FW
Spelling trouble for India at the on-going negotiations for the Regional Comprehensive Economic Partnership pact, China has demanded that New Delhi eliminate duties on almost all categories of items, including sensitive ones such as steel, electronics and chemicals, despite the initial decision taken by the two countries to keep ambitions low. In its first round of requests made to India, China’s demands have gone much beyond the understanding reached between the two countries on eliminating tariffs on 42.5 per cent of trade items.
India already held bilateral discussions with China on the sidelines of the last RCEP meeting in Australia asking it to be realistic and bring down its demand. But India has not yet received a positive response. New Delhi is worried about China’s aggressive stance as the Indian industry is neither equipped nor willing to face uninhibited competition from its neighbour.
The RCEP has prescribed a deadline of June 1 for all members to give their first round of requests to other members, based on the initial offers made by each, as efforts are on to wrap up the pact this year. In the first round of offers, India agreed to eliminate tariffs on 42.5 per cent of items for China, Australia and New Zealand, 65 per cent for Japan and South Korea and 80 per cent for the ASEAN. It is important for India to be a part of the proposed pact to counter bigger blocs like the TPP and also retain its competitiveness in the region.
Lectra, the world leader in integrated technology solutions dedicated to industries using fabrics, leather, technical textiles and composite materials has announced the winners of the Lectra/JCPenney (JCP) Fashion Design Contest, held recently at the Fashion Institute of Technology (FIT) in New York.
Lectra and JCPenney jointly organized the contest to support FIT in its mission to prepare its design students for careers in the fashion industry by giving them a chance to work on real-world projects and providing exposure for their designs. Fashion design students chose from one of JCPenney’s exclusive, private brands, including Worthington®, St. John’s Bay®, Stylus®, and Decree®, and created a collection using Lectra’s Kaledo® textile and fashion design solution, based on the brand’s positioning and its customer profile.
Cagla Ertan took first place in the competition, winning an eight-month internship at JCPenney’s SOHO design studio starting in September, along with a complimentary Kaledo license. Ertan created original designs, prints, and color palettes for Decree, JCPenney’s brand for juniors with a sophisticated point of view. The judges felt that Cagla’s collection best embodied the brand’s DNA. Second-place winner, Kevin Tung, and third-place winner, Cemile Simsek, were also awarded Kaledo licenses. Tung and Simsek’s collections both showcased strong original styles and prints.
FIT and Lectra have been partnering together for more than 25 years; both believe in the importance of educational initiatives that put students in direct contact with real-world businesses.
ICRA’s research update on Indian spinning industry indicates, slow growth in domestic consumption and exports will pose a challenge for profitability of spinners if the demand growth remains muted in FY17.
High dependence on exports to China and resulting sensitivity of India’s exports to China’s policy on reserve cotton stock has always warranted a cautious outlook on India’s yarn exports, says the report. Anil Gupta, AVP, Corporate Sector Ratings, ICRA points out, the slow pace of growth in spun yarn production has been driven by factors like tepid domestic consumption and limited growth in exports. With cautious outlook on cotton yarn exports, domestic demand growth will determine the production growth going forward.
As per ICRA estimates, the domestic consumption growth for FY16 is expected to be 1.4 per cent (7.6 per cent in FY15) for cotton yarn and 3.1 per cent (6.3 per cent in FY 15) for spun yarn. This is the lowest level of domestic consumption growth since FY2013. The growth in cotton yarn exports has also been slow with exports of 1,302 million kg in FY16, which reflects 3.7 per cent growth (47.5 per cent and 18.3 per cent growth witnessed in FY13 and FY14).
Industry has witnessed slowest pace of production growth in FY16 in terms of cotton yarn production growth, which is estimated to have grown by 2.0 per cent to 4,136 million kg and is lowest in last four years. Cotton yarn production had grown by 14.6 per cent, 9.6 per cent and 3.2 per cent in FY13, FY14 and FY15 respectively.
Bombay Dyeing’s net profit is expected to drop to Rs 32 crores at a rate 58.9 per cent quarter on quarter. Net revenue for the fourth quarter of financial year ’16 is expected to surge to Rs393 crores, at a rate of 17.1 per cent quarter on quarter but declining 48.1 per cent quarter on quarter. Operating profit margin is likely to be at 9.5 per cent, with a quarter on quarter jump of 1,253 basis points and a drop of 2,142 basis points year on year.
Bombay Dyeing is a flagship company of the Nusli Wadia group that was established in 1879. It is engaged in manufacturing textiles and chemicals. Textile manufacturing is the main activity of Bombay Dyeing. It manufactures cotton suitings, polyester cotton suitings, shoe linings and duck fabrics, satin furnishings, yarn dyed fabrics, towels, table tops and napkins, satin bed sets etc. Nearly 50 per cent of its textile production is exported.
The company is the largest manufacturer of Dimethyl Terephthalate (DMT) in India. DMT is the raw material for manufacturing polyester fiber, film, filament and yarn and engineering plastics. Presently it has a distribution chain of over 600 exclusive stores across the country.
www.bombaydyeing.com/
Kingpins this has introduced a new side show, called ‘Why by Kingpins’. This new branding show will be the first trade show ever to focus exclusively on branding in the denim industry. Kingpins was launched in 2004 in New York by Andrew Olah as an invitation-only, boutique denim sourcing show featuring a highly-edited selection of vendors that include denim and sportswear fabric mills. The trade show acquired cult like status among denim professionals over the years. Kingpins grew into a platform with biannual editions in New York, Los Angeles and Hong Kong.
The new side show is meant to act as a platform for denim brands and branding companies to share inspiration and education, while also shaping the future of branding design. It will feature everything from labels and trims to accessories and innovative technologies, and will also offer free seminars and panel discussions. Why is built on the idea that branding is a key component to the success of a denim brand.
In Amsterdam, the Kingpins show takes place during Amsterdam Denim Days, one of the world’s leading denim events. This week-long cultural festival brings together consumers and denim industry insiders, and includes in-store events, seminars, and fabric exhibitions. Amsterdam is also the home of Denim City, a center for craftsmanship and innovation in the denim industry.
www.kingpinsshow.com/
Pakistan and Uzbekistan are working on increasing bilateral trade and instituting joint ventures between the two countries. Uzbekistan is the biggest and the fastest growing economy in Central Asia, particularly advanced in agriculture and a major cotton producer with a very well developed indigenous production of cotton related machinery. And this also happens to be one of Pakistan’s primary economic sectors.
Pakistan and Uzbekistan have been enjoying cordial bilateral relations since the independence of Uzbekistan in 1991. The two countries are looking at the establishment of joint production facilities. They see significant potential for cooperation in areas such as fertilizers and the agro-chemical industry.
Uzbekistan is interested in investing in renewable energy projects in Pakistan, especially solar energy. The current volume of bilateral trade is $40 million. The countries are looking for enhancing bilateral cooperation in the fields of climate change, agriculture and science and technology.
Pakistan and Uzbekistan share affinities of culture, faith and customs. Pakistani ports offered the shortest land route to Uzbekistan for access to the Arabian Sea and the unique geographical locations of Pakistan and Uzbekistan are mutually advantageous for the two countries. Pakistan wants to build an energy infrastructure corridor to enhance connectivity with the Central Asian states.
India’s cotton output is estimated to be 341.50 lakh bales for the 2015-16 season, which began October 1. The total output for the 2014-15 crop year stood at 382.75 lakh bales.
The lower crop estimate is mainly due to crop damage in the northern region due to the white-fly attack this year. The total output estimated in the northern zone during the season 2015-16 is 41 lakh bales, down from 53.50 lakh bales last year. The arrival of cotton during April is estimated at 22.25 lakh bales compared to 27.05 lakh bales arrived during the same month last year.
Total cotton arrivals this season up to April are estimated at 302.40 lakh bales, which constitute around 89 per cent of the total estimated crop. The estimated total supply for 2015-16 is estimated at 429.10 lakh bales while domestic consumption is estimated at 305 lakh bales, thus leaving an available surplus of 124.10 lakh bales.
Cotton plays an important role in the Indian economy as the country’s textile industry is predominantly cotton based. India is one of the largest producers as well as exporters of cotton yarn and the Indian textile industry contributes about 11 per cent to industrial production, 14 per cent to the manufacturing sector, four per cent to the GDP and 12 per cent to the country's total export earnings.
Germany and Pakistan will work together for the development of a sustainable textile industry across the value chain. Germany is one of the most important trading partners of Pakistan in Europe. It is the fourth largest importer of Pakistani products and the seventh largest supplier of goods to Pakistan. Trade between Pakistan and Germany is conducted in freely convertible currency in terms of the trade agreement signed in 1957.
Germany is a good market for Pakistani textile products especially readymade garments, bed linen cotton fabrics and knitwear. Germany accounts for 20 per cent of Pakistan’s total exports to the EU and 21 per cent of Pakistan’s total imports from the EU. Germany is the eighth largest investor in Pakistan and several German multinationals are operating in Pakistan.
Germany also imports a variety of other products from Pakistan, which include leather clothing, leather gloves, sports goods and surgical instruments, textiles and other products. In turn Germany exports textile machinery, spinning machinery, finishing machinery, knitting and hosiery machinery and weaving machinery to Pakistan.
Germany is also helping Pakistan overcome its energy related issues. German companies are making big investments in Pakistan particularly in the energy sector.
According to analysts, with India’s domestic consumption of cotton yarn advancing at its slowest pace in three years and exports witnessing only a moderate increase, profits of textile spinning mills would be under stress. Domestic consumption is estimated to have advanced by only 1.4 per cent for cotton yarn and 3.1 per cent for spun yarn in 2015-16, the lowest since 2012-13. Consumption has increased by a robust 7.6 per cent for cotton yarn and 6.3% for spun yarn in 2014-15.
Incidentally, the growth in cotton yarn exports has also been slow in 2015-16 compared to previous years. Exports are estimated to have topped 1,300 million kgs (mkgs) in 2015-16, a 3.7 per cent increase compared to the previous year. Cotton yarn exports declined 4 per cent in volume terms and 14 per cent in value terms in 2014-15.
Cotton yarn production is estimated to have grown by about 2 per cent to around 4136 mkgs, the lowest increase in the last four years, data compiled by ratings agency ICRA showed. Production of cotton yarn rose by 14.6 per cent, 9.6 per cent and 3.2 per cent in 2012-13, 2013-14 and 2014-15 respectively. Slow growth in domestic consumption and export is leading to lower growth in production, ICRA said.
Pakistan cotton production has declined by 5,100,000 bales during the current season which has caused a loss of Rs 200 billion to the national kitty. The prime concern now is to ensure the interests of farmers besides boosting textile exports. A campaign will be launched for educating farmers so that they can grow more cotton in a proper manner. A meeting of all stakeholders will be convened to prepare a holistic strategy to address the issues of cotton production, a support price, quality of cotton and its import mechanism.
Ginners will be urged to work like a team to motivate growers/farmers for cultivation of cotton on the maximum area. The ginning sector wants a bailout package.
Cotton producers say that as the national cotton policy is being delayed, sugar mills are being shifted to the core cotton zone. They stress the need to impose a complete ban on the import of cotton and its thread from neighboring countries till the end of the cotton season and the disposal of bales lying in ginneries as unsold stock.
Steps will be taken to enhance the production of cotton in the country. Pakistan has a target of reaching 20 million cotton bales.
