Cotton now signifies the proposition of 'White Gold'. The 'Gold Price' has increment of around 30% whereas Cotton Price by more than 100% on the global commodity brochures during one year. Is not commodity beating the metals? Jim Rogers are more bullish than ever! Many of global factors are leveraging the high growth of Indian economy. There could be more liberal trading regime. Why not speculative market? At least not for the sake of Indian commodities as economic costs are much higher than benefits. In cotton context, Government cannot relinquish the ongoing efforts to tide the home conditions (holding of the flickering downstream under cotton product producers) and facilitation process for strengthening manufacturing with more value addition in cotton crop. Indian cotton has myriads of cultivators (farmers), cotton based industries (entrepreneurs), employees (under various cotton activities) and traders as major stakeholders. It is valid and desired to have growth for all stakeholders under cotton economy, but with objective preferences. One economic agent cannot subside its benefits (even if it comes with certain windfall gains) for the growth of others in private sphere, but Government can do through certain regulatory mechanisms. As it has a larger role to play for growth and development for domestic cotton economy. In this context, it becomes imperative to observe the Cotton Economy of India and recent undue malign arguments that restriction on Indian cotton exports has led the price volatility in international cotton markets; failures for international binding contracts (if any) and not propelling the right image for Indian brand cottons and hence exports restriction is not warranted at all. In fact the present circumstances warrant regulatory mechanism (restrictions) more than ever before.
Author is Economist with confederation of Indian Textile Industry. Views are strictly personal.