Home / Knowledge / News / Textiles / Suspension of cotton export contracts - CITI
Suspension of cotton export contracts - CITI
24
Nov '09
Cotton plays in the textile industry of India. It accounts for more than 60% of our fibre consumption and we are the second largest producer, consumer and exporter of cotton. Cotton is one of our largest crops and textiles are among our largest manufacturing industries. Thus, our cotton and textile sectors complement the strengths of each other and are highly inter-dependent.

During cotton year 2008-09 (October-September), the Government increased Minimum Support Prices for cotton by around 43% compared to the previous year and this led to substantial increase in cotton prices last year.

The same MSPs have continued for the current year. With increase in cotton consumption and apprehensions of a lower crop in the country because of the vagaries of the monsoon, cotton prices have increased substantially during the last few weeks. For Sankar-6 which is the standard Indian cotton, the price is around Rs.25000/- per candy on spot basis at present which is more than 10% above the price that prevailed one month back.

The unhealthy increase in domestic cotton prices has resulted largely from speculation by international cotton traders who have cheap capital available from global sources and therefore have an advantage over Indian mills and even Indian traders. There are reports that nearly 20 lakh bales of cotton has already been bought by traders for exports pushing up domestic cotton prices in the process. Operation of Minimum Support Prices ensures that cotton farmers get remunerative prices for their produce. Increase of cotton prices in the market through speculation basically helps only traders at the cost of both the farmers and the textile industry.

November to March is the most crucial period for our cotton economy since most of the best quality cotton produced in the country comes to the market during this period. By cornering a significant portion of this cotton for export, the traders are depriving the domestic industry the advantage of our cotton and transferring this advantage to our major competing countries like China, Pakistan and Bangladesh which are the major importers of our cotton.

Cotton Advisory Board(CAB) constituted by Government had estimated cotton production during 2009-10 (October – September) at 305 lakh bales. After this estimate was made, there were floods in major cotton producing States such as Maharashtra, Andhra Pradesh and Karnataka and water scarcity in the Northern tates.

Therefore cotton production this year is expected to decline at least to 280 lakh bales which would be 25 lakh bales lower than CAB's estimate and 10 lakh bales lower than last year production of 290 lakh bales. On the other hand, there has been some recovery in the economies of North America and West Europe which are major markets for our textile products and therefore cotton consumption in the country is expected to increase this year. It is essential to maintain a reasonable stock-to-use ratio and to provide for a comfortable ending stock to ensure cotton availability and price stability in the market. Thus, the country is unlikely to have any exportable surplus of cotton this year.


Must ReadView All

Indian govt approves special package for leather, footwear

Textiles | On 16th Dec 2017

Indian govt approves special package for leather, footwear

The Union Cabinet chaired by PM Narendra Modi has approved a special...

EU parliament resolution calls for Cambodia sanctions

Apparel/Garments | On 16th Dec 2017

EU parliament resolution calls for Cambodia sanctions

Following the ongoing crackdown in Cambodia on the opposition and...

Affordable prices to be hit if US pulls out of NAFTA: NRF

Apparel/Garments | On 16th Dec 2017

Affordable prices to be hit if US pulls out of NAFTA: NRF

US retailers’ ability to offer consumers quality products at...

Interviews View All

Siddharth Biyani
Mangalam Industries Pvt Ltd

‘The manufacturing sector is improving day-by-day, becoming better in...

Cindy McNaull
Cordura

We have broad range of options in durable fabrics

Manuj Terapanthi
Texaura

Transparent supply chain and fair trade will boost sustainable market

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Urmil Arya

Sushila International, a well established textile organisation established ...

Rikesh Mistry

Jupiter Comtex Pvt Ltd, established in 1973, started its textile machinery ...

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Aditi Somani
Aditi Somani

Aditi Somani specialises in luxury fusion wear with international cuts and ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

December 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.6%
No
12.0%
Skip
18.5%

Total Votes: 92

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
62.0%
No
30.4%
Skip
7.6%

Total Votes: 92

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.0%
No
9.8%
Skip
3.3%

Total Votes: 92

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
81.5%
No
8.7%
Skip
9.8%

Total Votes: 92


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search