Textile exports marginally rose four percent to $2.26 billion in the first two months of the current fiscal year of 2018/19 as value-added sector recorded increase in export revenue during the period with knitwear witnessing double-digit growth, official data showed on Wednesday. Pakistan Bureau of Statistics (PBS) data showed that textile exports amounted to $2.18 billion in the corresponding period a year earlier.

Knitwear exports surged 11.3 percent to $488.82 million in the first two months. Exports of bedwear increased 2.7 percent to $394.98 million. Towel exports rose 7 percent to $125.2 million. Exports of readymade garments increased 4.1 percent to $435.4 million in the first two months of the current fiscal year.

Knitwear garment exporter Jawed Bilwani said the growth stemmed from orders shifted from Bangladesh where workers rumbled on low wages.
Textile workers lodged protests against new wage announcement by the government and warned go-slows threatening the industry that fetched $30 billion in exports revenue, accounting for 83 percent of the country’s total exports in 2017/18.

“We are currently receiving spillovers,” Bilwani said. “Actual orders are still not coming.”

Bilwani said government’s decision to exempt export-oriented sector from a recent gas tariff hike would give some respite.

The government announced up to 143 percent increase in gas tariffs in a move to reduce outstanding receivables of state-run Sui Southern Gas Company and Sui Northern Gas Pipelines Limited, which swelled to Rs152 billion.

Textile exports surged 26 percent month-on-month and increased 7.3 percent year-on-year to $1.26 billion in August.
Bilwani, who is also chief coordinator of Pakistan Hosiery Manufacturers and Exporters Association, said the cost of production in the country is high. Industrialists in Karachi receive water at two dollar/gallon compared to 35 cents/gallon in other parts of the country.

The new government expressed readiness to resolve critical issues, including stuck refunds, facing the industry.

“If this happens exports would further increase,” Bilwani said. “Textile industry has potential to earn $25 billion in annual revenue.” Analyst Mirat Hyder at brokerage Taurus Securities said surge in exports is a promising early sign of the country’s external sector benefitting from its devalued currency.

“Since August 2017, the US dollar has appreciated 17.55 percent,” Hyder added. PBS data further showed that total exports increased 5.1 percent in the July-August period. Food exports soared 10.6 percent to $568.5 million during the two months period. Of the total, rice exports amounted to $223.9 million, almost flat compared to corresponding months a year earlier. Sugar exports soared 58 percent to $51.1 million in the July-August period.

In July-August, imports stood at $9.83 billion, slightly up compared to $9.73 billion in the corresponding period a year ago. Oil imports rose 30.1 percent to $2.64 billion in the first two months of the current fiscal year. The second biggest import bill was of machinery, which stood at $1.59 billion, down 19 percent year-on-year in the period under review. “In the long run, we can see that strengthening Brent corresponds with a weakening rupee, which predictably erodes a negative balance of trade as exports become competitive and imports become expensive,” Hyder said. “In the short run, we can see that a weakening Brent can relieve some of the pressures of our import bill.”

www.thenews.com.pk

Joann, the crafting and arts supplies chain, took the rare step last month of recruiting its millions of customers to help thwart President Trump’s tariffs on Chinese goods.
That didn’t work out so well.
The closely held retailer highlighted 30 categories of products with proposed tariffs — everything from cookie cutters to yarn and fabric — that it wanted to be spared. But only two were left off the finalized list released on Monday. The 10 percent duties will go into effect on Sept. 24 and will increase to 25 percent next year.
The company, which dropped Fabrics from its name earlier this year, tried to make the case that many small businesses shop at its stores for supplies to make locally produced goods, leading it to dub Trump’s tariffs a “made-in-America tax.” Chief Executive Officer Jill Soltau even testified before the administration on the duties.
“Our customers, many of whom are nonprofit organizations and small businesses that operate on tight budgets, could not tolerate the increased pricing resulting from the tariff costs,” Soltau said during a hearing on Aug. 23.
The retailer, with 870 locations across 49 states, generates 50 percent of its sales from fabric and sources from China because no U.S. manufacturer can meet its quality or volume needs, Soltau said during the hearing. A variety of fabrics, including knit and woven, will be receiving tariffs. One of the few reprieves for Joann was the removal of fleece fabric.
In a statement released Tuesday, the company thanked the administration for “removing some codes that would have negatively impacted American makers and small businesses.”
Nonetheless, “several codes still remain on the list, which will hurt American crafters, business owners and charities,” Joann said in an email. “We hope the administration will reconsider including these as negotiations go forward.”

www.washingtonpost.com

The arrival of cotton started picking up in the grain markets of Hisar, Bhiwani and Adampur on Monday, with the farmers getting comparatively better prices for their produce than the Centre’s minimum support price (MSP). The MSP for cotton is Rs 5,150 while the prevailing market price is about Rs 5,350 per quintal, with the millers procuring the produce. In Hisar, about 200 quintals of cotton arrived on Monday, which was mostly purchased by millers. A commission agent said farmers get Rs 5,300 to Rs 5,400 per quintal, depending upon the quality of the produce.
The Adampur market, which is a hub for cotton procurement, too saw significant arrival of produce and farmers fetched better than the MSP. Amit Kumar, a commission agent in Adampur, said though the quality was not up to the mark as there was moisture in it, the demand from millers was on the higher side, resulting in better prices.
Fatehabad grain market too saw the arrival of about 150 quintals. Market committee secretary Sanjeev Kumar said farmers had fetched approximately Rs 5,350 per quintal for the produce on Monday.
In Bhiwani, farmers brought about 50 quintals of cotton produce to the mandi. The commission agents, however, rued that produce was of bad quality and had moisture.
Prakash, a farmer, however, alleged that he did not get even Rs 5,000 per quintal for his crop.
Meanwhile, the Kisan Sabha has announced to start a dharna in Hisar and Bhiwani district, demanding special girdawari and compensation for the cotton farmers. Kisan Sabha president Sher Singh said the sudden wilt had affected the cotton crop in Bhiwani, resulting in about 50 per cent damage.
“There is about 70 per cent to 30 per cent damage to the crop in the region due to sudden wilt this season. The farmers are suffering huge losses. We will start dharnas at the offices of the sub divisional magistrates (SDMs) and deputy commissioner (DC) at the sub division and district level, respectively, from Tuesday,” he added.

www.tribuneindia.com

First kharif crop advance estimate shows fall in cotton, pulses, groundnut output
Coupled with delayed sowing and deficient rainfall, kharif production in Gujarat for the year 2018-19 is likely to be lower for most crops with reduced yields.
The first advance estimate released by the State agriculture department pointed to a sharp decline in key kharif crops such as groundnut, pulses and cotton with yields reduced over last year.
Cotton output for kharif 2018-19 is estimated at 88.28 lakh bales (each of 170 kg), which is about 14 per cent lower than the 102 lakh bales reported last year.
While farmers cry over lack of irrigation water amid scanty rain, the government sees weak monsoon as the spoil sport for the kharif crop. Sources in the government said that output has been impacted by delayed sowing and deficient rainfall during the sowing period. Government sources also confirmed about no significant impact of flooding due to excess rainfall in parts of Saurashtra earlier during the season.
As on September 17, 2018, the State received about 615 mm rainfall against the normal 831 mm, reflecting about 26 per cent deficiency.
Notably, the government had earlier suspended water supply for irrigation from the Narmada canal owing to reduced storage levels at the Sardar Sarovar Dam on the Narmada river.
This, according to farmer sources, was reflected by reduced sowing for pulses and oilseeds, while that for cotton and cereals increased as compared to last year.
However, even as cotton sowing increased to 27 lakh hectares for 2018-19 against 26.58 lakh hectares last year, the deficient rainfall is likely to dampen crop prospects with the reduced yield. Cotton yield is expected to be 554 kg in lint per hectare against 660 kg reported last year.
Big drop
The first advance estimate projects pulses output at 4,37,000 tonnes as against 5,23,000 tonnes last year.
Groundnut output is also likely to drop to 27 lakh tonnes, which is about 11 lakh tonnes or about 29 per cent lower than last year’s 38 lakh tonnes.
The State is still expecting one spell of rains to keep the crops in good health and save them from damage.
According to former State Agriculture Minister and cooperative leader Dilip Sanghani, unfavourable climatic conditions played spoilsport for farmers in the State.
“The monsoon wasn’t supportive this year. Due to this reason, there is a decline in sowing and subsequently in the production too. But consumers need not worry about a sharp rise in prices due to lower production because the Centre’s policies on buffer stock will cap the prices from rising,” he said.
“Water remains a major issue for farming. We have ensured drinking water security for the State but there may not be enough water for the winter crops,” said Sanghani, adding that in such a scenario, the government is encouraging agriculture-allied sectors such as animal husbandry to sustain farmers’ income.

www.thehindubusinessline.com

NEW DELHI: India will need to substantiate reasons for the measures it takes to restrict imports of certain products at the World Trade Organization (WTO), experts have said.
New Delhi has the option of invoking the clauses that relate to protecting national security, public morals or safeguarding human, animal and plant life or health, and conservation of exhaustible natural resourcesNSE 0.00 % to stop some imports. “We need to show the ground for our measures and national security can be one such ground for gold. But to substantiate textile or electronics imports harming public morals and health is hard to accomplish,” said an expert on trade issues.
As per WTO norms, the measures can’t be arbitrary, or mean unjustifiable discrimination between countries or constitute disguised restriction on international trade. The government plans to take steps to promote exporters and restrict non-essential imports in an attempt to curb the current account deficit and increase foreign exchange reserves in the face of depreciating rupee.
Though it will decide the products whose imports would be cut down after consultations with concerned ministries, finished electronics, certain textiles, automobiles and high end consumer products like watches could face the heat. After oil, gold and electronics are the highest imported items in the country. However, the norms give flexibility with respect to gold and silver imports.
These are stringent norms, difficult to comply except in case of gold imports,” said another expert. The US has already invoked the national security exception for raising tariffs on steel and aluminium imports from a host of countries this year. India’s gold imports were pegged at $33.7 billion in FY18 and have been one of the main reason for high gap between exports and imports. Imports of Chinese electrical machinery and equipment, sound recorders and television image and their parts rose 30% on year in 2017-18 to USD 28.6 billion, another cause of the country’s trade deficit.

economictimes.indiatimes.com

SHANGHAI: China’s main Shanghai Composite index fell to its lowest close in nearly four years on Monday as reports said U.S. President Donald Trump would unveil new tariffs on $200 billion of imported Chinese goods this week.
The Shanghai Composite index dropped 1.1 per cent to 2,651.79 points, its worst close since Nov. 27, 2014. The blue-chip CSI300 index also declined 1.1 per cent, to 3,204.92 points.
In Hong Kong, the Hang Seng index was down 1.3 per cent in late afternoon trade, and the China Enterprises index was off 1.2 per cent.
A senior official in the Trump administration told Reuters that Trump would announce the new tariffs as early as Monday. China has vowed to retaliate to any new U.S tariff action, and may decline to participate in further talks if new tariffs are announced.
On Monday, the widely read Global Times tabloid, published by the ruling Communist Party’s People’s Daily, said in an editorial that China would not only play defence in an escalating trade war.
Everbright Sun Hung Kai analysts, said in a note Monday, said China “would very unlikely be visiting the U.S. against this backdrop with both sides looking to preserve face and be seen to be in a strong position.”
The anticipated new tariffs, reported to be 10 per cent, may cover a wide range of items including internet technology products and other electronics, printed circuit boards and consumer goods including Chinese seafood, furniture and lighting products, tires, chemicals, plastics, bicycles and car seats for babies, according to a list of items announced in July.
Trump directed aides to proceed with the new tariffs despite Treasury Secretary Steven Mnuchin’s attempts to restart trade talks with China.
Fears of an escalating trade war pulled shares lower across the board. A CSI300 sub-index tracking the real estate sector ended 1.4 per cent lower, industrial firms fell 1.2 per cent and healthcare firms lost 2.4 per cent.
The drop in real estate shares came despite data showing China’s August home prices accelerated at the fastest pace in nearly two years.
The smaller Shenzhen index ended down 1.5 per cent on Monday and the ChiNext startup board finished 1.2 per cent lower.
China’s yuan also weakened on the prospect of a hotter trade war, despite the central bank setting the midpoint of the currency’s daily trading band firmer than expected. The yuan traded as low as 6.8756 per dollar before strengthening to 6.8699 per dollar as of 0725 GMT.
In Hong Kong, the sub-index of the Hang Seng index tracking energy shares dipped 0.6 per cent while the IT sector was 2.6 per cent lower.
Amid concerns that a protracted trade war could strengthen headwinds to Chinese economic growth, the People’s Bank of China (PBOC) on Monday injected 265 billion yuan into China’s banking system through its medium-term lending facility, in a move that surprised the market.
The injection “sends the message that the PBOC remains proactive in maintaining stable money market rates, especially as cash demand should increase over the next few weeks amid bond supply, a long holiday and quarter-end,” Nomura analysts said in a note .

economictimes.indiatimes.com

The recent high is likely to pose short-term resistance to the pair and consolidation within support at Rs 70.80-71.30 and resistance at Rs 72.50-72.90 zone could be expected for the next 1-2 week, says Navneet Damani of Motilal Oswal Financial Services.
The Indian currency continued to be volatile with the currency trading around 72.40 per US dollar mark. It had recovered during the day from its low points of 72.69 per US dollar.
The currency saw a lower opening at 72.52 per dollar, down 67 paise.
The government on Friday announced an array of steps, including removal of withholding tax on Masala bonds, relaxation for foreign portfolio investors and curbs on non-essential imports to contain the widening current account deficit (CAD), which has widened to 2.4 percent of GDP in April-June, and check the rupee’s fall against the dollar.
Navneet Damani of Motilal Oswal Financial Services said, “The recent high is likely to pose short-term resistance to the pair and consolidation within support at Rs 70.80-71.30 and resistance at Rs 72.50-72.90 zone could be expected for the next 1-2 weeks.”
“Meanwhile, lower support is at Rs 70.50 and medium-term bias (for next 1-2 months) remains bullish above the same with test of the ‘Cup & Handle’ target of 74.20 looking likely. Only sustained break of Rs 70.50 would point towards a bigger correction in which case the pair could decline towards major support at Rs 68.50,” he added further.
Rupee in the last couple of sessions rose against the US dollar on back of report that the PM is going to hold an economic review meeting during the weekend. In the economic review meeting the finance minister announced some steps to curb the volatility of the currency. The government plans to take measures to cut down “non-necessary” imports, ease overseas borrowing norms for the manufacturing sector and relax rules around banks raising masala bonds, or rupee-denominated overseas bonds, according to Motilal Oswal report.
Ajay Bodke, CEO PMS at Prabhudas Lilladher said, “The measures signal government’s intent to stem the panic that had gripped the currency market. However, impact of most of these measures would be felt not immediately but over the next few months. What the government needs to focus on is how to address the structural deficiencies that have plagued export competitiveness of various sectors and what has hampered indigenous development of sectors such as electronics and capital goods that has led to surge in their imports adversely impacting trade & current account deficit.”
“Lastly, rather than focusing primarily on how to fund the growing CAD policy makers need to think on how to contain it. Many countries with growing twin deficits are experiencing meltdown in their currencies, rising bond yields and swooning equity markets in these times of heightened risk aversion. Government must strictly adhere to fiscal prudence & its budgeted deficit target as well as resist the urge to embrace populism in an election year or else the typhoon of tumult is bound to batter the Indian shores again, he said further.

www.moneycontrol.com

The Gujarat High Court has struck down a provision of the goods and services tax (GST) Act which prohibited ‘first stage dealers from transitioning excise duty credit on goods procured more than a year before the rollout of the new indirect tax regime on July 1, 2017.
The Gujarat High Court has struck down a provision of the goods and services tax (GST) Act which prohibited ‘first stage dealers from transitioning excise duty credit on goods procured more than a year before the rollout of the new indirect tax regime on July 1, 2017. The court termed the sub-section concerned as unconstitutional as it violated the vested right of the petitioner.
Under the GST, businesses are allowed to claim credit of taxes paid on goods bought within 12 months of the appointed date for GST or after July 1, 2016. However, the court said under the Central Excise Act and the CENVAT credit rules, there was no such restriction on availing of credit for goods purchased prior to the one-year period.
A ‘first stage dealer’ refers to a dealer who purchases goods directly from either a manufacturer or an importer. While the judgment is limited to these dealers, it could be cited as precedent for other classes of businesses to seek credit of goods bought before July 1, 2016, experts said.
Rajat Mohan, partner at AMRG & Associates, said the ruling has come as a relief to many genuine ‘first stage dealers’, but it would be a cumbersome task for the government to verify if credit claimed for goods bought years ago had not become unusable or remained sold for commercial reasons.
As the GST Act restricts the input tax credit if underlying goods are not used for supply of output goods or services, the government might verify that the credit has not been claimed in respect of taxes paid on the dead, obsolete stock or which is otherwise not useable in output supply,” Shubham Mittal, DGM-GST of Taxmann, said.
The government had argued in the court that the provision to restrict the scope of availing of credit was to ensure that first stage dealers do not take any undue advantage of such benefit and also to accommodate administrative convenience. The order, however, said these reasons existed even in the earlier regime, and hence wasn’t a sufficient reason for the restriction in the GST.

www.financialexpress.com

In the cotton fields of Maharashtra, hybrid varieties are unable to withstand the onslaught of pests and diseases, prompting a shift in course towards India’s indigenous (desi) cotton varieties.
However, farmers want newer technologies or better alternatives but few are willing to test out desi cotton for fear of losing yields.
Illegal Bt cotton seeds are more popular than desi seeds. Even in the face of abundant evidence, there has been no action against the sale of illegal seeds.
Though there are NGOs promoting desi cotton, experts feel government backing is a must for a large-scale shift from Bt cotton to desi varieties.
In a region where Bt cotton rules the roost, Kamal Kishore Dhiran, a farmer in Balodi, 50 km from Yavatmal (in Vidarbha region of Maharashtra) is an outlier. He has been planting desi cotton seeds and withstood the pressure to grow transgenic or Bt cotton since it was introduced in 2002. He was once part of a successful organic cotton venture – the Vidarbha Organic Farmers Association (VOFA) which is now defunct, and which used to export organic cotton.
Dhiran still grows ‘straight’ (as opposed to hybrid) varieties of cotton; he sources it from the Punjabrao Deshmukh Krishi Vidyapeeth in Akola every few years. He is among the few farmers who saves the seed and only buys fresh ones every three years or so.
Dhiran has been a farmer since 1960, and owns 60 acres. He did try out hybrid cotton seeds and grew them with fertilisers and other chemicals – soon he found the yields were falling and he decided to grow desi (indigenous) cotton which was more suited to the area. Today he grows desi varieties like AK 7 and AK 8, and some American varieties, and gets 4 to 5 quintals (100 kg) per acre in dry land and about 8 quintals per acre in his irrigated land. He spends Rs 10,000 to Rs 12,000 per acre, which includes cow dung and other inputs. He deals with his pests using natural enemies and finds that his neighbours are spraying heavily for Bt cotton.
“Bt cotton is like Fair and Lovely [a popular fairness cream]. Does it really change your or make you fair? Similarly Bt cotton doesn’t address the main problem of pests. I have better techniques and fight pests using their natural enemies,” he said.
Dhiran stands alone in a market dominated by hybrid Bt cotton seeds, now numbering over 2,000. Few seed companies sell desi cotton seeds and they serve a niche market. A cursory look at the seeds market in Yavatmal shows the dealers only stock Bt cotton. A Mahabeej (Maharashtra state seeds corporation limited) dealer remarks no one wants alternative seeds. If they do, they have to place an order in advance; but often, there are no stocks available.
The last few years have seen a vicious attack by the pink bollworm which has developed resistance to Bollgard 2, the proprietary Bt cotton variety produced by Monsanto, reducing cotton yields and driving farmers to despair. This has prompted a belated shift in course away from hybrids, thanks to secondary pest attacks and pests like the pink bollworm that used to ‘minor’ morphing into a serious menace.
The alternatives to Bt cotton
Since 2002, field trials of 25 to 30 Bt cotton hybrids and straight varieties have been conducted under the All India Coordinated Research Project on Cotton. Since 2017, two straight Gossypium hirsutum varieties have been released for north Maharashtra. One of them was developed by the Punjab Agricultural University and is named PAU Bt 1; and the other developed by CICR is Bt 6. Farmers are growing them and a private seed company is commercially multiplying the Bt 6 seeds. In addition, the six straight varieties that have approved for release in Maharashtra are also G. hirsutum varieties — PKV 081, Rajat, Surat, and some others, but they are in the seed multiplication stage.
Vijay Waghmare, director, Central Institute for Cotton Research (CICR), Nagpur, said the trials were promising and the yields were as good as the early Bt cotton seeds — at 15-20 quintals per hectare in rainfed conditions and upto 24 quintals per hectare in irrigated conditions. It remains to be seen how these seeds perform in farmers’ fields over time.
Straight varieties can be reused by farmers but unless they gain wider acceptance, seed companies may not be interested in producing them on a large scale. However, hybrids continue to dominate the Indian market.
The prevalent menace of illegal Bollgard 3
After cotton fields were devastated by the American or green bollworm, Bt cotton was launched in 2002 but soon secondary pests including the mealy bug surfaced for the first time on cotton in India. The pink bollworm was already chewing up Bollgard 1, and the company Monsanto Mahyco came up with Bollgard 2. Even that has proved to be ineffective against the pink bollworm, as is evident in the last few years.
However, illegal herbicide tolerant (HT) Bt cotton is being sold and has found great popularity among farmers. Two years ago, Monsanto withdrew its application for approval of herbicide tolerant cotton from the Genetic Engineering Appraisal Committee over differences on its royalty being cut, but illegal herbicide tolerant cotton has found its way into farmers fields and seems to be extremely popular, with farmers naming it “Bollgard 3”. Agents come to villages and sell it cheaply to farmers who have been planting it all over the place. Maharashtra, Andhra Pradesh, Telangana, Gujarat and Tamil Nadu, among other states are growing this cotton but there is little regulation.
After many complaints of illegal cotton, in October 2017, the Prime Minister’s Office formed a Field Inspection and Scientific Evaluation Committee (FISEC) under the Department of Biotechnology in the Union Ministry of Science and Technology. Its report recommended action against such companies and destruction of illegal seeds. Maharashtra reportedly seized over 16,000 seed packets till April and confiscated unpacked seeds, apart from filing over 20 cases.
After analysing over 13,361 samples, the report found illegal herbicide tolerant cotton on 15 per cent of the area in Maharashtra, Telangana, Gujarat and Andhra Pradesh in 2017. The samples tested negative for all other herbicide tolerant genes except for that of Monsanto’s MON88913. This entire episode is reminiscent of 2001 when illegal Bt cotton was found in Gujarat fields even before it was approved by the government a year later.
While there were an estimated 35 lakh packets of illegal herbicide tolerant Bt cotton sold in 2017, despite the Committee’s recommendations, in 2018 too, Waghmare estimates that 12- 20 per cent of the cotton area is planted with this illegal cotton. At least 15 per cent of the area in Vidarbha is growing this illegal variety on which glyphosate is sprayed and the CICR has been warning farmers as glyphosate has long-term effects on the soil and the germination of the next crop.

india.mongabay.com

The power loom weaving sector has unanimously decided not to file the GST return with the central government still adamant on not allowing the refund of the accumulated input tax credit (ITC).
The decision has been taken by the Federation of Gujarat Weavers Association (FOGWA) at a meeting held on Monday.
According to the power loom industry leaders, weavers have till date not passed on the credit accumulation to the buyers and has treated as the part of its asset.
However, any attempt to deny to carry forward of the accumulated credit will amount to huge unbearable loss to the industry as the weavers will not be able to expand or modernise their units.
For example, a power loom weaver manufacturing man-made fabrics with turnover of Rs 5 crore for the period July 2017 -July 2018. The GST payable thereon is Rs 25 lakh (5%). Assuming that the net input tax credit (ITC) availed on inputs i.e., yarn during this period was Rs 30 lakh, the inverted duty structure comes to Rs 5 lakh. In other words, the manufacturer has accumulated Rs 5 lakh on inputs because of inverted duty structure during the same period.
If the ITC balance lying unutilized with the manufacturer is more than this amount, say Rs 10 lakh, the ITC equal to Rs 5 lakh will lapse. President of FOGWA, Ashok Jirawala told TOI, “There is no section under the GST law to block the ITC credit. The Central Government and the GST Council have blocked Rs 400 crore worth of accumulated ITC credit of the power loom sector from July 31,2017 to July 2018. If the textile processors are getting the ITC credit, the power loom weavers are also eligible for the same”.

timesofindia.indiatimes.com