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News Clips 5 July, 2013

[ Textile exporters struggle to fulfill orders ]
[ Govt ends moratorium on executions: Official ]
[ India: Textile exports on upswing ]
[ China textile mills lobby to boost cotton imports, cut local prices ]
[ US imports $40bn textiles & apparel in Jan-May’13 ]

Textile exporters struggle to fulfill orders   [ top ]

THE NEWS, Mansoor Ahmad, July 5, 2013
LAHORE: Textile exporters face problems in fulfilling their orders due to the lack of power supply. The exporters said that a few months ago the textile sector received huge orders from China and other Far Eastern countries. “Now all the value-added sectors, particularly apparel sector received heavy orders,” said Adil Butt, chairman of the Pakistan Hosiery Manufacturers Association (PHMA).

The knitwear exports in May increased by 25.5 percent in quantity over the exports made during the corresponding period last fiscal year, he said, adding that this is perhaps the largest monthly increase ever achieved in this sector.

Unfortunately, the knitwear units despite having much higher capacities and more orders in hand cannot execute these due to the energy-related problems, he said.

The knitwear production could be managed even by arranging energy through expensive alternative sources, he said. “The bottleneck occurs in the value chain,” Butt said, adding that the production of yarn, fabric and processing of fabric has suffered heavily due to power shortages. The basic textiles are the major raw material for the apparel sector and due to short supplies they are constrained to limit their exports, he said.

Pervaiz Hanif, former chairman of the Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea), said that exports of readymade garments increased by 21 percent in May. The figures for June will also show similar growth, he said, adding that the global garment buyers have started showing interest in Pakistani products.

However, he lamented that unavailability of processed cloth due to power and energy deficit has limited the growth of garments.

He expressed the hope that the new government will live up to its promise of supplying uninterrupted power to the exporting industries.

S M Tanveer, a leading high value-added yarn exporter, said that unfortunately the spinning industry in Pakistan is operating at less than 60 percent of its installed capacity.

He said the spinners are in a position to export the entire unused capacities provided power to the spinning industry is guaranteed.

Most of the yarn produced in the country has very low value addition, he said. “It is not commercially possible for the spinners to produce power from expensive alternative sources,” he said, adding that he runs his mills 24/7 even on high cost electricity because the yarn he exports has valuation equivalent to the apparel sector.

Tanveer said since China is opting out of basic textiles, Pakistan can export all its yarn even if its spinning capacities are doubled. The spinners are rearing to add capacities and only the power scenario is holding them back.

Govt ends moratorium on executions: Official   [ top ]

ISLAMABAD: The new government has ended a moratorium on executions, an official said Thursday as Amnesty International raised concerns about a “shocking and retrograde step”.

Under the previous government led by the Pakistan People’s Party (PPP), no one except a soldier convicted by court martial was put to death since 2008.

But the PPP suffered a crushing defeat in historic elections on May 11, which swept to power the Pakistan Muslim League-N (PML-N) under Prime Minister Nawaz Sharif.

A presidential order imposing a moratorium on the death penalty, issued in 2008, expired on 30 June.

In Pakistan, all executions must be approved by the president. The PPP’s Asif Ali Zardari is due to step down in August and the parliament controlled by the PML-N will elect a new head of state.

“The new government has decided to deal with all cases of execution on merit,” said interior ministry spokesman Umer Hameed. “The government has given clear instructions to see all such cases on a case-by-case basis and there will be no general amnesty for the convicts waiting for execution,” he told AFP.

London-based rights group Amnesty International on Wednesday called for an immediate moratorium on the use of the death penalty. “Any government green light to resume executions in Pakistan would be a shocking and retrograde step, putting thousands of people’s lives at risk,” said Polly Truscott, Amnesty’s deputy Asia Pacific director.

Amnesty estimates that Pakistan has more than 8,000 prisoners on death row, most of whom have exhausted the appeals process and could now be facing execution.

“The sheer number of people at risk makes the new government policy of turning back to the death penalty even more horrendous,” said Truscott.

The interior ministry spokesman said up to 450 convicts are awaiting execution and their cases will be examined.

The government will show sympathy towards convicts who fall into a “special category” such as women and the elderly, he said. Country’s crowded prisons lack basic facilities for inmates and the country normally deals harshly with prisoners.

It also suffers daily militant attacks blamed on extremists linked to the Taliban and al Qaeda, as well as chronic crime in its largest cities.

“Resuming executions would do nothing to tackle crime or militancy, but instead just perpetuate a cycle of violence,” said Amnesty’s Truscott.

India: Textile exports on upswing   [ top ]

BUSINESS STANDARD, Sharleen D'souza, July 4, 2013
Fall in the value of the rupee against the dollar has again brought the Indian textile sector back on the global map. Going by initial inquiries and orders, the industry hopes exports will be higher by 15-20 per cent in 2013-14. Textile export orders in the last few months have started to pick up due to the overall better sentiment in the US and the Euro zone, as well as the depreciation in the rupee.

India's textile exports were $32 billion in 2012-13 out of which apparel exports were $15 billion. This year, apparel exports are expected to be around $17 billion, while total textile exports are estimated to be $37-$40 billion.

"The rupee has been one of the worst performing currencies, while the Chinese yuan has appreciated against the dollar, which has made Indian textiles more competitive, causing more inquiries to flow in," said Sunil Khandelwal, chief financial officer, Alok Industries.

Arvind, which is a major textile player, as well as exporter, depends mainly on the customer relation they have built over a period of time and have their order books full for the next one year.

"We will receive an advantage due to the falling rupee, but we are running to our full capacity as our customers give a guidance at the beginning of the year. On the other hand, labour cost, gas, etc.. have gone up, which, to an extent, nullify the rupee depreciation to a certain extent," said Sanjay Lalbhai, managing director of Arvind.

Importers are now looking at India for exports, especially after the rupee fall. The rupee has witnessed a six per cent fall against the dollar in the last one month, while the Chinese currency, yuan has remained stable.

"Last year, exports fell due to the poor global economic sentiment. This year, however, textile exports have started picking up. After witnessing a lull last financial year, apparel exports have also improved," K S Rao, Union textile minister, said. Rao has targeted $50 billion textile exports till FY15.

He was banking upon the steps taken by the government to boost textile exports, include extending a two percent interest subsidy scheme on handicrafts, handlooms, carpets and garments up to March 2014, additional duty credit of two percent of freight on board value on export of certain knitwear apparel for 2013-14.

Textile exporters will be able to take advantage of the current fall in the rupee for the orders which were placed earlier, but the advantage as exporters usually hedge around 50 to 60 per cent of their foreign exchange.

Orders from the US and the Euro zone have also improved in the last few months due to which orders have increased to India, which is also beneficial for the sector.

Last financial year, textile exports were lower by 4.8 per cent to $32 billion due to weak demand coming in from major countries. Many textile players are now also changing their focus to other non-traditional countries like Japan, Latin America and Australia to increase exports.

China textile mills lobby to boost cotton imports, cut local prices   [ top ]

DAILY TIMES, July 5, 2013
BEIJING: Chinese textile mills are lobbying for permission to import more cotton as they struggle to find high-grade fibre locally, a move that would boost prices from key exporters such as the United States and Australia if the government grants its approval.

But traders in the world’s largest cotton importer are sceptical Beijing will agree to larger import quotas while its reserves remain swollen with domestically grown cotton bought under an aggressive stockpiling programme.

China strictly controls cotton imports to support local growers, making it difficult for some textile firms to source the high-quality cotton they need to make fabric for global clothing brands, with limited amounts of the grade grown locally.

Larger quotas would bolster prices for international cotton, with December cotton contracts on ICE dropping 4 percent last quarter, the weakest quarterly performance in a year on concerns over slowing economic growth in China.

The mills also want the government to reduce the price of sales from state reserves to around 18,000 yuan ($2,900) per tonne from recent prices of as much as 20,100 yuan. Prices are typically 40 percent higher than international levels, forcing many textile mills into heavy losses.

“This is a really serious problem and has lasted too long,” said Yang Shibin, assistant president of the China National Textile and Apparel Council, referring to restrictions on imports and higher domestic prices.

“We want everyone to use more cotton and more domestic cotton. This way would stimulate cotton use,” he told Reuters in an interview. China’s cotton stockpiling programme is closely monitored by international markets, with the country currently holding about half the world’s stocks in its reserves.

Earlier this year, Beijing promised to grant mills new import quotas allowing them to purchase 1 tonne of overseas cotton for every 3 tonnes bought from state reserves.

But millers want the ratio changed to 2-to-1 due to robust competition from Asian mills, the poor quality of cotton in state stockpiles and a lack of supply of certain grades. Yang said the cotton in China’s reserves is inconsistent in quality and contains stray manmade fibres, as well as duck and chicken feathers.

The association in mid-June submitted its recommendations to China’s economic planning body, the National Development and Reform Commission, he added. But traders were doubtful the government would boost quotas.

“They have so much in stock, why would they allow more imports?” said Ma Jun, a trader at Founder Commodities.

Another trader said it was unclear when any increased quotas could be used, with the next US crop not ready until late October at the earliest and much of the Australian crop already committed.

Beijing had said it would end sales from its reserves in late July, but traders believe it is likely to continue selling into August and September as it needs to get rid of old inventory ahead of the upcoming harvest in October.

Of the 9.55 million tonnes of cotton up for sale since January this year, only 28 percent, or 2.65 million tonnes, was sold by 3 July, with mills put off by high prices and poor quality. Reuters

US imports $40bn textiles & apparel in Jan-May’13   [ top ]

FIBRE2FASHION, July 4, 2013
The US has imported $ 40.011 billion worth of textiles and apparel during the first five months of the current year, according to the data released by the Office of Textiles and Apparel (OTEXA), Department of Commerce.

China maintained its position as top supplier of textiles and apparel to the US by accounting for $ 14.45 billion worth of products imported by the US during the five-month period.

Among the top 5 suppliers of textiles and garments to the US from January to May 2013, Vietnam’s exports to the US grew the highest by 13.19 percent year-on-year to $ 3.338 billion.

India, Indonesia and Bangladesh were other major suppliers of textiles and clothing to the US during the period under review with exports valued at $ 2.735 billion, $ 2.33 billion and $ 2.196 billion, respectively.

Among the textiles and garment supplying countries, Norway was the most noticeable as its exports to the US skyrocketed by 624 percent to $ 13.145 million in January-May 2013 from mere $ 1.814 million registered during the year ago period.

Category-wise, US imported apparel worth $ 30.114 billion during the period under review, while the non-apparel segment imports were valued at $ 9.896 billion, according to the data.

On the basis of composition of textiles and apparel, the imports of cotton products by the US were worth $ 20.485 billion, followed by man-made fibre (MMF) items which accounted for $ 17.37 billion, and wool products made up for $ 1.221 billion.

In 2012, US imported $ 76.811 billion worth of apparel, and $ 24.12 billion worth of non-apparel textile items.