The sector has contributed to foreign exchange earnings, balancing export and import (BOT and Payment), reduction of huge unemployment problem of the country and upgrading of empowerment of woman along with giving them financial benefits. Inward remittance is the life-line of the economy which also contributed a lot to balance of payment. According to the Bangladesh Bank, remittance averaged 1.21 billion dollar per month from 2012 until October 2015. In a few years' time inward remittance would enter the country through informal channel. But strict enforcement of anti-money laundering laws, wide branch network of scheduled banks, availability of exchange houses and consciousness of the beneficiaries have made it possible to receive remittance through formal channel. Moreover, expansion of European, Australian and American manpower markets and the UN peace keeping mission have also contributed to the growth. Once one of the poorest countries of the world Bangladesh has now become a lower middle income country. Density of population is one of the highest in the world. Overpopulation was considered as the main obstacle to the economic growth during the 80s and the 90s. But now population is no more a problem. Rate of literacy is increasing day by day. A significant number of young people is now highly educated and capable of rendering services anywhere in the world. In today's world, it is being acknowledged that population is not a problem when it is turned into skilled human resource. Therefore, our country has huge opportunities to create multiple sources of our national income through utilisation of the most valuable human resource.

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Entrepreneurs in our country are very innovative. Therefore, we are observing the beginning of diversity in industrial production. Companies now produce goods ranging from food, agriculture, pharmaceuticals, electronics, and medical services to outsourcing. We have a huge growth in the backward linkage industries related to RMG industry. This might be a huge alternate source of income through reducing import and expanding export. Even a decade ago, almost all the fabrics and accessories used in RMG industry were to be imported from abroad, especially from China. But today Bangladeshi entrepreneurs and investors have gained the capability to produce huge volume of global standard fabrics and to set up billion-dollar projects. It is also expected that within the next few years, the RMG and composite industry could procure most of their fabrics, accessories and yarn from local markets. Export of medicine could be one of the largest sources of national income. The growth of local pharmaceutical industries is rising by double digit each year. Recent extension of waiver on drug patent for LDCs up to 2033 will make this growth steadier. Our entrepreneurs, pharmacists and technicians can now compete with any overseas multinational pharmaceutical company. Bangladesh has a huge opportunity to become an attractive destination of medical tourism and could earn and save huge volume of foreign currency being spent as medical expenses. In the healthcare services, our country is achieving global standard in quality and service. Once many people were going to India, Thailand and Singapore for open heart surgery, kidney, liver and bone marrow transplantation. But now many people are availing all these treatments confidently in the local hospitals because of the satisfactory rate of success. Outsourcing is a multi-billion dollar market all over the world. Our neighbouring countries have already captured a big market share in this industry. Bangladesh has also a huge number of qualified IT personnel who are ready for rendering all sorts of outsourcing services. In the last financial year, Bangladesh earned $1,000 million from outsourcing and this sector is growing by double digit each year.

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The government should prioritise and institutionalise this promising sector through necessary infrastructural development like high speed, uninterruptible internet connection, providing young generation with quality IT education and strong IT security. Local and foreign investment in the tourism industry could attract a huge number of foreign tourists in the county as we have the longest sea beach of the world, the world's largest mangrove forests and heavenly beauty of Chittagong hill tracts and many more. Moreover, we have a huge reputation worldwide as a hospitable nation. In order to create better business opportunities in all of these sectors, Bangladesh must come forward in line with global goals for sustainable development which is known as Sustainable Development Goals (SDG) that include quality education, gender equality, good health, renewable energy, innovation and infrastructure, reduced inequalities, responsible consumption, climate action, peace and justice and partnerships. Only then the country would be able to gain the status of a middle income country very shortly and could be able to shift from labour-intensive industrialisation to service- oriented industry or tech-based heavy industrialisation. For development of entrepreneurship and maximum utilisation of human resources, the government and the policy-makers must provide them with sufficient infrastructure, various incentives, good governance, and hassle-free process of starting business. Bangladesh should focus on these key issues in order to diversify the sources of income as well as for reducing dependency on RMG export and inward remittance for growth of national income. Source: thefinancialexpress-bd.com– Jan 11, 2016

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Japan: Shima Seiki exhibits Wholegarment machine at ISPO Japanese computerised knitting machine manufacturer Shima Seiki is exhibiting its Wholegarment technology at the ISPO exhibition in Munich which will be held from January 24-27, 2016 at booth C3.415. “On display will be the company's SWG091N2 compact Wholegarment knitting machine suited to seam-free knit production in the field of athletic performance wear,” a Shima Seiki press release stated. Featuring the original SlideNeedle, the SWG091N2 is capable of flexible production from small knitted items such as gloves and socks to garment-size products. “It can also knit various textures and fabric structures for creating compression fabric, spacer fabric and other effects that aid in athletic support and protection,” the company added in the press release. Also on display for the first time at ISPO will be the SRY123LP machine which can produce hybrid knit-weave fabrics using inlay yarns. Inlay technique allows difficult-to-knit technical yarns such as monofilament and metallic yarns, expanding its applications to include technical textiles for sportswear, sports gear as well as the outdoor and leisure industries. The latest version of Shima Seiki's SDS-ONE APEX3 3D design system will also be available for demonstrations, which is an 'all-in-one' 3D design system that supports all aspects of fashion design and production. The SDS-ONE APEX3 is at the core of Shima Seiki's 'Total Knitting System' and 'Total Fashion System' concepts, allowing smooth workflow from planning, design and programming to production and even sales promotion. According to Shima Seiki, APEX 3 also improves on the planning process through photo-realistic simulation capability, effectively reducing time, material and cost from the sampling process with virtual sampling in 3D. Source: fibre2fashion.com– Jan 11, 2016

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Blended yarn price falls in China and Pakistan In Qianqing, PC (65/35) 32s yarn prices fell to US$2.41 a kg while 45s PC combed yarn prices were down US cents 4 a kg in the last week of December. Blended spun yarn prices further fell in China, which could eventually trigger a move on the international market and on domestic markets in India and Pakistan. In Qianqing (Zhejiang), polyester-cotton prices were declining, although only for lower counts. In India, blended yarn pries moved in different directions in Indore and Ludhiana markets. In India, 30s (65/35) PV warp yarn prices inched down INR1 a kg in Indore market. In Ludhiana, PC 30s (52/48) prices were up INR1 a kg (up US cents 4). In Pakistan, polyester-Cotton carded yarn prices slightly recovered while prices of combed PC yarns dropped 1% or stayed stable after a new fall in PSF prices. 24 PC (52/48) carded yarn prices were down US cents 2 a kg on the Faisalabad market while 30s were down US cents 3 a kg. Source: yarnsandfibers.com– Jan 11, 2016

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NATIONAL NEWS Steel Sector Seeks Government Support on Lines of Textiles, Sugar India's steel industry, which is facing a crisis due to cheap imports and subdued prices, has sought a government support package on the lines of the ones extended to the textiles and sugar sectors. After lobbying for imposition of import duty, safeguard duty and anti-dumping duty on imports from China, South Korea and Japan, the over $100-billion industry has now approached the government for a comprehensive steel package. The demand includes a year-long moratorium on payment of interest and principle amount as well as segregation of debt into two categories - sustainable and balance. According to analysts, domestic steel companies are sitting on a debt burden of Rs 3 lakh crore and falling prices have led to steeply lower realisation making it difficult to service the debt burden. Besides, cheap imports from China, South Korea and Japan, among others, have further exacerbated the situation leading to a decline in the share of the firms in the domestic market. According to the industry, the sector's share in gross non-performing assets as well as restructured standard advances of scheduled commercial banks is 10-11 per cent. Besides, an estimated 26 per cent of the total advances to the iron and steel sector are under stress. In a presentation made to the Steel Ministry last week, companies said cheap imports and fall in prices of steel products are eating into their working capital funds and is impacting their debt servicing capacity. That apart, investments to expand capacity has led to large borrowings and huge financial charges.

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Appreciating the efforts taken by the government to help the sector, the firms in their presentation said that there is an "urgent need for a far more comprehensive relief (steel package) involving participation from all stakeholders, including the Banking sector". The government has provided similar support to industries such as textiles and sugar, the presentation said. Under the package, the one-year moratorium will be a short-term measure to ensure continued operations, while various remedial measures are put into place. Besides, segregating debt into Sustainable and Balance will help the industry in managing its financial burden. Sustainable debt will include long-term debt and working capital loans that are required to run the business as well as maintain cash flows to pay debt obligations. The remaining - termed as balance debt - will be repaid over an extended period of time by converting it into redeemable preference shares with a nominal rate of about 0.01 per cent. "Considering the financial position of the companies due to various factors beyond their control, the industry would require a comprehensive package for its survival," the presentation explained. Source: profit.ndtv.com – Jan 10, 2016

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Birla Cellulose plans global marketing drive Birla Cellulose, which is currently spearheading a unique initiative called Liva Accredited Partners Forum (LAPF) to scale up the textile value chain, will now kick off a joint marketing drive to increase reach of its partners at the international markets, it said in a press release. “We will help the LAPF partners to promote their products at the international level by enabling them to take part at different marketing fora, apart from helping them with design developments and technology,” said Manohar Samuel, President, Marketing and Business Development at Birla Cellulose. He was talking at the LAPF conclave in Noida, organised as part of the ongoing efforts to help the partners reach out directly to the leading women's wear exporters and international brands. After launching the LAPF to aggregate the top talent in the fabric industry, Birla Cellulose has roped in leading players like Shreeji, Mafatlal, Mercury, Karuna Tex, Svarn Tex, MI Industries, VSM among its 250 plus partners. Apart from enabling the LAPF partners to join the international marketing fora, Birla Cellulose will provide them chance to promote their products through special drives like Market Week and Mill Week abroad, Samuel said. On January 8, the company brought together LAPF partners and international brands at Delhi NCR. The initiative was held in collaboration with the Society of Noida Apparel Export Cluster. Around 40 LAPF partners showcased their innovations in Liva fabrics to 160 garment exporters, including international brands such as Marks & Spencer, Macys, and GAP, apart from Shahi Export, Orient Craft, Pearl Global and Richa &Co. Top buying house such as Triburg, Impulse, LI Fung, and Asmara, domestic brands like Biba and ITC were present. “India is the second biggest textile hub in the world with a huge potential for Man Made Cellulosic Fibre (MMCF) Clothing.

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The conclave in Noida provided an open platform to integrate leaders in the value chain from Spinner to Fabricator to Garmented and Brands to achieve excellence,” said Samuel. The conclave also saw the unveiling of Liva Spring Summer 2017 Collection with innovations like Modal Knitted slubs, Modal Denim, Lurex embellishments in Liva blends and Modal Yoga Wear. The Liva SS 17 would be showcasing the collection in two unique themes namely Tropical Trails and Leisure Luxe. Birla Cellulose launched its fabric brand Liva in March 2015 in line with the vision of establishing connect with the end consumer in the viscose staple fibre business. Source : fibre2fashion.com– Jan 11, 2016

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Hosiery owners ask unions to scale down wage hike demand Hosiery and garment manufacturers' associations in nearby Tirupur today appealed to the trade unions to reconsider their demand for 100 per cent increase in the wages. The appeal was made by Joint Committee of five associations of manufacturers associaition, including South India Hosiery Manufacturers' Assocation, Tirupur Exporters Association, which met this evening to discuss the demand by the Joint Action Committee of Trade Unions. As the manufacturers' were not in a position to give 100 per cent increase, the committee appealed to the trade unions to reconsider it and give a new proposal, a release said. Source : business-standard.com– Jan 12, 2016

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Cotton shrinks on weak demand Cotton price moved down on the back of weak export demand as well as slow buying from mills. Moreover, weak international markets supported the domestic price to go down. Gujarat Sankar-6 cotton was traded down by ₹100 to ₹33,600-33,800 per candy of 356 kg. About 40,000 bales of cotton arrived in Gujarat and 1.40 lakh bales arrived in India. As cotton demand decreased, buying for kapas or raw cotton declined from ginners. Kapas was quoted down by ₹10 to ₹950-960 per 20 kg and gin delivery kapas stood at ₹960-970 per 20 kg. Cotton seed moved down by ₹5 to ₹460-465 per 20 kg. Source: businessline.com– Jan 11, 2016

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No Maharashtra govt compensation for cotton crop damage Farmers having suffered losses due to drought or drought-like situation will be getting compensation, but not in case of cotton. This despite the fact that cotton is the main crop of Vidarbha. State government has announced a relief amount of Rs 6,800 per hectare, which is capped at 2 hectares taking it to Rs 13,600 for farmers. This is more than the payout of Rs 9,000 by earlier standards, but covers only crops like soyabean, tur or paddy in Vidarbha. Most of the farmers grow both soyabean and cotton side by side. The cotton crop is also reported to be better this year. Farm activists, on the other hand, say compensation even by new standards is not enough, considering the overall losses. Sources also say the compensation will be available only to farmers covered in the first round of survey. The final round was completed early this month which reported that 85% of the villages in Vidarbha are distress hit. A distress is declared when crop losses exceed 50% of the average yield.

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Officials executing the plan say there have been no instructions regarding cotton, so far. However, it has been learnt that the state is working out an aid package for cotton growers also. Cotton is linked with Vidarbha's agrarian crisis. However, there are reports of cotton harvests being better this season, though soyabean output has come down to negligible levels. Earlier, it was mooted to declare a bonus for cotton growers over and above the minimum support price (MSP) of Rs 4,000 a quintal. However, it was seen that a large number of traders have taken advantage of the MSP scheme. Many farmers had shown output as much as 30 to 40 quintals in their land documents, presented at government procurement centres. Since MSP purchase is open to only farmers, it was seen that traders had fudged the former's land records in order to sell their stock through MSP centres, said Kishore Tiwari of Vasantrao Naik Shetkari Swavalamban Mission (VNSSM), a state government agency for farmers. Bonus may not be as effective now as many farmers have already offloaded their stock. A fresh survey is being carried out to assess the cotton losses. There are certain pockets in every district where cotton harvest has been low, said Tiwari. "It will be ensured that every farmer who has suffered losses in cotton will be compensated," he said. Vijay Jawandhiya, a Shetkari Sanghathana veteran, said a farmer incurs an expenditure of almost Rs 1,000 an acre on soyabean crop. "The compensation should be enough to take care of the crop loan repayment at least. If cotton is also included, the amount may be enough," he said. Source: timesofindia.com - Jan 11, 2016

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Warm winter melts millions from winter gear market Warm winter in the state has cost dearly to the winter gear market as it has recorded a dip in sales of around 40 per cent compared to last year. While the exporters are struggling hard to retain their share from the ever-rising sales figures of countries like China and Bangladesh, the domestic market too has got severely hit this time due to the warm winter caused due to the “EL Nino” effect, a global weather pattern where parts of India have suffered a dry spell due to the unusual warming of the Pacific Ocean. Multiple reports received from the apparel industry in Amritsar and Ludhiana have revealed that though the “dry spell” did not cause much effect on the production of winter gear, including apparel and electronic items, including heaters and geysers and other F&CG products, it has cast a “cascading effect” on the retailers’ profit. According to Jalandhar-based apparel retailer Mansa Ram, his business is a weather-driven industry and due to the warm winter, the retailers could not even record up to half of the sale done last year. “The only respite was kids’ wear that still performed well despite a huge sulk in the market,” said Mansa Ram. He said even retailers were not able to pay to manufacturers and also the loans taken to buy winter stuff were also costing them dear. Another retailer Raman Gupta, manager of a multi-brand electronic mart in Chandigarh, said though the months from November to January register a huge sale in winter goods like room heaters and geysers, this was not so this year. “Of course, savvy consumers may be less disappointed as instead of winter-specific goods, they bought other electronic items, but we did register a huge dip in the sale of room heaters and geysers,” said Gupta. Though retail markets and mega marts announce winter clearance sales by end of January, keeping in view the unsupportive weather, they had announced sale by December 20 only.

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Even Amritsar, known to be a hub of shawls, has recorded almost 50 per cent dip in their sales this year. According to Pyarelal Seth of the Shawl Club of India, the industry was already in doldrums due to the change in fashion style amongst youngsters who do not prefer to include shawls in their wardrobes. The warm winters have proved to be the final nail for the already ailing industry. “Around 60 per cent of India’s population is of youngsters who do not wear shawls. Also, with an increase in the number of working women in society, the sale of traditional shawls has taken a backseat. Due to warm winters, we are forced to compete with products from Uttar Pradesh that are as cheap as Rs 100 in the retail market even during winters,” said Seth. Industry experts believe that the warm season is also going to impact the production of winter gear in the next winter season also. According to Swapan Dutta, head, retail sales, Oswal Woollen Mills, Ludhiana, the production target of an year is derived from the demand and sale registered in the previous year. “With an expected sales dip of around 40 per cent this season, the production of winter gears is expected to dip down by 20 per cent next year,” said Dutta. He also said that along with retailers, manufacturers will also get affected, as a majority of their payments got stuck with retails due to a huge dip in the sales which will also hamper the production of the winter gears next year. Source: tribuneindia.com– Jan 11, 2016

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The bad and the good for India behind China's slowdown

Ever since the economic growth of China - India's largest trading partner in goods - started slowing down, concerns have been raised over its possible impact on the Indian economy. The steep fall in value of the Chinese currency Yuan in recent weeks has once again emboldened the naysayers. Last week's stock market crash in India, though it was only a shade of what happened in China, has only added strength to such voices. While it will be erroneous to argue that India will not be impacted by the economic churning happening in China, it will be equally irresponsible to suggest that India will be completely doomed if China falters. Let us look at the basics first. In value terms, China accounts for approximately one-tenth of India's merchandise trade, and bulk of it comes from imports of goods to India. In 2014/15, Chinese imports accounted for 13.5 per cent of India's total merchandise import bill of $448 billion. In comparison, the value of goods exported from India to china was just 3.9 per cent of $310 billion, India's total merchandise export earnings that financial year. Unlike merchandise trade, Chinese presence in India's $235 billion worth services trade is minimal and hence can be kept aside for a moment. So, what does India import from China? Well, almost all toys, a child might say. For the grown-ups, nearly all household smart phone brands, be it Apple, Micromax, Xiaomi or Lenovo, would either have been shipped from China, or will have some components made in China. Telecom instruments, right from the handset to equipment that goes into telecom infrastructure, come from China. Pharmaceutical companies will tell you how dependent they are on China made basic raw materials - intermediates, bulk drugs etc. - for the manufacture of medicines in India. How will the devaluation of Yuan affect these imports?

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As Commerce Minister Nirmala Sitharaman rightly points out, "It is a worrying development as it will make imports from China cheaper and our products more expensive." Slowing down of economy in China will also create excess capacities, leading to increased dumping of cheap products into China. The government is monitoring the situation and would be initiating anti-dumping measures on products - such as steel, where cheap imports are known to be doing material harm to domestic manufacturers - if it gets bad to worse. The early signals of this trend are already there. India's import of Chinese goods has grown 18.4 per cent, from $51 billion in 2013/14 to $60 billion in 2014/15. What about the impact of Chinese slowdown on our exports? Compared to what we import from China, Indian exports to that country are less diverse. Raw cotton and cotton yarn, petroleum products, iron ore, granite, copper and metal products, and some spices will account for over 70 per cent of our imports (by value). If Chinese demand slows down, its raw material requirement will be less, and India's exports to that country will decrease to such an extent that we may not be able to take advantage of the Yuan devaluation to earn more dollars. The fact that India's exports to China declined 19.5 per cent to $11.9 billion in 2014/15 from $14.8 a year ago illustrates this. The government may have the ability to take some measures to curb dumping of cheap goods, but it can probably do nothing to trigger growth and demand in China to help Indian exporters. India and China do not necessarily compete for the same product segment in same markets abroad, but availability of cheaper products from China increases the possibility of intense competition in global markets as well. It is quite evident that China's slowdown will have an impact on India's bilateral trade. But, can it improve the chances of India becoming a more favourable destination for manufacturing and investments for Chinese players?

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In addition to electronic components, consumer electronics, electric, equipment and industry machinery and chemicals, India is also one of the largest markets for project exports from China. It is estimated at over $60 billion worth projects are under execution by Chinese companies in India. As per Chinese figures, cumulative Chinese investments into India till December 2014 stood at $2.8 billion. India's big push for infrastructure development perhaps could get a boost from cheaper Chinese funds and resources. Chinese cooperation in the development of India's high-speed rail network, renewable energy sector, smart cities and more importantly, the manufacturing sector, could become more feasible in the wake of reduced possibilities and opportunities for Chinese companies in their home country. India should cushion itself to reduce the negative impact of a Chinese slowdown. At the same time, it should also explore the positive side of a Chinese slowdown. Source: businesstoday.in– Jan 11, 2016

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