With the Goods and Services Tax (GST) Council not able to land at an agreement on Friday on the Textile segment, the rate declaration has been conceded to June 3. The postponement is naturally because of complexities inside the whole value chain, and expectation for a fiber unbiased tax collection system over the chain.
| Prices of Raw Cotton for the week ending 10/05/2014 | ||||
| Variety | Price (Rs. Per Kg.) during | |||
| Current | Last | Last | Last | |
| Week | Week | Month | Year | |
| 10/05/2014 | 03/05/2014 | 26/04/2014 | 25/05/2013 | |
| MEDIUM (20.5 - 24.5) | ||||
| J-34 (Bikaneri Narma) | 128.46 | 126.45 | 125.78 | 108.12 |
| V-797 | 73.60 | 72.47 | 71.35 | 75.37 |
| JAYADHAR | 88.76 | 87.08 | 87.08 | 85.78 |
| Average | 96.94 | 95.33 | 94.74 | 89.76 |
| LONG (27.5 TO 32 mm) | ||||
| H-4/MECH.1 | 118.54 | 116.57 | 115.73 | 104.06 |
| Shankar-6/shankar-4 | 122.47 | 121.63 | 120.79 | 106.87 |
| Average | 120.51 | 119.10 | 118.26 | 105.47 |
| EXTRA LONG (32.5 & ABOVE) | ||||
| MCU-5 | 123.03 | 121.35 | 120.79 | 108.56 |
| DCH - 32 (SI) | 176.97 | 175.56 | 174.72 | 138.37 |
| Average | 150.00 | 148.46 | 147.76 | 123.47 |
| Wt. Avg Price of Raw Cotton | 113.52 | 112.00 | 111.29 | 100.58 |
| Source : Tecoya Trend, Bombay. | ||||
Eco Textiles has published a news Article on Indian Textiles as below stating that Indian textiles are not adhering to Environmental law .
Textiles minister Naseem Khan claimed the Maharashtra government's new textile policy had helped in attracting investments to the tune of Rs 2400 crore in this sector.
The state and Centre had approved 263 textile projects which will provide employment to nearly 18,000 people in the state, he said. Khan said the government now plans to hold road shows in Gujarat to attract the state's textile magnets to set up plants in Maharashtra.
Gujarat has a highly flourishing textile industry. Though Maharashtra is the largest cotton producer in the country, an absence of an effective textile policy meant that over 80% of the cotton is exported to neighbouring states for processing. <<this is a Times of India article, click to view it>>
Expressing concern over volatility in yarn prices, the Apparel Export Promotion Council (AEPC) has sought early Government intervention to overcome the situation.
In a letter to Commerce and Industry, Textile Minister Anand Sharma, the AEPC said cotton yarn prices should be carefully monitored, as small manufacturers and handloom weavers were considerably impacted due to the steep price hike.
AEPC Chairman A. Sakthivel said, “Unfortunately in the last few months, we have experienced volatility in the price of cotton yarn. While cotton has gone up by about 3-5 per cent in the last two months, yarn prices have increased over 15 per cent in the same period. Also, Indian cotton yarn prices are higher than in other countries such as Pakistan”.
He said at the recently concluded Cotton Yarn Advisory Board meet on August 23, a rather grim scenario had emerged as the total production estimate of cotton yarn stood at 3.5 billion kg. While exports of cotton yarn were projected at 920 million kg, based on current estimates it may exceed one billion kg.
AEPC said that to tide over the situation, the Government needed to put a cap on exports of cotton yarn or free imports of cotton yarn.
“At this stage, we are not advocating any cap on exports, but at the same time, we request that the custom duty of 10 per cent on cotton yarn be completely removed and yarn imports made duty-free. Also, drawback may be allowed on export of garments manufactured from such imported cotton yarn,” he added
The Cotton Advisory Board has estimated that Indian textile mills may import 12 lakh bales of natural fibre in the current season (October-September).
“The Cotton Advisory Board (CAB) has estimated cotton imports in 2011-12 season (ending September 30, 2012) at 12 lakh bales, including short staple cotton,” Textile Minister Anand Sharma said in a written reply in the Lok Sabha.
In July 2012, prices of Indian cotton crossed world cotton prices, making imports of other varieties of the natural fibre more economical, he said.
Other reasons for India’s rising natural fibre imports include availability of international credit finance at lower interest rates, savings in the carrying cost for textiles mills, higher yarn realisation and better quality cotton, the minister added.
Till date in the current season, 4.8 lakh bales of natural fibre have been imported, Sharma said. In the 2010-11 year, the natural fibre imports stood at 5 lakh bales.
Asked if there is acute shortage of cotton in the country, Sharma said: “There is no acute shortage of cotton in the country. As per the estimates of the CAB closing stock is expected to be at 28.46 lakh bales (for 2011-12) which account for more than 30 days of inventory for textiles mills.”
Also, he said, the government does not envisage any import curbs on cotton. Textiles mills are free to import cotton depending on commercial viability.
The CAB has pegged India’s cotton production at 353 lakh bales this season against 339 lakh bales last year and its exports at around 127 lakh bales this year as compared to over 76 lakh bales in 2010-11.
Agriculture Minister Sharad Pawar has written to Prime Minister Manmohan Singh saying that the restriction on cotton exports would have an adverse impact on farmers. Targeting the ministries of food and textiles, Pawar wrote to the prime minister Tuesday saying that the policies of the two departments were going against the interests of the farmer. The letter came a day after a group of ministers Monday restricted cotton export to 13 million bales for the current year. “Cotton farmers should not be asked to bear the burden of subsidising textile mills,” Pawar said in his letter, indicating that the decision would benefit textile companies. Gujarat Chief Minister Narendra Modi has also opposed the restriction on cotton exports. Experts said farmers are suffering due to high input cost and low return from the cotton produce. Pawar also expressed his concern on sugar exports and said: “The negativity prevalent in the department can be gauged from the fact that though the decision to allow sugar exports of 10 lakh tonnes was taken on 26 March no orders have been issued till date.” Sources said Pawar’s move was aimed at building pressure on the government.
read the full article at : http://www.livemint.com
Cotton prices have been punctured by recent forecasts of a close to 10% increase in production in the country in the 2011-12 season, coming at a time when global demand for yarn and readymade garments has been lacklustre. The price of cotton (Sankar-6 grade) has fallen from an all-time high of Rs. 59,700 per candy of cotton by 43%. On the brighter side, will the resulting fall in input costs lift the profit margins of yarn spinning mills, which hit an abyss in the past two quarters?
Crisil Research, in its optimistic report last week, says that yarn mills’ operating margin could improve by 200-300 basis points (bps) in fiscal 2013, from a low of about 8% estimated in the current year. One basis point is one-hundredth of a percentage point.
Traders believe that cotton prices have bottomed out—they are down to August 2009 levels, from where they had begun spiralling month-after-month until March this year.
However, the key determinant for yarn offtake will be demand growth for readymade garments, which ultimately depends on the economic well-being of developed markets—Europe and the US. The outlook in these markets is expected to be dull for the next two quarters at least.
Only the depreciating rupee could boost export revenue, since volumes are likely to remain subdued.
But what may bring marginal relief to the yarn mills is improved demand on the home turf. This fact, and low cotton prices, could ease pressure on their profitability. The situation was slightly different in the first half of the current year. In spite of a 15-20% year-on-year growth in revenue, yarn mills’ profits tanked.
According to D.K. Nair, secretary general of the Confederation of Indian Textile Industry, of the 226 listed cotton textile firms, 187 reported poor performance with 126 posting net losses, while only a handful of integrated firms clocked decent profit growth during the September quarter.
Most spinners had stocked high-cost inventory anticipating sustained demand growth, which led to high interest cost dragging most firms into the red. For example, during the quarter, large companies such as Vardhman Textiles Ltd and KPR Mills Ltd clocked only one-third the profit of the year-ago period. Further, the southern yarn mills are plagued with a 20% power cut, which, in turn, is affecting utilization levels and operating profits. Present valuations of the yarn mills mirror the negative industry sentiments with the share prices of firms down to less than half the year-ago levels.
The good news is that most mills have cleaned both inventories and losses. The Crisil report adds, “The stock-to-use ratio, which drives the sentiments regarding cotton prices, is estimated to return to the normal level of about 2.5 months in cotton season 2011-12 from a low of 1.2 months in the previous cotton season.”
That said, the December quarter may only be a tad better as high interest costs and power paucity in some regions continue to plague firms.
A pullback in domestic demand, along with lower cotton prices, will help mills turn out better profitability. The question is, when? Ideal conditions would be when demand from the developed world improves, and the rupee remains at these elevated levels. Both, together, may be too much to ask for, but some improvement in global demand itself can provide a boost to the performance of textile companies.
There is an unofficial information that almost all or most of dyeing units which are closed now could be back in action after pongal festival (which is mid January). There has been efforts from the tamilnadu government and Tirupur industrial association to re open the dyeing units. In case if most of the dyeing units are reopened tirupur will soon get back again with a progressive growth story in knit garments.
Bangladesh got duty-free access of 46 textile items to Indian market, ushering in a new horizon in Dhaka-Delhi trade.
"India finalised duty-free 46 textile items' access to its market. Bangladesh will benefit enormously as it will help narrow down trade gap between the two countries," Commerce Minister Lt Col (retd) Faruk Khan told BSS.
The decision came from an official meeting between Bangladesh Cabinet members and four chief ministers of Indian states at Sonargaon Hotel Tuesday.
Currently, 480 items are on India's negative list. Last year, Dhaka demanded the removal of 61 products, mostly textile items (46), from the list.
According to Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), India has 3.0 billion US dollars apparel market size in which Bangladesh can easily capture a large portion because of its cheap labour cost benefit.
Indian trade with Bangladesh will also be increased as Bangladesh imports huge amount of raw materials from India for value-addition, according to the country's apex trade body.
India is Bangladesh's single largest trading partner. Bangladesh's imports from India in 2009-10 were 3213.70 million US dollars against its exports of just $304.63m.
India's cotton exports are likely to remain unrestricted for the 2011-12 season starting next month, but the government is yet to take a final decision on the matter. Exports of cotton are likely to remain under Open General Licence (OGL) for the next cotton season on account of better production estimates and sluggish world demand. However, a final call is yet to be taken.The cotton season runs from October to September. Early last month, the government removed restrictions on the export of the natural fibre and permitted shipments under OGL till this month-end. For the current season, the government had initially allowed exports of 5.5 million bales of cotton. Later, another 1 million bales were permitted.
According to the Cotton Advisory Board (CAB), the cotton export is estimated to rise to seven million bales in the 2011-12 season. The production is estimated to increase to 35.5 million bales next season as against 32.5 million bales in the current season. The annual domestic consumption has also been pegged higher at 26.4 million bales for the 2011-12 season as against 23.6 million bales.
Cotton price rise is in accordance with market fundamentals and international volatility in cotton prices. The price situation for 2010-11 cotton season is at Annexure-I. Cotton price have moderated from April 2011 and currently stand at Rs. 36500/- per candy. Cotton prices had been ruling above MSP level from the beginning of the cottons season 2010-11. The opening cotton prices in medium staple and long staple group had been higher by around 60% and 28% respectively over MSP. In the wake of high cotton prices in cotton season 2010-11, the cotton farmers received better and attractive prices for their produce as against MSPs and preferred to sell their produce at prices higher than MSPs. As price moderation has already taken place, no further policy interventions are necessary.
Annexure A
Fortnightly Movement of Cotlook A Index vis-a-vis S-6 : 2010-11 Cotton season
| date | Price of S-6 cotton |
| 01/10/2010 | 37700 |
| 15/10/2010 | 41000 |
| 29/10/2010 | 43000 |
| 15/11/2010 | 42500 |
| 30/11/2010 | 42000 |
| 15/12/2010 | 39800 |
| 31/12/2010 | 43000 |
| 14/01/2011 | 43900 |
| 31/01/2011 | 48800 |
| 15/02/2011 | 58500 |
| 28/02/2011 | 58000 |
| 08/03/2011 | 58500 |
| 15/03/2011 | 59000 |
| 31/03/2011 | 61500 |
| 15/04/2011 | 57800 |
| 03/05/2011 | 49000 |
| 16/05/2011 | 45000 |
| 31/05/201 | 46000 |
| 15/06/2011 | 43000 |
| 30/06/2011 | 38000 |
| 15/07/2011 | 33500 |
| 29/07/2011 | 30800 |
| 16/08/2011 | 35500 |
| 30/08/2011 | 36500 |
(1 candy=355.62 kgs)
. To meet the training needs of the Textiles industry Government has launched the Integrated Skill Development program (ISDS) with an allocation of Rs. 229 crores in the 11th Five Year Plan. For meeting the demands of the industry for technology upgradation 11th Five Year Plan allocations under TUFS have been enhanced from Rs. 8000 crore to Rs. 15401 crore. The production of textile items for the year 2009-10, 2010-11 and 2011-12 (Apr. June) and exports of textiles items during 2008-09, 2009-10 and 2010-11 (April-October) are at annexure.
, the rupee adjustment against the Dollar has been orderly and in accordance with market fundamentals and no representation was received from industry by Government that exports have slowed down due to exchange rate fluctuations;
To address Textile industry slowdown government has placed cotton and cotton yarn exports on OGL without any quantity caps, and restored DEPB benefits on cotton and cotton yarn. In addition Government has introduced several export promotion measures in the Union Budget 2011-12 as well as through schemes of Foreign Trade Policy 2009-14, including incentives under Focus Market Scheme and Focus Product Scheme; broad basing the coverage of Market Linked Focus Product Scheme for textile products and extension of Market Linked Focus Product Scheme etc.
As per the latest available data released by WTO Secretariat for the calendar year 2009, the share and rank of India in textiles and clothing exports globally were 4.32% (Rank: 6) and 3.62% (Rank: 5) respectively. The Government is pursuing several schemes viz. Technology Upgradation Fund Scheme, Integrated Skill development Scheme, Scheme for Integrated textile Parks, Development of Mega Clusters, FDI Promotion Scheme, Common Compliance Code Scheme, participation in international fairs & exhibitions under the Marketing Development Assistance and Market Access Initiatives Schemes to increase India’s share in the global exports of textiles & clothing.
Annexure
Table 1 indicating production of Textiles items:-
| Items | Unit | 2009-10 | 2010-11 (Prov.) | (April- June) | |
| (Prov.) | |||||
| 2011-12 | 2010-11 | ||||
| Raw Cotton (cotton year) | Mn. Kg. | 5015 | 5525* | -- | -- |
| Man made fibre | Mn. Kg. | 1268 | 1281 | 308 | 309 |
| spurn yarn | Mn. Kg. | 4193 | 4649 | 1066 | 1129 |
| Man made filament yarn | Mn. Kg. | 1522 | 1550 | 346 | 385 |
| Fabrics (including Khadi, wool & silk) | Mn. Sq. mtr | 60333 | 61811 | 13540 | 14943 |
Table 2 indicating Exports of major textiles items:-
(Value in Rs. Mn.)
(Qty. in Mn. Kg.)
| | | | | | April – Oct. | |||
| ITEMS | 2008-2009 | 2009-2010 | 2009-2010 | 2010-2011 | ||||
| Qty. | Value | Qty. | Value | Qty. | Value | Qty. | Value | |
| FIBRE | 836 | 44176 | 1868 | 117664 | 571 | 29091 | 570 | 33042 |
| YARN | 1031 | 114378 | 1105 | 128069 | 547 | 62417 | 843 | 110802 |
| FABRICS | NA | 154964 | NA | 176020 | NA | 104212 | NA | 102411 |
| RMG | NA | 503897 | NA | 508321 | NA | 283959 | NA | 267372 |
| MADEUPS | NA | 108223 | NA | 116628 | NA | 64441 | NA | 78475 |
| OTHER TEXTILE | NA | 60884 | NA | 63875 | NA | 33356 | NA | 42803 |
| Grand Total | 1867 | 986522 | 2974 | 1110577 | 1119 | 577477 | 1413 | 634906 |
Source: Monthly Statistics of the Foreign Trade of India. DGCIS, Kolkata.
This information was given by Smt. Panabaaka Lakshmi, Minister of State for Textiles, in a written reply in the Lok Sabha today.
