National News

Dip of USD 727 mn in forex reserves to USD 429.6 bn

MUMBAI:RBI data showed that due to a decline in foreign currency assets, the country’s forex reserves slipped by USD727 mn to USD429.649 bn for the week ended July 26. Only in the previous week the forex kitty had increased by USD1.579 bn to a new lifetime high of USD430.376 bn. But later, foreign currency assets, a major component of the overall reserves, fell by USD1.734 bn to USD399.357 bn. However, reserves of gold surged by USD1.025 bn to USD25.330 bn, according to the Central Bank data.

Visakhapatnam Port Trust – ranked third Major Port in Cargo traffic

VISAKHAPATNAM:In the first four month of FY2019-20, the Visakhapatnam Port Trust (VPT) ranked third among Major Ports in cargo traffic, advancing itself from fourth position last year.Between April and July 2019 it handled cargo traffic of 23.70 mn tonnes as compared to 21.52 mn tonnes in the same period last year. Achieving an incremental volume of 2.18 mn tonnes, more than 10% growth which is the highest among Major Ports.This can be attributed collectively to increase in volumes of iron ore and pellets, coking coal, crude oil and petroleum products and container cargo. This is the fourth consecutive year that cargo traffic handled at Visakhapatnam Port is on the growth trajectory.VPT has developed a Business Development Team which has adopted innovative marketing strategies. Besides it now provides end-to-end logistics solutions to its customers, even if they are outside the state. It recently signed an MoU with Tangedco for transporting coal directly from mines to the power plant in Tamilnadu.The VPT’s has expanded its horizons by monitoring wagon loading at mine heads, liaising with railways for transportation to the port besides providing port services like unloading from rakes, storage of cargo and loading into ships.They are trying a similar route with end-to-end service for coal transportation to the Nagarnar steel plant of NMDC. These strategies are proving fruitful. Meanwhile, VPT Chairman Rinkesh Roy congratulated the VPT team, PPP operators, stevedores, shipping agents and the stakeholders for the achievement. He expressed confidence about the port remaining buoyant and retaining it’s the third place until the end of the year, assuring them that they will be able to reach 70 mn tonne mark.

Fortnightly coastal service to Bangladesh to be launched by CONCOR soon

HYDERABAD: Exporters are likely to benefit soon from the coastal service between Krishnapatnam Port to Chittagong in Bangladesh to be launched by the Container Corporation of India (CONCOR).Initially a fortnightly service, it is targeted at exporters in and around Hyderabad, Bengaluru, Andhra Pradesh and Nagpur, particularly those supplying raw material and engineering products to the textile industry of Bangladesh.“We are expecting that it would take a month or two [for the launch],” CONCOR Senior General Manager (C&O), South Central Region Mr. D. Satyanarayana said, adding, “frequency of the service can be increased once the patronage picked up. On the factors behind the proposed service, he said it follows demand from exporters. At present, containerised exports to Bangladesh from the region is routed through JNPT on the West Coast. Exports from some areas such as Guntur is sent by road,” he said recently. It will be the first service of its kind for CONCOR, whose strength lies in rail movement.Currently, it operates a coastal service from Kandla that connects Mangalore, Kochi and Tuticorin for which a vessel that can carry 700 TEUs (twenty foot equivalent units) is being used. “We have been successfully running that, patronage is good and running on a weekly basis,” he said. Earlier on he also mentioned about CONCOR’s plans of evaluating the prospects of operating a rail service connecting Hyderabad, Chennai and Krishnapatnam.

2019 coal imports expected to rise by 13 pc to 185 mt

In 2019, India is expected to import up to 185 mn tonnes of thermal coal, about 13 % higher than its estimate for 2018. Imports of coal from Australia and Colombia will rise as demand for high-energy coal grows due to environmental reasons, Dale Hazelton said at the India Coal Conference in New Delhi, as per a report.One of the largest consumers of coal, it features as one of the top 5 commodities imported by India. After a slowing of imports for two consecutive years, India’s imports of the polluting fuel increased in 2018.Restrictions on consumption of petroleum coal, a better burning alternative to coal, in some parts of the country caused India’s imports of American coal to grow by 24 % in 2018-19.
There was a 9.1% increase in India’s coal demand which rested at 991.35 mn tonnes in 2018-19, with utilities accounting for most of the consumption.For example, in 2018-29 the consumption by the largest electricity generator, state-run NTPC Ltd, was 185 mn tonnes. Coal India has not been able to meet the growing demand of coal from cement and sponge iron industries, whose coal requirements rose by over two-thirds during 2018-19, said the report.

EY: For USD 5 trn economy India needs 9% growth annually

MUMBAI: To achieve Narendra Modi’s target of converting India to a USD 5 trn economy, it will need a growth of 9 % every year for five years in a row and raise the aggregate investment rate to 38 % of GDP, EY has said.
RY has said in the latest edition of Economy Watch that of growth in India stays at the projected 7 % in this fiscal the economy will grow to USD 3 trillion from USD 2.7 trillion last year.Only a 9% growth for the next five years will progressively take the economy to USD 3.3 trillion in FY21, USD 3.6 trillion in FY22, USD 4.1 trillion in FY23, USD 4.5 trillion in FY24 and USD 5 trillion in FY25.”Assuming an inflation rate of 4 % which is the target inflation rate as per the Monetary Policy Framework, a real growth rate close to 9 % would be required to increase the size of the Indian economy to USD 5 trillion by FY25. This implies a nominal growth rate of 13 %, assuming an average annual depreciation of the rupee viz-a-vis the USD at 2 %,” it said.

Indian export of sugar may miss target this season

NEW DELHI: The export target of 5 mn tonnes of sugar may get missed by India. It was expected to reduce the glut in the market, having shipped out only 3.4 mn tonnes. The current season ends on September 30th and barely two months are left.“Another one lakh tonne can be shipped out this season making it 70% of the total target set by the Government. Higher production cost and weak global prices restricted the exports. Even incentives offered by Government could not help match the global prices,” said an industry expert, on condition of anonymity.In an effort to boost exports to reduce the glut the Government has offered many incentives such as transport subsidies of between Rs.1,000 a tonne to Rs.3,000 per tonne to sugar mills, depending on the distance to ports. With a possibility of global short supply, the industry aims to export 7 mn tonnes of sugar in the coming season.“In the current season, there is net global surplus of 2 mn tonnes. So, the prices are weak and we are not able to export the targeted 5 mn tonnes. But in the next season, there is likely to be a gap of 4 mn tonnes between demand and supply making exports lucrative,” said Abinash Verma, Director General of ISMA.

Duty free export of higher grade iron ore under consideration by Steel Ministry

NEW DELHI: An evaluation is underway by the Steel Ministry to study whether higher grade iron ore is being exported as lower grade or pellets. The reason is that inferior grade ore with iron content up to 58 % and pellets with no restriction on the content of iron ore are exempted from export tax whereas richer grade ore attracts 30 % duty. Consultancy firm Mecon will undertake the study.With environmental regulations more lenient than expected Chinese steelmakers have shown a renewed appetite for buying lower grade iron ore fines. Chinese companies can show better margins by purchasing inferior grade iron ore instead of pellets.With no demand in the domestic market lower grade iron ore fines are getting stacked up at mine heads. By the fiscal end the iron ore stockpile at mines is estimated to be over 150 mn tonnes. Almost 80% of the inventory is from Odisha & Jharkhand together.

World Bank: India 7th largest economy in 2018

NEW DELHI: Data compiled by the World Bank shows that India has been pushed behind to seventh place in the global GDP rankings in 2018. The UK and France have advanced to the fifth and sixth spots respectively. In 2017, India was ahead of France in 6th place in the global GDP league table.With a GDP of USD 20.5 trn in 2018 the US maintains number one position, China at second place with a GDP of USD13.6 trillion and Japan at the third place with USD5 trillion. At USD 2.7 trn India is behind the UK and France who were both at USD2.8 trillion.In 2017, the GDP numbers were India at USD2.65 trillion, UK at USD2.64 trillion and France at USD2.5 trillion. Thus the third-largest Asian economy emerged as the fifth largest economy in the world in 2017. Economists believe that this slip happened on account of currency fluctuations and slowdown in growth.

US-China trade war: India’s gem and Jewellery exports get a boost

MUMBAI:The announcement of the US government of levying a 10% tariff on new commodities originating from China has spelt well for India’s gem and jewellery industry.Starting September 1st, the 10& tariff will apply to rough and polished diamonds, rough and polished “synthetic gemstones” as well as “jewellery articles of precious or semi-precious stones” to the US from China, if China is not able to give satisfactory reasons against it.Paul Zimnisky, a Diamond Analyst and Consultant in New York, said: “The US imports less than 1 % of loose polished diamonds from China but 15 % of jewellery. If the tariffs persist, this may lead to US retailers buying more fabricated jewellery from India.”If implemented, the tariffs will make China’s gold jewellery export to US non-viable and Indian exporters will find an opportunity to fill that gap.

Cotton yarn should be included in interest subvention scheme: Texprocil

NEW DELHI:The Cotton Textiles Export Promotion Council (Texprocil) has urged the Union Government for inclusion of cotton yarn in the interest subvention scheme.With exports of cotton declines from 338 mn in Q1 of fiscal 2019 to 226 mn in Q1 this fiscal, marking a 33% declines, the Government should also discount the embedded taxes like agricultural cess, mandi tax, power and fuel surcharge which incurred production process, said KV Srinivasan, chairman, Texprocil.Of concern is the decline in exports every month from 90 mn kgs in April 2019 to 77 mn kgs in May and to 59 mn kgs in June. In fact 59 mn kgs is the lowest monthly export ever in the last five years, he added.Cotton yarn has been a pillar of the Indian textile industry, is highly modernised and technology driven and provides sustainable incomes to farmers. There are many reasons for this decline in exports to leading markets like China, Bangladesh, South Korea and the duty free access given for import of cotton yarn by China to countries like Pakistan and Vietnam from 1st April 2019.

To clear inventories steel companies look to export market

NEW DELHI:In an attempt to clear stocks to circumvent poor offtake from almost all segments steel companies are diverting material to export markets. The stocks were for around 45 days instead of the industry norm of 15 days admitted at least two major steel producers. They admitted to exporting more to reduce inventories. They were also planning to prepone maintenance shutdowns. Some cold rollers have even resorted to a production cut of around 50 % over the past few months.

First National Time Release study underway to benefit traders: moots for faster cargo movement across borders

NEW DELHI: India’s first ever Time Release Study was conducted between August 1st and 7th by The Department of Revenue, Ministry of Finance, under its strategic commitment to improve global trade. This will become an annual exercise held during the same period every year hereafter. An effective tool to measure the efficiency and effectiveness of international trade flows the TRS is advocated by World Customs Organization.It will measure rule based and procedural bottlenecks (including physical touch points) during the clearance of goods, from the time of arrival until the physical release of cargo and proves an effective step towards the initiative for accountable governance. The objective it to identify bottlenecks in the trade flow process and modify the corresponding policy and operational measures required to improve the effectiveness and efficiency of border procedures, without compromising efficient trade control.MSMEs and export oriented units will be the biggest beneficiaries of this exercise as they will enjoy greater standardization of Indian processes with comparable international standards.It will also go a long way in helping India advance its rank on Ease of Doing Business, particularly on the Trading across Borders indicator which measures the efficiency of the cross border trade ecosystem. Last fiscal India advanced its rank from 146 to 80.Previously, individual customs formations had independently conducted TRS at the port level. With the national TRS our outlook will take a leap forward and will be able to evolve a uniform, multi-dimensional methodology which measures the regulatory and logistics aspects of the cargo clearance process and establishes the average release time for goods.The exercise was done simultaneously at the same time across 15 ports including sea, air, land and dry ports which together account for 81% of total Bills of Entries for import and 67% of Shipping Bills for export filed within India. Baseline performance measurement and standardized operations and procedures across all ports will get rooted by the national TRS. Based on its results government agencies associated with cross border trade will identify existing and potential bottlenecks which prevent the free flow of trade, and take remedial actions for reducing the cargo release time. The initiative is on ground lead by the CBIC.

CARE: Cargo growth at Ports & Railways impacted by slowing economy

MUMBAI: Q1 of this fiscal has taken a beating by the subdued economic activity as a drop in the performance of cargo at Major Ports and railways indicates.As against 4% growth in Q1 of 2019, this Q1 clocked only 1.5% growth.Major Ports cargo performance was poor because liquid cargo comprising crude oil, petroleum products, naphtha and LNG registered a flat increase of only 1.12 %. No Major port excepting Cochin registered a double digit growth in their cargo throughput. In fact growth of Mormugao, New Mangalore, Chennai and Kamrajar (Ennore) was negative.Cargo volume increased primarily due to increased volume of coking coal (16.9 %), iron-ore incl. Pellets (15.3 %) and container volumes. 14USD of the cargo handled by Majot Ports is coking coal and iron-ore and their volumes recorded a 5 % increase and their share improved by 71 basis points in the overall cargo handled by major ports to 21.3 % during Q1 of FY20, CARE Ratings noted in its report on ‘Passenger & Cargo Movement’.Compared to the 6.5% growth in Q1 of 2019, the Railways posted a 2.7 % growth in cargo volumes this Q1. Coal cargo moved through railways grew by 3.8 % in the quarter, accounting for 51 % of total volumes. Pig Iron, finished steel and iron ore, which accounted for 16 % of the total cargo handled recorded an 11.1 % growth in cargo volume handled by railways.

IFTRT: Truck rentals decline 2% in July and 18% in last 3 quarters

CHENNAI: In July truck rentals on main trunk routes dropped by 2% as monthly full round trips dropped by 30%. For the 9 months period ending July truck rentals have dropped sharply by 18%. Barring the festive seasons of September and October there are no signs of recovery over the next few months. In fact truck rentals are expected to fall further during the year, said Indian Foundation of Transport Research and Training (IFTRT), the apex body tracking the truck industry for more than two decades.There has been no increase in diesel prices. This drop has resulted from a drop in cargo offerings from agri produce of 15% and a 7% drop in offerings from factory gates. Monthly full load trips dropped by 30% leading to a 2% fall in truck rentals, the foundation pointed out. New axle load norms introduced in September 2018 coupled with liquidity crisis, lack of cargo movements and uncertainty over general elections (held in May 2019), truck rentals continued to nosedive over the last 9 months, IFTRT said further.Since November 2018 individual truckers and fleet owners across the country, who depend on open market for full load weight, have had to face a challenging time due to steep drop in truck rentals as majority of APMCs were receiving lower agri outputs. The weakening economy has adversely affected even MSMEs. Only a handful of operators who have had annual contracts have been shielded from this downward slide, the foundation said. More than 90% of the fleet operators depend on open market for freight rates.Only hope for the operators is a normal monsoon and the peak festival season to partially offset their loss. The next harvest season will help truck rentals to recover to some extent with the cargo offerings expecting to see improvement in APMCs, IFTRT said further.

Some Chinese and Vietnamese steel goods may be served with CVD: GoI

NEW DELHI: In an attempt to protect the domestic industry from cheap imports, for the period of five years, the government of India may impose countervailing duty (CVD) on certain kind of steel pipes and tubes from China and Vietnam, as recommended by the Commerce Ministry’s investigation arm DGTR after concluding a thorough investigation.
Stainless Steel Pipe and Tubes Manufacturer Association; South India Stainless Steel Pipe And Tubes Manufacturer Association; and Haryana Stainless Steel Pipe And Tube Manufacturer Association had complained to the Directorate General of Trade Remedies (DGTR) who then conducted the probe.

AAR: No GST on supply of maritime products from bonded warehouses to vessels

MUMBAI: Supply of Maritime Products from Bonded Warehouses to Vessels are not liable to Goods and Services Tax (GST) as has been held by the Maharashtra Authority of Advance Ruling(AAR).The applicant, the largest maritime services network in the world, Wilhelmsen Maritime Services Pvt Ltd (WMSPL) supplies a wide portfolio of maritime goods and services worldwide to every conceivable vessel type, in every market and region.Goods imported by WMSPL from foreign countries are kept in Bonded or Non-Bonded Warehouses, which are then carried by ships proceeding to a foreign port from Indian ports.The Authority has observed that, WMSPL has w.e.f 1.7.2017 levied and paid GST on all its “Maritime Products” supplies. However, in WMSPL view the said supply should be considered an “Export of goods” as defined under Section of the IGST, 2017 and thus be considered as a zero-rated supply as per Section 16 of IGST Act, 2017.The activity carried out by WMSPL is export of goods as the goods will move out of India when the next port call is not within the territorial waters of India. The shipping bill is filed to the customs at the relevant port for the purpose of delivery of goods on board. As per the Customs Act, 1962 and the Central Excise Act, 1944 goods delivered to a ship proceeding to a foreign port at Indian sea-port were treated as exports of goods.The Authority also said that, supply from bonded warehouse will fall under schedule III of the CGST Act “and exempted from GST and supply from Non-Bonded warehouse will not fall under Schedule III of CGST Act “and therefore not exempted from GST.

Reduction of Repo rate by RBI upheld by Tirupur Exporters’ Association

TIRUPUR:RBI announced in their third bimonthly policy a dip in Repo rates of 0.35% to now be 5.4%, a move that has been lauded by the Tirupur Exporters’ Association (TEA).TEA President Raja M Shanmugham in a statement said overall the banks have reduced their Weighted Average Lending Rates (WALRs) on fresh rupee loans only by 0.29 % during the current easing phase so far (Feb-June 2019), when RBI reduced the Repo rates by 0.75 % during this period. The RBI Governor had meetings with banks and asked them to transmit the reduction, but only one or two banks reduced their rates, he pointed out.He hoped that looking at the need of the hour for the industry all banks will come forward to pass on the reduction of interest rate to the borrowing units, which is desperately required for the knitwear garment exporting units, particularly to MSME exporting units which are suffering further to macroeconomic changes. Mr. Shanugham expressed gratitude to the Union Finance Minister and RBI Governor for this decision which will support for the growth of the industries.

Reduction of Repo rate by RBI upheld by Tirupur Exporters’ Association

TIRUPUR:RBI announced in their third bimonthly policy a dip in Repo rates of 0.35% to now be 5.4%, a move that has been lauded by the Tirupur Exporters’ Association (TEA).TEA President Raja M Shanmugham in a statement said overall the banks have reduced their Weighted Average Lending Rates (WALRs) on fresh rupee loans only by 0.29 % during the current easing phase so far (Feb-June 2019), when RBI reduced the Repo rates by 0.75 % during this period. The RBI Governor had meetings with banks and asked them to transmit the reduction, but only one or two banks reduced their rates, he pointed out.He hoped that looking at the need of the hour for the industry all banks will come forward to pass on the reduction of interest rate to the borrowing units, which is desperately required for the knitwear garment exporting units, particularly to MSME exporting units which are suffering further to macroeconomic changes. Mr. Shanugham expressed gratitude to the Union Finance Minister and RBI Governor for this decision which will support for the growth of the industries.

China News

After Trump raises tariffs on Chinese goods, China suspends purchase of US farm products

BEIJING:After nearly one week after Trump increased tariffs on Chinese goods, China has announced that its firms have suspended purchases of US agricultural products.Xinhus News Agency, state run agency of China reported, “has not ruled out import tariffs on US agricultural products purchased after August 3, and related Chinese companies have suspended purchasing US agricultural products.””It is hoped that the US will conscientiously implement the consensus reached at the meeting between the Heads of State of China and the US, and have the confidence to implement the commitments to create the necessary conditions for cooperation in the agricultural fields between the two countries.”After trade talks between the two countries in Shanghai, Trump announced on August 1, that he would impose a 10 % tariff on the remaining USD 300 bn worth of untaxed imports from China.

Trade war escalates after US accuses China of currency manipulation

BEIJING:The yearlong U.S.-China trade war accentuated as Washington accused Beijing of manipulating its currency after China let the yuan drop to its lowest in the last ten years.Late on Monday 5th August, the U.S. Treasury Department announced that it had determined for the first time since 1994 that China was manipulating its currency, knocking the U.S. dollar sharply lower and sending gold prices to a six-year high.The designation by U.S. Treasury Secretary Steven Mnuchin starts a formal process of bilateral negotiations between the world’s two largest economies, and fulfills a promise made by U.S. President Donald Trump on his first day in office.“As a result of this determination, Secretary Mnuchin will engage with the International Monetary Fund to eliminate the unfair competitive advantage created by China’s latest actions,” the Treasury Department said.The U.S. action came after China let its currency weaken 1.4%, sending it past the key 7-per-dollar level for the first time in more than a decade.

Region’s ‘collective interest and highest priority,’ say Trade Ministers is concluding the RCEP this year

BEIJING:The Regional Comprehensive Economic Partnership (RCEP) has decided to conclude the trade pact this year with the highest priority as Ministers of the 16 Asian Pacific member countries believe that it is in the region’s collective interest to do so.After the two-day Intersessional Ministerial Meeting in Beijing held on August 2-3, the joint statement of the trade bloc said, “It is in the region’s collective interest and highest priority to conclude a modern, comprehensive, high quality, and mutually beneficial RCEP in 2019, adding that the pact is the most important trade agenda in the region.”RCEP is a proposed regional economic integration agreement among the 10 Asian countries and its six free-trade agreement (FTA) partners- Australia, New Zealand, Japan, China, South Korea and India. Commerce Secretary Anup Wadhawan represented India at the meeting. The Ministers highlighted that growth outlook remains overcast by rising uncertainties. In 2018, the RCEP region grew 5.6%, slightly moderated from 5.8% the previous year.

Market access-related issues being pushed by Commerce Secretary with China

BEIJING:Market access related issues were pushed by Commerce Secretary Mr. Anup Wadhawan for various milk and milk products during his meeting with the Vice Minister of China’s Commerce Ministry, Wang Shouwen, on the side-lines of the Eighth Regional Comprehensive Economic Partnership (RCEP) Intersessional Ministerial Meeting here on August 3.”Wadhawan emphasised on RCEP agreement which would duly consider the existing level of the trade imbalance. He emphasised on larger exports of products like pharmaceuticals, sugar, rice, etc. from India to China. He also used the opportunity to push for some of the market access-related issues of various products such as milk and milk products, pomegranate, soybean meal, okra, etc.,” an official press release stated.
“He also used the opportunity to flag issues pertaining to Indian service sector including IT and ITeS and issues pertaining to easing business visas by China to Indian business travellers. China’s Vice Minister reaffirmed its commitment to address the trade imbalance,” the statement added.

Chinese Exports surprise all with a turnaround despite the trade war with USA

Exports from China rose 3.3% last month as per their data, but economists suggest the reversal may be transient

BEIJING: In July exports from China rebounded because of increased shipments to Europe and Southeast Asia, but economists estimate it to be short-lived as Beijing and Washington escalate their trade battle.Data for July 2019 from the General Administration of Customs showed China’s exports having risen by 3.3% from those of july 2018, a u-turn from the 1.3% decline in June 2019. A poll of 13 economists by Wall Street Journal had forecast a drop of 2%.European and Southeast Asian shipments — two of China’s topmost trading partners — also bounced back. US exports decline relaxed after President Trump and President Xi Jinping struck a conciliatory tone on trade at the G20 summit in Japan in June.As the trade war waged on many Chinese exporters made an effort to diversify their markets. Accordingly, this July data suggests that exports to the Association of Southeast Asian Nations bloc and EU rose 15.6% and 6.5%, respectively, from that of last July.“The rising trend in China’s exports to non-U.S. markets may act as a cushion,” against new U.S. tariffs on Chinese goods, said ANZ economist Betty Wang.Some economists suggest that the strength in exports this year was partly boosted because of resorting to transshipments, a practice by which Chinese exports broefly stop at a third country where they are minimally processed or altered and then re-exported to the U.S.
U.S. Customs and Border Protection is aware of this practice in recent months and has detected illegal Chinese exports through several countries, including Vietnam, Malaysia, and the Philippines. To match up Chinese customs data showed double-digit export growth to these Southeast Asian countries, higher than exports growth to all trading partners.China’s customs data shows that exports to the U.S. dropped by 6.5% in July from those of last July, while there was a 7.8% decline in June. Imports from the U.S. in July fell 19.1% from those of July 2018, compared with a 31% drop in June. China’s trade surplus with the U.S. also diminished, totalling USD27.97 bn in July compared with USD29.92 bn in June.“While July’s trade headlines showed improvement, China’s foreign trade remains on the downward trend in coming months. Weakening exports will still be the biggest headwinds for Chinese economy,” said Larry Hu, an economist with Macquarie Capital Ltd.
August witnessed a rapid escalation of bilateral trade tensions after Mr. Trump announced plans for 10% tariffs on USD300 bn in untaxed Chinese goods. China has weakened the uean in response and has halted the purchase of U.S. agricultural products in retaliation. China has been displaced as number one trading partner with USA by Mexico and Canada and now holds third position.In retaliation on Thursday, China’s central bank weakened the yuan even more by setting a daily anchor for trading in the currency at its weakest level since 2008, breaking through the symbolic 7-per-dollar level that it was allowed to breach earlier this week. The move sets the stage for an even weaker yuan, which economists say could offset some of the impact of higher U.S. tariffs.Chen Lin, General Manager of Hefei DGCT Imp. & Exp. Co., commented that since Mr. Trump announced his new tariff plans, his company’s American clients have asked for discounts, without which they would cut down orders or venture into other markets.“We don’t have much choice but to wait for the trade tensions to subside,” said Mr. Chen, whose company produces pet supplies that are set to be hit with the increased tariffs from Sept. 1. He said that a weaker yuan won’t help much either, and gives more clients an excuse to ask for discounts.A slackening demand in the domestc market is another threat thet China faces. In July overall imports continued to slide, slipping 5.6% from a year earlier.Mr. Hu, the Macquarie economist, said as the domestic economy faces more downward pressure later this year, Beijing will have to step up stimulus measures and consider softening its stance on trade issues.“Cutting interest rates in any form will be a choice for policy makers to substantially lower financing costs for the real economy,” he said.

Africa News

Construction of more dry ports mulled by Nigeria

In a move which is seen as a catalyst for trade stimulation and economic development, an official said that the Nigerian government is considering the construction of more dry ports across the country.Since the Nigerian seaport facilities seem to have been over-stretched, the government is particularly committed to this, Mr. Chidi Izuwah, head of the country’s Infrastructural Concession Regulatory Commission, told reporters in the northwestern state of Kano.For exporters the dry ports serve as rallying points, where their consignments for export would be moved by using multiple modes of transportation, by rail or road, to the conventional seaports.On January 4, 2018 Nigeria’s pioneer dry port was inaugurated.The Dala Inland Dry Port in Kanois among the dry ports which are expected to be fully constructed soon is the which, according to Mr. Izuwah, is “quite important for the country’s economy, being the commercial city in the north.”“It will receive containers by rail or road from the seaport for inspection and clearance by Customs as well as other relevant authorities,” the official said. “It has all the loading and off-loading equipment needed to handle containers.”lso known as dry ports, the inland container depots, are expected to bring shipping services to the doorstep of shippers across the country, he said. This will assist in decongesting the seaports and make them more user-friendly.He said providing the impetus to revive and modernize the Nigerian railway network as a primary mode for long-distance haulage, as well as to assist in the overall costs of cargo to hinterland locations and transit cargoes to landlocked countries are other benefits included.With the initiative he noted that, imported goods meant for certain hinterland would be transferred by rail or road to the facility where importers in the areas could access their consignments at cheap rates and closer to their warehouses and markets.There have been proposals from the private sector to establish ports in some northern and southern states in the country, Mr. Izuwah confirmed.Already, for effective coverage of the hinterlands across the West Africa country, the Nigerian government has approved seven locations for the dry ports, which are under concession with private sector operators.

The pace on infrastructure boom being set by African ports

African countries from Benin and Côte d’Ivoire to Djibouti, Congo and Somaliland are expanding port capacity to boost trade and economic diversification

While Kenya is about to launch a decades-long ‘master plan’ to transform shipping and logistics, Morocco’s Tanger-Med has become the Mediterranean’s largest port.Gabon secured USD341mn funding to expand capacity at its Owendo port in the capital Libreville on 5 August, and on the same day, Namibia launched a USD268mn expanded container terminal at its main port of Walvis Bay.A mix of government spending, donor funding and private investment from companies including France’s Bolloré and Dubai’s DP World are some of the the driving forces behind this.
According to research by Deloitte, 52.8 % of the bns Beijing has pumped into infrastructure in Africa since the turn of the century has gone to ports, shipping and logistics projects. These could add 85 mn tonnes of new annual capacity. China appears to be the game-changer.
The initiative is in line with Africa’s needs to infrastructure development to drive trade and investment, in which ports developments are seen to be refreshing bright spots.

EGA starts bauxite exports from Guinea

The first exports of bauxite ore from Guinea Alumina Corporation (GAC) have been announced by Emirates Global Aluminium (EGA). GAC is the mining project of EGA in the Republic of Guinea, West Africa. The first exports of bauxite ore from GAC mark the completion of EGA’s strategic expansion upstream in the aluminium value chain to create an integrated global aluminium giant.EGA’s GAC project, and the Al Taweelah alumina refinery where EGA began production in April, create new revenue streams for EGA, and secure the raw materials required by the UAE’s aluminium industry at competitive prices.Aluminium is derived from the ore Bauxite, which is refined into alumina, the feedstock for aluminium smelters. In the past, EGA relied on imports to meet all its alumina needs.The GAC project is one of the largest Greenfield investments in Guinea in the past 40 years, costing around USD 1.4 bn. More than half the funds were provided by the largest Greenfield mining project financing ever in Guinea – a USD 750 mn loan from development finance institutions, export credit agencies and international commercial banks.EGA invested around USD3.3bn to develop the Al Taweelah Alumina Refinery, the first refinery in the UAE and the second in the Middle East.“Our first export of bauxite ore is a landmark moment for EGA and for Guinea. For EGA, it completes our strategic expansion upstream, making us an integrated global aluminium producer. For Guinea, the project creates economic opportunity and helps the country to expand the production of its biggest natural resource,” said Abdulla Kalban, Managing Director and CEO, EGA.“On the GAC project, as in all EGA operations, safety is the first priority. I am particularly proud of our safety performance on this project was world-class and I thank everyone at GAC and our contractors for this important achievement,” Kalban added.

Joint statement between the USA and AU on AfCFTA

A joint statement concerning trade has been signed between the USA and the African Union at the opening ceremony of the 2019 African Growth and Opportunity Act (AGOA) Forum Deputy United States trade representative C.J. Mahoney and African Union Commission Acommissioner for trade and industry Albert Muchanga said.Under the African Continental Free Trade Area (AfCFTA), the USA and the African Union share a common goal of enhancing the African Union’s efforts to increase continental trade and investment.They share a mutual desire and common goal to deepen dialogue and cooperation on trade and investment matters and to increase trade and investment between the USA and Africa.The African Union’s expression of interest to work closely together to identify ways the USA can cooperate on the development of the AfCFTA is recognised by the USA. It is one of the African Union’s principal aims is to promote sustainable development as well as the integration of African economies and the USA recognises that.To promote a sound trade policy environment, regional economies of scale, and the increased flow of goods and services on the continent in order to increase continental trade and investment, as well as trade and investment between the USA and Africa, the USA and the African Union intend to work together with respect to the AfCFTA.The two intend to jointly identify subject areas related to the ongoing negotiation and implementation of the AfCFTA as subjects for cooperation and for possible technical assistance and capacity building.The USA and the African Union intend to work together to develop activities that support these priority objectives.Eventually leading to a continental trade partnership between the USA and Africa that supports regional integration, they share a mutual desire to pursue deeper trade and investment ties beyond the African Growth and Opportunity Act, which is scheduled to expire in 2025.

Construction of the USD1.38bn Rufiji power plant in Tanzania started

At Stiegler’s Gorge in the presence of President John Magufuli Tanzania marked the start of construction of the Rufiji power plant Rufiji Hydropower Project (RHPP)
The area around the 2,115-MW Rufiji hydro project officially handed over to Cairo-based JV Arab Contractors Company and Elsewedy Electric Company by the government.“Our envisaged industrial economy needs adequate, cheap and reliable power supply through hydrogeneration. This project has stalled for many years. We will build it with our own money,” said President Magufuli.Costing USD1.38bn the RHPP will be completed in 2022. Shadow minister for energy Mr. John Mnyika however said the project is expensive and will have an adverse economic impact. Contrary to the government’s insistence that it is a three-year project he said in parliament that it could take nine to 12 years to build the power plant,.“The project is costly and will have an adverse economic impact on the country. The costs are likely to jump from USD1.38 bn to USD9.8 bn as a result of cost overruns,” Mnyika added.The facility will involve building the main dam and appurtenant structures, with an expected reservoir length of 100 km, covering an area of about 1,350 sq. km. With the height of about 134 m. the dam will be fourth-largest in Africa and ninth-largest in the world.Being built for Tanzania Electric Supply Company Limited (Tanesco), the power plant, upon completion, will more than triple the current installed hydropower capacity of 562 MW in the country.The project is part of Tanzania’s power master plan, which envisages Stiegler’s Gorge helping to interconnect Tanzania, Kenya, Uganda and Zambia’s grids.

For next-gen train communications solutions Siemens Mobility chooses Softil

An agreement that will see a range of next-generation communications solutions come to market for use in long term evolution-railway (LTE-R) railways as well as mission-critical push-to-talk (MCPTT) metro applications like underground tram buses etc has been jointly announced by Siemens Mobility and SoftilInorder to build a global rail traffic management system (GRTMS) for the entire rail industry, bringing significant economic and operational benefits and efficiencies to operators in the process the MCX solutions aim to support the future railway mobile communications systems (FRMCS) of the International Union of Railways (UIC).“The rail industry is at the forefront of the mission-critical communication revolution and GSM-R based systems have already been replaced by LTE-R solutions in the Asia-Pacific (APAC) and the trend is expected to widen across other markets in 2019/20,” said Pierre Hagendorf, CEO of Softil.The three main areas the railway industry aims to guarantee the interoperability new radio system with GSM-R whilst delivering are:· Critical communications: Secure voice communication between driver and signaller, provision for emergency and group calls, real-time video imagery for any occurring incidents and the intelligent bearer for European Train Control System (ETCS) and Automatic Train Operation (ATO) operation· Performance communications: Track condition monitoring, connected driver advisory system (C-DAS), on-train telemetry, maintenance of non-critical infrastructure, non-critical real-time video, wireless communication for on-train-staff· Business communications: Passenger information system, passenger entertainment and passenger communication connections“The rail industry is facing unprecedented challenges in handling increasing numbers of passengers and freight traffic loads,” noted Russell Clarke, general manager, mobile communications at Siemens Mobility.The foundation for the railway variant of the 3GPP MCC over LTE/5G (MCPTT) standard is LTE-R. Apart from the currently used GSM-R what sets the LTE-R technology is that it brings the full power of broadband networks including voice, video, text, images, location and more and not just simple voice.Being LTE-R compatible the Softil BEEHD framework is set to enable Siemens Mobility’s solutions to deliver stable voice as well as data communications on trains running at speeds in excess of 400km per hour.Live tracking of a train and transmitting railroad information to engine drivers, is made possible by LTE-R technology and also enables multimedia-based group calling and SMS services on top of voice call services. Real-time group/individual communication is made possible between train engineers and control centres in addition.

International News

US: ‘Working hard’ with India to help its economy grow

WASHINGTON:The United States Secretary of State Mike Pompeo has said that it is “working hard” with the Indian Government to ensure it gets enough opportunities to grow its economy as part of the Trump administration’s Indo-Pacific strategy.A US Trade representative delegation visited India for talks on wide ranging bilateral trade issues, particularly tax and tariffs. Pompeo’s remarks come weeks after this. Reporters accompanying him on the Indo-Pacific tour were told by Pompeo, “Our Indo-Pacific strategy is well on its way to bearing fruit for not only them but for the United States, and we have watched these coalitions build out. We’re working hard with the Indian Government to provide them with opportunities to grow their economy as well.”India’s Ambassador to the US Harsh Vardhan Shringla said in Colorado just before that that trade between the two nations had grown to USD 142 bn in 2018, and was expected to reach USD 238 bn by 2025. He said that growth from small and medium enterprises (SMEs) will drive the next phase of growth in both the countries. He said that an opportunity for growth of increased Indo-US cooperation existed in the digital marketplace.

Opportunities created by port digitization to be explored by British Ports Association & Port of Rotterdam

LONDON/ROTTERDAM:A joint smart ports paper has been launched together by the British Ports Association and Dutch Port of Rotterdam to explore opportunities offered by port digitalization.In it they have outlined requirements to create more efficient processes in and between ports. It cautioned saying that not all traditional ports will be able to survive this digital disruption.“Just as with retail, the travel sector and the world of banking and insurance, digital platforms are set to dominate the supply chain in the logistics sector as well,” it was said.“For ports, the challenge is to determine their digital strategy so they can preserve and strengthen their competitive position in relation to more digital ports and other transport resources.”They both emphasized that the development of a global network of connected ports around the world is the key to the digital transition.The paper chalks the way forward for ports to develop into smart ports gradually through a “digital maturity model.” It has broken gown the process into four maturity levels. These are Step 1: digitization of individual parties in the port
Step 2: Integration of systems in a port community
Step 3: . Integrate the logistics chain with the hinterland
Step 4: Connect ports in the global logistics chain
“This paper sets out some of the benefits of smart operations and how ports can benefit. Ports of all sizes face similar challenges in adapting to new technologies and developments in the industries we serve,” Richard Ballantyne, BPA Chief Executive, commented.
“Smart port operations will give ports the edge in becoming greener and ultimately, more efficient in serving the wide range of industries we support.”

Mega Cargo-handling capacity master plan unveiled by South Kores

SEOUL:On 1st August South Kores unveiled a plan to inject 41.8 trillion won (USD35.2 bn) in 12 ports across the country by 2040 to boost their cargo-handling capacity. The capacity will rise from 1.32 bn tonnes in 2017 to 1.85 bn tonnes per year in 2040 according to the Ministry of Oceans and Fisheries. One key project is to transform the southern port of Busan into a “Mega Port” that will be able to accommodate several 25,000-TEU vessels. “We will make Busan Port the world’s third largest port by 2040,” Moon Seong-hyeok, Minister of Oceans and Fisheries, told reporters recently.

Wall Street Journal: China loses position as top trading partner of

WASHINGTON:Neighbours of USA namely Mexico and Canada, in that order have displaced China from being the number trading partner as a result of their ongoing trade war. Imports from China to the US dropped by 12 % and America’s export to China fell by 19 %.Since inception the Trump administration has imposed 25 % tariff on Chinese goods worth USD 250 bn. Another 10 % tariff on products worth USD 300 bn will come into effect on September 1. Trump maintains that China has been unfair to the US.China is retaliating in its own way. A Commerce Department report suggests that the total value of bilateral goods exchanged with China dropped by 14 % in the first half of the year to USD 271.04 bn, The Wall Street Journal said.”After holding the top spot among US trading partners from 2015 to 2018, China now sits at No. 3 and now smaller than Mexico for the first time since 2005,” it said.

Drewry: Panamax owners cheer about strong Indian coal imports

LONDON: A strong demand for coal is expected as Indian imports are expected to rise and consequently lend continued support to rates in the Panama bulk sector in the coming quarters, rates that are already climbing this year, according to analyst Drewry.The Indian Government has plans to invest heavily in infrastructure, domestic coal demand will prompt firmness in coal imports, leading to increased rates in the Panama market.“Panamax rates have skyrocketed in 2019 and are likely to rise in the coming quarters supported by strong demand for coal imports in India,” said Rahul Sharan, Dry Bulk Lead Research Analyst at Drewry.
Starting off in 2019 at almost 1500 point, the Baltic Panamax Index (BPI) plummeted to a little over 500 points in February. But that seems to have been buried as the BPI has gained from strength to strength showing a steady rise until end-June, a surge in July and closing at 1,753 points on 5 August.Annual investment plans in infrastructure as announced by India’s Finance Minister in early-July expect an influx of USD 285bn annually over the next five years – a jump of 150% and more compared with the past.This will result in a massive surge in demand for steel, cement and power. Cement demand surge has already generated huge requirements for non-coking coal imports this year. Cement production in India has increased to over 337 mn tonnes in FY2018-19, a 13% rise over last year.“It takes about 200 kilograms of coal to produce one tonne of cement. Therefore, to produce 337 mn tonnes, the Indian cement industry consumed 67 mn tonnes of coal in FY2018-19. With the new Government firmly in place with emphasis on infrastructure, the demand for cement is expected to surge over the next few years. Additionally, with increased industrial production, coal demand for power generation will also expand,” Sharan explained.“Moreover, domestic coal production has been increasing at a very slow pace, leaving power companies to depend on coal imports. For instance, domestic coal production increased 5% until May 2019, but imports surged 29%,” he added.Domestic coal producers will not be able to keep up with internal demand therefore keeping Indian imports high over the next few quarters. Sharan affirmed that the Indian Government plans to commercialise coal mining, to boost domestic production and reduce imports. But “this will take time and until then coal consumers will have to rely on imports for a large part of their requirements”, according to Sharan.

US-China trade war: Trump levies more tariffs, says Xi not moving fast enough

WASHINGTON: Starting 1st September, US President Donald Trump declared a 10% tariff on USD 3 bn worth of Chinese goods, assuring that if the Chinese President Xi Jinping fails to take action soon enough to strike a trade deal. The announcement marks an abrupt end to a temporary truce by extending the trade tariffs to nearly all China’s imports into the US. The trade war seems to have disrupted global supply chains and roiled financial markets. “I think President Xi … wants to make a deal, but frankly, he’s not going fast enough,” Trump said.These announcements were made by Trump on Twitter after his top trade negotiators briefed him on a lack of progress in U.S.-China talks in Shanghai recently. He has even threatened to increase them further if no action is taken in arriving at a trade deal. The news has hit US financial markets hard.

10 free ports to be established by IUK after Brexit

LONDON: The United Kingdom plans to set up 10- free ports to drive growth after the UK leaves the EU on October 31. Imagined to be hubs for business and enterprise for both manufacturing and services trade, the ports will be free of some checks and paperwork, and include customs and tax benefits. The UK will invite porta and airports of UK to become one of up to ten free ports.The idea is to lap up any opportunities post-Brexit including increased trade with USA and Asian markets as the UK signs its first free trade deals with global partners.“Freedoms transformed London’s Docklands in the 1980s, and free ports will do the same for towns and cities across the UK,” Liz Truss MP, International Trade Secretary, said.“I look forward to working with the Freeports Advisory Panel to create the world’s most advanced free port model and launch the new ports as soon as possible.”The British Ports Association (BPA) claimed to be working with associated agencies on complementary proposals that would support economic activity across a wider range of ports across the UK. The proposals have flooded the BPs with recommendations around planning, enterprise and the tax system that could be incorporated into or sit alongside a UK free port model as well as Teesport, ports like Milford Haven and Tyne are at an advanced stage in looking at such options, according to BPA.

IATA: Air Freight Market slips for eighth consecutive month globally

MONTREAL: Data released by the International Air Transport Association (IATA) shows that demand, measured in freight tonne kilometres (FTKs) decreased by 4.8% in June 2019, compared to the same period in 201, making it the eighth consecutive month of year-on-year decline in freight volumes.The decline is June is broadbased and spread across the world except in Africa. Therefore any hint of a modest recovery in recent months could be premature. Growth in capacity remains unexcitable and the cargo load factor continues to fall. Globally, trade growth is languishing, and business uncertainty is shrouded in the latest tariff increases in the US-China trade war.“Global trade continues to suffer as trade tensions—particularly between the US and China—deepen. As a result, air cargo markets continue to contract. Nobody wins a trade war. Borders that are open to trade spread sustained prosperity. That’s what our political leaders must focus on,” said Alexandre de Juniac, IATA’s Director General and CEO.