Interviews
Cotton prices to rule firm: Experts' Say
30 Aug '10
6 min read
Mr Townsend also shows his concerns for farmer community. He is worried that the farmers are among the first to feel the impact of policies to reduce international demand for commodities, and reduced industry confidence that market forces will respect, further discourage ginners, merchants and textile mills from making future investment in the cotton sector.
ICAC- Director supports his point by stating- “There is ample empirical evidence that countries that disrupt international trade by intervening in markets suffer a measurable increase in country risk premiums, not only for trade in the commodity of immediate interest, but also in many other products exported from that country. “
Mr Townsend also remarked –“As an alternative to encouraging rent-seeking behavior by industrialists seeking to profit from government interventions, all countries are encouraged to facilitate market-based price risk management strategies. Industries that become dependent on government intervention to manage stocks of inputs and the risks inherent in commodity markets are doomed to long term decline. “
Answering our query on the causes of high cotton prices, the old hand in cotton world, Mr Suresh Kotak, Chairmam, Kotak & Co Ltd, commented–“Primarily, Price rise has been due to, global tight supply of cotton, which though external, has reciprocal chain effect on Indian price lines. The internal factors, however, are increasing Domestic mill consumption. The external factor of cheapness of Indian Cotton vs other growths, have also created greater demand.”
Mr Kotak also made mention of the consequent measures the market could adapt to. He told that the balancing work out has to be done and judicious measures have to be instituted so that farmer, the exporter and consumers; everyone's requirement of availability is taken care of. He is of opinion that the governing bodies may resort to most important guiding tool i.e. Stock to Use Ratio. “The government is likely to go for 2 months National Inventory composed of Industry inventory and Trade inventory”, foretold Mr Kotak
In order to get a holistic view on the matter, Fibre2fashion team with its heartily consolations, interviewed veteran from Pakistan cotton industry where under flood afflictions, the industry is washed out and confronting challenges. Mr Sohail Naseem, the Chairman of Karachi Cotton Association mentions –“Cotton Market, during coming few months, is to be under obvious tight situation due to recent flood damage in Pakistan which is now being estimated around 2 million bales valuing more than 700 million dollars, in addition to the loss of cotton crop more than 15 million peoples are being effected along with damage to the infra structure as well as properties.”
ICAC- Director supports his point by stating- “There is ample empirical evidence that countries that disrupt international trade by intervening in markets suffer a measurable increase in country risk premiums, not only for trade in the commodity of immediate interest, but also in many other products exported from that country. “
Mr Townsend also remarked –“As an alternative to encouraging rent-seeking behavior by industrialists seeking to profit from government interventions, all countries are encouraged to facilitate market-based price risk management strategies. Industries that become dependent on government intervention to manage stocks of inputs and the risks inherent in commodity markets are doomed to long term decline. “
Answering our query on the causes of high cotton prices, the old hand in cotton world, Mr Suresh Kotak, Chairmam, Kotak & Co Ltd, commented–“Primarily, Price rise has been due to, global tight supply of cotton, which though external, has reciprocal chain effect on Indian price lines. The internal factors, however, are increasing Domestic mill consumption. The external factor of cheapness of Indian Cotton vs other growths, have also created greater demand.”
Mr Kotak also made mention of the consequent measures the market could adapt to. He told that the balancing work out has to be done and judicious measures have to be instituted so that farmer, the exporter and consumers; everyone's requirement of availability is taken care of. He is of opinion that the governing bodies may resort to most important guiding tool i.e. Stock to Use Ratio. “The government is likely to go for 2 months National Inventory composed of Industry inventory and Trade inventory”, foretold Mr Kotak
In order to get a holistic view on the matter, Fibre2fashion team with its heartily consolations, interviewed veteran from Pakistan cotton industry where under flood afflictions, the industry is washed out and confronting challenges. Mr Sohail Naseem, the Chairman of Karachi Cotton Association mentions –“Cotton Market, during coming few months, is to be under obvious tight situation due to recent flood damage in Pakistan which is now being estimated around 2 million bales valuing more than 700 million dollars, in addition to the loss of cotton crop more than 15 million peoples are being effected along with damage to the infra structure as well as properties.”
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