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Exports grew 7.11 percent year-on-year to $2.95 billion in April riding on the higher shipment of garment items.
Although the receipt is 0.51 percent higher than the monthly target of $2.94 billion, it was the lowest in six months.
Overall, exports rose 6.41 percent year-on-year to $30.40 billion in the July-April period. The earnings narrowly missed the periodic target of $30.49 billion, according to data from the Export Promotion Bureau.
Garments exports grew 9.37 percent year-on-year to $25.30 billion in the first 10 months of the fiscal year.
Knitwear exports rose 11.43 percent to $12.54 billion and woven garments exports were up 7.42 percent to $12.76 billion.
The shipment of garments, which account for more than 80 percent of the national export, grew because of the increased sales of high-value items and the depreciation of the local currency against the US dollar, according to exporters.
“We will be able to achieve more than 10 percent garment export growth at the end of the fiscal year as the trend in the international market shows very bright prospects,” said Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association.
“At the end of the current fiscal year, we will be able to surpass the garment export of $30 billion for the first time,” he said.
He said the country’s garment factories are full of orders from international retailers and brands, thanks to the massive progress in workplace safety carried out by the Accord, the Alliance and the government.
The exporters also benefitted from the depreciated exchange value of the taka.
On Wednesday, the interbank exchange rate was Tk 83.10 per US dollar, up from Tk 80.50 a year earlier, according to central bank data.
Frozen and live fish exports grew 2.32 percent to $434.97 million on the back of the higher demand in Europe.
Shipment of agricultural products such as fruits and spices was up 16.77 percent to $543.18 million.
Cement, salt and stone fetched $11.08 million, up 33.01 percent, and pharmaceuticals brought home $85.96 million, an increase of 14.84 percent.
Cotton, cotton products, and yarn exports went up by 19.01 percent to $108.22 million in the July-April period.
Jute and jute goods also fared well as the demand for the goods made in Bangladesh from the natural fibre is rising.
In July-April, jute and jute goods fetched $889.74 million, up 7.66 percent.
Home textile export rose 13.07 percent to $751.67 million, footwear 5.29 percent to $205.30 million and furniture 21.86 percent to 51.68 million.
On the other hand, exports of plastic goods fell 19.92 percent to $81.19 million in July-April.
Leather and leather goods sector, the second largest export earner after garments, fetched $916.74 million in the 10-month period, down 10.02 percent.
The shipment of leather and leather goods was hit largely by the relocation of tanneries from Hazaribagh to Savar as production was hampered.
All the 155 tanneries have been relocated, but only 25 of them have so far been able to start production in their new location, industry people said.
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Hovering at approximately 85 cents a pound this week, cotton has been selling at record highs not seen in four years. The causes vary, but there is one issue taking a lot of the blame—the looming trade war between the United States and China.
Since the Chinese government in April announced potential 25 percent retaliatory tariffs on U.S. goods, many in the cotton industry have wondered about the consequences. If implemented, the tariffs would affect approximately $50 billion in goods—$16.5 billion of which includes crops and food items the United States sends to China. China’s proposed tariffs are in response to the 25 percent tariff the United States has threatened to tack on to $50 billion in Chinese goods imported into the U.S.
While talks of a tariff war go on, some in the U.S. cotton industry aren’t convinced this trade climate is the only culprit driving up prices. For Roger Isom, president and chief executive officer of the California Cotton Ginners and Growers Association, one of the largest threats to the state’s cotton industry has been a lack of water.
“The biggest difference would be water,” he said. “Because I can tell you, in December we were looking at a 10 to 15 percent increase, but it didn’t rain until March and guys already made planning decisions. It’s only been 20 percent water allocation.”
Despite 2017’s high rainfall, which yielded a precipitation index of 95 inches, according to the California Department of Water Resources, the agency couldn’t forecast the same wet weather for 2018. After an unimpressive storm season that ran from December 2017 through February 2018, this year’s water supply doesn’t look promising for California’s cotton crop.
This dry spell isn’t limited to California. Jon Devine, the senior economist at Cotton Inc., was concerned about other regions of the country as well.
“A little bit more than half of our cotton acres are in Texas, located in the northwestern part of the state in Lubbock,” he explained. “They are in a pretty severe drought right now, which is feeding into concerns.”
With these dry conditions, farmers are cautious about growing and their lenders aren’t as generous. As growers wait to see what the second half of 2018 brings, there is still a bit of hope for this cotton season. While 2018 hasn’t delivered a lot of rain in certain regions, other threats from last year—such as insect infestations—seem to have been resolved.
“One thing that happened last year, even though we had more acres, was a big problem with lygus. People lost half a bale to a bale per acre,” Isom said. “We don’t think we’ll have the lygus pressure like last year. We might have fewer acres, but we hope yields are better. We want price, quality and yield, but we’ll take two out of three.”
Tumult in the cotton trade
After stepping away last year from the Trans-Pacific Partnership free-trade accord, the United States’ trade policies with Pacific Rim countries have been a hot topic since the beginning of 2018. While Devine agrees that China is an important trade partner for cotton, he emphasizes the Asian country’s cotton imports from the United States have fallen over the years from approximately 40 percent to 15 percent to 20 percent. Chinese tariffs on U.S. cotton would be problematic, but they are not the only country importing this commodity.
“China is an important customer of U.S. cotton and has been for the past two or three decades, but the U.S. has been shipping more cotton to other locations over the last few years,” Devine said. “There is not as much of a concern as five or 10 years ago when [this tariff] would have been catastrophic.” With U.S. cotton exports expanding to other countries, the market has opened up more. Last year, Devine said, the U.S. saw its second-highest cotton export yield and would have been successful without China’s business.
The cotton trade between the United States and China might be jeopardized if tariffs are implemented, but that doesn’t mean all U.S. cotton products to China would incur tariffs. There is a roundabout way to get around this import tax. “Vietnam has seen tremendous growth. Growth in Vietnamese spinning has been fueled by China, too,” Devine explained. “If you take a look at Vietnam, more than half of its spun cotton is shipped to China. There is still a lot of U.S. cotton fiber being shipped to China through Vietnam, but it’s spun into yarn first.”
In marketing year 2016/17, U.S. cotton exports to Vietnam totaled 644,229 metric tons, or 2.95 million bales, valued at $1.07 billion. The United States comprises 53.7 percent of the market share for Vietnam’s cotton imports—an increase from 42.1 percent in 2017, and China imports 75 percent of its cotton yarns from Vietnam, according to the U.S. Department of Agriculture. In this climate of unpredictable growing conditions and threatening tariff talks, the apparel industry should be concerned, but it’s not all doom and gloom. Prices still haven’t risen to the $2-per-pound high seen in 2011.
The textiles and garment industry gained the second-largest export value in the first four months of this year, after the export value of phones and their components, according to the Ministry of Industry and Trade.
The export value of textiles and garments in the first four months was estimated at US$8.6 billion, a year-on-year increase of 15.7 per cent.
Regarding the export markets, the ministry said in the first three months of the year, the United States ranked first, with the export value of textiles and garments from Vi?t Nam reaching $3.04 billion, a year-on-year surge of 11.6 per cent. This accounted for 47.3 per cent of the total garment export value.
The export value of textiles and garments from Vi?t Nam to Japan reached $855.44 million, 19.6 per cent higher than the same period last year, accounting for 13.3 per cent of the total export value.
The export value of textiles and garments to South Korea stood at $798.6 million and $268.95 million to China, an increase of 14.8 per cent and 40.9 per cent, respectively, against the same period in 2017.
Meanwhile, the value rose by 11.8 per cent to reach $806.23 million worth of exports to the European Union and by 26 per cent to $228.36 million worth of exports to the ASEAN market compared to the same period last year.
To reach the target of $35 billion in total textiles and garment export value for this year, the Vi?t Nam Textile and Apparel Association has asked enterprises to fully exploit the working capacity of their workers as well as restructure their management practices to improve labour productivity.
Besides maintaining and developing export markets such as the United States, European Union, Japan and South Korea, the enterprises should focus on developing other markets such as ASEAN, Eurasian Economic Union, India and Latin American countries, including linkage with the distribution system in the local market.
Uzbekistan is among countries producing the best quality cotton and talks are underway for cooperation with Pakistan on cotton production technology, Uzbek Embassy officials said on Thursday.
Uzbekistan Embassy Visa Consular Shukhrat Zaripov and Commercial Attache Jasur Saydakhmedov in a meeting at the Multan Chamber of Commerce and Industry (MCCI) said Muhammad Nawaz Sharif University of Agriculture Multan was in contact with Uzbek authorities for cooperation in cotton production technology.
They said numerous opportunities existed for joint ventures in medicines, agriculture and industrial products, and Pakistan could export fruit and vegetables, particularly from south Punjab to Uzbekistan.
“Uzbekistan utilises 60 percent of the cotton production at home, while the rest is exported to other countries at comparatively lower price,” they said, and added that Uzbekistan was a big consumer market and products produced there carried European Union Certification.
Relations between the two countries were improving, and Pakistanis were being issued visas after five to seven days of filing applications. Tourism aspirants get one-month visa while those who apply for trade get six months to one year visa. Officials said efforts were afoot to remove hurdles in transportation, and to streamline cooperation in banking sector between the two countries.
In a recent report on emerging trends in manufacturing, the World Bank has mentioned Textiles, Garments and Leather based industries will continue to be biggest job creators in low and medium industrialised countries like India.
However, growth in export from these sectors in India has remained stunted for quite a long time, which may be a good indication of the status of these sector.
More than the resultant poor export revenue, it is playing havoc with job creation. And what is more important, these sectors will remain comparatively safe and create jobs even in the era of automation and artificial intelligence.
The world bank report cryptically titled’ Trouble in the Making?’ has cautioned that widespread use of robotics and 3 D printing will cause a disruptive change in the global manufacturing sector and the first casualty will be jobs.
This is of great concern for countries like India where the large mass of low and zero skilled youth joining the job market can only be absorbed in the manufacturing in the low technology sectors.
And here the silver lining is low skill sectors like garments and leather products will remain comparatively immune from the automation wave and continue to be job spinners.
However, with a focus to hi – tech manufacturing, the policy makers probably has put the low priority tag on the traditional industries.
The results are evident. Almost all sectors with high employment potential, which also contribute significantly in countries export basket, are in negative or near zero growth rate for a considerable period.
Commenting on the scenario, Animesh Saxena, a leading exporter of Textiles and Garments and Member of the Central Committee of FISME, mentioned that the industry today is throttled by the current business environment – starting from arbitrarily set high minimum wages to imposition of GST on exports.
While fully agreeing to the world bank report Saxena mentioned that a number of studies has brought out the high employment potential of Garments industry vis a vis capital intensive industries and its ability to absorb and skill a large number of unskilled youth.
If the Government is really interested in Growth with Employment, this sector should be immediately provided relief from the arbitrary regulations, Saxena opined.
The World Bank report also provides a prescription for the countries to survive with manufacturing and prescribed 3Cs – competence, connectivity and competitiveness as remedials.
The report shows that while India has achieved some level of competitiveness in the internal market, its connectivity or ease of trade is much lower that other developing countries, even behind Bangladesh and Pakistan.
And exactly this is being continuously advocated to the Government. The invisible barriers in the trade regime, the catch the thief approach of the revenue officials and rent seeking at every node of the import / export chain is making international trade really difficult in India.
With the added confusion created by GST and also the global protectionism has made the situation hopeless particularly for the Textiles, Garments and leather exporters, largely in the MSME sector
The department of handlooms and textiles of the Tamil Nadu government in association with Sardar Vallabhbhai Patel International School of Textiles and Management (SVPITM) will organise a series of workshops, seminars and conferences in technical textiles for the young and budding entrepreneurs. The workshops beginning from May 17 includes three phases.
In the first phase, training will be held on various sectors in technical textiles, product development, manufacturing process and market. The second and third phase comprises of planning and execution business plan on technical textiles sector respectively.
In sectorial programme, participants will undergo training in their respective sectors including industrial visit. This sectorial programme includes sessions on agro / home textiles – products, manufacturing process, technology, machines, standards, market demand and marketing strategy.
A field visit has been arranged for the participants to manufacturing and application site to understand the practical aspects. Participants will also be provided with questionnaire to conduct a survey at various industries / agro / home textile product dealers / end users. In the last day, sessions on new product development, brain storming session, SWOT analysis, discussion on intellectual property rights and new business startups has been planned. The resource persons will be from various manufacturing industries research associations, center of excellences, higher learning institutions, etc.
These technical textiles workshops will be a platform to provide technical support, knowhow and the entire necessary infrastructure at one place. It will provide an opportunity for the conventional textile entrepreneurs to extend their business in technical textiles field with the existing facility. And also it is going to be a key for the budding entrepreneurs to start a business in technical textiles field, SVPITM press release said.
Global research is slowly revealing its high indirect impact on the ecosystem
The bald tops of the Western Ghats are a pristine ecosystem replete with innumerable animal species and, apparently, an abundance of wind and windmills.
As the country tries to achieve an ambitious renewable energy target of 175 GW, windmills have popped up in at least 65 sq km of forested area, with permissions for another 30 or so sq km still pending. This isn’t surprising given that India’s potential wind power map envelops the Western Ghats (from Kerala to Gujarat) and even large parts of the Eastern Ghats.
While this has often led to expressions of concern over the environmental impact — as often in localised protests or civil action suits — these must be articulated in policy to prevent irrecoverable changes in the local ecosystem. Global scientific research has also highlighted the impact of windmills on wildlife. For example, in the first few months of 2018 alone, published papers have shown that in the Pacific islands, bat activity is as much as 20 times lower in areas with windmills. In Poland, higher stress levels have been observed among rodents in the windmill areas of Poland while in Portugal, windmills close to wolf breeding sites are leading to lower breeding rates. And in Texas, there has been a staggering 77% decrease in redhead ducks in coastal ponds within windfarms.
The situation may not be different in India. In fact, it may be worse considering the high levels of biodiversity in every square kilometre of forest. In Rajasthan, for instance, transmission lines and spinning blades have reportedly led to increasing mortalities of the critically-endangered Great Indian Bustard. In studies of wind farms from Kutch to Andhra Pradesh, direct collisions have been reported. In Karnataka, where over 6,000 acres of forest land have been diverted for windmills, anecdotal evidence suggests that not only birds, but also amphibians and mammals such as wolves could be affected.
What global research has indicated, and which Indian research is yet to do, is the high indirect impact on the ecosystem.
At the Indian Institute of Science, Bengaluru, Maria Thaker and her team have been studying the fan-throated lizard around windmills. They have observed that apart from birds, even smaller rodents and mammals avoid these patches due to the constantly whirring turbines. In this predator-less micro-environment, the lizard population has increased, leading to an increase in competition and decrease in consumable resources. “The whole aspect of the ecosystem is changed. The food web is inter-connected, and it is out of whack in these areas,” she says. Only long-term research can reveal if these changes have led to cascading effects on insects, vegetation and the soil. Further, construction denudes forests, fragments them through access roads and transmission lines, and even raises the risk of forest fires.
Currently, the guidelines for wind energy skirt wildlife impact, while the process for forest land diversion focusses primarily on compensatory afforestation. In some cases, only studies on the direct impact on bird and bat species are called for. However, any mitigation based solely on direct collisions cannot prevent the indirect impacts and the jolts to the local ecosystem.
The International Monetary Fund (IMF) released a report, which affirms that India will become the fastest growing economy in 2018. The growth rate is expected to rise from 7.4 per cent to 7.8 per cent in 2019 as the economy is showing positive signs.
HIGHLIGHTS FROM THE REPORT:
India has proved to be one of the most resilient nations, despite the infamous backlash of demonetisation, introduction of Goods and Services Tax.
The IMF’s Asia Regional and Pacific Economic Outlook report said: “The recovery is expected to be underpinned by a rebound from transitory shocks as well as robust private consumption.”
The forum appreciated the country for medium-term consumer price index inflation “is forecast to remain within but closer to the upper bound of the Reserve Bank of India’s inflation-targeting banda of four per cent with a plus or minus two per cent change”, the report said.
WORD OF ADVICE:
The report said: “In India, given increased inflation pressure, monetary policy should maintain a tightening bias.”
“The current deficit in fiscal year 2017-18 is expected to widen somewhat but should remain modest, financed by robust foreign direct investment inflows,” the report said.
The IMF urged the countries in the region to follow conservative policies “aimed at building buffers and increasing resilience” and push ahead with structural reforms.
INDIA RULES AMONG OTHER ASIAN COUNTRIES:
Bangladesh is following India’s footsteps and is the second fastest-growing economy in South Asia with a growth rate of seven per cent for 2018 and 2019.
After Bangladesh, Sri Lanka is taking a queue with four per cent growth rate in 2018 and 4.5 in 2019.
Lastly, Nepal which showing a downward trend by plunging from five per cent in 2018 to four per cent in 2019.
Overall, Asia contributes 60 per cent of the global growth and three-quarters of this comes from India and China, which is expected to grow 6.6 per cent in 2018 and 6.4 per cent in 2019, it said.
The medium term said the report said “downside risks dominate” and it is going exert pressure on global financial conditions, which will show a shift toward protectionist policies, and an increase in geopolitical tensions.
WHAT IS IMF?
IMF stands for the International Monetary Fund, an organisation whose “primary purpose is to ensure the stability of the international monetary system-the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. The Fund’s mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.”
It does so in three ways: keeping track of the global economy and the economies of member countries; lending to countries with balance of payments difficulties, and giving practical help to members,” the official website said.
Surat: Power loom weavers are preparing to take on yarn spinners for not passing on the Goods and Services Tax (GST) benefits following the formation of anti-profiteering screening committee in the states by the central government.
The anti-profiteering screening committee, which has been set up by the central government to ensure that the consumer is protected from arbitrary price increase in the name of GST, is headed by GST commissioner from central government Sunil Kumar Singh and additional sales tax commissioner, Gujarat, Supreet Singh Gulati.
The power loom sector had demanded formation of anti-profiteering screening committee as yarn spinners had gone on a spree of increasing yarn prices despite the GST Council lowering GST rates from 18 per cent to 12 per cent. With the formation of the anti-profiteering screening committee, the weavers are preparing the cases of price hike by yarn spinners. They allege that the yarn spinners have formed a cartel and are increasing yarn prices every fortnight by Rs 2 to Rs 3 per kilogram. They alleged that front and second line spinners have gone on a spree of increasing yarn prices, which is main raw material for the power loom weavers. The price hike has come even as there is subdued demand for polyester fabrics across the country and export is dwindling.
In January, the spinners had increased yarn prices by almost Rs 50 per kilogram in nylon filament yarn and Rs 20 in other categories, giving a tough time to the power loom weavers.
Sachin Industrial Cooperative Society Limited secretary Mayur Golwala told TOI, “The GST on yarn has been reduced from 18 per cent to 12 per cent. Instead of passing on the benefit of rate reduction to the weavers, the spinners are continuously increasing yarn prices every fortnight by Rs 3 per kilogram. Now, that the anti-profiteering screening committee has been formed, we will file cases against the yarn spinners for arbitrarily increasing the prices.”
Pandesara Weavers Association president Ashish Gujarati said, “Yarn is a basic raw material and the increase in prices has severely impacted the power loom sector. Even though we are investing in modernized machines, but the cost of raw material is bringing down our net profit margins.”
ICE cotton futures edged up in low-volume trade on Wednesday ahead of the U.S. supply, demand report and export sales data on Thursday.
* The most active ICE cotton contract for July expiry CTc1 CTN8 settled up 0.48 cent, or 0.56 percent, at 85.86 cents per lb.
* The contract traded within a range of 85.18 and 86.04 cents a lb.
* “We are recovering on a chart basis, we got close to support near the 85 area and that seems to have held the least so far today,” said Jack Scoville, vice president with Price Futures Group in Chicago.
* The U.S. Department of Agriculture’s (USDA) World Agricultural Supply and Demand Estimates (WASDE) report and weekly export sales report are due on Thursday.
* “The U.S. export demand really has been very high this year and there is a chance that we can see USDA increase the export demand and decrease the ending stocks estimates.”
* Market participants are keeping a close watch on rain in Texas, the major cotton-growing region in the United States.
* ICE cotton contract for December expiry CTZ8 rose 0.6 percent to 80.56 cents.
* “Markets are looking a little ahead at the new crop that remains very dry in most of Texas … there are definitely some problems with getting the crop planted in a timely way in West Texas and that’s a huge part of the crop, that has got the market on the edge a little bit as well,” Scoville said.
* Total futures market volume fell by 9,859 to 19,754 lots. Data showed total open interest gained 775 to 286,386 contracts in the previous session.
* Certificated cotton stocks CERT-COT-STX deliverable as of May 08 totaled 72,999 480-lb bales, down from 73,541 in the previous session.
* The Indian Meteorological Department (IMD) forecast a near normal Southwest Monsoon for 2018 as per USDA attache.
