Thursday, September 21, 2017

Imports by competitors Sri Lanka and China increase; Darjeeling impact muted

Notwithstanding the loss of exports on account of the prolonged closure of the Darjeeling tea estates, India’s tea exports have increased 4.6% by volume in the first seven months of 2017, statistics showed.

Interestingly, two countries where Indian teas made major inroads were China and Sri Lanka — among India’s top rivals in the global tea arena. Exports increased 150% to the island nation and by 71% to China according to Tea Board statistics. “We hope to maintain the trend,” S. Soundararajan, secretary at the Board told The Hindu.

Total exports stood at 121.1 million kg in January-July 2017, against 115.8 million kg a year earlier. India exported 227 million kg last year.The more than 90-day closure of the Darjeeling tea industry by the Gorkha Janmukti Morcha, which is demanding a separate state, has harmed the interests of the premium and speciality teas but has not hampered India’s overall tea exports, either by volume or by value.Darjeeling produces about 8 million kg annually, of which about 6 million kg is exported. Production between January and June, in the 87 tea estates in Darjeeling halved from 4.1 million kg a year earlier to 2.1 million kg. No export figures are available, but exporters are facing order cancellations, enquiries revealed.Three countries have played a prominent role in the current year’s export scenario — China, Sri Lanka and Egypt. An erstwhile green-tea consumer and producer, China has, of late, taken to black tea production, of which there is increased demand from the youth segment. Sri Lanka has increased imports of Indian tea for blending, it was learnt.

Egypt’s imports rise

Egypt, a traditional market for Indian teas has almost doubled its imports in the period. India has also seen a rise in exports to Ukraine and Kazakhstan. Taken with Russia, the CIS region is India’s single-largest block for tea exports.

The Tea Board has facilitated several international expositions and delegations this year. While there was a delegation to Moscow this month, there were two delegations to the U.S. and to Chile in June.

Chilean fruit export volumes rose in 2016-17

U.S.-bound exports surged to further cement the country’s position as the leading market for Chilean fruit, while the Netherlands lost ground as the port of call in Europe.

Chilean fruit exports were up 4.3% in 2016-17 to reach almost 2.6 million metric tons (MT), but the campaign was marked by challenges arising from earlier harvests for most crops.

The Chilean Fruit Exporters Association’s (ASOEX) recently released figures show the United States continued to be the top market by country with growth of 9.7% to 869,296MT, followed by China (including Hong Kong) which saw a slight drop in volume down to 231,647MT.

The gap in export volumes between the country’s two leading fruit commodities, grapes and red apples, widened with the former increasing 6.5% to 732,498MT and the latter down 5.4% at 616,694MT.

Avocados rose from fifth to fourth place courtesy of a 36.5% year-on-year volume increase to 163,600MT, coming in behind kiwifruit which had a slight drop of 3.4% to 179,393MT.

Other fruits that saw export increases included pears (+17.1%; 148,940MT), blueberries (+13.7%; 103,897MT), cherries (+13.8%; 95,342MT), lemons (+13.1%; 82,526MT), oranges (+3.6%; 77,919MT), mandarins (+37.1%; 75,973MT) and nectarines (+8.2%; 62,107MT).

But the news of higher volumes, as is often the case in the fruit industry, was not entirely positive.

“Despite the fact that overall shipments were greater than in the previous year, the season was affected by adverse climatic conditions for the fruit industry, such as unexpected frosts and rains which had effects on production and overseas shipments,” ASOEX president Ronald Bown said in a release.

“To that can be added that in this campaign practically all fruit types had earlier harvests of between two to three weeks, which meant exports started earlier and because of that they coincided with local production and supply from other countries,” he said.

The executive highlighted this dynamic had a negative effect on the behavior of markets, and the situation was particularly complicated in the United States.

And while the figure was higher than last year, it was still short of the 2.65 billion MT achieved in 2012-13. The release did not provide details of export returns, as the association’s key focus for the report was the changes in shipment figures.
Market changes

Like the USA, the European market saw a sharp uptick in imports of Chilean fresh fruit, jumping 8.7% to 596,891MT. But shifts within the old continent were pronounced.

Leading European importer and re-exporter the Netherlands saw a 17% decline in volume arrivals to 186,704MT, giving way to sharp rises in Chilean fruit imports in other EU markets such as Germany (+144%; 57,181MT), Spain (+27.8%; 47,933MT), Italy (+12.7%; 39,693MT), France (+51%; 33,219MT) and Belgium (+116.9%; 11,214MT).

England retained its spot as the second-largest European market for Chilean fruit, holding steady with a 0.9% increase to 107,859MT, while Russia was the third-largest European market receiving 72,912MT representing a 29.2% rise.

Meanwhile, even though exports to Eastern markets were down slightly at 479,620MT, the 0.6% reduction was mainly due to reduced exports to the Chinese mainland and Hong Kong, and to a lesser extent India.

Upward movements were seen in Taiwan, China (+5.8%; 70,447MT), South Korea (+4.2%; 45,726MT), Japan (+15.5%; 33,909MT), Indonesia (+81.5%; 8,625MT) and Thailand (+13.9%; 6,119MT).

Exports to the Middle East were down 8% at 90,117MT, Latin America’s intake dropped 2.2% to 506,188MT mainly due to a sharp drop in exports to Brazil, while Canada’s imports rose 6.4% to 55,637MT.

In terms of export origin, there was a rather dramatic change in the ports where produce was shipped from in 2016-17.

Leading port Valparaiso increased its volumes by a whopping 40.1% to 1.59 million MT, while San Antonio’s volume was down 38.9% at 543,593MT.

Meanwhile, recovery from damages caused by an earthquake and subsequent tsunami led to a 200% uptick in exports from the port of Coquimbo, according to ASOEX.

In addition, the opening of a USDA-approved phytosanitary inspection site in Cabrero spurred a 30.5% uptick in exports from the Port of Coronel south of Concepción, which is close to a major region for the production of blueberries, cherries and apples.

Wednesday, September 20, 2017

Modi government finds a fix for India's big economic worries; remedial measures likely soon

NEW DELHI: The government may soon unveil a package of measures to speed up growth, generate employment, lift exports and step up investment in infrastructure.

A broad framework to boost the economy was discussed in a meeting of ministers and officials chaired by finance minister Arun Jaitley late Tuesday evening as the government grappled with a slump in growth.

Prime Minister Narendra Modi will take a final decision on the measures, according to people with knowledge of the deliberations. “We may need to take some specific, targeted steps... It's not as if there is a course correction,” a government official said.

There has been concern in government circles over growth slumping to a three-year low of 5.7% in the April-June quarter with disruption due to the rollout of goods and services tax (GST) and lingering impact of demonetisation being the primary cause. A rise in the current account deficit and inflation has added to worries. Some economists have argued that the decline is structural in nature and needs to be addressed appropriately.

Finance minister Jaitley is expected to consult other ministries before preparing a detailed plan that will be presented to the prime minister. The plan is expected to examine the reasons for the slowdown and the measures that can be taken to accelerate growth. A stocktaking meeting by the prime minister could not take place on Tuesday.

Chief economic advisor Arvind Subramanian had briefed the prime minister on the economic situation last week.

The meeting was attended by commerce and industry minister Suresh Prabhu, Niti Aayog vice chairman Rajiv Kumar, secretaries of key economic ministries and the additional secretary to the PM.

The Confederation of Indian Industry (CII) called for a 100 basis point reduction in interest rates to “inject huge growth impulse” and urged the Centre and states to ensure that public capital investment remains elevated even as it pointed to a rebound in many sectors. A basis point is 0.01percentage point. The Reserve Bank of India is set to make its next monetary policy statement on October 4.

State Bank of India’s Ecowrap said the economy has been in slowdown mode since the second quarter of FY17 and such prolonged slump cannot be called technical or transient.

Quarterly growth has declined from 7.9% in first quarter of FY17 to 5.7% in first quarter of FY18. SBI group chief economic advisor Soumya Kanti Ghosh said there is urgent need of a fiscal push to shore up growth. That may not be easy since the government has pledged to reduce fiscal deficit to 3.2% of GDP this year and 3% next year.

India’s exports have not picked up to the extent expected even as the global economy has rebounded. Export growth was 8.57% in the April-August period while imports rose 26.63%, worsening the trade deficit and the current account deficit.

The appreciation of the rupee has eroded India’s exports competitiveness while teething troubles with GST have not helped. Exporters met revenue secretary Hasmukh Adhia to present demands for relief.The sluggish growth has also led to worries about job creation.

Korea objects to curbs on gold imports

NEW DELHI: South Korea has objected to India’s move to restrict all forms of gold imports from the country, saying it is not compliant with the norms and that India should have discussed the issue first instead of unilaterally taking the decision. The objection comes ahead of a highlevel meeting of the trade ministers of the two countries in Seoul later this week to review the India-South Korea free trade agreement. On its part, India has reasoned that the move is justified as South Korea does not produce gold but was being used only to circumvent import duty on the metal.

On August 25, India had put all forms of gold import from South Korea in the restricted category wherein importers will need permission from the government before importing them.

“They have raised objections, saying the move is not compliant with norms,” said one official privy to the details. India's decision of a clamp down came in the wake of more than $1 billion worth of gold imports from South Korea between July 1and August 21.

India's FTA with South Korea is called the Comprehensive Economic Partnership Agreement (CEPA) under which the 10 per cent basic customs duty on gold has been eliminated. Under the goods and services tax (GST), the 12.5 per cent countervailing duty on gold imports was replaced by a 3 per cent integrated GST.

Hence, as per the present norms, gold imports from a country with which India does not have a trade pact attract a 10 per cent BCD and a 3 per cent GST, while those from the FTA channel have to pay only the 3 per cent GST.
This makes imports via treaty countries attractive. Another official aware of the development said that South Korea also complained that India could have discussed the issue during the review of the CEPA, which is scheduled for later this week.

Japan exports surge at fastest in nearly four years on global demand

TOKYO (Reuters) - Booming shipments of cars and electronics in August drove up Japan's exports at the fastest pace in nearly four years, further evidence that overseas demand is strong enough to support healthy economic growth.
The 18.1 percent annual increase in exports was the fastest since November 2013 and handily beat the median estimate for a 14.7 percent annual rise seen in a Reuters poll.

August's export result was well up on July's 13.4 percent, and marked a ninth straight month of expansion.
Export growth is seen likely to continue as the global economy remains on a solid footing, which should underpin policymakers' confidence in Japan's economic outlook.
The Bank of Japan is expected to keep monetary policy on hold at a meeting ending on Thursday as inflation remains confusingly low despite data pointing to solid economic growth.

"This data suggests that overseas demand will drive Japan's growth in July-September and make up for slight weakness in consumer spending," said Hiroaki Muto, economist at Tokai Tokyo Research Center.
"The global economy is healthy, so expect Japan's exports to accelerate even further."
Japan's exports rose 10.4 percent by volume in August from a year ago, following a 2.6 percent annual increase in July.
Export volumes rose the most since 2010 in August, suggesting that net trade should have started to support growth in the third quarter, Marcel Thieliant, Japan economist at Capital Economics, said in a research note.

A pickup in shipments of cars, car parts, and semiconductor manufacturing equipment increased Japan's year-on-year exports to the United States in August by 21.8 percent versus an 11.5 percent annual increase in the previous month.
The rise in Japan's exports to the United States in August was the fastest since December 2014, finance ministry data showed.
China-bound exports rose 25.8 percent year-on-year in August, faster than a 17.6 percent annual increase in July as Japan shipped more electronic screens panels and plastics.

Imports rose 15.2 percent in the year to August, versus the median estimate of an 11.8 percent increase.
The trade balance came to a surplus of 113.6 billion yen ($1.02 billion), versus the median estimate of a 93.9 billion yen surplus.
Capital Economics' Thieliant noted, however that: "The surge in the annual growth rates was driven by base effects. In seasonally-adjusted terms, both export and import values rose by a modest 1.2 percent month-on-month."

Tuesday, September 19, 2017

UM Lohia sees India as export hub for big bikes

UM Lohia Two Wheelers, a joint venture between US-based UM Motorcycles and Indian electric two-wheeler company Lohia Auto Industries, is planning an aggressive expansion in India and overseas.

It will make India an export hub for large bikes and ship India-built vehicles to Europe from next year. It sees favourable growth outlook for 300cc bikes in Europe. It has been exporting bikes made at Kashipur (Uttarakhand) plant (of Lohia Auto) to Nepal and Bhutan.

“We are developing bikes with ABS system, which is a requirement for the European market. The process is in final stages of validation and we will start exporting bikes to Europe from next year,” said Jose Villegas, Director, UM India Two Wheelers.

In the domestic market, it is looking to set up a new factory in the next 18 months and achieve close to 100 per cent localisation from the current 60-70 per cent. The company, which has just introduced two sub-300cc bikes — Renegade Commando Classic and Renegade Commando Mojave at ₹1.94 lakh and ₹ 1.85 lakh (ex-showroom, Chennai) respectively — expects to grow its annual volumes to 50,000-60,000 units by 2018-19 from 10,000 plus now.

“Presently, we have 57 dealers across the country and we hope to increase the number to 72 around Diwali,” said Ayush Lohia, Director, UM Lohia Two Wheelers, on the sidelines of the launch of the new bikes here.

The company expects its new bikes, particularly the Classic model, to fetch higher volumes as it bets on the cruiser category of mid-size super bike market.

“No other company is offering touring-ready cruisers with such features and equipment at this price like our Classic model. We started bookings a week ago and the response has been four times than we anticipated,” said Villegas, but declined to provide the numbers.

The company is simultaneously developing higher cc engines and platforms for India and other markets. Given that the growth in 300-350cc market is in India, the company expects all of these customers to mature to the next level and look at buying 700cc plus bikes in the next five years.

Monday, September 18, 2017

Vietnam loses $15mn from crude oil sales to China

The country exported 4.9 million tons of crude oil at $408 per ton to other markets but charged only $400 per ton for the 1.7 million tons it exported to China, according to the General Department of Vietnam Customs.
During the same period, Vietnam’s crude oil exports rose 2 per cent year-on-year to an estimated 4.748 million tons, or 143,000 barrels per day (bpd). Revenue in the eight-month period rose 24.5 per cent to $1.88 billion.
Oil product imports increased 9.1 per cent to an estimated 8.649 million tons, while the value of imports jumped 38.2 per cent to $4.46 billion.
Vietnam’s liquefied petroleum gas imports during the period increased 19 per cent from a year earlier, to 968,000 tons.
Reuters reported previously that August would mark the first month on record in which Vietnam was a net importer of crude oil, citing shipping data from Thomson Reuters Eikon.
The surge in overseas orders comes as Vietnam’s 200,000 bpd Nghi Son refinery, its second such facility, prepares to produce liquefied petroleum gas, gasoline, diesel, kerosene, and jet fuel, mainly for the domestic market, likely starting later this year or in early 2018.
With local oil production stalling, traders said the country, with over 90 million people and 6 per cent annual economic growth, would gradually increase its crude imports.
“We expect to send bigger and more frequent volumes of crude to Vietnam in the future,” a senior oil trading manager said.
“Vietnam is one of the key new centers of oil demand growth, and we wouldn’t want to miss this opportunity.”
Vietnam’s orders are still small compared with Asian’s top buyers, China and India, which import around 8 million and 4 million bpd, respectively.
“But in an environment of oversupply, this incremental new demand is very welcome for crude suppliers,” the trading manager said.
Prime Minister Nguyen Xuan Phuc approved a plan in July for the country’s total crude oil and oil product stocks to be at least 90 days’ worth of net imports by 2020, joining developing nations such as China and India in establishing an oil buffer that will enhance its energy security as imports have jumped while domestic production is on the decline.
The government said it planned to keep commercial oil stockpiles stable at 35 days of net imports while crude and oil products reserves at import terminals and those held by trading companies are expected to reach 20 days of the country’s net imports by 2025.
The country’s two refineries are estimated to meet about two-thirds of its demand when the Nghi Son refinery begins operations later this year or in 2018.

Sunday, September 17, 2017

India exempts import duty on goods for FIFA U-17 World Cup

NEW DELHI: The government has exempted from import duty sports items and a wide range of goods for the upcoming FIFA U-17 World Cup India, which will see 24 nations vying for the coveted trophy.

The first FIFA event to be held in India will be spread over six cities starting October 6 and have 52 matches. The final football match, on October 28, will be played at Kolkata's Salt Lake Stadium.

"All sports goods, sports equipment and sports requisites; fitness equipments; team uniform/clothing; spares, accessories and consumables of the same" will be exempt from the whole of the duty of customs leviable subject to certain conditions, said a notification.
The notification issued recently by the Central Board of Excise and Customs (CBEC) further said the importers will have to furnish undertakings that all the goods, excluding gift items, souvenirs, mementos will be re-exported within three months of conclusion of the World Cup.
Doping control equipment, first aid kits, satellite phones/GPS, dining/kitchen items, and office consumables, are also among the goods that have been exempted from the import duty.

Broadcast equipment and supplies used in organising and during the event imported by FIFA Host Broadcasters too falls in the exemption list.
These goods will also be exempt from the integrated tax levied under the GST.
The 17th edition of the FIFA U-17 World Cup, under the slogan 'Football takes over', will be held in six cities -- New Delhi, Margao, Kochi, Guwahati, Kolkata and Navi Mumbai.

India, as the host country, is automatically qualified for the FIFA U-17 World Cup 2017.
Brazil, Spain, Germany, France, USA, England, Paraguay, Japan and Korea DPR, are among the nations participating in the Federation Internationale de Football Association (FIFA) World Cup event. 

Saturday, September 16, 2017

$400 billion & counting: India puts up a special show

MUMBAI | KOLKATA: Four years after a currency crisis singed Indian financial assets, the country’s foreign exchange reserves have surged to a record $400 billion, up 45% from the trough, bolstering the hope that there’s enough cushion to face any headwinds originating in global markets.
India now ranks eighth in foreign exchange reserves in a list that’s headed by China ($3.09 trillion) and Japan ($1.2 trillion).
The record amount of reserves accumulated, mainly through the flow of funds from portfolio investors and foreign direct investment in manufacturing as well as services, reflects the strength of India’s macro economy and investor faith in growth.
But the swelling dollar corpus has meant a stronger rupee, hurting exports amid rising imports, thus posing a currency management challenge for the Reserve Bank of India (RBI).
The current account deficit (CAD) widened to 2.4% of gross domestic product in the June quarter, up from 0.1% in the year-ago period, the central bank said. To be sure, a recovery in global demand helped India’s exports rebound in August after slowing in July, the government said on Friday in a separate data release. But imports outpaced exports and grew 21%, widening the trade deficit to $11.6 billion from $7.7 billion in the year-ago period.
“Record high foreign reserves, mainly borne out of strong portfolio inflows, reinforce investors’ positive view on the economy, beyond the attraction of higher yields and a stable currency,” said Radhika Rao, economist at DBS Bank in Singapore. “With the central bank intervening heavily in the forwards space, the reserves stock is bound to climb further as those swaps mature.” Foreign exchange reserves stood at $400.73 billion for the week ended September 8, RBI said on Friday. Of this, about 6% was contributed by currency movements with the dollar depreciating across a range of currencies.
India was among those at the receiving end of global financial turmoil in 2013 when then US Federal Reserve chairman Ben Bernanke roiled the markets with comments on the possible tapering of the quantitative easing that began after the 2008 global financial crisis.

Rupee Appreciation Affects Trade 
The rupee plummeted to a record 68.85 against the dollar and reserves slumped to a low of $275 billion, prompting the government and central bank to embark on a series of crisis-management measures. Among these was a special threeyear deposit scheme for non-resident Indians (NRIs) with a hedge facility that brought in about $27 billion, which helped stabilise the currency.
Since then, the focus on inflation containment at 4% (with a 2 percentage point band on either side), restricting the fiscal deficit and macroeconomic reforms have helped soothe investor nerves.
Foreign portfolio investments have been strong with equity investments at Rs 42,659 crore in 2017 and Rs 1.32 lakh crore going into debt. This has resulted in the rupee strengthening 6% this year, making it the best performer among major emerging economies. It should be noted that the rupee slumped to 68.86 in November 2016 before recovering. It closed at 64.09 to the dollar on Friday.
The currency appreciation is making imports more attractive while exports are becoming uncompetitive. The latest RBI data shows that the current account deficit, the excess of imports over exports, was at $14.3 billion in the June quarter, up from $0.4 billion a year earlier, and $3.4 billion in the March quarter.
“The widening of the CAD on a year-on-year basis was primarily on account of a higher trade deficit of $41.2 billion brought about by a larger increase in merchandise imports relative to exports,” RBI said in a statement.
“The sharp surge in the current account deficit comes as no surprise, with the spike in gold imports prior to the introduction of GST (goods and services tax) responsible for half of this uptick,” said Aditi Nayar, economist at ICRA, the Indian unit of Moody’s. “With the size of the current account deficit in Q1 nearly as high as the FY2017 level of $15 billion, the FY2018 deficit may double to around $30-32 billion or 1.2-1.3% of GDP.” 

India's exports up 10.29% in August; trade deficit widens to $11.64 billion

New Delhi: India's exports grew by 10.29 percent on a yearly basis to USD 23.81 billion in August on account of rise in shipments of engineering, petroleum, chemicals and pharmaceuticals products, official data released on Friday showed.

Imports too rose by 21.02 percent to USD 35.46 billion in August from USD 29.30 billion in the year-ago month due to rise in inward shipments of crude oil and gold, according to the data released by the commerce ministry.

The trade deficit in the month widened to USD 11.64 billion from USD 7.7 billion during the same month a year ago.
Gold imports increased by 68.90 percent to USD 1.88 billion in August against USD 1.11 billion in the same month last year.

Oil imports was valued at USD 7.75 billion in August, an increase of 14.22 percent over the same month in 2016.

Cumulative exports during April-August of 2017-18 rose by 8.57 percent to USD 118.57 billion while imports increased by 26.63 percent to USD 181.71 billion, leaving a trade deficit of USD 63.14 billion.

Friday, September 15, 2017

Kolkata Port : 'Import racket ' busted ,DRI arrests four

The Directorate of Revenue Intelligence (DRI) on Thursday busted a “racket” in which a shell company was used to import undervalued imports worth Rs 18 crore. Four persons have been arrested.“The magnitude of misdeclaration is huge. The extent of undervaluation has been found between 80 to 100 times to the value declared before customs,” said an official. This helped them evade customs duty. “As part of this operation launched by the DRI four consignments from China and Hong Kong imported at Kolkata port by one Kolkata based firm were intercepted and examined.”As per sources, the importer used a Kolkata-based shell company with a valid Import Export Code (IEC) to import the goods.
“The shell company’s directors with other persons allowed the IEC to be misused for a hefty consideration without going into the nitty-gritty of the imports,” an official told The Indian Express.The accused include Shailendra Singh (the IEC holder), Sanjay Agarwal (suspected to be the middleman in the racket), Mukesh Kumar (a partner in the shell company) and Lakshman K Das

Wednesday, September 13, 2017

India’s exports to Japan halve to $3.85 billion in four years

India’s trade deficit with Japan has widened to $5.9 billion in 2016-17 against $2.7 billion in 2013-14.New Delhi: Amid growing bonhomie between Japan and India —Asia’s second and third largest economy, respectively—lies the dark reality that in just four years, Indian exports to Japan have almost halved to $3.85 billion in 2016-17, from $6.81 billion in 2013-14.

Japanese Prime Minister Shinzo Abe is currently on a two-day state visit to India and aims to further strengthen the strategic partnership between the two countries. Abe was received by Indian Prime Minister Narendra Modi in Ahmedabad.
The Comprehensive Economic Partnership Agreement (CEPA) signed by India and Japan in February 2011 and implemented from August 2011 was expected to boost bilateral trade in goods and services. However, India’s merchandise exports started contracting in four out of five years between 2012-13 and 2016-17. As a result, India’s trade deficit with Japan has now widened to $5.9 billion against $2.7 billion in 2013-14. In 2016-17, India’s exports to Japan contracted 17.5%, and its imports fell by 1%.
Commerce ministry analysis of data for the period 2009-10 to 2013-14 indicates that preferential imports under the CEPA still form a small proportion of total imports. In 2013-14, it stood at 22.4% of total imports under the India-Japan CEPA.
“The negative or slow growth in trade with Japan is a matter of concern for India, in view of the fact that there is high potential for faster progress on goods and services trade,” the Indian embassy in Tokyo says on its website.

Even the foreign trade policy statement 2015-20 released by the commerce ministry alludes to non-tariff barriers faced by Indian exporters. “While on the one hand, the Japanese market has not seen growth in the product areas of India’s interest, Indian business entities are facing problems in market access. These problems can be briefly said to be arising out of language constraints faced by Indian companies in Japan, highly demanding product and service standards, regulations that require business modalities making market access a costly venture, and a relative lack of intensive effort on the part of Indian business,” it said.
“The other route of access of India’s export sectors into Japan will require language proficiency, negotiating a simplified framework for market access and continuous trade promotion efforts on the part of businesses and the government,” it added.

India’s primary exports to Japan have been petroleum products, chemical elements, fish and fish preparation, non-metallic mineral ware, metalliferous ores and scrap, clothing and accessories, iron and steel products, textile yarn/fabrics, machinery, feeding-stuff for animals.

India’s primary imports from Japan are machinery, iron and steel products, electrical machinery, transport equipment, chemical elements, plastic materials, manufactures of metals, precision instruments, rubber manufactured, coal and briquettes.
Bilateral trade in services between India and Japan also remains subdued. India’s exports of IT and IT enabled services to Japan account for less than 1% of Japan’s IT services market and India also has an overall trade deficit in services with Japan unlike the surplus position it has with many developed countries.

“The CEPA sub-committee on services could take up several implementation issues including those relating to expeditious issue of visas for IT and other service providers, clarification of ‘technology services’ in the bilateral double taxation agreement, regulatory issues relating to financial services, particularly insurance and progress on the built-in agenda in CEPA including in respect of nurses and healthcare workers and mutual recognition agreements among professional bodies,” said a study of India-Japan trade published by New Delhi-based think tank Research and Information System for developing countries.
Pravakar Sahoo, professor at the Institute of Economic Growth, said the CEPA has been a failure when it came to boosting India’s exports to Japan. “Since tariff lines of Japan were already close to zero, it is India who gave more market access to Japan through significant tariff cuts,” he said.

However, Sahoo said Japan has very strict quality controls and Indian exporters need to comply with those regulations to increase exports to this lucrative market.

The commerce ministry plans to run special programmes for trade promotion in Japan in identified sectors like textiles, garments, information technology services, pharmaceuticals, leather products and agro-processed products, according to the FTP statement. Biswajit Dhar, professor of economics in the Jawaharlal Nehru University, said India should look at higher investment from Japanese companies along the Delhi Mumbai Industrial Corridor.

“Building of the DMIC which has been languishing for years needs to be fast-tracked. Industries along the corridor could help us boost investment led exports,” he added.

Export Summary-U.S. sells soy to Mexico; South Korea buys corn

Sept 13 (Reuters) - Snapshot of the global export markets for grains, oilseeds and edible oils as reported by government and private sources as of the end of business on Wednesday:
SOYBEAN SALE: The U.S. Department of Agriculture said private exporters sold 167,370 tonnes of U.S. soybeans to Mexico for delivery during the 2017/18 corn marketing year that began Sept. 1.
CORN PURCHASE: South Korea's largest feedmaker Nonghyup Feed Inc. (NOFI) bought 138,000 tonnes of corn in an international tender which closed on Wednesday, European traders said. NOFI had also sought 65,000 tonnes of feed wheat, but rejected all offers and made no purchase.
CORN PURCHASE: A group of Israeli private buyers bought at least 30,000 tonnes of corn in a tender which closed on Wednesday, European traders said. The corn was expected to be sourced from the Black Sea region. It was purchased at around $172.80 a tonne c&f for November/December shipment. The group also purchased about 13,000 tonnes of feed wheat at around $182 a tonne c&f. No purchase was believed to have been made of 20,000 tonnes of feed barley also tendered for.
WHEAT TENDER PASSED: Jordan's state grain buyer made no purchase in an international tender to buy 100,000 tonnes of milling wheat which closed on Wednesday, European traders said. A new tender is expected to be issued in coming days, closing on Sept. 20, they said.
FEED WHEAT AND BARLEY PURCHASE: Japan's Ministry of Agriculture said it would import 100 tonnes of feed-quality wheat, and 6,000 tonnes of barley for livestock use, via a simultaneous buy and sell (SBS) auction that closed late on Wednesday.
RICE TENDER UPDATE: The lowest offer in a tender from Bangladesh's state grains buyer to buy 50,000 tonnes of rice which closed on Tuesday was $438.00 a tonne CIF liner out, sources in the country's grains buying agency and European traders said. The offer was submitted by Thailand-based trading company Siam Rice trading. Offers were still being considered and no purchase had yet been made, they said.
BARLEY TENDER: Algeria's state grains agency issued an international tender to purchase a nominal 35,000 tonnes of feed barley, European traders said. Origin was optional and tender deadline is Sept. 13, they said. Shipment was sought between Nov. 1-15 in at least two consignments.
WHEAT TENDER: Japan's Ministry of Agriculture is seeking to buy a total of 139,382 tonnes of food-quality wheat from the United States, Canada and Australia in a regular tender that will close late on Sept. 14.
FEED BARLEY TENDER: Jordan's state grain buyer issued another international tender to purchase 100,000 tonnes of animal feed barley to be sourced from optional origins, European traders said. Tender deadline is Sept. 14. Traders had been anticipating a new tender after Jordan made no purchase in its previous tender for 100,000 tonnes of barley on Sept. 7.
SOYBEAN TENDER: South Korea's state-backed Agro-Fisheries & Food Trade Corp issued international tenders to purchase around 10,000 tonnes of soybeans free of genetically modified organisms. The registration deadline to participate in both tenders is Sept. 14 with offers to be submitted on Sept. 15, they said.
SOYMEAL TENDER: Iranian state-owned animal feed importer SLAL issued an international tender to purchase about 200,000 tonnes of soymeal, European traders said. Offers in the tender must be submitted on Oct. 2. The soymeal can be sourced from Argentina or Brazil only and prices must be submitted in euros.

Tuesday, September 12, 2017

India renegotiates 20-year Australian LNG import deal with ExxonMobil

NEW DELHI: India has agreed to buy an extra one million tonne of liquefied natural gas (LNG) from Exxon Mobil's Gorgon project in Australia in a trade-off for cheaper rates for the originally-contracted volume.

Petronet LNGBSE 0.97 %, a state-controlled natural gas importer, had signed a deal with Exxon Mobil in 2009 to purchase 1.44 million tonnes of LNG annually for 20 years, and began receiving supplies in January at a rate that was much higher than the spot. An LNG supply glut and a collapse of crude prices, with which LNG prices are mostly linked, have prompted buyers' demand for renegotiation and increased suppliers' inclination to accommodate such demand.
Petronet and Exxon Mobil 'have reached a broad understanding of terms', the company informed stock exchange on Monday. The final agreement is a couple of months away, a person with direct knowledge of the matter said.
As part of the deal, Petronet will take about another million tonne of LNG at 12.5 per cent of the Brent oil price, the person said. The original supplies will come for 13.9 per cent of Brent, down from 14.5 per cent earlier, and the transportation cost would shift on to Exxon from Petronet earlier, he said.
Petronet had similarly reworked a long-term gas purchase deal with Qatar in November 2015 after spot rates crashed, leaving the company with fewer consumers willing to accept expensive gas. There again Petronet agreed to take an extra one million tonne to get the supplier, Qatar's Rasgas, to change pricing formula that brought down prices.

State-run GAIL too is caught in an expensive gas import deal with US and trying to renegotiate the terms. GAIL has a contract to buy 3.5 million tonnes of LNG annually for 20 years from Cheniere Energy and has also booked capacity for another 2.3 million tonnes a year at Dominion Energy's Cove Point liquefaction plant. US supplies would start early next year.
LNG import deal

Export Summary-U.S. sells soybeans to unknown; Egypt seeks vegoil

Sept 11 (Reuters) - Snapshot of the global export markets for grains, oilseeds and edible oils as reported by government and private sources as of the end of business on Monday:
SOYBEAN SALE: The U.S. Department of Agriculture said private exporters sold 352,000 tonnes of U.S. soybeans to unknown destinations for delivery during the 2017/18 corn marketing year that began Sept. 1.
FEED BARLEY PURCHASE: Turkey's state grain board TMO bought 60,000 tonnes of feed barley in a tender which closed on Monday, European traders said. The purchase awards were still subject to confirmation.
VEGOILS TENDER: Egypt's state buyer, the General Authority for Supply Commodities (GASC), said on Saturday it was seeking crude soyoil and sunflower oil in an international tender. The deadline for offers is Sept. 12, it said.
FEED GRAIN TENDER: A group of Israeli private buyers issued international tenders to purchase up to 90,000 tonnes of corn, 50,000 tonnes of feed wheat and 20,000 tonnes of feed barley, European traders said. The tenders close on Sept. 13. The corn should be sourced from the Black Sea region and is sought in three 30,000 tonnes consignments for shipment between Nov. 20, 2017, to Feb. 10, 2018.
FEED BARLEY TENDER: Jordan's state grain buyer issued another international tender to purchase 100,000 tonnes of animal feed barley to be sourced from optional origins, European traders said. Tender deadline is Sept. 14. Traders had been anticipating a new tender after Jordan made no purchase in its previous tender for 100,000 tonnes of barley on Sept. 7.
FEED BARLEY, CORN TENDER: Iranian state-owned animal feed importer SLAL issued two international tenders to buy up to 200,000 tonnes of feed barley and 200,000 tonnes of corn, European traders said. The tenders close on Sept. 11.
RICE TENDER: Bangladesh's state grains buyer issued another international tender to purchase 50,000 tonnes of rice, traders said, stepping up the country's rice import program. The tender deadline is Sept. 12. The latest tender on Thursday sought non-basmati parboiled rice with offers to be made in CIF liner-out terms, including cost, insurance, freight and ship unloading costs.
WHEAT TENDER: Jordan's state grains buyer issued an international tender to purchase 100,000 tonnes of hard milling wheat which can be sourced from optional origins. The tender closes on Sept. 13.
SOYBEAN TENDER: South Korea's state-backed Agro-Fisheries & Food Trade Corp. issued international tenders to purchase around 10,000 tonnes of soybeans free of genetically modified organisms. The registration deadline to participate in both tenders is Sept. 14 with offers to be submitted on Sept. 15, they said.
SOYMEAL TENDER: Iranian state-owned animal feed importer SLAL issued an international tender to purchase about 200,000 tonnes of soymeal, European traders said. Offers in the tender must be submitted on Oct. 2. The soymeal can be sourced from Argentina or Brazil only and prices must be submitted in euros.

Philippines imports down for second straight month in July, exports up

MANILA, Sept 12 (Reuters) - The Philippine Statistics Authority on Tuesday released data on July exports and imports. KEY DATA July June May April March Feb Total exports ($bln) 5.28 4.91 5.49 4.81 5.58 4.74 yr/yr chg (pct) 10.4 5.8 14.0 19.1 18.1 8.7 Electronics ($bln) 2.76 2.61 2.74 2.45 2.8 2.47 yr/yr chg (pct) 11.8 4.4 17.8 6.8 19 15.9 Total imports ($bln) 6.93 7.06 8.24 6.86 7.88 6.51 yr/yr chg (pct) -3.2 -1.3 16.6 -0.1 18.0 15.2 Electronics ($bln) 1.55 1.64 1.97 1.81 2.01 1.74 yr/yr chg (pct) -21.0 -8.4 12.9 -0.2 13.8 11.5 - Exports in the seven months to July rose 13.9 percent to $36.6 billion from a year ago, while imports were up 7.9 percent at $51.2 billion from a year ago. - The annual decline in imports was due to double-digit reduction in the shipment of iron and steel, electronic products and plastics in primary and non-primary forms. - The trade deficit of $1.65 billion in July was narrower than the previous month's $2.15 billion gap.

Monday, September 11, 2017

Gas stocks up 5-7% as India wins price cut on LNG import from ExxonMobil

Shares of gas companies, Petronet LNG and GAIL, rose between 5 and 7 percent intraday on Monday as investors cheered Petronet's successful renegotiation with Australia's Gorgon project for lower LNG prices.

Over the weekend, oil minister Dharmendra Pradhan said they renegotiated the pricing of liquefied natural gas (LNG) imported from Australia's Gorgon project to make the imported fuel affordable to price-sensitive domestic customers.

India has been trying to leverage its position as one of the biggest energy consumers to strike better bargains for its companies. In 2015 it renegotiated the LNG pricing formula with Qatar's Rasgas to buy the gas at half the original price.

"Indian customers will receive (Gorgon) LNG volumes at an amicable price soon. This is done in a similar way to what we did with LNG from Qatar," Pradhan said in a tweet.
India's top gas importer Petronet LNG signed a deal in 2009 with Exxon Mobil Corp to buy 1.5 million tonnes of LNG annually from Gorgon for 20 years. At that time Petronet agreed to buy LNG at a cost equivalent to 14.5 percent of the oil price and to pay for the shipping freight as well.

Supplies under the deal began from January 2017, with the landed price of gas costing about USD 11-13 per million British thermal units (mmBtu), almost double that of Asian spot LNG prices.

The Gorgon gas prices are now linked to about 13-13.5 percent of the global oil price on a delivered basis, two sources with knowledge of the negotiation said.

Renegotiation of the deal also shows how softening oil prices and a global supply glut are forcing LNG exporters to offer better deals to retain their share in global energy markets.

At 10:18 hrs, Petronet LNG was quoting at Rs 233.80, up Rs 9.70, or 4.33 percent, on the BSE, while GAIL India was quoting at Rs 398.45, up Rs 19.10, or 5.03 percent.

Sunday, September 10, 2017

Russia to boost wheat exports on expectations of record harvest

MOSCOW: The booming Russian agriculture sector is attracting new customers, with China and Venezuela planning to increase imports of Russian wheat. The country is expecting a record grain crop this year, exceeding the numbers from 1978. Four thousand tons of spring wheat will be delivered to China from Russia’s Novosibirsk region by October 10. It’s the first batch of wheat purchased by China’s largest food processor COFCO. “Together with our suppliers, we plan to discuss how to better meet the demand of Chinese mills. We want to know more about the production and the quality of Russian wheat in order to prepare for the expansion of imports,” said COFCO’s general manager for wheat Ma Lijun. COFCO is among the 500 largest global companies and is ready to import up to two million tons of Russian grain, gradually increasing to five million tons. Venezuela is also expecting to increase Russian wheat imports. President Nicolas Maduro says he plans to discuss it with his Russian counterpart Vladimir Putin. “I will talk to President Putin – very soon I’m going to Moscow – about increasing [deliveries of wheat – Ed.] to 100,000 tons,” said Maduro at a meeting of the country’s Constitutional Assembly. The current agreements is for Venezuela to import 60,000 tons per month.
Saudi Arabia, Iran, and Egypt have also expressed an interest in buying more grain from Russia, including wheat. Last year, Russia managed became the world’s leading exporter of grain, after shipping 34 million tons out of its 119 million ton harvest. According to the Moscow-based grain consultant ProZerno, the country is expected to harvest 130.7 million metric tons this year. It is 2.6 percent more than the previous record set in 1978 before the Soviet-Afghan War. Agriculture has become Russia’s second biggest export after oil and gas. The head of the United Nations’ Food and Agriculture Organization (FAO) Jose Graziano da Silva said Russia has made considerable progress in developing its agricultural sector and is now a major player in the world agricultural market.

wheat exports

Trade deficit may improve to $10.3 billion in August: Morgan Stanley

India's trade deficit is expected to improve in August to about USD 10.3 billion from USD 11.5 billion in July, largely on moderation in export as well as import growth, says a Morgan Stanley report.
According to the global financial services major, the moderation, on a year-on-year basis, is likely owing to higher oil prices and unfavourable base effects.

"We estimate a moderation of export growth to 3.4 per cent year-on-year in August from 3.9 per cent in July and imports of 11.3 per cent in August from 15.4 per cent in July," Morgan Stanley said in a research note.
The report noted that gold imports are also likely to have remained strong in August at around 61 tonnes (USD 2.5 billion), though lower than the pre-GST levels of about 130 tonnes (USD 5.4 billion).
Besides, non-oil non-gold imports, which is a proxy for domestic demand, is expected to continue to post strong growth.
According to official data, India's trade deficit stood at USD 11.44 billion in July from USD 7.76 billion in the year ago period.
Cumulative export during April-July of 2017-18 rose by 8.91 per cent to USD 94.75 billion while import increased by 28.30 per cent to USD 146.25 billion, leaving a trade deficit of USD 51.5 billion.

Meanwhile, the second part of the Economic Survey, which was tabled in Parliament in August, India's rising trade deficit and protectionist tendencies on the global front are areas to watch for in the short term.

Friday, September 8, 2017

German trade surplus narrows as imports outgrow exports in July

BERLIN, Sept 8 (Reuters) - German imports grew far faster than exports in July, narrowing the trade surplus in Europe's biggest economy, data showed on Friday.
Seasonally adjusted exports rose by 0.2 percent on the month while imports were up 2.2 percent, data from the Federal Statistics Office showed.
Both figures came in weaker than expected after a Reuters poll had pointed to exports rising 1.25 percent and imports jumping by 2.8 percent.
The seasonally adjusted trade surplus narrowed to 19.5 billion euros ($23.55 billion) from 21.2 billion euros in June. The July reading was lower than the Reuters consensus forecast of 20.3 billion euros.
Germany's wider current account surplus, which measures the flow of goods, services and investments, fell to 19.4 billion euros after an upwardly revised reading of 25.0 billion euros in June, unadjusted data showed.
The figures came after the Ifo institute said on Thursday that Germany's current account surplus is likely to remain the world's largest this year despite shrinking somewhat mainly due to higher costs for oil and natural gas imports. ($1 = 0.8280 euros)

Germany Exports Imports

China August imports beat expectations, but exports disappoint

China on Friday reported data pointing to strong domestic demand as imports beat expectations in August, although overall export growth eased.In August, China reported August exports were up 5.5 percent from a year ago in dollar terms, while imports were up 13.3 percent in dollar terms.

Analysts polled by Reuters expected a 6.0 percent rise in Chinese exports in August from a year ago in dollar terms. August imports were forecast to rise 10.0 percent in the same period.

"The strong import data suggests that domestic demand may be more resilient than expected in the second half," Louis Kuijs, head of Asia economics at Oxford Economics wrote in a note.As for exports, the headline figure points to a softening of global demand momentum, although a pickup in shipment growth to emerging Asia and the U.S. offset slower export expansion to the EU and Japan, Kuijs added.

The slowdown in export growth may be temporary, said ANZ's senior China economist, Betty Wang.

Even with the recent strength in the Chinese currency, China's role in global supply chains is unlikely to replaced in the near term as the country's export competitiveness shifts from low-value added to high-tech products, added Wang.

China's August trade balance was $41.99 billion, data from the General Administration of Customs showed.The country's surplus with the U.S. rose to $26.23 billion from $25.2 billion in July. The two countries' trade is closely-watched amid current tensions between the economic giants about trade practices.

China's economic data have been showing robust growth ahead of leadership changes later this year.

But many expect the mainland's economy to slow in the second half of the year due to a crackdown on debt and as the property market cools.

In July, China reported a 7.2 percent increase in imports and a 11.0 percent on-year rise in exports in dollar terms.

Market watchers are keeping their eyes on the health of the world's second-largest economy ahead of a key Communist Party meeting in October.

China on Friday also reported August exports were up 6.9 percent in yuan terms, while imports were up 14.4 percent in yuan terms from a year earlier, Chinese customs data showed.

Wednesday, September 6, 2017

Oilmeal exports surge 78%

India’s oilmeal exports are seen on a revival path. According to data released by the Solvent Extractors Association of India (SEA), there was a 78 per cent jump in the overall exports of oilmeals during the April-August period at 8,64,818 tonnes against 4,85,220 tonnes in the same period last year.

“In last three months, the export of oilmeals improved compared to the previous year, thanks to good monsoon, better oilseeds production and price parity,” said SEA. For the month of August, the exports nearly doubled from 71,879 tonnes in August 2016 to 1,39,568 tonnes in August 2017.

Export growth
The export of soymeals recorded steady growth since June from 45,975 tonnes to 81,079 tonnes in August, while castor seed meals dropped to 1,132 tonnes - lowest so far this year.

The apex trade body also noted that in percentage terms exports reflected improvement, but it continued to be lower compared to earlier years.
During the April-August period, South Korea was the top destination for India’s oilmeal exports with 2,88,502 tonnes, followed by Vietnam at 1,23,121 and Germany at 60,647 tonnes. While the rest of Europe imported 95,410 tonnes during the period, which is sharply up from 10,475 tonnes in the same period last year.
Sharp jump was also seen in exports to Thailand from 1,999 tonnes to 47,674 tonnes this year so far.
export of soymeals

Govt to fix 300,000 tonne import Quota for Sugar Mills in Southern India

India will soon permit import of 300,000 tonnes of raw sugar at a concessional rate of 25 per cent import duty against normal 40 per cent duty. Import is most likely to be permitted to sugar-starved mills in the southern states, where prices are Rs 2-2.50 higher than in Maharashtra.

Ramvilas Paswan, Union Consumer Affairs, Food and Public Distribution minister tweeted on Monday night that India will soon take a decision on sugar imports. He, however, did not share details of the quantum of imports to be allowed or the duty rates that would be imposed on them. 
However, sources close to the development said that the government will allow sugar imports up to a certain limit. 
"South Indian mills will get the permission to import 3 lakh tonnes of sugar to be refined and sold by mid-October," said a source. He added that a new crop sugar would enter the market by October-end and import supplies would not be able to help the mills in terms of managing the supply balance.
The government allowed import of raw sugar to mills and refineries three months back and a quota of 500,000 tonnes was fixed, along with a zero import duty to help address the crisis. While the industry is still waiting for a government notification, sources close to the development said the mills are expected to be allocated quota as last time, owing to the region's insufficient refining capacities.
As of now, sugar from Maharashtra is sold in Tamil Nadu as prices are over 5 per cent higher in the former state.

According to some industry experts, the import quota is not so high and smaller mills would be able to fire boilers just for a few days before they come to a halt again as boilers need to be fired three weeks before the usual crushing time in the region that begins from November-end and is over by December. As a result of this, not all mills might opt for the quota.

Another issue that has raised concerns among industry players is that refining raw sugar is less viable for smaller firms because it leads to higher wastage, as compared to making sugar from juice.
Last month, mills in south India had requested the government to permit them to import sugar. However, instead of allowing imports, the government had imposed a stock limit for mills last week. Sugar prices in the region, however, continued to be high, thereby, compelling the government to reconsider its position.
An indenting agent said: "The arrival of raw sugar across ports in southern India may not take much time as sugar imported by Bangladesh may be diverted to Indian ports. Moreover, raw sugar lying in customs bonded warehouses, which are typically outside domestic tariff area, will also enter south Indian mills."
Sugar Mills

India to soon allow 300,000 tons of raw sugar imports

NEW DELHI: India will soon allow imports of 300,000 tonnes of raw sugar on the country’s southern ports, a government source said on Tuesday. “The imports will be allowed in a day or two,” the source added.
India’s food minister said on Monday the country would soon take a decision on the need to import sugar.

Monday, September 4, 2017

Brazil soy exports hit all-time High in August, Association says

Brazilian soy exports hit an all-time high for the month of August, an industry association said, as many farmers resumed sales after delaying shipments in hopes of securing better prices amid a bumper 2016/17 crop.
According to cereals exporter association Anec, Brazil shipped 5.7 million tonnes of the oilseeds last month, about 500,000 tonnes above August 2015, which until now had seen the highest volume for the month yet.
Brazil has so far this year exported 57.6 million tonnes of the grain. The data show exports are on track to reach Anec's 62 million tonne export forecast in 2017, the association said.
"This is the best result for soy exports within the same calendar year, even considering we are still four months away from yearend," Anec said.
Brazil will export at least 3.2 million tonnes of soybeans in September, Anec predicted.
In a statement, Anec also revised its annual corn export forecast to 32 million tonnes from 30 million tonnes after a 67 percent annual rise in August exported volumes.
soybeans exports

Iran begins honey exports to Africa

TEHRAN, Sep. 03 (MNA) – An Iranian official says that interactions with a representative of South Africa at Iran’s Chamber of Cooperatives yielded in the deal to export Iran’s honey to the African country.
“The export of the honey produced by Iranian beekeepers cooperatives to South Africa is one of the results of having the commerce attaché of this country in the meetings of the agriculture commission of the Chamber of Cooperatives,” said Alireza Banaiefar, the Director of the International Affairs at Iran’s Chamber of Cooperatives on Sunday.

“Developing trade relations with 7 countries is on the top of the agenda, considering that the representatives of Brazil, India, Russia, Bosnia and Herzegovina, Turkey, Malaysia, and South Korea are present at Iran’s Chamber of Cooperatives,” reassured the Iranian official.

The Director of the International Affairs at the chamber recounted that more than 100,000 cooperatives have been registered with a total number of 12,000,000 members which provide services to more than 40,000,000 people. He also highlighted that the cooperatives are active in more than 120 fields of agriculture which makes the sector attractive for investment.

The official affirmed that the active presence of the commerce attaché of South Africa in the technical meetings of agriculture commission increased interaction between Iranian beekeepers and fruited in the export of Iran produce of honey to South Africa. Beekeepers managed to sell their sweet, sticky wares, using this opportunity,” he said.
Honey Exports Imports

Saturday, September 2, 2017

India's garment exports may hit $20 billion in FY18

MUMBAI: India's garment exports are expected to register a 15-18 per cent growth to touch USD 20 billion during the current fiscal following improved market conditions in US and other markets.

"We have clocked 15 per cent growth in garment exports at USD 17 billion in FY17. We expect 15-18 per cent in current fiscal to register exports of USD 20 billion.

"The US market, which consists of 30 per cent market share is doing reasonably well and we are also looking at good exports potential to South America, European, Middle East and Japanese markets this year," Clothing Manufacturers Association of India (CMAI) president Rahul Mehta told PTI here.
Due to the world recession and heavy competition from China, Bangladesh and Vietnam, India could not fulfill the export target for the year 2016-17.

However, there has been a growth in export to the tune of 13 per cent in dollar terms, in the last 5-6 months. This has been mainly due to the favourable special apparel package announced in July 2016.

"We are strong player in spring and summer wear, but we need to increase exports of autumn and winter wear, which we hope to do in coming years," he said.

Mehta said demonetisation last year had not hit the industry and proposed GST (Goods and Services Tax) rates implementation is also unlikely to impact the industry adversely.

Whilst welcoming the GST, Mehta said there could be some confusion and uncertainty for initial 2-3 months for manufacturers and dealers. However, in the long run, it will be beneficial to the garment industry.

The government has accepted most of the recommendations made by CMAI, and keeping a majority of the industry under the 5 per cent GST slab, he said.
Although, there is some concern among fabric manufacturers for the 5 per cent duty. The government has also accepted CMAI's request to reduce the GST applicable on job work from 18 per cent to 5 per cent, but unfortunately this has been done only up to the fabric stage, Mehta said.
Job working in garmenting still attracts 18 per cent GST. This will be a major blow to the small manufacturer, most of whom follow the job work basis of manufacturing. CMAI has requested the government to reconsider this obvious anomaly and reduce GST on job working at the garment stage to 5 per cent.
To showcase the business opportunity, CMAI is organising 65th national garment fair, the largest apparel trade show in Mumbai from July 10-12.
The B2B fair will be spread over approximately 6 lakh square feet, covering all the halls at the Bombay Exhibition Centre.

The trade show will have 881 stalls displaying 1005 brands by 822 exhibitors.
Garment exports India

Garment exports imports

Brazil's new 20 pct ethanol import tax rule takes effect

SAO PAULO, Sept 1 (Reuters) - New rules governing Brazil's ethanol imports, which slap a 20 percent penalty for volumes above a tax-free import quota, took effect on Friday, authorities said.
Brazil's foreign trade chamber Camex said in an official written resolution that the rules will be valid for two years.
It is the first time that Brazil has taxed ethanol imports, with the government reversing its position of avoiding taxes on the biofuel's trade, following complaints from local producers about rising imports. The government had opposed an import tax so as to encourage use of the biofuel worldwide, enabling it to boost exports of the fuel, a stance it shared with the United States.
U.S. producers will be the hardest hit by the Brazilian tax, since almost all imports come from the United States.
Camex said 600 million liters of ethanol will be allowed in per year tax free but it will be broken down by quarter. Once imports have surpassed 150 million liters in any given quarter, the 20 percent tax will begin.
It also said the Trade Ministry will work on complementary legislation looking to define how the tax-free quota will be divided among ethanol importing companies.
A report by local broadcaster BandNews on Friday said some importers had rushed to guarantee as much as 500 million liters of ethanol importing licenses before the new rule's publication. Reuters could not immediately confirm the information.
The import restriction comes at a time when ethanol sales are rising in Brazil, due to a recent change in local PIS/Cofins taxation that made the biofuel more competitive against gasoline at the pump.
Sales of hydrous ethanol, the type used by flex-fuel cars popular in Brazil, jumped 14 percent in Brazil's center-south in the first half of August.
Some analysts expect ethanol to get a larger boost this week after Petrobras increased gasoline prices by almost 7 percent in the last two days, following higher values in the international market due to the Harvey storm in the U.S.
That situation could shift more cane to ethanol production at Brazilian mills, reducing the amount of sugar output.
 ethanol import , Brazil

India Cotton yarn exports down 9.79% in Apr- July

India exported 283.18 million kilograms of Cotton yarn worth $916 million in the April–July period of the current financial, down 9.79% year-on-year, according to latest data compiled by the apex industry body Cotton Textiles Export Promotion Council (Texprocil).
The decline is largely attributed to slow pick up from China and Bangladesh, the two large destinations comprising around 50 per cent of overall shipments from India.

Exports to China have declined by a staggering 48.58 per cent during the April–July period in 2017.
“Vietnam is gaining market share at the cost of India mainly due to zero tariff on imports to China. Whereas imports from India attract a tariff of 3.5 to 5 per cent, Texprocil noted.

Apart from that, Chinese textiles mills have invested immensely in textile and apparel sector in Vietnam. So, they are buying back yarn to China from their own manufacturing units, thereby, cutting down imports from other countries including India, Texprocil said.

India's Cotton yarn industry has also suffered a hit due to GST levy of 5% that came to force after the goods and services tax (GST) was rolled out on July 1. Since Cotton yarn manufacturers never paid any taxes in the past, compliance under the GST regime brought the entire business to a standstill, even before the July 1 deadline.
Cotton Yarn Exports  India

Commerce Ministry extends window for raw sugar export to US till October

NEW DELHI: The commerce ministry has extended the last date of raw sugar export to the US under tariff rate quota (TRQ) till October 31.
TRQ is a quota for a volume of exports that enter the US at relatively low tariffs. Once the quota is reached, a higher tariff kicks in on additional imports.
"The last date of export of raw sugar to the US under TRQ quota for the US fiscal year 2017 (October 1, 2016 to September 30, 2017) has been extended till October 31 this year," the Directorate General of Foreign Trade (DGFT) has said in a public notice.
India enjoys import duty-free sugar exports to the US for up to 10,000 tonnes annually under preferential quota arrangement.
India, the world's second-biggest producer and the largest consumer of sugar, has a preferential quota arrangement for sugar export with the European Union as well.
Sugar Exports India

Friday, September 1, 2017

Indian cotton yarn exports dip due to rupee appreciation, GST levy

India’s cotton yarn exports have declined by 9.79 per cent in the April–July period of the current financial year due to slow pick up from China and Bangladesh, the two large destinations comprising around 50 per cent of overall shipments from India.
Data compiled by the apex industry body Cotton Textiles Export Promotion Council (Texprocil) showed India’s cotton yarn exports stood at 283.18 kgs for the first four months of FY18. In terms of value, however, India’s total cotton yarn exports stood at $916 million.
Domestic cotton yarn manufacturers have been reeling under tremendous pressure since the demonetisation of the high-value currency notes in November last year. This is because a major chunk of the industry falls under the unorganised sector and deals primarily in cash.

 The industry has also suffered a hit due to GST levy of 5 per cent that came to force after the goods and services tax (GST) was rolled out on July 1. Since cotton yarn manufacturers never paid any taxes in the past, compliance under the GST regime brought the entire business to a standstill, even before the July 1 deadline.

The decline in exports has put massive investments in this sector at risk due to a 60-65 per cent fall in capacity utilisation owing to the weak demand from domestic and global markets.

Yarn exporters from India, however, attributed the decline to the slow pick up from China. China is the single largest market for Indian cotton yarn, accounting for 31 per cent of country’s exports. Therefore, a substantial decline in exports to China has a major impact on overall export performance. Exports to China have declined by a staggering 48.58 per cent during the April–July period in 2017.
Yarn exports, surprisingly, have rebounded a bit after falling by a third to 130 million kgs in the in the first two months of FY18 over 198.5 million kgs in the corresponding period last year. Trade sources held that recovery was temporary as Chinese traders’ were more inclined towards imports from Vietnam.

“Vietnam is gaining market share at the cost of India mainly due to zero tariff on imports to China. Whereas imports from India attract a tariff of 3.5 to 5 per cent. Apart from that, Chinese textiles mills have invested immensely in textile and apparel sector in Vietnam. So, they are buying back yarn to China from their own manufacturing units, thereby, cutting down imports from other countries including India. To regain India’s losing share in China and other important markets, it is suggested that a 2 per cent incentive is provided to the sector under the Merchandise Exports from India Scheme (MEIS),” said Siddhartha Rajagopal, Executive Director, Texprocil.
Interestingly, Vietnam has no base in cotton but it has nevertheless emerged as the largest supplier of cotton yarn to China, accounting for around 32 per cent of imports into China.
Meanwhile, Chinese textile mills have built a large inventory of cotton and yarn over the past few years amid fears of a sharp increase in prices. Following the price hike, mills there started to use local cotton and yarn resulting in a sharp decline in their import not only from India but also from other surplus countries.

According to Arun Sakseria, a city-based cotton and yarn exporter, the appreciating rupee aggravated the situation. Between April and July, the Indian currency appreciated by over 1 per cent to close at 64.19 against the dollar. But, the rupee reported an appreciation of over 5 per cent from its recent low level of over 67.02 against the dollar on February 17 this year.
cotton yarn exports

Cargill estimates Brazil to export 5 mln tonnes of corn in Aug

SAO PAULO, Aug 31 (Reuters) - A Brazil Cargill executive estimated on Thursday that the country will have exported 5 million tonnes of corn in August, with the U.S.-based agriculture firm accounting for a large share of the trade.
Brazil is expected to export 35 million tonnes of corn this year, he said, higher than a 28-million-tonne forecast by the government and above industry group Anec's 30-million-tonne projection.
Brazil is set to account for 50 percent of global corn exports between this August and January next year, Paulo Sousa, the head of Cargill's local grains and oilseeds unit, told an industry conference.
"Cargill will be the leader," he said in relation to the company's ratio of Brazil's August corn exports, declining to elaborate. The company has operated in the country for 52 years.
Brazil's prominence as a corn exporter in the second half of the year is due to winter corn, which is planted between February and March, and harvested between July and August.
"Brazil originates the cheapest corn in the world and will continue to do so until April or May of next year," he said.
Corn futures closed higher in Chicago on technical buying and short-covering at the end of the month. CBOT December corn CZ7 settled up 12-1/4 cents at $3.57-3/4 per bushel on Thursday.
A second annual corn crop, planted after soybeans are harvested, has made Brazil the world's second-largest exporter of the cereal and a major competitor to the United States in global markets.
The second corn harvest represents about 68 percent of Brazil's total corn crop, which this year is estimated at roughly 97 million tonnes.
"But winter corn is a lot more vulnerable to climate risks, so price volatility tends to be a constant issue," Cargill's Sousa said.
Last year, he said to illustrate his point, there was a steep fall in Brazil's corn production due to weather factors affecting winter corn planting in the first quarter. Because a significant portion of the winter corn had been traded by farmers in advance for the export markets, there was a problem on the supply side.
"The price went up so much that it allowed exporters like Cargill and competitors to buy back what they had sold," he said, adding this was done to cover the production gap and cater to domestic demand. Not all of the exported corn could be bought back, he said.
Corn exports

Thursday, August 31, 2017

Scenario Of Apparel Industry In India

The Indian apparel industry is expected to grow at a CAGR of 8.7 per cent till FY16. The growth has driven due to the increase in demand for readymade apparels in rural areas, the rise in income levels and more preference for branded apparels.
The domestic apparel industry constitutes of five segments – menswear, womenswear, Kids wear, unisex and uniforms. Menswear is the largest segment whereas uniforms and womenswear are the fastest growing segments.
Apparel manufacturing is highly labor intensive section of the textile value chain and is therefore characterized by low entry barriers. Therefore, it requires skilled, unskilled and semi-skilled laborers.
Indian apparel industry , India apparel exports  ,Readymade apparels

Challenges in Garment Industry

The apparel industry is facing many challenges like labor, safety and health compliances in the global market. To increase competitiveness in the global market, it is very necessary to focus on these issues.
The current export of Indian garment industry is $14 billion. Due to increase in demand in the new markets like Latin America and Africa, it is expected to touch $16 bn in 2012-13.
Apparel exporters in India have requested the Government to extend the Focus Market Scheme (FMS) for at least six months for exports to the US and Europe.

A meeting held to discuss India’s Foreign Trade Policy (FTP) for 2012-13, to be announced on June 5, several issues were discussed that can help the country to achieve US$ 350 billion export target by the end of next fiscal year.

Growth in Garment Industry
Venky Rajagopal, Chairman, and MD of Indian Terrain Fashions said that the apparel industry will become a dominant part of the retail scenario. The favorable factors are an increase in the number of young adults, more disposable income, and high consumption patterns.
To get a maximum market share in American and European countries, the Government has granted incentives under various provisions of the Foreign Trade Policy 2009-14. This includes incentives for exports of focus products, interest subvention on pre-shipment credit, duty-free import of trimmings, etc.
Garment Exports India

Legal issues in Garment Industry
In India, children were involved in the production of garments for export to the United States. Many of the major apparel manufacturers and retailers have developed various codes or business policies that address child labor and other working conditions.
India’s apparel export sector and the textiles ministry have taken an initiative to help manufacturers to focus on good work practices and prevention of child/forced labor. This would help to improve country’s image as an ‘ethical sourcing destination’.
Increase in pressure from developed countries, to meet global standards on labor has pushed Indian apparel manufacturers to take legal compliance matters in their own hands to change the negative image of the country.
The apparel export promotion Council of India (AEPC) helps the garment industry to follow various global norms, which help the factories to improve their universal standards through development and implementation of tools.
India’s apparel export sector and the textiles

Wednesday, August 30, 2017

India’s apparel exports continue to remain volatile: Report

India’s apparel exports continue to remain volatile and unencouraging with the global apparel trade not showing any signs of uptick amid subdued demand trends in the key importing countries. The latest trends point towards a third consecutive year of decline in global apparel trade, says an ICRABSE 0.50 % report.
Says Jayanta Roy, Senior Vice-President and Group Head, Corporate Sector Ratings, ICRA, “Although we have witnessed brief phases of growth in the past 18 months, the trend has been unsustainable and has failed to instil confidence. In such a scenario, sustained growth in India’s apparel exports remains challenging. The challenges have been further augmented by the appreciation of Indian Rupee in recent months which has reduced competitiveness of Indian exporters vis-a-vis global counterparts.”

The apparel and fabric industry has been facing further headwinds as a result of temporary disruptions caused by demonetisation drive and transition to GST regime. The impact of these developments has been more pronounced for the highly fragmented fabric segment, with Indian fabric production declining by 1% in Q1 FY2018 following a flat production in FY2016 and 2% de-growth in FY2017.
Despite the significantly higher raw material prices, the revenues of fabric manufacturers in ICRA’s sample grew by a modest 4% in Q1 FY2018 pointing towards a steeper de-growth in sales volumes vis-a-vis production volumes
“De-growth in fabric sales volumes in Q1 FY2018 was higher than the aggregate nation-wide production de-growth (1%), due to the clearance of channel inventory by intermediaries prior to GST implementation,” Roy added
Besides the demand pressures, high raw material prices and currency movements also continue to weigh on the industry’s performance, which has been visible in the profitability of apparel and fabric manufacturers over the past three quarters.

In this context, ICRA notes that although the profitability of export-oriented players has been protected to an extent by prudent hedging practices, sustained strength of Indian Rupee against US dollar may exert pressure on their pricing ability and hence demand and profitability. Notwithstanding the likely pressures on profitability, debt levels however are expected to decline with the industry focusing on sweating the existing assets more and undertaking limited debt funded capacity additions.As a result, ICRA expects the financial risk profiles of Indian exporters as well as domestic-focused apparel/ fabric manufacturers to remain steady in the near term.

India ,Exports Apparel &  Apparel Trade

Tuesday, August 29, 2017

India to import 2MT Rice and Wheat to meet domestic demand

With the normal monsoon in many areas in India, the sowing of kharif crops like Rice, Pulses, Coarse Cereals, Sugarcane and Cotton are progressing well. Even though some areas in India received excess rainfall which caused flood and some were affected by drought, the overall sowing increased by about 3 percent.
It is anticipated that this increase is not enough to meet the demand supply gap in India. in order to meet that domestic demand and to control the market prices until January next year, government has decided to imports 2 million tons of Rice and Wheat.
In the 2 million ton of imports, 1.5 million tons of Rice would be imported from Cambodia and Thailand, while the rest 0.5 million tons of Wheat will be imported from Russia and Ukraine. The imports will be done within January 31 next year.
The government also stated that no additional food grain imports will be allowed, as additional imports will affect the farmers around the country, and the prices will also go down significantly.

Rice and Wheat exports imports