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Interview with Atul Ganatra

Atul Ganatra
Atul Ganatra
President
Cotton Association of India
Cotton Association of India

Textile industries will give good performance in 2022
Engaged in providing a wide range of services to the entire cotton value chain since its incorporation in 1921, the Cotton Association of India (CAI) represents all segments of the cotton trade and textile industry of the country including mill buyers, growers and growers’ co-operatives, ginners, brokers, merchants, importers and exporters, etc. Atul Ganatra, president of the 100-year-old organisation, speaks to Fibre2Fashion on the performance and future of the Indian cotton industry.

What are your key takeaways from the developments in the industry in 2021?

In 2021, the spinning mills have given excellent performance and they made huge profits. I can say 2021 was a golden year for the entire textile industry.
 

Is the industry still feeling as much uncertainty about demand in 2022 as it was for 2021? Which factors would you rank as of topmost concern?

I think textile industries will give good performance in fourth quarter of 2021 and also in 2022 as demand is very good. As many customers of China have turned to India for buying garments, the demand for cotton yarn has picked up.

Cotton prices have spiked up recently helping cotton producers while increasing cost of yarn manufacturers. How is the latter group coping and how long do you expect the prices to remain elevated?

Yes, cotton price in India has gone up, but Indian cotton price is still the cheapest in the world. Also, our yarn manufacturing capacity is in excess by 30 per cent than what we require to meet domestic demand. Due to this excess production of cotton yarn, India exports nearly 25 per cent of its yarn production.

Related to this, Indian cotton products are perhaps less competitive globally due to the import duty on raw cotton. Can we expect any relief on that front soon?

Yes, 10 per cent duty on cotton import is hurting the textile industry because India imports mainly extra length cotton varieties like Giza and Pima cotton. After paying 10 per cent duty, our mills are not able to compete in the world market. CAI has urged the textile and finance ministries to remove this import duty. We expect the duty to be removed in the next budget.

The share of Xinjiang cotton remains intact in the global supply chains until now. Do you see any movement happening there in 2022?

India has benefitted from the US ban on Xinjiang cotton, as many customers who were earlier purchasing from China have turned to India for buying cotton yarn and readymade clothes. 

How have elevated energy prices impacted India’s cotton value chains until now?

Compared to the world, energy is costly in India, but many textile mills now have their own windmills or solar plants. With their investment in power generation, these mills are now able to bring down their energy cost.

What is your view on the Indian and global cotton market outlook from a sustainability perspective?

India is a surplus cotton country; hence we are doing good amount of cotton export. This year cotton rates have gone up by 30 per cent compared to the last year. Such a big increase in price will attract farmers worldwide to grow cotton. So, we are expecting big cotton crop in the years to come.

What would you say are the low hanging fruits to increase India’s share in textile and apparel value chain globally?

We are expecting India’s textile share in the world market to increase by 6 to 8 per cent in the coming years because we have raw materials like cotton, and our quality of cotton and cotton yarn is very good.

What is your view about growing cotton sustainably?

There is good demand of cotton and cotton yarn made from BCI cotton and organic cotton, and India is the number 1 producer of these types of cotton.

What do you see as the top three challenges to the cotton value chain in 2022?

COVID-19 is the biggest challenge we humans are facing today, and if India is hit by a third wave, there might be a decline in our cotton production. We are also facing challenges in increasing cotton production in India, which is stuck at around 35 million bales since the last 5 years. On the other hand, our cotton consumption is going up every year (this year it was 33.5 million bales). So, failing to increase cotton production will hurt the entire Indian cotton textile industry. We request the Indian government to look into this matter very seriously and take steps to boost cotton production.
Published on: 11/01/2022

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.

This interview was first published in the Jan 2022 edition of the print magazine