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US
Quota Fill Rates and Estimated Embargo Dates
US Customs yesterday cleared less imports from China than
by the end of last week. Rather than in the current week,
first US embargoes could be placed after next weekend as
a result, unless a rebound in imports is reported in the
coming days. 
|
Cotton
yarn prices begin softening in India
Cotton yarn prices have probably begun leveling out in India,
after rising for 2-3 months. Prices started showing a softening
trend as export oriented units are shifting to the domestic
market. Fine count prices are not declining, however, since
in short supply, our India Correspondent reports.
|
Battle
under way for US T-Shirt Market
With quotas now eliminated, the battle for US T-Shirt market
is in full swing. Imports surged from China in the first
third of the year, but also from other countries in Asia
and Latin America. With US embargoes being placed on Chinese
T-shirts, main competitors should enjoy an acceleration
in sales to the US market.
|
Indian
textiles are excluded from EU's GSP, Sri Lanka and Bangladesh
to profit
India's textile exports to the European Union will be excluded
from EU's new GSP scheme, due to be effective from 1 January
2006. India's apparel exports will still enjoy tariff reductions
by contrast. Bangladesh continues negotiating a change in
rules of origin under the so-called EBA provision that grants
duty-free entry while Sri Lanka will get duty-free access
from 1 July. |
EU
will implement new GSP package from 1 January 2006
The European Union yesterday announced that its new Generalized
System of Preferences (GSP) will be effective from 1 January
2006. India will continue benefiting from GSP treatment
and associated tariff reductions. Sri Lanka could enjoy
a duty-free access from 1 July, thanks to an anticipated
treatment under the new "GSP-plus" provision.
Following EU's delay in implementing the new GSP, China
gets a relief until the end of the year before losing preferential
treatment. |
Sanctions
may be imposed by US on China due to Yuan-dollar peg
Washington has been stepping up pressure on Beijing over
the long running dollar peg. For the White House and some
sectors of U.S. business, this gives unfair advantage to
Chinese exporters and costs jobs in the U.S. Beijing resists
pressure to immediately revaluate the Yuan even though Washington
may be prepared to impose tariffs on Chinese imports.
|
US
Imports of cotton trousers in categories 347/348: May 2005
The first five months of the year witnessed an overall increase
of more than 17% in Cotton Trousers imports to the US. China
has seen an acceleration in its imports in Cotton Trousers
notably picking up pace towards the end of May and the beginning
of June. Mexico remains the second largest exporter although
its share of imports declined. Bangladesh, Indonesia and
Cambodia all performed well.
|
EU
textile firms urge action to be taken on Indian imports
Further to the recent successful outcome of negotiations
between the EU and China to limit textile and apparel exports,
some EU textile firms are now worried by Indian exports.
India disputes EU concerns stating it is not a threat, but
certain EU member states are still pushing for excluding
India from GSP benefits. |
Latest
Regulations regarding Textile Trade
- European Union: Implementation of the Textiles Memorandum
of Understanding with China (MoU). Commission Regulations
related to textile trade: modifications regarding Vietnam,
Serbia, Montenegro, Kosovo.
- Hong Kong Trade and Industry Department: The Mainland
of China / Interim Administrative Measures on Textile Exports
(in Chinese) / Exemption of Hong Kong Textile and Clothing
Products under Outward Processing Arrangements (OPA) from
Automatic Export Licensing Administration (in Chinese).
- Hong Kong Trade and Industry Department: EU/Mainland Memorandum
of Understanding on export of certain Chinese textiles and
clothing products to the EU.
- European Union: Memorandum of Understanding (MOU) between
the European Commission and the Ministry of Commerce of
the People’s Republic of China on the export of certain
Chinese textile and clothing products to the European Union.
- US International Trade Administration: Notice of solicitation
of applications for allocation of a tariff rate quota on
the import of certain worsted wool fabrics.
- Hong Kong Trade and Industry Department: China notice
concerning the exemption of export duty for Hong Kong and
Macao textile products under outward processing arrangements.
- US CITA: Short supply requests and denial of commercial
availability request.
- US ITA: Anti-dumping duties on Polyester Staple Fibers
from Korea/Preliminary results of review and partial rescission
of review.
- US Customs: Short Supply Designation Under the Caribbean
Basin Trade Partnership Act (CBTPA): certain colored, open-end
spun yarns.
- China Ministry of Commerce: Circular on further adjusting
export tariffs on textiles as from June 1, 2005.
- Hong Kong Trade and Industry Department: Outward processing
arrangement (OPA)- Exemption from Mainland export duty for
Hong Kong textiles products.
- US CITA: Request for bilateral textile consultations with
China and the establishment of import limits for certain
cotton and man-made fiber textiles and textile products
in categories 301, 340/640, 638/639, and 647/648.
- US Customs: Implementation of China Safeguards in categories
301, 340/640, 638/639 and 647/648.
- USITC: Greige Polyester/Cotton Print cloth From China.
- European Union: Notice of the impending expiry of certain
anti-dumping measures (Polyester staple fibres from India. |
US
Imports of cotton knit shirts in categories 338/339: May
2005
US imports of cotton knit shirts were affected by the boom
in shipments from China in the first five months of the
year with a clear acceleration at the end of May and the
start of June, in addition. Imports from Mexico sharply
declined while India and Pakistan could take advantage of
an imminent US embargo on knit shirts from China.
|
US
Quota Impact: Combed Cotton Yarns in category 301
Washington reimposed a very surprising quota on combed cotton
yarn imports from China. Shipments of Chinese yarns did
not more surge than imports from other origins in the first
quarter this year, especially when compared with Pakistani
and Indian yarns. Prices of Chinese yarns were not dramatically
lowered when compared with other products, in addition. |
SBP
ask to submit textile export data in order to decide refinance
rate issue
The State Bank of Pakistan (SBP) has asked leading value-added
textile exporters to submit export data in order to decide
refinance rate issue on a long-term basis. The data was
sought by the SBP and government officials in a recent meeting
with the representatives of value-added textile sector,
revealed Adil Butt, Chairman Pakistan Hosiery Manufacturers
Association (PHMA), to reporters here on June 23. He said
that the exporters had been asked to submit the details
of consignments dispatched during such period when they
availed of export refinance facility. He said that the government
had taken back the whole six per cent subsidy, extended
to the value-added textile sector for research and development,
by enhancing the export refinance rate. "We demand
that the government cap the export refinance rate for three
to five years so that the industry can take decisions on
long-term basis," he said and added that the attitude
of government officials as well as SBP was positive as they
had promised to consider the request. |
APTMA
ask for reduction of import duty on raw materials
All Pakistan Textile Mills Association (Aptma) has sent
a list of 200 raw materials to the Central Board of Revenue
(CBR) for reduction of import duty on them. An official
in the CBR told reporters on June 22 that in the budget
proposals for 2005-06, the association had submitted a list
of 43 items mostly raw materials for zero rating of customs
duty, which was dropped because most of these raw materials
were manufactured locally.
The official said that this list had now been enhanced to
over 200 items, which was again sent to the Engineering
Development Board (EDB) and Ministry Of Industries for seeking
their opinion on it. The government in the budget 2005-06
had zero rated the whole chain of textile from sales tax
and customs duty with a purpose that export of textile products
would register growth in the years ahead. Duty on those
items were not reduced which were manufactured locally to
provide them protection, added the official. |
Textile
trade with China increased by 24 pct. in five months
Leader of the eight-member Chinese trade delegation and
Chairman, China Chamber of Commerce for Imports and Exports
of Textiles (CCCT), Wang Shenyang, said on June 21 that
Pakistan and China should cooperate with each other for
the development of textile trade. Out of total trade volume
of around $1.11 billion, textiles alone stood at $770 million,
of which $450 million of textiles and apparel were exported
from Pakistan and $320 million worth of textiles were imported
by Pakistan from China in 2004, thus showing a 12 per cent
growth over a year. However, textile export between January-May
2005 witnessed a 24 per cent growth between the two countries.
|
Malaysia
declines to extend tariff concessions to textile products
Malaysia has declined to extend tariff concessions to Pakistan
on textile products, a local press report said in June 21.
According to the reports, Kuala Lumpur linked relief on
Pakistani textile products with tariff reduction by Pakistan
on importing palm oil. However, both sides have not shown
any disagreement on the issue of Rules of Origin. The experts
from both sides met on June 8-9 in Islamabad, the report
added. It predicted that substantial progress was expected
when experts from both countries meet again on July 18-20
in Malaysia.
|
EC
likely to withdraw 13.1 percent duty on bed linen
The European Commission is most likely to substantially
reduce or withdraw the anti-dumping duty of 13.1 percent
which it imposed on Pakistan’s bed linen, a senior
government official quoting the telephonic conversation
of Pakistan’s economic minister in Brussels, Tariq
Iqbal Puri, told reporters. An investigation team of the
European Commission at Dubai has completed its investigation
on June 10 against eight Pakistani companies. The proprietors
of the companies and their lawyers presented their cases.
The official said that the European Commission’s investigating
team cleared two companies on the spot after completing
its investigations. The official said that optimistic Pakistan’s
economic minister in Brussels, Tariq Iqbal Puri, had informed
the government of Pakistan that the EC after the investigations
had hinted at substantially reducing the anti-dumping duty
or withdrawing it in toto.
The EC had imposed the 13.1 percent anti-dumping duty on
Pakistani bed Lenin some time in January 2004. Since then
the review of the EC on its decision has been due, but the
EC team could not come in Pakistan for investigations, fearing
an attack on members of the EU team. The EC team conducted
much delayed investigations in Dubai and competed them by
June 10, 2005. The European Commission was bound to review
its decision after the enlargement of the EU by including
10 more countries. |
China
for cooperation textile trade
Leader of the eight-member Chinese trade delegation and
Chairman, China Chamber of Commerce for Imports and Exports
of Textiles (CCCT), Wang Shenyang, said on June 21 that
Pakistan and China should cooperate with each other for
the development of textile trade. Mr. Shenyang said that
after becoming WTO member, China’s import of yarn
and fabrics from Pakistan increased manifold, as there was
a growing demand in China for these products. He stressed
upon the need for exchanging views and information with
regard to cost and other problems of the textile industry
between the two countries. Out of total trade volume of
around $1.11 billion, textiles alone stood at $770 million,
of which $450 million of textiles and apparel were exported
from Pakistan and $320 million worth of textiles were imported
by Pakistan from China, thus showing a 12 per cent growth
over a year. However, he said from January to May 2005,
textiles witnessed a 24 per cent growth between the two
countries.
The objective of the visit of his trade team, he said, was
to study textile and apparel markets of Pakistan and look
into ways and means for increasing their exports to China.
“The spinning industry in China is of very large scale
where over 800 million spindles are installed and it could
be compared with Japan at places and with Italy and the
UK in other places.” However, he said a unit with
six million spindles engaged 150,000 workers, and on an
average the salary comes to around Rs7,000 per month. Energy
deficient units, he said, had their own power generation
that was either run on gas or oil. He said Chinese concept
of textile industry was to be sufficient from raw material
to finished products and it took over 11 years to become
textile and apparel manufacturer leaders of the world. |
EU
duty on home textiles unfair: Pakistan
Textile Minister Mushtaq Ali Cheema stated that the EU’s
decision of restricting Pakistani home textiles is unfair
and unjustified. He explained to the British High Commissioner
Mr. Mark Lyall Grant who met him in his office, that the
duty imposed on Indian and Bangladeshi textiles is much
lower and all countries in this region should be treated
equally.
Minister informed that the private sector has invested a
huge amount in this sector so government would support them
and be let them avail all possible facilities to enhance
the sector. This is main sector of our economy and playing
very vital role in Pakistani economy, said Cheema. Currently
Pakistan is exporting cotton, yarn and various textile products
but it is also working on value addition, as its produces
of high-end quality of read-made garments and home textile
products.
On the issue, the British High Commissioner Mr. Mark Lyall
said the current budget is textile oriented and incentives
given to the textile sector are considerable. Pointing on
anti dumping issue, Lyall explained that we will support
Pakistan and try to seek resolution for this issue, as we
is very big importer of its home textiles. |
Profitability
in textile sector grows by 77pc
Profitability in textile sector during the first half (October
2004-March 2005) of the current financial year stood at
Rs2.78bn as compared to Rs1.58bn in the corresponding period
of the previous year, thus showing an impressive growth
of 77 per cent year-on-year. A report prepared by Suleman
Amir Ali, analyst at stock brokerage firm, InvestCap stated
on June 8, that the study was based on 28 textile companies,
out of which 14 were from spinning sector, 5 from weaving
and 9 from the composite segments of the textile sector.
The analyst mentioned that significant improvement was seen
in the gross margins of the companies as they increased
from 11 per cent in 1H2004 to 14.2 per cent in 1H2005. That
was primarily because of 34 per cent lower cotton prices
during the period due to bumper cotton crop. Total sales
of the companies improved slightly by 4 per cent from Rs40.7bn
in 1H2004 to Rs42.5bn in 1H2005. Profitability of the textile
composite sector by far exceeded the growth in other two
sectors. The textile-spinning sector witnessed a nominal
growth of 13 per cent during the period and increased from
Rs510 million in 1H2004 to Rs577 million in 1H2005. Lower
cotton prices resulted in a significant improvement in gross
margin of the companies as it increased from 9.50pc in 1H2004
to 12.25 per cent in 1H2005. However, this rise to a certain
extent was offset by a 55 per cent jump in financial charges
due to higher interest rates. Sales of the companies remained
stable at Rs13.5bn. |
Budgetary
incentives not enough to bridge competition gap in garment
exports
Budgetary incentives to bridge the competition gap in the
garment trade with countries like China and Bangladesh will
not be enough as the average price of Pakistani exports
are still high, said Sajid Saleem Minhas, Pakistan Readymade
Garments Manufacturers and Exporters Association (South
Zone) Chairman. "Pakistan's garments are on average
about 15 percent to 30 percent more expensive than those
of China and Bangladesh which results in lower demand,"
he said. He said the government has tried to bridge the
gap but it was still not enough to reverse the trend, he
added.
Mr. Minhas pointed out that the announcement regarding the
exemption of basic raw materials from import duty while
extending the SRO 410 to 2006 in order to make suitable
changes in the DTRE Scheme are contradictory as the purpose
of the DTRE and the SRO 410 itself is to facilitate the
zero-rated import of raw material for re-export. Once the
government intends to extend this facility across the board
then these schemes become redundant, he said.
He suggested that the term basic raw material be substituted
with 'all materials' as the basic raw material for the garment
industry could include small parts such as a one-centimeter
long string. "Due to the lack of information people
have, they need to be satisfied during the clearance of
these type of raw materials. This is where the garment industry
differs vastly from commodity industries like ginning, spinning,
fabric weaving and dyeing." He said the PRGMEA had
recommended during pre-budget meetings that the government
increase tax at source to 1 percent and do away with the
collection of EOBI and social security. The government,
on the other hand, has increased the tax at source to 1
percent but not done away with EOBI and social security
payments, he said. The chairman urged the government to
look after operational training institutes in other sectors
besides focusing on TEVTA activities. The PRGMEA is currently
running two institutes, one in Lahore and one in Karachi,
which need further funding. |
Cotton
market welcomed the new budget
Cotton market on June 7 welcomed the new budget, which is
generally called “textile budget” as government
has gone all out to give it a maximum possible relieves
and import duty cuts to boost textile exports to $10 billion
during the next fiscal starting from July 1, 2005. “Lint
cotton, being a major raw material, which is expected to
play a vital role in achieving the export target, if all
goes well with the new crop and prices remain competitive,”
ginners said. The removal of 15 per cent general sales tax
on the purchase of lint, which was to be refunded in the
form of duty drawback at the export level will have a positive
impact on the export shipments after the elimination of
villain of the game in-between, spinners said. “The
new budget provides a level-playing field on the export
front, with the zero-duty option and how the spinners and
mills perform under the new regime will be the chief supporting
factor behind the current export drive,” cotton analysts
said. They would much depend on the value-addition by the
spinning sector in tax-free environment as far as the government
is concerned it has met all the demands of the textile sector
and now the ball is in its court, they said. |
No-duty-No-drawback
for the textile chain
The federal government has finalized a number of proposals
for the budget 2005-06, which include two separate comprehensive
packages for the development of textile sector and rationalization
of duty structure for auto industry. Finance ministry sources
told reporter on June 1, that under "no-duty-no-drawback",
the whole of textile chain - weaving, spinning and ginning,
etc. - would be brought out of the general Sales Tax (GST)
net. The main focus of this exercise was to compel the local
industry to achieve complete deletion programme in real
sense instead of allowing it to continue importing various
parts but showing them as if these were manufactured locally.
|
Customs
duty cut to zero percent on import of 24 inputs
The government has proposed reduction of customs duty to
zero percent on import of 24 inputs - materials and accessories
used in export oriented textiles, leather and sports industries...
|
Export
of textile products increased by 4.90 per cent to $7.62
bn
Pakistan’s export of textile products increased by
4.90 per cent to $7.627 billion during the 11 months (July-May)
period of the current fiscal year... |
|
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