The Hindu Business Line : Cotton stocks seen okay, but quality a concern

COTTON supplies in the current year may be not be a disaster as initially anticipated because of late-season recovery in yields aided by rains and moderate pest infestation, despite a 10-12 per cent fall in area under cultivation.

Together with 35 lakh bales carried-over from last season, domestic availability would be comfortable, Mr Suresh Kotak, President of East India Cotton Association (EICA) has said.

Addressing members at the 80th annual general meeting of the association here on Thursday, Mr Kotak however pointed out that persisting quality deficiencies and price advantage will induce the industry to resort to imports, expected to be close to last year's level.

Welcoming the recent dilution of Maharashtra's monopoly procurement scheme wherein the State Government has allowed mills and the Cotton Corporation of India to purchase from farmers, the EICA President asserted that the private trade should also be allowed to source cotton directly and the scheme should be fully dismantled which would benefit not only growers but also the State exchequer.

India is not a major exporter of cotton, but a significant exporter of cotton yarn to the world textile industry, taking a sizeable share of around 25 per cent.

Several developed countries as well as significant economies like China are gradually reducing the spinning segment and concentrating on fabric production, utilising imported cotton yarn as the raw material.

``This opens up an opportunity for India to capture a greater share of the global cotton yarn trade,'' Mr Kotak pointed out, adding that China's migration towards garmenting, raising their requirement of fabrics, will mean a positive signal for fabrics exports from India. In order to seize the opportunity, cost reduction and quality upgrade in terms of technological parameters as well as purity and cleanliness are imperative, and this can be achieved by attacking the problem of low productivity and high contamination, he asserted.

Cautioning the association members that the cost of cotton will decide its future particularly in the context of competition from man-made fibres, Mr Kotak pointed out that between 1999 and 2000 while world demand for cotton grew by a mere 8.2 per cent to 20 million tonnes, world consumption of polyester more than doubled and actually exceeded that of cotton in 2001.

Mr Kotak laid down office after serving as president of EICA for eight years. He is the President of the Indian Merchants' Chamber as also the Chairman of the Federation of Indian Commodity Exchanges.

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Cotton stocks seen okay, but quality a concern