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Ethiopian Prime Minister Abiy Ahmed will inaugurate the Chinese-built Dire Dawa industrial park located in the eastern part of the country on Sunday, state affiliated media outlet Fana Broadcasting Corporate reported on Tuesday.
Dire Dawa industrial park constructed by China Civil Engineering Construction Corporation (CCECC) at a cost of 51 million U.S. dollars, is expected to host investors in textile and leather sectors, and construction input sectors, reported FBC.
Stretched on 14,500 hectares of land, Dire Dawa industrial park will have 15 industrial sheds ready to accommodate prospective investors once it’s fully commissioned. The industrial park is also expected to create employment opportunities to about 40,000 Ethiopians.
Speaking to Xinhua recently, Zhu Lei, Deputy Manager of the Industrial Parks Group under the China Civil Engineering Construction Corporation (CCECC) Ethiopia Office, said the industrial park has environmentally friendly waste discharge system.
Zhu further said CCECC has already constructed and commissioned Hawassa, Kombolocha and Adama industrial parks, while it has completed 70 percent of construction work for Bahir Dar industrial park.
CCECC was also a co-constructor of the 4 billion U.S. dollars Ethiopia-Djibouti electrified rail line which started commercial operations earlier this year.
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The Southern India Mills Association (SIMA) Friday welcomed the increase in duty drawback rate for textile items by saying it would help exporters improve competitiveness especially in countries which are signatories to the Preferential Trade Agreement (PTA).
The Central government had on Thursday announced a marginal increase of the rate.
In a press release here, SIMA chairman P Nataraj thanked Prime Minister Narendra Modi, Union Commerce & Industry Minister Suresh Prabhu and Textiles Minister Smriti Irani for revising the rate.
Also, the SIMA chairman lauded the removal of value cap for most of the items, which has been discouraging value addition.
Though the duty drawback rate was increased from 1.2 per cent to 1.7 per cent for cotton yarn; from 1.3 per cent to 1.6 per cent for cotton fabric; and from 2 per cent to 2.6 per cent for made-ups, there was a marginal decrease in the rate for apparel items, Nataraj said.
Considering the continuous fall in export of garments, he said, the industry was hoping for increase in the rate and the government could have at least continued the existing rate of duty drawback to sustain the existing level of exports.
New proposal limits slabs from 6 to 4
The Bangalore Electricity Supply Company (Bescom), which caters to eight districts, including Bengaluru Urban and Rural, has sought a Rs. 1/unit hike in tariff for the financial year 2019-20.
Bescom sources said the hike is to cover the gap in revenue incurred during power purchase. The power utility had asked for an 82 paise hike last year, which was the least sought by the five electricity supply companies.
Bescom has also proposed a ‘non-telescopic’ tariff, wherein the number of slabs for LT2 a (i) (low tension) consumers, i.e., domestic consumers, has been reduced.
“The HT (high tension) and commercial/temporary tariff consumers are cross-subsidising the domestic consumers. We have now proposed to segregate the domestic consumers based on consumption for intra-cross subsidisation,” explained an official. Two years ago, the power utility had introduced more slabs, according to which, consumers had to pay more as they crossed each slab. However, the new tariff proposal limits the number of slabs from six to four.
For example, consumers had to earlier pay Rs. 3.5 a unit if their consumption was less than 30 units, and Rs. 4.95 for consumption between 31 and 100 units. Under the new proposal, those who consume below 50 units will have to pay Rs. 3.90, while those who consume more than 50 units, but less than 100 units, will have to pay Rs. 4.95 for all units from 1 to 100, officials explained.
Bescom’s tariff petition has also included the proposal of bringing in ‘new businesses’ under the commercial category. “There are these vending kiosks in tie-up with an online grocery store, wherein people can make purchases via an app and take items from a refrigerator. Those that were installed at offices and malls were under the commercial category. But the ones that were installed within apartment premises, at club houses and sports areas, were being considered under the domestic category, though it is a commercial activity,” Bescom officials said.
The levy was on account of disproportionate current usage
The Tamil Nadu Electricity Regulatory Commission (TNERC) has directed the Tamil Nadu Generation and Distribution Corporation (Tangedco) to refund the compensation charges levied on Indian Oil Corporation (IOC) for discharge of harmonics during the three months time granted for rectification.
Harmonics are generated by any load that draws current disproportionate to the voltage applied.
According to the petition, Tangedco had issued a notice on October 31, 2014 to IOC, granting a three-month period to bring down the harmonic limit within permissible limits. This was following an inspection in September that year. The notice said if there is a default, IOC would have to pay compensation charges at 15% of current consumption charges. Even when the measures to mitigate the harmonics was under process, Tangedco imposed a compensation charge of Rs. 17,35,877 with retrospective effect from October 2014 in the Current Consumption (CC) bills of March 2015, IOC said.
‘Charges not in order’
The state utility continued raising the compensation charges in the monthly bills of April 2015, May 2015, June 2015, July 2015 for Rs. 2,99,193, Rs. 2,97,174, Rs. 3,70,830 and Rs. 3,75,939 respectively, it added. Tangedco said discharge of harmonics severely affected its grid power quality and it was the responsibility of the company to reduce its harmful effects by maintaining within limits.
The TNERC said the levy charged retrospectively before the expiry of the three-month period granted to the consumer to rectify the limits of harmonics was not in order.
The compensation charges collected prior to the expiry date of the three-month period, i.e prior to 24.12.2014, is liable for refund, it said.
However, the TNERC said that IOC is liable to pay compensation charges for the period after the expiry date of the three-month notice on 23.12.2014 to the date of rectification of limits of harmonics, which is 28.11.2015.
India’s annual cotton output could drop 12 percent to the lowest in nine years as limited rainfall in the top two producing states has slashed crop yields, potentially cutting exports from the world’s top producer, industry officials said.
Lower cotton shipments from India will allow rivals such as the United States, Brazil and Australia to increase cargoes to key Asian buyers such as China and Pakistan. It may also support global prices that have fallen 16 percent since hitting a four-year peak in June.
India could produce 32.5 million bales in the 2018/19 marketing year that began on Oct. 1 – the lowest since 2009/10 – as farmers in the western states of Gujarat and Maharashtra are reporting poor yields, said Chirag Patel, chief executive at major exporter Jaydeep Cotton Fibres Pvt Ltd.
Rains in Gujarat and Maharashtra, which account for more than half of India’s cotton production, were nearly a quarter below normal during the June-September monsoon season.
Many farmers had to uproot plants after first cotton picking. There won’t be a second or third picking like every year,” Patel said.
India produced 37 million bales in 2017/18 and was expected to harvest 36.1 million bales this year, according to the state-run Cotton Advisory Board.
Despite higher prices, supplies are not picking up. The crop is lower than estimated,” Patel said.
New season cotton supplies usually start from October and peak in November and December. But spot supply in the past two months only reached around 7 million bales compared to 10 million bales a year ago, said Atul Ganatra, president of the Cotton Association of India (CAI).
Pink bollworms also hit plantation in Maharashtra, he said.
Indian farmers have adopted genetically-modified seeds known as Bt cotton that are resistant to bollworms, but it hasn’t stopped the infestations. Pink bollworms consume the fibre and seeds inside a cotton plant’s boll, or fruit, and yields fall.
LIMITED SURPLUS
In June, traders were expecting India to export as much as 10 million bales amid strong demand from China due to the trade dispute between Beijing and Washington.
But smaller crop size will limit surplus for overseas sales and lift local prices, said Arun Sekhsaria, managing director of exporter D. D. Cotton.
“We could export 5 to 6 million bales. Export demand is likely to pick up in coming months as Indian cotton is cheaper than other origins,” Sekhsaria said.
Indian cotton is being offered around 84 to 85 cents per lb, cost and freight, to buyers in Bangladesh and Vietnam, versus around 90 cents for those from the United Sates and Brazil, dealers said.
In the current season, traders have contracted to export around 2.5 million bales and have shipped around 1 million bales, said Ganatra of CAI .
The policy is aimed at helping India step up exports of an array of farm goods but also seeks to avoid ad hoc, knee-jerk policy decisions often aimed at keeping a lid on food inflation
Seeking to double agricultural export to $60 billion by 2022, the Union Cabinet Thursday approved a maiden export policy for the farm sector that imposes no restrictions on export of all organic and processed products. However, export policy for primary agricultural products, like onion, would reviewed periodically on a case-to-case basis depending on price-supply situation, said Commerce Minister Suresh Prabhu after the Cabinet meet.
“The policy aims at doubling agricultural shipments to over $60 billion by 2022,” he said, adding that achieving the target was “doable”.
He said the farm exports have grown by 20 per cent in a year.
Agricultural exports are currently estimated at $30 billion. Prabhu said there was a time when India used to import agricultural products, but now it is exporting in a big way.
He rued India had no export policy for agri products despite a major producer. Prabhu said the first ever ‘Agriculture Export Policy, 2018’ would help the government in achieving the target of doubling farmers’ income. The policy aims to boost exports of agriculture commodities such as tea, coffee and rice and increase the country’s share in global agri-trade.
The policy would focus on all aspects of agricultural exports including modernising infrastructure, standardisation of products, streamlining regulations, curtailing knee-jerk decisions, and focusing on research and development activities.
It will also seek to remove all kinds of export restrictions on organic products, the minister added.
The implementation of the policy will have an estimated financial implication of over Rs 1,400 crore. As per an official release, the objective of the policy is to diversify export basket, destinations and boost high value and value added agricultural exports.
It will also provide an institutional mechanism for pursuing market access, tackling barriers and deal with sanitary and phyto-sanitary issues.
Other objectives of the policy is to strive to double India’s share in world agri exports by integrating with global value chain at the earliest and enable farmers to get benefit of export opportunities in overseas market.
Prabhu said the policy has arrived at after consultation with state governments. He said states have also agreed to remove ‘mandi tax’ and reforms in Agriculture Produce Marketing Committee (APMC) norms.
To operationalise the policy, the government would focus on creating agri clusters, promote value added shipments, attract private investment and infrastructure development.
This story has been published from a wire agency feed without modifications to the text.
CBIC has notified the Revised All Industry Duty Drawback Rates Schedule for 2018-19 applicable w.e.f. 19 Dec. 2018, vide Notification No. 95/2018 Customs (NT) dt. 6 Dec. 2018, in respect of specified exports and subject to compliance with the procedural requirements notified from time to time, as under:
G.S.R. (E). – In exercise of the powers conferred by sub-section (2) of section 75 of the Customs Act, 1962 (52 of 1962) and sub-section (2) of section 37 of the Central Excise Act, 1944 (1 of 1944), read with rules 3 and 4 of the Customs and Central Excise Duties Drawback Rules, 2017 (hereinafter referred to as the said rules) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 89/2017-Customs (N.T.) dated the 21st September, 2017 published vide number G.S.R. 1178(E), dated the 21st September, 2017, except as respect to things done or omitted to be done before such supersession, the Central Government hereby determines the rates of drawback as specified in the Schedule given below (hereinafter referred to as the said Schedule) subject to the following notes and conditions, namely :-
Notes and conditions. –
(1) The tariff items and descriptions of goods in the said Schedule are aligned with the tariff items and descriptions of goods in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) at the four-digit level only. The descriptions of goods given at the six digit or eight digit in the said Schedule are in several cases not aligned with the descriptions of goods given in the First Schedule to the Customs Tariff Act, 1975.
(2) The general rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 shall, mutatis mutandis, apply for classifying the export goods listed in the said Schedule.
(3) Notwithstanding anything contained in the said Schedule, –
(i) all art-ware or handicraft items shall be classified under the heading of art-ware or handicraft (of constituent material) as mentioned in the relevant Chapters;
(ii) any identifiable ready to use machined part or component predominantly made of iron, steel or aluminium, made through casting or forging process, and not specifically mentioned at six digit level or more in Chapter 84 or 85 or 87, except those classifiable under heading 8432 or 8433 or 8436, may be classified under the relevant tariff item (depending upon material composition and making process) under heading 8487 or 8548 or 8708, as the case may be, irrespective of classification of such part or component at four digit level in Chapter 84 or 85 or 87 of the said Schedule;
(iii) the sports gloves mentioned below heading 4203 or 6116 or 6216 shall be classified in that heading and all other sports gloves shall be classified under heading 9506.
(4) The figures shown in column (4) in the said Schedule refer to the rate of drawback expressed as a percentage of the free on board value or the rate per unit quantity of the export goods, as the case may be.
(5) The figures shown in column (5) in the said Schedule refer to the maximum amount of drawback that can be availed of per unit specified in column (3).
(6) An export product accompanied with a tax invoice and forming part of project export (including turnkey export or supplies) for which no figure is shown in column (5) in the said Schedule, shall be so declared by the exporter and the maximum amount of drawback that can be availed under the said Schedule shall not exceed the amount calculated by applying ad-valorem rate of drawback shown in column (4) to one and half times the tax invoice value.
(7) The rates of drawback specified against the various tariff items in the said Schedule in specific terms or on ad valorem basis, unless otherwise specifically provided, are inclusive of drawback for packing materials used, if any.
(8) Drawback at the rates specified in the said Schedule shall be applicable only if the procedural requirements for claiming drawback as specified in rule 12, 13 and 14 of the said rules, unless otherwise relaxed by the competent authority, are satisfied.
(9) The rates of drawback specified in the said Schedule shall not be applicable to export of a commodity or product if such commodity or product is –
(i) manufactured partly or wholly in a warehouse under section 65 of the Customs Act, 1962 (52 of 1962);
(ii) manufactured or exported in discharge of export obligation against an Advance Authorisation or Duty Free Import Authorisation issued under the Duty Exemption Scheme of the relevant Foreign Trade Policy :
Provided that where exports are made against Special Advance Authorisation issued under paragraph 4.04A of the Foreign Trade Policy 2015-20 in discharge of export obligations in terms of Notification No. 45/2016-Customs, dated 13th August, 2016, the rates of drawback specified in the said Schedule shall apply as if in the said Schedule, the entries in columns (4) and (5) against the Tariff items in the said Schedule below all Chapters, except Chapter 61 and 62, are NIL, and those in Chapters 61 and 62 are as specified in the Table annexed hereto;
(iii) manufactured or exported by a unit licensed as hundred per cent Export Oriented Unit in terms of the provisions of the relevant Foreign Trade Policy; (iv) manufactured or exported by any of the units situated in Free Trade Zones or Export Processing Zones or Special Economic Zones;
(v) manufactured or exported availing the benefit of the notification No. 32/1997- Customs, dated 1st April, 1997.
(10) Whenever a composite article is exported for which any specific rate has not been provided in the said Schedule, the rates of drawback applicable to various constituent materials can be extended to the composite article according to net content of such materials on the basis of a self-declaration to be furnished by the exporter to this effect and in case of doubt or where there is any information contrary to the declarations, the proper officer of customs shall cause a verification of such declarations.
(11) The term „article of leather? in Chapter 42 of the said Schedule shall mean any article wherein (a) 60% or more of the outer visible surface area; or (b) 60% or more of the outer and inner surface area taken together, excluding shoulder straps or handles or fur skin trimming, if any, is of leather notwithstanding that such article is made of leather and any other material.
(12) The term “dyed”, wherever used in the said Schedule in relation to textile materials, shall include yarn or piece dyed or predominantly printed or coloured in the body.
(13) The term “dyed” in relation to fabrics and yarn of cotton, shall include “bleached or mercerised or printed or melange”.
(14) The term “dyed” in relation to textile materials in Chapters 54 and 55 shall include “printed or bleached or melange”.
(15) In respect of the tariff items in Chapters 60, 61, 62 and 63 of the said Schedule, the blend containing cotton and man-made fibre shall mean that content of man-made fibre in it shall be more than 15% but less than 85% by weight and the blend containing wool and man-made fibre shall mean that content of man-made fibre in it shall be more than 15% but less than 85% by weight. The garment or made-up of cotton or wool or man-made fibre or silk shall mean that the content in it of the respective fibre is 85% or more by weight.
(16) The term “shirts” in relation to Chapters 61 and 62 of the said Schedule shall include “shirts with hood”.
(17) In respect of the tariff items appearing in Chapter 64 of the said Schedule, leather shoes, boots or half boots for adult shall comprise the following sizes, namely : –
(i) French point or Paris point or Continental Size above 33;
(ii) English or UK adult size 1 and above; and
(iii) American or USA adult size 1 and above.
(18) In respect of the tariff items appearing in Chapter 64 of the said Schedule, leather shoes, boots or half boots for children shall comprise the following sizes, namely :-
(i) French point or Paris point or Continental Size upto 33;
(ii) English or UK children size upto 13; and
(iii) American or USA children size upto 13.
(19) The drawback rates specified in the said Schedule against tariff items 711301, 711302 and 711401 shall apply only to goods exported by airfreight, post parcel or authorised courier through the Custom Houses as specified in para 4.72 of the Hand Book of Procedures, 2015-2020 published vide Public Notice No. 1/2015-2020, dated the 1st April, 2015 of the Government of India in the Ministry of Commerce and Industry, after examination by the Customs Appraiser or Superintendent to ascertain the quality of gold or silver and the quantity of net content of gold or silver in the gold jewellery or silver jewellery or silver articles. The free on board value of any consignment through authorised courier shall not exceed rupees twenty lakhs.
(20) The drawback rates specified in the said Schedule against tariff items 711301, 711302 and 711401 shall not be applicable to goods manufactured or exported in discharge of export obligation against any Scheme of the relevant Foreign Trade Policy of the Government of India which provides for duty free import or replenishment or procurement from local sources of gold or silver.
(21) “Vehicles” of Chapter 87 of the said Schedule shall comprise completely built unit or completely knocked down (CKD) unit or semi knocked down (SKD) unit.
2. All claims for duty drawback at the rates of drawback notified herein shall be filed with reference to the tariff items and descriptions of goods shown in columns (1) and (2) of the said Schedule respectively. Where, in respect of the export product, the rate of drawback specified in the said Schedule is Nil or is not applicable, the rate of drawback may be fixed, on an application by an individual manufacturer or exporter in accordance with the said rules. Where the claim for duty drawback is filed with reference to tariff item of the said Schedule and it is for the rate of drawback specified herein, an application, as referred under sub-rule (1) of rule 7 of the said rules shall not be admissible.
3. The amount referred in sub-rule (3) of rule 7 of the said rules, relating to provisional drawback amount as may be specified by the Central Government, shall be equivalent to the drawback rate and drawback cap shown in column (4) and (5) in the said Schedule for the tariff item corresponding to the export goods, if applicable, and determined as if it were a claim for duty drawback filed with reference to such rate and cap.
4. This notification shall come into force on the 19th day of December, 2018. (please refer above attachment for Schedule of All Industry Duty Drawback Rates applicable w.e.f. 19 Dec. 2018)
There is a need to work on challenges in the form of outdated technology, inflexible labour laws and infrastructure bottlenecks. The government also needs to re-look at fibre neutrality and evaluate various trade agreement opportunities.
The textiles sector in India, primarily dominated by the unorganised and small players, had taken a major hit with demonetisation and the implementation of the goods and services tax (GST). The sector appears to be finally recovering, as reflected by the improvement in the Index of Industrial Production (IIP) and exports data over the last few months.
The government has tried to support the domestic industry by increasing import duty on several textile items. However, there are some deep-rooted problems with the sector, and these need to be addressed to see any long-term sustainable revival in the sector. At the same time, it is also disheartening to note that the Indian textiles industry—which is one of the oldest industries of the Indian economy—is finding it difficult to compete with much smaller players such as Bangladesh and Vietnam.
The textiles and apparels industry in India is valued at around $127 billion in size. The sector is a large foreign exchange earner, and is the second-largest employer (after the agricultural sector) in the country. In India, the sector enjoys the presence of the entire value chain—from fibre, yarn, fabric and apparel—apart from the availability of cheap and abundant labour. However, in spite of these benefits, India’s share in the global textiles exports is just 5%, which is minuscule as compared to China’s share of 38%. Much smaller players like Bangladesh and Vietnam have a share of 3% in global exports and are increasingly threatening India’s exports.
The exports from the sector are valued at around $37 billion, amounting to 13% of India’s total exports. The share of textiles in India’s total exports has fallen sharply—from a high of 25% in FY02. The export growth from the textiles industry was expected to jump, with the abolition of the Multi Fibre Arrangement (MFA) in 2005-06, whereby developing countries were released from export quota requirements. However, growth did not rise sharply, as the industry faced increased competition from low-cost producers like Vietnam and Bangladesh. The rise in labour cost in China could have been the perfect opportunity for India to increase its share in the global textiles industry. But India’s textiles industry has not been able to encash this opportunity, as the industry grapples with domestic issues including outdated technology, inflexible labour laws, infrastructure bottlenecks, and a fragmented nature of the industry.
In midst of the existing challenges, the industry also needs to gear up for the abolition of some of the existing export subsidies. According to the World Trade Organisation’s Agreement on Subsidies and Countervailing Measures, a country needs to phase out export subsidies for a product as it achieves export competitiveness, defined as 3.25% share in world trade, and the per-capita income reaches more than $1,000 per annum. As per this agreement, India is under pressure to end export subsidy for the textiles sector by 2018. This implies that the existing subsidy schemes—including the Merchandise Export from India Scheme (MEIS) and the Export Promotion Capital Goods (EPCG) Scheme—will get affected by the same.
There are a number of factors ailing the industry and the government needs to take multiple actions to revive the industry. To begin with, the government needs to move away from export-specific subsidy, which violates WTO norms, to focus on regional and cluster subsidies, technology upgradation and skill development subsidies, which benefit all the producers. Fibre neutrality is another aspect that will give a boost to the industry. In India, cotton and manmade fibres (MMF) have differential tax treatment. It was expected that with the introduction of GST, the fibre neutrality aspect will be looked into, but the differential tax treatment continues, with cotton taxed at 5% and manmade fibres at 12%. Globally, manmade textiles and garments are in high demand, with the ratio of cotton-to-manmade-fibre consumption at 30:70. India, despite being the second-largest textiles exporter in the world, lags in this category because of unavailability of manmade fibres at competitive prices. In fact, of the total textiles and clothing exports from India, cotton accounts for around 75%. There is a need to align our production with the global consumption patterns.
While India has abundant supply of labour, flexibility in labour laws and adequate skilling will give a big boost to the textiles industry. For instance, women should be allowed to work in all three shifts, after taking into account adequate safeguard measures. This will enable the industry to employ more female workforce. The textiles industry in India is mainly dominated by small scale and unorganised players—small and medium-sized enterprises (SMEs) make up around 80% of the industry. These SMEs find it difficult to manage the latest technology. It is here that technology upgradation schemes will help Indian players to increase both their productivity and competitiveness. In addition, the government needs to carefully evaluate the various trade agreement opportunities—Bangladesh and Vietnam benefit from favourable access to some of the big apparel markets.
Lastly, the Indian textiles industry needs to move up the value chain. India has a high share in global export market in upstream products, such as fibre and yarn (14% each). However, India has a low share in value-added downstream segments. India’s exports of apparels and fabrics have a share of around 3.5% each in world trade. Compare this to China’s share of 40% in the apparels segment, and even smaller players like Bangladesh and Vietnam have a higher share of 5.6% and 4.2%, respectively, in global apparels exports.
The textiles industry is important not just for labour absorption and as a source of foreign exchange, but also as a symbol of India’s rich heritage. We have the required ingredients in the form of raw material availability and abundant labour to make the industry a success story. There is a need to work on correcting the challenges in the form of outdated technology, inflexible labour laws and infrastructure bottlenecks. The government also needs to re-look at fibre neutrality and evaluate various trade agreement opportunities, while domestically focusing more on technology upgradation and skill development.
Minister calls upon industrialists to hand over the required land in five districts
Minister for Electricity, Prohibition and Excise, P. Thangamani, has called upon industrialists to handover the required land for establishing zero liquid discharge-based Common Effluent Treatment Plants (CETPs) in the five districts in the region.
At the special plenary session of Premier Textile Fair, Weaves, at Texvalley, here on Friday, he said that next to agriculture, textile industry provided jobs to 45 lakh people in the State and problems in dyeing were a major challenge to the growth of the industry. Former Chief Minister Jayalalithaa had announced establishing CETPs at Rs. 700 crore as most of the units in Tirupur, Erode, Salem, Namakkal and Karur districts were cottage industries. But industrialists were yet to provide the land, he added.
The Minister said that if textile industry needed to flourish, a permanent solution was needed which was establishing CETPs. He said that the government would create awareness among the villagers that the CETPs would not pollute groundwater Mr. Thangamani said that currently 18,000 MW power was generated in the State and an additional 5,000 MW was needed in the near future, of which Tangedco had proposed to generate 4,000 MW by 2023. “But a few farmers’ organisations and political parties are stirring people to protest against erection of electric towers in farm lands”, he said and called upon people to cooperate in implementing new schemes.
Minister for Industries, Steel Control and Special Initiatives, M.C. Sampath said industrial growth in the State was positive as the State led in 12 sectors in the country. He said a total of 2,216 companies had applied in the single window clearance portal of which 168 proposals were cleared and work had begun. These companies would provide jobs to 44,000 people, he added.
Minister for School Education K.A. Sengottaiyan said the department had proposed to provide skill training in textile sector as the opportunities were enormous. Minister for Environment K.C. Karuppannan, and Collector C. Kathiravan also spoke. S. Chandramohan, vice-chairman of CII, Tamil Nadu, called upon effective steps to increase cotton production in the State, integrated facility for processing from yarn to garment, designing centres and continuous wet processing facilities.
A Memorandum of Understanding was also singed by power loom clusters with 25 educational institutions that would help design and market textile products.
News reports that cotton crop yields will hit a three-year low in the October 2018-September 2019 season have set alarm bells ringing on the Street. A low yield implies lower output and higher cost of production. This could raise cotton prices and put spinning mills in distress. The moot question is how severe the impact on profits of spinning mills will be. Will they spin a woeful yarn with high input costs in the near future?
Estimates from the Cotton Advisory Board point to production of 36 million bales (one bale = 170kg) during the 2018-19 cotton season compared to 37 million bales in the previous year. Drought and uneven rainfall in Gujarat and Maharashtra is likely to pull down the average yield.
However, spinning mills do not look distraught, at least yet. According to K. Selvaraj, secretary general of the Southern India Mills’ Association, “The situation is comfortable after the arrival of the initial crop in the market. Also, the last season ended with higher than normal cotton stock position that would act as a buffer for the current season.”
So far, cotton prices have softened. After touching ?136 per kg (Sankar-6 variety), the price has eased to ?124 per kg. On the other hand, robust demand for yarn both in domestic and international markets has supported yarn prices. A 35% jump expected in yarn exports between April and October from a year ago and a 25% growth in overall textile exports will bolster yarn prices in the near term.
Stable demand and production would kick in benefits of operating leverage too. This should help sustain operating margins if not improve them. That said, there are challenges of rising wage and interest costs.
In other words, lower cotton output may elevate prices at the end of the current cotton season. But, a stable demand for yarn will help minimize the impact on mills’ profitability.
