New cotton varieties to be rolled out soon
If new varieties are adopted, yields will rise to more than 200,000 bales
our high-yielding hybrid cotton varieties could boost the crop’s cultivation and the textile industry.
The cotton varieties, which are currently in the final stages of analysis of the national performance trials at the Kenya Agricultural and Livestock Research Organisation (Kalro) in Mwea, have already shown promising results.
The varieties were developed by crossbreeding high-yielding varieties from India and Kenya.
“For a long time, Kenya has largely depended on two cotton varieties: the KSA 81M and the Hart 89M, which were developed in 1981 and 1989.
“These are archaic and unimproved varieties, and ideally, for optimal production, the crop’s varieties should be upgraded after every six years,” said Dr Charles Waturu, the principal researcher of
Bt-Cotton in the country, noting that the Hart 89M, the most recent enhanced cotton variety released 20 years, is now obsolete.
Being timeworn, the productivity, resilience, and robustness of these old varieties have been over-taken by time, hence their low yields, due to susceptibility to attacks by pests, and particularly the African bollworm (Helicoverpa armigera); the largest pest threat to cotton production.
According to Dr Waturu, the ideal cotton for the best textiles is the long and the extra-long staple variety Gossypium barbadense.
The new cotton varieties will undergo a second and final trial in four sites: Mwea, Katumani, Kampi ya Mawe and Perkerra, before multiple demonstrations across the country in May 2019, and subsequent rollout in October.
To give them self-protecting mechanisms against the highly destructive bollworm, there are enhanced with Bacillus thuringiensis (Bt).
RISE IN PRODUCTION
Kenya, which has not cultivated hybrid cotton before, leading to a sharp decline in production from the 80s, hopes to follow in the footsteps of India, the largest producer of cotton globally with more than 11.4 million hectares under the crop.
Thanks to hybrid varieties enhanced with Bt, India has a thriving cotton sector, whose annual production is about 35 million bales, with exports worth Sh3.5 trillion.
The Bt microorganism, which occurs naturally in the soil, gives the plant ability to protect itself from bollworm, hence reducing expenses required for pesticides, according Dr Anne Kimani, a Kalro scientist working in the cotton programme.
This is important because pesticides have little effect on the African bollworm, as the pest has developed resistance to synthetic pyrethrins and pyrethroids.
According to Martin Mbuthia, a researcher at the National Biosafety Authority, the national performance trials, which sought to explore the possibility of growing Bt cotton in the country, have given the adoption of the technology in cotton production a nod for both food and environmental safety.
The Fibre Crops Directorate estimates that with the adoption of the new breeds, cotton production in the country is expected to rise from the current 21,000 bales to more than 200,000 bales annually.
This is because the challenge, initially posed by poor seeds which produce crops whose fruits are highly susceptible to pest attacks, will be addressed by the introduction of the new breeds containing the self-protecting mechanism Bt.
With these new varieties, farmers can expect to get up to 1,000 kilogrammes per hectare of lint and 2,500 kilogrammes per hectare of cotton seed, compared to the 211 kilogrammes per hectare and 572 kilogrammes per hectare of cotton lint and seed respectively, which they get from the currently avail-able conventional varieties.

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A Chinese company is investing $100 million for the construction and development of a green textile industry park at the Cagayan Special Economic Zone and Freeport.
In a news statement issued on Tuesday, the Cagayan Economic Zone Authority said China Zhejiang Guannan Group is finalizing the terms for its $100-million textile- production facility in the economic zone. Officials of the firm were in Manila this week to prepare the memorandum of agreement (MOA) with the Ceza.
Ceza Administrator and Chief Executive Officer Raul L. Lambino said the new Chinese venture is a “bold [venture] since it will break new ground” in the economic zone. The Ceza is trying to diversify its industry portfolio currently dominated by financial technology firms.
Once China Zhejiang enters the economic zone, it will be classified as a locator. Lambino said up to 10,000 hectares of land in Sta. Ana, and other towns in Cagayan could be developed to accommodate the requirements of the green textile industrial park.
He added China Zhejiang will build its own power and water plants, sewerage-disposal facility and waste-processing plant, among other infrastructures needed to operate the industrial park. The project is now awaiting approval from the Ceza board of directors.
China Zhejiang is engaged in textile production, as well as in real-estate development across Asia. Lambino also claimed the firm could diversify its investment portfolio in the country. After the textile production facility, he said, it might consider developing townships and real estate, following its successful projects in Hong Kong, Shanghai and Shaoxing.
Last Friday Lambino said growth in the economic zone will be investment-driven to ensure the Ceza’s diversified industry portfolio. He added the agency will not rely on cryptocurrency and blockchain operations for its revenue stream, as it expands its offering to industrial and tourism investments.

businessmirror.com.ph

‘Mill performance points to good year’
Cotton production this season might be less than that seen last year. According to provisional estimates made by the Cotton Advisory Board, which met on November 22, the production from October 2018 to September 2019 is estimated to be 361 lakh bales as against 370 lakh bales last season.
While the total area under cotton for last year was 124.29 lakh hectares, it was 122.38 lakh hectares for this season. The average yield (kg per hectare) has also reduced from 506.07 to 501.47.
Cotton demand by textile mills, including small-scale units, might be slightly higher this year at 305 lakh bales from 303 lakh bales last year.
K. Selvaraju, secretary general of Southern India Mills’ Association, who took part in the Board’s meeting, said that while there is not much change in area, parts of cotton growing areas in Gujarat and Maharashtra experienced shortfall in rains.
This might hit cotton production.
However, crop estimates are provisional and can change in the coming months. With a better domestic market, the performance of textile mills has improved after March. So, cotton demand by the mills is projected to be higher. It is likely to be a comfortable year for both farmers and the industry, he said.

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Dismantling the organization that US President Donald Trump has threated to pull out of would be a disaster for world trade, says Suresh Prabhu.
Indian Commerce and Industry Minister Suresh Prabhu argues that the international trade body, the World Trade Organization, is in need of reform but definitely should not be dismantled.
“The absence of the WTO will be a disaster for the entire world trade,” the veteran Indian politician said in an interview on Channel NewsAsia’s Conversation With.
The commerce minister’s remarks fly in the face of recent comments by the Trump administration. In August, United States President Donald Trump threatened to pull out of the 164-member trade organization if the WTO did not “shape up”.
Meanwhile, the US is embroiled in a trade war with China, with America imposing tariffs covering US$250 billion of Chinese goods sold to the US, while China has hit back by putting counter-tariffs on US$100 billion worth of American goods imported into China.
But the US has also lashed out other big economies such as India, with President Trump calling the South Asian country “Tariff King” – and complaining to the WTO about perceived unfair subsidies by India to its agricultural exports like cotton. India is the world’s second largest cotton exporter.
Mr Prabhu made his name during his time as India’s Railway Minister, helping to start the reform of India’s massively over-crowded and accident-plagued rail system. The soft-spoken 65-year-old was moved though in 2017 to India’s Commerce Ministry to handle another growing problem – trade.
However, Mr Prabhu downplayed the trade tensions between the US and India.
“I don’t think having trade-related issues is something of any serious magnitude,” he said. “It’s inevitably bound to happen because if you have a trade relationship, you’re bound to have some issues coming out of the relationship.”
At the same time, President Modi’s administration in New Delhi has been facing domestic criticism about plans to join what is seen as a China-backed trade bloc: The Regional Comprehensive Economic Partnership (RCEP).
RCEP would cover 16 countries – including the Association of Southeast Asian Nations, India and China – accounting for a whopping 40 per cent of global trade. If the deal were to be signed, RCEP would become the world’s largest free trade bloc.
However, critics worry that India – which is already running trade deficits with many of the RCEP countries – would be in poor position, having to open up its large market to even more outside goods and making its already significant trade deficit even worse.
“We will never have an agreement that is not in India’s national interest … But if I only say only India should benefit and others should lose, then all other countries will come up with the same argument, (and) there will be not be any agreement,” the Commerce Minister said.
With China mired in a trade war and weakening domestic demand, India has taken over as one of the fastest-growing of the big economies in the world. The International Monetary Fund predicts that the South Asian nation will grow at 7.4 per cent in 2018 and 7.8 per cent in 2019. This is a good clip ahead of the IMF’s outlook for the world economy, which looks set to grow at 3.9 per cent next year.
“Actually India is growing, the fastest growing large economy in the world. So what you’re saying is absolutely right, we could even have grown at 10 percent if the global challenges that exist today were not there,” the Commerce Minister concluded.

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Ten units to come up at the processing park proposed in Cuddalore
The textile sector in Tamil Nadu, which has production facilities across the textile value chain, is unlikely to attract major investment commitments at the Global Investors’ Meet to be held in Chennai next year.
Construction of individual units at the Cuddalore processing park might commence if the Government makes arrangements for water supply. Ten units will come up at the park at an investment of Rs. 1,000 crore. These units might sign MoU at the GIM, say industry sources. If the park is commissioned, it might encourage stitching units to set shop nearby, triggering more investments in future.
Lukewarm response
With regard to spinning mills signing agreements at GIM, just a couple of individual units have come forward so far, the sources say.
Raja Shanmugam, president of Tirupur Exporters’ Association, said that every year the Tirupur knitwear units invested approximately Rs. 1,000 crore towards minor expansion works. This year too that investment would come in. But, the GIM might not attract major investment in the garment sector because of the downward trend faced by the sector over the last couple of years. The Government should have made preparations to push for sectoral expansions. For instance, for textile processing units to expand, there should be adequate infrastructure, he said.
According to M. Senthil Kumar, Chairman and Managing Director of Palladam Hi-Tech Weaving Park, the Technology Upgradation Fund Scheme that provided subsidy to textile investments has slowed down. Subsidy available for powerloom units under the scheme has reduced. “So, major new investments at GIM from the powerloom sector is difficult.”
Incentives needed
Further, the State Government is yet to announce a textile policy. The Government should provide incentives for automation to encourage investments, he said. The job working powerloom units say the segment faces several challenges and, hence, is not expected to make major investments now.

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Over the past few weeks, the central government and the Reserve Bank of India (RBI) have been locked in an intense debate over several issues. Three are of critical importance. First, ever since the implosion of IL&FS, many have been concerned about the liquidity crunch facing non-banking financial companies (NBFCs). As shown in, Rs 2.2 trillion of NBFC debt was set to mature in November and December. And while there were concerns that NBFCs may not be able to roll over their debt, so far there has not been any default.
It is possible that financial institutions such as LIC and SBI have stepped in. Mutual funds may have also helped roll over debt. It is equally possible that higher securitisation transactions may have also helped. The other issue centres on credit flow to MSMEs. Some have argued that bank credit to micro and small industrial firms had slowed considerably as many banks had been placed by the RBI under its prompt corrective action (PCA) framework. However, as seen in, bank credit to medium and large-scale industrial firms has also been sluggish. By comparison, as seen in, credit to micro and small enterprises in the services sector has soared over this period.
On the issue of the RBI’s PCA framework, at the aggregate level, these banks have seen their gross non-performing loans decline. But with their credit also shrinking during this period, GNPA as a percentage of advances has risen. And while their cumulative losses have declined, only three, namely Bank of Maharashtra, Corporation Bank and Oriental Bank, have reported profits. Of these, the latter two appear to be in better shape On the issue of the RBI’s capital level, much of the rise in reserves in recent years is on account of the currency and gold revaluation fund. By comparison, the RBI’s contingency reserves have barely registered a rise over the past decade.

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T The trade in renewable energy certificates (RECs) zoomed 325 per cent from a year before, from 1,205 MUs to 5121. Total volume trade on IEX went up 34 per cent, to 33,705 MUs in the period.
During the period, the market was congestion-free on most days. Volume curtailment due to congestion was only 0.6 per cent.
Revenue in April-September was up 21 per cent to Rs 1.49 billion, with the rise in volumes in both the electricity and REC segments. At nearly Rs 1.25 billion, the earnings before interest, taxes, depreciation and amortisation (Ebitda) was up 23 per cent. The Ebitda margin was a robust 83 per cent.
However, operating expenses rose 14 per cent to Rs 246.6 million. Depreciation rose 19 per cent to Rs 52.2 million on account of capital expenditure in 2017-18, primarily on acquisition of trading software technology. Tax expense was Rs 348 million, an effective tax rate of 29 per cent.
rade volumes rose 19 per cent at the Indian Energy Exchange (IEX) in the first six months of this financial year.
This was aided by a pan-India 6.2 per cent increase in electricity generation during the period. In all, 28,584 million units (MUs) of power were traded between April 1 and September 30, counting both the day-ahead and term-ahead markets.
Its highest volume trade wa 306 MU in the day-ahead market (DAM) on September 29. The average market clearing price rose 33 per cent, from Rs 3 to Rs 3.98 a unit. Largely due to inadequate availability of coal with generators, the exchange told investors.
In the term-ahead market, 892 MUs were traded, a spike of 86 per cent over the April-September period of 2017-18. As many as 22 solar energy projects, aggregating 1,066 Mw in capacity, were registered and solar energy sold through DAM on the exchange.
As noted earlier, all this performance was bolstered by the marked rise in electricity demand. To meet this, generation (including of renewable energy) rose 6.2 per cent in April-September to 705 billion units (BUs) from the year-before period. Among the marked increases in demand (figures in percentage) were Karnataka (27), Telangana (19), Maharashtra (18), Andhra Pradesh (17), Odisha and Gujarat (both 16).
Thermal generators faced inadequate availability of coal, leading to increase in e-auction rates. Imported coal prices also rose. All this led to the rise in market clearing price noted earlier, to Rs 3.98 a unit.

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But some gaps remain; expectations are high in new regime
A year after implementation of the Goods and Services Tax (GST), the system is getting streamlined for the intended purpose of achieving the objective of ‘One nation one tax’. In the excise regime, multiple tax systems had increased administrative costs for manufacturers and distributors. With GST in place, the compliance burden has eased.
GST brought in developments and changed the way businesses conducted themselves.
It is commendable on the part of the GST Council to arrive at decisions on a consistent basis, despite differences of opinion among various sectors and political parties.
The textile sector is one of the oldest and largest in the country and a major contributor to the development of the economy. The industry employs both skilled and unskilled manpower and contributes over 10% of the total annual exports of the country, which is likely to increase under the GST regime.
Tax burden declines
Many from the textile industry have stated that the overall tax burden has come down for the sector to 18% from 20% and that the new system has also increased transparency in the sector, which provides employment to 45 million people.
A majority of the Indian industry functions in the unorganised sector or the composition scheme, creating a gap in the flow of input tax credit (ITC). If a registered taxpayer procures the input from taxpayers under the composition scheme or the unorganised sector, ITC will not be allowed for him.
With the implementation of GST, the input credit system has smoothly shifted the balance towards the organised sector. By subsuming different taxes such as entry tax, luxury tax and octroi, the costs for manufacturers will be reduced in the textile industry.
For textile mills, the import cost of the latest technology to manufacture textile goods is expensive because the excise duty paid for the same was not allowed in ITC. Under GST, ITC is available for all the tax paid on capital goods.
The process of claiming ITC is simplified in GST, which allows the textile sector to be competitive in the export market.
Expectations are high on three counts. First, yarn now attracts 5% GST and the machinery to manufacture yarn attracts 18%. This is uneven. Yarn manufacturers will be left with a huge input credit which they won’t be able to utilise.
There is no provision under GST to get such accumulated credit as refund for capital goods. This will contribute to dead investment for the textile industry over several years.
Second, a foreign manufacturing company is now permitted to set up a unit without any investment from the domestic market, bring in 100% of their share, and repatriate profit to their countries. This has made the domestic textile machinery manufacturing companies to compete in an unfavourable environment. To safeguard the domestic industry’s interest, government should create a level-playing field which will pave the way for ‘Make in India’ to prosper.
It also keeps domestic industries healthy and facilitates a healthy employment environment. Also, more incentives must be given to the textile sector to help explore the export market at competitive prices.
Finally, a simplified procedure is needed in the e-way bill legislation to ease transportation of goods by minimising documentation, physical verification and the like.

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