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OCTOBER 05, 2012

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INTERNATIONAL NEWS

1 Singapore: Clariant makes sustainability measurable for textile mills and brands

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2 U.S. cotton eases as technical selling offsets export rise 4

3 Pakistan: Higher arrivals reported by cotton ginners 6

4 Hong Kong: Pacific Textiles supports DuPont PrimaGreen enzymes

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5 China’s Labor Costs Are Less Rising 11

6 Cotton Fiber & Yarn Price Comparison: China vs. India and Pakistan Statistical Report

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NATIONAL NEWS

1 Dip in Chinese orders pulls down cotton export 15

2 Cotton arrival in Punjab and Haryana likely to be lower 18

3 Tamil Nadu announces 20% subsidy on cotton 19

4 Default rate scales to new high in H1: CRISIL 20

5 Cotton output pegged at 334 lakh bales on Gujarat factor

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6 Wool product makers seek hike in duty drawback rate 22

7 Cotton productivity on decline across India 24

8 Textile Park remains a yarn 26

9 Yarnex ‘12 attracts over 50 exhibitors of world repute 28

10 India: India Announces Cotton Export Registration Policy

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OCTOBER 05, 2012


INTERNATIONAL NEWS

Clariant makes sustainability measurable for textile mills and brands

• A systematic methodology based on sophisticated tools

• Products pre-tested against the industry's most stringent standards and compiled in a unique database for instant information

• Sophisticated calculation tool for informed decision on products and processes, and their ecological impact

Singapore, 4 October 2012 – The Swiss specialty chemicals group Clariant today announced the introduction of a new service called ONE WAY that helps textile mills, brands and retailers measure the impact of their textile solutions on the environment, resource and climate.

Clariant believes that it can help its customers to develop textile solutions that are both more ecologically and economically sustainable by providing a fast, measurable and reliable approach to the selection of chemical products and process solutions.

Taking on the textile industry’s toughest challenges

According to Textile Exchange*, an estimated six million tons of textile chemicals is used each year, making the environmental impact of textile processing a global issue. Textile waste occupies nearly five per cent of all landfill space, with one million tons of textiles ending up in landfills every year. In addition, 20 percent of industrial fresh water pollution comes from textile treatment and dyeing; and one trillion kilowatt hours are used every year by the global textile industry, which equates to 10 percent of global carbon impact.

OCTOBER 05, 2012


“With increasing consumer awareness of these issues, brands and retailers today are under growing pressure to set and enforce sustainability policies, as well as monitor and measure the environmental impact of their textile dyeing and finishing processes,” said Emrah Esder, Head of Marketing, Textile Chemicals, Clariant.

“However, a long-time headache has been the difficulty of measuring the overall ecological impact of any textile process. Clariant’s ONE WAY will address this gap by providing fast and reliable information on the economical and ecological impact of each textile solution.”

Systematic approach and stringent standards towards industry leadership Clariant’s ONE WAY will offer mills, brands and retailers a systematic methodology based on a three-step process.

Step 1: Product selection based on eco-standards requirements Customers will benefit from a wide range of Clariant ONE WAY products, developed and pre-tested by the company against more than 15 of the industry’s most stringent environmental and consumer safety standards including Blue Sign®1,OekoTex®2, GOTS3, the 11 substances of the Joint Roadmap towards Zero Discharge of Hazardous Chemicals, bioelimination and 20 major Restricted Substances List (RSLs).

Today, the Clariant ONE WAY product database already includes more than 200 products, covering most of the needs of the industry across the value chain. This database will be accessible anytime, anywhere, by the 20-strong ONE WAY specialist team, who will be located around the world and comprise of product stewardship experts.

Step 2: Process short-listing based on environmental focus With Clariant’s ONE WAY, dyes and chemicals have been screened and clustered into groups based on their environmental focus. This will allow textile manufacturers to narrow their selection of potential products to the

OCTOBER 05, 2012


process group that best fits their environmental focus, whether this is CO2 emissions, savings in water or energy or the amount of waste water generated. Step 3: Solution selection based on cost & eco-benefits calculations A sophisticated calculation software tool, which will be the cornerstone of the ONE WAY toolbox, is currently in final testing phase and will be available by January 2013.

This calculation tool will allow customers to make an informed decision by delivering the overall cost and performance profile – including dyes, chemicals, water, energy and time – and the impact of each textile solution against key ecological performance indicators, such as chemical oxygen demand, biological oxygen demand, CO2 emissions, energy and water.

As a leading supplier of chemical solutions for the textile industry, Clariant has a long-term commitment to developing products and application processes that are safer for the consumer, and have less impact on the environment. In May 2012, it joined the Sustainable Apparel Coalition (SAC). Clariant is also a member of the Textile Exchange and is a System Partner of bluesign®.

http://www.pressreleasefinder.com/– Oct 04 2012

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U.S. cotton eases as technical selling offsets export rise

* Weekly U.S. exports jump 80 percent on China mill buying

* Market hits resistance at 100-day moving average

* Beijing seen resuming buying spree after holiday

OCTOBER 05, 2012


NEW YORK, Oct 4 (Reuters) - Cotton prices eased on Thursday on technical selling after prices rose to touch a 100-day moving average after data showed mills in China, the world's largest textile market, resumed buying last week as prices were tumbling to close to 70 cents.

Ending a three-day winning streak, selling started as prices hit resistance following a rally to a one-week high of 72.65 cents per lb.

New York cotton for December delivery settled down 0.10 percent at 72.09 cents per lb on ICE Futures U.S. With just over 9,600 lots traded, volumes were almost half Wednesday's levels.

Buying was triggered by a buoyant grains market and U.S. Department of Agriculture data that showed export sales jumped 80 percent last week to just under 240,000 running bales, reaching their second-highest level since June.

With almost half the total headed for China, the market was relieved mills had made a return to the market, lured in by falling prices, which hit two-month lows of 70.22 cents last Thursday.

"This would be fresh mill buying," Ron Lawson, a long-time trader with brokerage logicadvisors.com in Sonoma, California. The latest export total is the largest since early September when over 300,000 bales were sold, ending a hiatus of over three months when exports were on average below 100,000 bales.

Merchants hope the data may be the start of a buying spree, which could help soak up some of the global surplus and offset sluggish overall demand.

China's mills typically rely on imports if they can secure sufficient import quotas, because prices are cheaper than the domestic market which is elevated by government buying.

Beijing is expected to start a months-long buying program next week, after the country's week-long holiday, to replenish strategic stocks and support local farmers.

OCTOBER 05, 2012


"For at least the next four months, the strategic reserve will be focusing on buying domestic farmer supplies in order to help smooth over the changing of the governmental guard," said Lawson.

While supplies are plentiful due to the record carryover from the previous marketing year, exchange certified supplies are running low, with the old crop depleted and the market awaiting fresh arrivals with the U.S. harvest in November.

Stocks rose by just two 480-lb bales, and the total of 9,072 bales is a low of more than a year.

Fibers underperformed a strong broader commodities market, with oil leading the Thomson Reuters-Jefferies CRB index , a global benchmark for commodities, up 1.3 percent.

Reuters– Oct 04 2012

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Higher arrivals reported by cotton ginners

Pakistan Cotton Ginners's Association (PCGA) have reported higher seedcotton (Kapas/Phutti) arrivals for the preceding fortnight for the current crop (August 2012 - July 2013) compared with the same period during the previous season (2011-2012). Arrivals of seedcotton till the 1st of October, 2012 were declared at 3,447,163 lint equivalent bales of domestic size on ex-gin basis compared to 2,798,773 bales during the previous season, or an increase of 23.17 percent.

From the above quantity, the domestic mills have lifted 2,804,849 bales, the exporters bought 36,740 bales, while the ginners are carrying 605,574 bales equivalent in both pressed and loose form. The phenomenal gains in seedcotton arrivals have been recorded from Sindh (77.82 percent), while the Punjab province is showing a decrease in seedcotton arrivals of 3.24 percent compared to the previous season (2011-2012).

OCTOBER 05, 2012


Cotton prices had been drifting lower earlier this week but since yesterday they have become comparatively stable due to grower resistance to sell at lower prices and thus the ginner is also biding for time. Cotton exporters have also made a modest entry into the market which put up the lint prices a shade higher on Thursday compared to a day earlier.

Seedcotton (Kapas/Phutti) prices on Thursday reportedly ranged from Rs 2,000 to Rs 2,400 per Kg in Sindh, while in the Punjab they also reportedly ranged from Rs 2,200 to Rs 2,400 per 40 Kilogrammes. Generally speaking, lint prices in Sindh reportedly ranged from Rs 5,300 to Rs 5,450 per maund (37.32 Kgs), while in the Punjab they are said to have ranged from Rs 5,250 to Rs 5,450 per maund according to the quality.

In ready cotton business in Sindh, 200 bales from Nawabshah were said to have been sold at Rs 5,300 per maund (37.32 Kgs), 200 bales from Kazi Ahmad sold at Rs 5,325 per maund, while 600 bales from Tando Adam were said to have been sold at Rs 5,350 per maund. In the Punjab, lower grade cotton, 600 bales each from Muridwalla and Mamun Kanjan (Faisalabad), were both said to have been disposed at Rs 5,100 per maund. Furthermore, 200 bales each from Burewalla and Vihari sold at Rs 5,300 per maund, 200 bales from Arifwalla sold at Rs 5,400 per maund, while 200 bales from Harunabad reportedly sold at Rs 5,450 per maund.

It is said that the quality of cotton in the Punjab has some problems but it is improving. Also, there are some staple problems on the loop line stations (Choti Line) in Sindh. In overall appearance of cotton prices in the coming weeks seem to be under pressure globally due to an abundance of supplies.

On the global economic and financial front, one can only take hats off to the committed persistence of the investors on the leading equity markets around the globe who have brought back the shares prices to the peak levels of 2007-2008.

OCTOBER 05, 2012


Unmindful of the continuous deterioration of business, banking and manufacturing performance and morale in all the four corners of the world, the investors on the foremost equity markets around the world have shown uncommon determination and remarkable optimism in the revival of the global economic performance.

Unfortunately, the ground reality is different and speaks of more trials and tribulations before the global economic recovery materialises. To begin with, the global financial system is in tatters and suffers from many accusations of fraud, fixing of interbank rates, the misdemeanours of several investment and commercial bankers. The entire banking domain gives the impression that it is rotten to the core.

With the banking and services sectors being the lynchpins on which the economic infrastructure is based, the whole global economic edifice is rattling and thus vulnerable to a crash or comedown of gigantic proportions. Genuine mistakes may be reformed or rectified, but the corrosion and crumbling of the very foundations of the vast and varied global economic structure appear irreparable.

The United States leadership has entered into a limbo because all essential decisions are being put off till the presidential elections in early November to decide as to who will steer the world's largest economy come January 2013 for the next four years. Moreover, the "fiscal cliff" is approaching at a galloping pace when a number of subsidies will be withdrawn and tax cuts will also be reapplied from the beginning of next year.

In the Eurozone, the economic situation is becoming increasingly complex and murky. The situation in France is grim where steel plants are shuttling down due to lack of demand. In Catalonia, widespread and rowdy demonstrations are being held against the Spanish central government. Moreover, due to massive debt of Catalonia which puts the blame on the central government, the Catalonian Parliament voted a few days ago to hold an independence referendum.

OCTOBER 05, 2012


Moreover, the Spanish economy is getting from bad to worse so that another bailout seems imminent. In France, thousands of protestors took to the streets this week where they reportedly denounced the European Union fiscal pact to force the government to lower the unworkable fiscal limits set by the European Union. Besides the Eurozone, reports of contraction in Chinese manufacturing for the second straight month in September is aggravating the already depressed global economic outlook. Thus crude oil prices fell at midweek due to the dire economic downturn persisting both in the Eurozone and China.

As far as the Arab countries are concerned, they is being battered by continuing political and social upheaval arising out of the Arab Spring which has destabilised the area, at least for the time being.

The row between China and Japan over their territorial dispute is casting negative impressions on the global economy as both these economic behemoths are too big to be ignored. The IMF Chief Christine Lagarde advised "neighbourly tolerance" between them as their policies could disturb the international economic and financial situation in a sizeable way.

In his assessment, the Canadian finance minister Jim Flaherty is quoted to have said that Europe's debt crisis portrays "a clear and present danger" and all the measures taken till date have failed to remedy the situation. The banks remain under-capitalised and soaring debts persist despite the measures taken by the relevant financial institutions and the respective governments. We may summarise by quoting Olivier Blanchard, the Chief Economist of the International Monetary Fund (IMF), who believes that it will take at least ten more years before the global financial crisis goes away.

Reuters– Oct 04 2012

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OCTOBER 05, 2012


Pacific Textiles supports DuPont PrimaGreen enzymes

DuPont Industrial Biosciences presented results of collaborative trials with Pacific Textiles Limited Ltd, a Hong Kong-based manufacturer of custom fabrics, which demonstrate the significant sustainability benefits of bio-based enzymes used to replace traditional chemicals in cotton textile processing at bulk-scale production. DuPont’s enzymes are derived from natural resources and are biodegradable.

Speaking about DuPont’s strategy to address global energy needs and biobased solutions at the Sustainable Textiles Conference, DuPont Industrial Biosciences Vice President John P. Ranieri reported that the trials with Pacific Textiles found DuPont PrimaGreen enzymes used in combination can eliminate the need for caustic chemicals, while also dramatically reducing water, energy use and processing time. Ranieri said the trial with Pacific Textile confirmed the results from an earlier lab study DuPont conducted with Cotton Incorporated that was released in May 2012.

“The results of these ongoing trials at Pacific Textiles show we have taken our more eco-friendly enzymatic processes from the lab to full factory scale,” said Mark Oostendorp, global business leader Textile Processing. “DuPont’s enzymes provide the textile industry a more eco-friendly, high-quality and cost-effective alternative to chemicals commonly used in the pretreatment and finishing process of cotton textile manufacturing.”

PrimaGreen, as a replacement to traditional chemicals in cotton textile preparation, led to an average reduction of 70 percent water (by liter); 33 percent steam (in pounds); and 27 percent in energy (as kWH) across dark, medium and light shade ranges. By bio-optimizing these processes, total production time was reduced by an average of 27 percent. In the Cotton Incorporated trial, the cotton knits produced showed good whiteness values, mote removal, maintenance of fabric strength and weight, and were receptive to dark, medium and light dye shades.

OCTOBER 05, 2012


“The main advantages of using the DuPont PrimaGreen process are savings in processing time and water,” said Ronald K.K. Chan, assistant supervisor at Pacific Textiles, who facilitated the trails. “The enzymes also will ensure we produce high-quality fabrics that have been created in a more sustainable and cost-effective process, which aligns with our company goal to save more energy and reduce emissions as demanded by our customers.”

The DuPont PrimaGreen enzymes help save energy by allowing textile preparation to occur at much lower temperatures. In addition, DuPont’s bio-enzymes also save water volume by enabling the same water bath to be used for multiple steps in the production process.

Fibre2fashion– Oct 04 2012

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China’s Labor Costs Are Less Rising

Minimum wages in China increased by an average of 17% in first half 2012 so far, for 16 provinces , and are pursuing the trend of deceleration seen in 2011. Why are wages still increasing in spite of an economic slowdown? What is the outlook for the future? Our report tries to answers these questions by providing detailed tables on minimal wage per region, workforce and population evolution.

Wage increases in percentage terms were not as rapid in 2011 as in 2010. This trend has been pursuing through the first half of 2012. For example, in Shandong while minimum wage increased by 45% or 340 RMB/month over the period 2009-2010, it only increased 13% or 140 RMB/month on the period 2011-2012.

Less Rapidly Rising

16 regions in the country raised their minimum wages in 2012 with an increase averaging just below 17%, while in 2011, 25 regions had raised their minimum wages by an average of 22%.

OCTOBER 05, 2012


Guangdong still remains the region with the highest minimum wage in China with 1500 RMB/month with an increase in 2011 and in 2012. Lower minimum wages are 870 RMB/month in Chongqing.

The falling economic growth since the second quarter and the low inflation rate have been putting a negative pressure on wage increase.

The government efforts to cool the property sector have also released the pressure on the households.

Shrinking Workforce

Despite the economic slowdown, wages are still going up in China because there is a shortage in the labor market.

The economy is still developing fast with a GDP growth target at 7% for 2013 while the size of the workforce has leveled, and will start to shrink in the middle of the decade.

China's one-child policy is starting to eat into the labor supply.

In 2000, there were 442.7 million Chinese people aged 15-34, according to United Nations estimates.

By 2010, that had fallen to 418.1 million, and by 2020 it is expected to drop to 399.9 million.

Lower Worker Mobility

Besides the mobility of workers is not as strong anymore to fill the industrial centers.

The number of farm workers heading to city factories is no longer growing rapidly.

According to the National Bureau of Statistics, the number of migrant workers working outside their home province is relatively stable at 252.8 million in 2011, up only 4.4% from 242.2 million in 2010.

China is committed to raising minimum wages with its 12th five-year-economic plan and has still targets to increase by 13% annually the minimum wages to 2015 but down from the 20% annual growth target expressed in 2010.

OCTOBER 05, 2012


Severance Payments

Beijing also has raised requirements for severance payments, which discourages layoffs unless business drops severely.

This has put pressure on apparel and textile industries whose cost breakdown is highly dependent on wages, even though China has more advanced automation in its factories than most other competitive countries.

Employers will be forced to keep raising salaries for higher skilled workers and to cut into their profits.

Chinese government figures showed that from January to May, profits at industrial companies fell 2.4%, despite an 11.9% growth in revenue in the same period. Chinese efforts to offset the rise in production costs are through pushing and promoting more efficiency.

Chinese factories are being forced to invest more in labor-saving technology as wages rise, affirming the impact of the labor shortage.

A Grim Macroeconomic Outlook

The fall of demand in international markets is expected to continue throughout 2013, impacting Chinese exports that have played a key part in China's early growth.

Competition from East-Asia, Central and South America are also putting pressure on Chinese prices in clothing and textile imports to the European and US markets.

The shortage of labor is also a reason why Beijing is not as insistent in hurrying to match the massive stimulus plan it put in place in 2009.

Officials have confirmed that the rebound is not yet stable and that economic hardship may continue. The confidence index in China is also at a low level with 3 consecutive months below 100 while it was at 108.1 in Jul 2011.

The move to higher wages in China has been influenced by changes in population and government policy. As the Chinese economy continues to slow down and export growth fades, China will have to balance rising labor costs and structural shortage in the labor market.

OCTOBER 05, 2012


The transition to a higher-wage economy, with a bigger role for service-sector output and domestic consumption, won't be straightforward for China, the whole process will require years.

Emerging Textiles– Oct 04 2012

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Cotton Fiber & Yarn Price Comparison: China vs. India and Pakistan Statistical Report

Cotton fiber prices are falling in India and Pakistan where yarn prices were kept unchanged, however. Our monthly report compares cotton fiber and cotton yarn prices in China, India and Pakistan, with latest margin trends at domestic yarn plants. Historical data back to 2007 are available for download.

Cotton prices stayed unchanged on China's domestic market in September, while falling 3.2% in Pakistan and even plunging more than 6% in India.

From a year earlier, cotton fiber prices have lost only 6% in China and 10% in India. By contrast, they dropped by 18% in Pakistan.

Cotton yarn prices stayed stuck at the same level in September in China and in Pakistan while very slightly declining in India.

As result, gross margin of spinners continued surging in Pakistan and in India while Chinese yarn producers continued suffering from low margins, especially if using domestic cotton.

From a year earlier, gross margins fell 4% from very low levels in China, while surging 66% in India and 32% in Pakistan.

In both countries, spinners had to accept to digest the surge in cotton prices in 2010-2011. They were however able to regain control of their prices and margins when raw material costs plunged.

Emerging Textiles– Oct 04 2012

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OCTOBER 05, 2012


NATIONAL NEWS

Dip in Chinese orders pulls down cotton export

However, mills at home expected to consume more

India’s cotton export in 2012-13 is expected to fall to seven million bales (a bale is 170 kg) compared with 12.8 million bales last year, following a sharp fall in Chinese demand, according to the Cotton Advisory Board (CAB), headed by the textile commissioner.

China’s total imports are projected to fall to 2.5 million tonnes this year, half of last year’s. Around 65 per cent of India's cotton export goes to China.

“China’s imports will be lower as their crop is good; they also have huge stocks,” said A B Joshi, textile commissioner. India's cotton prices are higher compared to global ones.

COTTON BALANCE SHEET

(in million bales)

2011-12*

2012-13*

SUPPLY

Opening stock 4.58 2.86

Crop 35.30 33.40

Imports 1.20 1.20

Total supply 41.08 37.46

DEMAND

Mill consumption

21.77 23.00

Small-scale units

2.16 2.00

Non-mill consumption

1.41 2.00

Exports 12.88 7.00

OCTOBER 05, 2012


Total demand 38.22 34.00

Closing stock 2.86 3.46

* Provisional Source: Cotton Advisory Board

“Although China is expected to reduce import of cotton from India, they may start importing cotton yarn,” said Umang Kapasi, joint managing director of the Coimbatore-based Shri Vardhaman Cotton Corporation, which is also an indenting agent.

CAB has estimated this year's (the cotton year starts in October and ends in September) total cotton production at 33.4 million bales compared to 35.3 million last year. The 2012-13 production would be lower due to scanty rainfall in major growing areas of Gujarat, particularly Saurashtra.

However, output in Andhra Pradesh is expected at 7.2 million bales compared to 5.6 million last year, compensating for the loss in Gujarat.

Cotton Area State-Wise (Figures in Lakh Hectares)

State 2011-12 2012-13 Punjab 5.60 5.16 Haryana 6.41 6.03 Rajasthan 4.70 4.49 North 16.71 15.68 Gujarat 29.62 23.63 Maha. 41.25 41.30 M.P. 7.06 6.08 Central 77.93 71.01 A.P 18.79 21.40 Karnataka 5.54 5.16 T.N. 1.33 1.20 South 25.66 27.76 Orrissa 1.02 1.19 Others 0.46 0.50

TOTAL 121.78 116.14

OCTOBER 05, 2012


Cotton Prodn. State-Wise (Figures in Lakh Bales)

State 2011-12 2012-13 Punjab 18.50 18.00 Haryana 25.00 24.00 Rajasthan 17.00 16.00 North 60.50 58.00 Gujarat 120.00 85.00 Maha. 74.00 80.00 M.P. 18.00 17.00 Central 212.00 182.00 A.P 56.00 72.00 Karnataka 14.00 12.00 T.N. 6.50 5.00 South 76.50 89.00 Orrisa 2.00 3.00 Others 2.00 2.00

TOTAL 353.10 334.00

Consumption of cotton by mills and non-mill consumption is expected to be higher this year compared to last year (see table). “Mill consumption is higher this year due to rise in productivity of smaller mills, which are in a financially better situation compared to last year. Also, the order inflow is much better this year,” said D K Nair, secretary general of the Confederation of Indian Textile Industry.

Last year, many mills had financial issues, which led to their taking less of orders.

Internationally, too, mill consumption is put higher. According to the estimates by International Cotton Advisory Committee, “outside of China, mill use is expected to increase by five per cent, to 14.9 million tonnes (mt). Taking into account reduced shipments to China, cotton production is forecast down by six per cent to 18.6 mt, while stocks in the rest of the world are expected to grow by 16 per cent to nine mt in 2012-13.”

OCTOBER 05, 2012


According to ICAC, with this projected fall in Chinese imports, the price outlook in the rest of the world is conducive to lower international prices in 2012-13.

Business Standard– Oct 05, 2012

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Cotton arrival in Punjab and Haryana likely to be lower

CHANDIGARH: Cotton arrival in Punjab and Haryana is likely to be lower by 10-15 per cent this year on account of dip in area under cultivation even as fibre prices are ruling lower than the minimum support price (MSP) in spot markets of both states.

"Cotton arrival in Punjab and Haryana is expected to remain 40-42 lakh bales this year as against 48 lakh bales arrived last season. It is because of decline in area under crop in both states," said Rakesh Rathi, Director, Northern India Cotton Association.

Punjab and Haryana this kharif season have witnessed lower area under cotton crop, with growers preferring crop like guar to fetch higher returns.

Haryana has seen the sharpest drop in acreage as cotton area was expected at 5.25 lakh hectares as against 6.03 lakh hectares last fiscal.

The less acreage will also have an impact on output with production being estimated at 21.62 lakh bales compared to 26.21 lakh bales last year, an official of Haryana Agriculture department said here.

Punjab has seen marginal fall in area under cotton at 5.06 lakh hectares as against 5.15 lakh hectares. However, the production of cotton is also estimated at over 19 lakh bales in comparison to 16.21 lakh bales last season.

OCTOBER 05, 2012


"The yield of cotton in Punjab will be good on account of conducive weather conditions prevailed this year," an official of Punjab Agriculture Department said here.

With cotton crop arriving in mandis, farmers are fetching lower returns this season for their crop.

The spot rate of cotton is ruling at Rs 3,480 a quintal to Rs 3,600 per quintal while MSP for cotton is Rs 3,600-3,900 per quintal. Moreover, last year during fresh arrival, cotton rates were around Rs 4,000 per quintal.

"Cotton prices are lower this year because of weak global demand though our prices are still higher than the cotton rates in Pakistan," Vardhman Textiles, CGM, I J Dhuria said.

Punjab Newsline– Oct 04, 2012

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Tamil Nadu announces 20% subsidy on cotton

With the aim to encourage production of yarn and cotton, Tamil Nadu Chief Minister J. Jayalalithaa today announced a 20 per cent subsidy for it, which would cost the exchequer Rs 12 crore a year.

Of this, five per cent would be given as bonus to manufacturers, an official release said.

The subsidy would be given to spinning mills and cotton yarn producers, it added.

OCTOBER 05, 2012


Besides increasing production of cotton yarn in Tamil Nadu, this initiative stands to benefit spinning mill owners and weavers, the release said.

Business Line– Oct 04, 2012

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Default rate scales to new high in H1: CRISIL

India Inc, which had been battered by downgrades, would continue to see rating downgrades, although their severity and intensity might decline, said rating agency CRISIL.

On a base of 10,542 ratings, there were 484 downgrades and 320 upgrades in the first half of current financial year. Of the downgrades, 183 were to “default” category. The default rate scaled new high of 4.2 per cent surpassing the ten-year high of 3.4 per cent.

Sectors like textile, steel and hotels accounted for a fourth of defaults. The downgrades were driven largely by slowing demand and pressure on liquidity, because of stretched working capital cycles.

On the other hand, companies dependent on retail consumption saw the highest number of upgrades. “The continued demand from the retail side is one of the factors that was factored into the upgrades,” said Pawan Agrawal, senior director, CRISIL Ratings.

CRISIL’s credit ratio (ratio of upgrades to downgrades) declined to 0.66 in first half (H1) of 2012-13 from 0.91 in H2 of 2011-12, primarily on account of slowdown in economy. Ramraj Pai, President, CRISIL Ratings said, “Around a third of the downgrades has been among the highly-indebted industries, including power, construction, engineering and capital goods, and textiles”.

OCTOBER 05, 2012


However, with pressure on profitability and on economic growth showing signs of abating, CRISIL believes that the credit ratio has begun to bottom out. The ratings agency said material improvement in credit ratio would, however, take time and needed substantial revival in demand. Over the near term, rating downgrades will continue to outnumber upgrades, although their severity and intensity may decline.

CRISIL’s rating actions in the first half of 2012-13 reflect increased pressures on credit quality of corporate India. However, with indications emerging that pressures on profitability and economic growth are abating, Crisil believes that the weakness in credit ratio is likely to bottom out over the next six months.

Business Standard– Oct 05, 2012

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Cotton output pegged at 334 lakh bales on Gujarat factor

Cotton production is estimated to be lower by over five per cent at 334 lakh bales (of 170 kg each) during the current season that began this month.

The drop from 353 lakh bales is mainly due to lower production in Gujarat, according to the Cotton Advisory Board. A.B. Joshi, Textile Commissioner, said that scanty rainfall and farmers shift to other remunerative crops in Saurashtra, the main cotton growing region in Gujarat, led to 24 per cent drop in area to 24 lakh hectares.

Production in the region is anticipated to dip 29 per cent to 85 lakh bales (120 lakh bales).

Domestic demand

Overall, production in the northern region will fall four per cent to 58 lakh bales (60 lakh bales), while central zone is expected to register a drop of 14 per cent at 182 lakh bales (212 lakh bales).

OCTOBER 05, 2012


In contrary, cotton production in the southern region is expected to increase 16 per cent to 89 lakh bales even as output in Karnataka and Tamil Nadu shrink 14 per cent and 23 per cent, respectively. Andhra Pradesh, the bright spot in the southern region, will register a growth of 29 per cent at 72 lakh bales. Domestic demand has been pegged higher by five per cent at 230 lakh bales against 218 lakh bales registered last year.

EXPORTS TO HALVE

The total supply including imports and carryover stocks will dip nine per cent to 375 lakh bales (411 lakh bales). Though the demand from the textile and non-mill consumption is expected to remain stable at last year’s level, exports may almost halve to 70 lakh bales from 129 lakh bales due to weak demand from China. China accounts for nearly 65 per cent of the total shipments made from India, said Joshi. Moreover, the high global carryover stock of 13.78 million tonnes will also exert pressure on demand for cotton produced in India, he added. The Directorate General of Foreign Trade has issued a notification designating seven regional authorities of DGFT at Ahmedabad, Bangalore, Chennai, New Delhi, Hyderabad, Kolkata and Mumbai to issue registration certificate (RC) for exports. Exporters can apply for one RC at a time for a maximum of 10,000 bales. New exporters can apply for 1,500 bales, it said.

Business Line– Oct 05, 2012

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Wool product makers seek hike in duty drawback rate

CHANDIGARH: Indian wool products makers today asked the Centre to raise duty drawback rates by at least 5 per cent across the board to boost exports.

OCTOBER 05, 2012


"The central government should take measures such as raising the duty drawback rates for exporters at least by 5 per cent to revive exports as the target set for wool exports for current fiscal is looking not achievable in the wake of slowdown in Europe and US which are the major markets for us," Wool and Woollens Export Promotion Council (WWEPC) Chairman, Ashok Jaidka said.

The current duty drawback rate, which is a refund of import duty on raw material, varies between 4 and 10 per cent on wide range of wool and woolen items. Hit by the recessionary phase in European countries and the US, Indian exports for the first quarter of current fiscal fell by 5 per cent in rupee terms and 14 per cent in US dollar terms.

Indian export of wool and wool blended products for a period between April and June went down to Rs 112.20 crore from Rs 129.96 crore in corresponding period of last fiscal.

"The impact on our export has been largely on account of fluctuation in exchange rate as well as recession in the US and Europe," he said.

However, he said that the exports of wool and wool blended products shown an increase of 21 per cent in rupee term and 16 per cent in dollar term during the year 2011-12 as compared Exports of 2010-11.

The export of wool and wool blended products during 2011-12 was Rs 2,434.16 crore (USD 512.12 million) against the export of Rs 2,012.13 crore (USD 441.18 million) of year 2010-11.

OCTOBER 05, 2012


He added that for the current fiscal, the Ministry of Textiles has fixed export target of USD 750 million for the Council.

Jaidka said during 2011-12, the Council had participated in four international trade fairs in different countries to promote the exports and for the current year, the Council has also finalised an ambitious export promotional programme across the world.

Economic Times– Oct 05, 2012

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Cotton productivity on decline across India

AHMEDABAD: India has been harvesting more than 3 crore bale cotton per year, however, the yield is gradually tapering off from the highs of 2007-08. The rise in production can be ascribed to increase in acreage, believe experts; but the yield (per hectare) has been static or slipping in major producer states Gujarat and Maharashtra due to lack of technology penetration among new farmers and erratic monsoons.

According to trade estimates, new kharif (beginning October 1) marketing will not see any increase in cotton productivity with Gujarat likely to see a major fall in the yield. Gujarat may show production of 610 kg per hectare for the kharif marketing 2012-13; 10 kg lower than the last year's 620 kg and 123 kg lower from the 743 kg of 2007-08. State cultivated cotton in 20 lakh hectare and produced 89 lakh bale in 2005-06. This year cotton has been sown across 24.5 lakh hectare and production is likely to be only 70 lakh bale.

In case of Maharashtra (second largest producer and likely to unseat Gujarat in 2012-13) productivity will remain 335 kg per hectare compared to last year's 305 kg. Maharashtra had registered peak yield of 376 kg per hectare in 2009-10.

OCTOBER 05, 2012


On the other hand, Punjab, Haryana, Rajasthan and Andhra Pradesh have improved yields over the last four years. This may help India, overall, to produce average 500 kg cotton per hectare, tad lower than 507 kg last year. India produced, on average, 554 kg of cotton (hectare) in 2007-08, the highest ever. This year, Andhra Pradesh is likely to produce 593 kg cotton compared to 578 kg last season. The state has seen a significant rise in acreage at 21.5 lakh hectare compared to last year's 16.5 lakh hectare. The peak productivity, in terms of yield, was recorded at 665 kg in 2009-10. Overall, for kharif 2012-13, cotton acreage has slipped in India to 114.91 lakh hectare compared to record 118.34 lakh hectare in 2011-12.

"Multiplicity of varieties, low percolation of technology and vagaries of weather has eroded India's cotton productivity," said Dr V Kumar, head of main cotton research station at Navsari Agriculture University in Gujarat. "There are farmers in Gujarat who equal world average of approximately 800 kg per hectare but they are only a handful. If better inputs and resources are provided to farmers, the yield can go up significantly," he stressed. He was also critical of distribution of seed varieties based on field trials only at a few places. The distribution of seeds should be allowed after broad-based trials, he opined.

According to Institute for Cotton Research ( CICR), India registered a huge jump in the average yield (509 kg per hectare per year) during 11th five year plan (between 2007-08 to 2009-10) compared to 434 kg in 10th five year plan (2002-07). The rise in yield in Gujarat is more significant as the state produced 580 kg per hectare during 10th plan against 375 kg in ninth plan (1997-2002). In the 11th plan, state produced average 674 kg per hectare.

OCTOBER 05, 2012


Traders blame cotton frenzy among farmers for stagnation of productivity. "Repeated sowing of cotton in the same fields has led to significant fall in yield," said Arun Dalal, an Ahmedabad-based cotton broker. "Farmers need to change crop patter every year to improve productivity," he said.

Farmers in Gujarat are also known to resort to cheaply priced seeds provided by the unorganized sector.

Cottonyarnmarket - Oct 05, 2012

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Textile Park remains a yarn

Another cotton procurement season rolls on Monday but the idea of building Textile Park, a cluster of fabric industry, in the fibre-crop belt of the state remains hanging in the air. Textile Park is supposed to bring together industrialists and cotton farmers for common financial benefits. However, their conflicting interests have become the obstacles in implementing the idea. Cotton farmers want big industry in the region but they also seek the best deal for their land. The industrialists would like to keep the input cost as low as possible, so they wouldn't like to pay much for space.

"Farmers demand up to Rs. 50 lakh an acre for land, and industrialist seek a lower price," said Chaman Lal, general manager of the district commerce and industrial department. Earlier this year, after several rounds of meetings with the representatives of the textile industry, deputy chief minister Sukhbir Singh Badal had ordered district officials to locate a site in the region for Textile Park.

"We found a suitable land in different villages where the textile-industry cluster could come up," said Chaman Lal. "We looked for the less fertile land. A few industrialists who inspected the site did not get back to us.

OCTOBER 05, 2012


There is big difference in the land price that farmers expect and industrialists are willing to pay. At the moment, we are busy with other projects."

The concept of building a textile park in the Malwa region is not new, and the government now has been promising it for the past two years. "Textile Park will help farmers get good value for their crop but over the last decade, boom in the real-estate market has also increased the price of agricultural land," said Ashok Kapoor, a trader and cotton expert. "The oil companies who built the refinery at Rama Mandi got land for a genuine price but that was then. Now the land value has increased manifold, which will increase the input cost of any industry."

Farmers are now aware of the true value of their land. "Boom in real-estate sector as well as the agitation over the Gobindpura land acquisition in Mansa district last year has awakened farmers to the power of negotiation," said Manjit Singh Honey, leader of the Bharti Kisan Union. "The government can no longer acquire any farmer's land by force for any industrial project."

Cottonyarnmarket - Oct 05, 2012

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OCTOBER 05, 2012


Yarnex ‘12 attracts over 50 exhibitors of world repute

The Indian International Yarn Exhibition, Yarnex 2012, a three-day event held at the India Knit Fair Complex in Tirupur in August, attracted more than 50 exhibitors and nearly 4,000 buyers. It witnessed significant new entries from international exhibitors and major yarn and fiber manufacturers like RSWM, INVISTA, Trident Group, Kingdon-China, Pallavaa Group, Ramco Group, Vardhman Textiles Ltd. and Welspun, among others, demonstrating the importance of the trade platform within the upstream yarns and fiber industry.

Yarnex 2012 brought together major players and experts and featured latest product displays. The participants showcased their collections of yarns and fibres, ranging from natural fibres made from cotton, wool silk, linen/ramie to regenerate and synthetic man-made fibres and special yarns as well as fancy blended yarns.

The event proved an ideal platform for manufacturers and suppliers worldwide to reach buyers and sellers not only from Tirupur and the surrounding areas like Coimbatore, Salem, Karur, and Chennai, but also from cities like Mumbai, New Delhi, the National Capital Region (NCR), Bangalore, Kolkata, etc. As in the case of the previous edition, there were a number of buyers from the EU nations, Middle-East and South-Asian countries.

OCTOBER 05, 2012


The show helped to exchange market information, learn the latest innovations, gain views of experts and make direct business contacts within the knitting, weaving, spinning dyeing, garmenting and related supporting industries.

Invista: For the past few years Invista has realigned its focus in South-Asia, including India, and is very bullish about the market. “Next to China, the South Asian market is a major manufacturing base which is increasing by leaps and bounds and especially India, recognized all over the world for its domestic market and its manufacturing prominence.”

Invista is trying to create its presence in all the platform, at all the levels in the value chain starting from the mill manufacturer to the brands. Yarnex is a show focusing more on the trade at the spinning mill, weaving mill level and buyers who come looking for speciality yarn. “We at Invista are manufacturers of a variety of speciality yarn which serves various functions and a variety of end users”.

Amsler: Amsler provides attachments for the spinning frame using which the spinner can produce value-added yarn like Amsler cub effect yarn or the Amsler core spun yarn to make stretch garments. The company has its good presence in the Tirupur market.

Amsler works on a network basis where the systems are supplied to a spinner and then support the spinner in selling the yarn as well. “In Tirupur, we developed the slub yarn market for the knits”. There is a very good response in the Tirupur region for the Linen Look, meaning possibility of having a linen finish on a 100% cotton fabric using Amsler’s attachments. Focusing on a niche segment, Amsler is very positive about the growth prospects for its speciality yarns.

Kingdom-China: Kingdom, a China-based company, is the biggest manufacturer of wet spun linen yarn in the world. Out of the 440,000 spindles produced in the world for linen, Kingdom has a capacity of 75 thousand spindles which will be increasing to 100,000 spindles by 2013, giving the company a market share of more than 20 per cent of this segment.

Kingdom is offering yarns of pure linen from 5nm to 60nm in bleached as well as natural category. It has also pioneered the art of manufacturing wet spun linen yarn for knitting.

OCTOBER 05, 2012


Kingdom, having its presence in India for more than four years, is supplying to top customers like Raymonds, D’Decor, Cotex Industries, Arvind, etc. Since linen yarn is growing by 20 per cent year on year and the trend is expected to continue for another five years, Kingdom feels there is a huge untapped market for linen in India and aims at capturing a sizable market share in the coming years.

Royal Yarns: The company, established more than two decades ago, is the sole distributer for Vardhaman in south India. Vardhaman caters to all the needs of this industry, from cotton to compact to milanges to special blends, etc., which is the biggest plus point for the company. “Commitment to on-time delivery and supplying of superior quality are our biggest strengths”.

The two-day show was a good platform to meet customers not just from the local Tirupur region, but on a pan-India level. In an exhibition where most of the players talking about the speciality yarn, Vardhaman is the biggest producer of special yarns in India. VORTEX, a new kind of yarn manufactured by air-jet spinning method, was on display at the expo.

Ramco Group: The Ramco Textiles Division is a dominant player in the Tirupur and surrounding markets supplying coarser counts like 40’s, 50’s, and 60’s. The Ramco Group is also one of the biggest manufacturers of Amsler slub yarn and coarse spun yarn. The company is supplying a major portion to Mitsubishi Corp of Japan and also to major brands in Italy. “Compared to 2011, this year seems to be dull and will have to concentrate more on technology and innovation to sustain further in this industry”.

RSWM: RSWM, a company with 400,000 spindles and 10,000 tonne yarn manufacturing capacity, is a major manufacturer of cotton and synthetic yarns. The company manufactures a variety of special yarns with varying counts and different manufacturing methods according to the needs of the customer.

RSWM also produces special yarns used in the manufacture of terri-towels such as zero-twist yarn, modal yarn, etc. It has also ventured into technical textiles to capture a sizable market share in the growing vertical.

OCTOBER 05, 2012


The company showcased stretch yarns used in sport wears, bamboo yarn and static yarn. “So far India has been a cotton dominated market, and the use of speciality yarn is slowly increasing. Hence RSWM is looking at increasing its market share is this particular segment. We hope Yarnex will open new doors for our products in Tamil Nadu”.

Trident: Trident, a Rs. 5,000-crore textile group, has its activities predominantly in terri-toweling and spinning. The company’s major chuck of business is from spinning but of late is virtually moving more and more towards value addition. “The main purpose of participating in the Yarnex expo is to exhibit our value-added yarn, and Tirupur is one of the major destinations for foreign buyers for garments, retail chains and lifestyle buyers. We are targeting this market for our value-added yarns”.

Trident turns out products that include melanges, dyed yarns, blended yarns, speciality yarns with anti-bacterial properties, etc. The company also provides better solutions to the terri-towel and denim industry. Directly or indirectly, the products are being used by brands like Marks&Spencers, Next, IKEA, Walmart, Target, etc., all over the world.

“We see a lot of growth potential for our speciality yarns in this segment, because India’s strategy is different. We cannot compete with China or Bangladesh in the mass segment. Hence we are gearing up to focus on this newly emerging textile area”.

Welspun: “Welspun mainly focuses on the speciality variety and not the common ones. The company’s main motto is to produce speciality yarns that are not being manufactured by our competitors”. The quality of Welspun is known across the globe and is also the reason for their premium pricing.

“Regarding the Yarnex, the association decided to conduct to have an interaction between the buyers and sellers and so started this exhibition couple of years back. It is a very good platform to display our wide variety of yarn to our existing and new customers. The quality of response has picked up in the last 2-3 years and the focus for this exhibition has been to target the domestic manufacturers and the local powerloom weavers.”

OCTOBER 05, 2012


KG Denim, Raymond’s and Arvind are just a few of the customers. Welpun is supplying with a network of offices across India to cater to the vast growing needs of the nation.

Indian Textile Magazine - Oct 05, 2012

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India: India Announces Cotton Export Registration Policy

The Indian government recently promulgated new procedures and conditions required for the registration of cotton export contracts, a series of guidelines intended to “streamline” the process that seem more likely to hinder rather than promote trade. India’s Directorate General of Foreign Trade (DGFT) announced registrations for cotton exports are subject to the following conditions, effective October 1st:

(1) Registration Certificates (RCs) will be issued by the seven designated Regional Authorities (RAs) of the DGFT at Ahmedabad, Bengaluru, Chennai, CLA New Delhi, Hyderabad, Kolkata and Mumbai.

(2) The procedure of obtaining Registration Certificate (RC) mandated in August 2011 [1] and modified in September 2011 [2] will continue to apply. In effect, one must be a shipper not in default, submit a LC or proof of advance payment, and agree to ship the cotton within 30 days of issuance of the RC, else the RC expires. The DGFT says one’s failure to ship the full quantity listed on the RC could entail prohibition from obtaining any future RCs.

(3) An exporter can apply for one RC at a time for a maximum quantity of 10,000 bales (170 kgs each) or actual quantity exported in the previous cotton season, whichever is less. Exporters who shipped up to 1,500 bales during the previous cotton season and new exporters who have not exported cotton the previous season can apply for up to 1,500 bales. Effectively, the requirement segregates bigger shippers from smaller ones and ensures that smaller shippers last year will stay that way this year.

OCTOBER 05, 2012


(4) Eligibility to apply for a subsequent RC will be on completion of at least 50% of the exports against the RC obtained now under this notification. In effect, this means a shipper can have multiple sale contracts under one RC, but cannot exceed 10,000 bales in total. Also, at least half of those bales must be shipped before the exporter can re-apply for another RC. Exporters are required to submit the documentary proof of such exports to the concerned RAs along with the application for issue of new RC.

(5) Revalidation of Registration Certificates will not be permitted.

If these requirements were not onerous enough already, the DGFT also is enforcing requirements for emailed applications for RCs. In particular, emailed applications for RCs must mention details of the letter of credit/FIRC (giving evidence of advance payment). Also, the DGFT is requiring the number of the instrument and date of such instrument (LC/FIRC) be listed in the message body of e-mail. Once the e-mail has been sent to the DGFT, a hard copy of the application along with a print-out of the e-mail sent must be submitted to the RA within two working days. Many in the domestic industry find these requirements redundant, unnecessarily burdensome, and fraught with pitfalls that could hinder trade and cost substantial money. As a result, these measures could have the unintended consequence of weighing on already-weaker domestic prices through the marketing year.

Globecot News - Oct 05, 2012

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