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SICA pleads government to save cotton industry
01
Oct '08
The Indian Economy is going through very tough times. There is global recession in textiles and its effect is felt very heavily by countries like China and India. Our exports of textiles have come down.

On the general side, crude oil prices have shot up thus creating heavy imbalance and fluctuations in world trade. Domestically prices of petrol, diesel and other petroleum products have been increased by the Government.

As a result of inflation, prices of all essential commodities have shot up, like grains, vegetables, edible oils etc thereby eroding into the normal savings of the middle class. The Government is taking several measures to fight inflation, through the Reserve Bank of India, by hiking the CRR (Cash Reserve Ratio), increasing the repo rate (Bank lending rate) etc.

In spite of these measures, the inflation rate is hovering around (12.14% as against 3.5%) previously. Added to this is the unprecedented power cut in Tamil Nadu affecting the working of the mills very badly. The GDP which was a robust 9% earlier, has fallen to 8% or even lower.

The Agricultural sector is however doing very well and contributing largely to tackle the problem by producing yet another year of good crop. The cotton yields in this country have also been growing steadily.

During the previous season the record cotton crop resulted in the growth in Cotton Exports to record levels of 95 lakh bales. The high volume of exports pushed the cotton prices to such high levels, that the domestic textile industry could not function profitably.

The continuous decline in yarn prices and fall in export volumes of yarn and garments against these high cotton prices, resulted in pushing the Textile Industry to losses.

Following several representations, the government stepped in to introduce a registration procedure for cotton exports, to collect reliable and timely statistics. The govt. has also withdrawn the import duties on Cotton. These steps are expected to provide a balance in prices.

The Cotton Technology Mission has inspired the research activities in evolving newer varieties of cotton and also in improving the standards of our Cotton Ginning and Pressing factories.

Our Cotton bales which are being exported are generally meeting export standards in grade, length, strength and cleanliness in a large way. This is a good development, but we still have a long way to go considering the requirements and thereby increasing the volumes of our crop.

The Indian Cotton Crop for 2008-2009 is being estimated at 315 lakh bales. The new crop is blessed with very favourable weather conditions and the acreage under BT has expanded.

BT has been sown enthusiastically by farmers in Andhra Pradesh and Karnataka also and the crops in these states are also likely to register higher figures than the previous year.

Domestic consumption has been declining and exportsare stagnant at the moment. The exports during 2007-2008 were placed by CAB at 85 lakh bales, and are placed higher by trade sources.


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Courtesy: Business wire

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