India:

Cotton exports register mind boggling figures

Cotton production in India is seeing a rising trend. While the production was 136 lakh bales (170 kg) in 2002-03 season, it rose to 241 lakh bales in 2005-06 and jumped to 315 lakh bales in 2007-08, translating in to a phenomenal growth of 131 percent in 5 years. Correspondingly the yield has also increased from 310.55 kgs/hectare in 2002-03 to 427.17 kgs/hectare in 2005-06 and 560.44 kgs/hectare in 2007-08 which means an increase of 80.46 percent again in 5 years. The best performance came on the export-import front. From 16 lakh bales in 2002-03 imports climbed down to just 6.5 lakh bales in 2007-08. Exports galloped from just 84 thousand bales in 2002-03 to 47 lakh bales in 2005-06 and a stupendous 85 lakh bales in 2007-08. This in effect means a growth in exports of a mind boggling ten thousand percent in just 5 years. The consumption pattern is also similar to the growth in yield. From 168.83 lakh bales in 2002-03 it ascended to 219 lakh bales in 2005-06 and an awesome 241 lakh bales in 2007-08. Closing stocks rose from 24 lakh bales in 2002-03 to a comfortable 72 lakh bales in 2004-05 but dipped to 43 lakh bales in 2007-08. The stock to use ratio also witnessed a similar pattern. From 14 percent in 2002-03 it augmented to a perfect 37 percent in 2004-05 and plunged again to a precipitous 18 percent in 2007-08. The alarms raised by the textile industry and industry bodies are not farfetched. Though production and yields have gone up, the exponential growth in exports has led to a shortage of good quality cotton in the market and led to a price increase of as much as 25 percent in the current cotton season. The stock to use ratio is also at a risky 18 percent, which ideally should be around 30 percent.

Mauritius:

A textile industry on hinges of survival

The textile industry has seen a lot of ups and downs in the last few decades, but has managed to be resilient. Presently, the sector is facing a lot of difficulties, some created and others due to changing international economic environment across the globe. Despite producing good quality products, the manufacturers of textiles and apparels have not been able to compete in the international markets due to their high pricing. The sector has not invested in the latest technology and makes do with obsolete machinery which ultimately leads to higher costs. Export of apparels and textiles only to the US in 2005 were US $167 million, dipped to $119 million in 2006 and fell to a further $114 million in 2007. The figures are a pointer to the extremely bad condition of the apparel industry in Mauritius. The depreciation of the Mauritian rupee (MUR) in 2005-2006 led to a favourable environment for the textile industry. It helped in making products price competitive internationally. However, the down turn began when the MUR started appreciating since late 2007, due to massive influx of foreign investment. This led to the Mauritian textile goods becoming less competitive in the international markets. At the same time, rampant inflation and rising fuel costs, among other factors, have contributed in making the environment difficult for the industry. Profits which used to be in the range of 12-15 percent are now reduced to 5-7 percent. Those companies which were surviving on wafer thin margins due to extreme competition are forced to put their shutters down. Despite low margins, industry morale was high, but, constant decrease in orders in last few months due to looming recession in the US and other factors across the globe altered the entire scenario. The first alarm bells started ringing in January 2005 with the advent of multi fibre trade agreement and dismantling of quotas. This led to an exodus of companies, who had invested in the sector to take advantage of quotas and left thousands of workers jobless in their wake.