The Hindu Business Line : `Conditions ripe for growth in cotton exports'

Following satisfactory South-West monsoon, cotton output in 2003 is poised to grow significantly. Far from facing a price collapse, the cotton growers are enjoying remunerative prices thanks to a sharp upturn in international cotton prices, which have not only made cotton imports expensive but also opened up a window of opportunity for export of Indian cotton.

In this optimistic scenario, Business Line elicited the views of Mr Vishwa Nath, Chairman and Managing Director of Cotton Corporation India (CCI), who cautioned that the situation is dynamic and one needs to watch domestic and international markets more closely.

The following are excerpts from the interview.

On cotton production and quality:

Cotton production in the country during the 2003-04 season is estimated around 170 lakh bales (170 kg each), up from 136 lakh bales last year. The quality parameters in almost all the cotton-growing states are likely to be quite satisfactory.

Export prospects:

Looking at the international prices of cotton, the chances of exports from India are very good. Although it is difficult to quantify right now, exports are likely to be anywhere between five lakh and seven lakh bales this season as against 0.50 lakh bales last year.

Will imports take place?

Cotton imports during the current year will be much lesser, because the prices of all cotton of foreign origin are much higher than the equivalent varieties of Indian cotton. However, we feel that the cotton imports of extra long staple and some specific growth, which are required for exports of finished textiles products, may continue this year. Total imports, however, may not exceed 8 lakh bales. Last season, imports were 16 lakh bales.

CCI's market intervention:

We will continue market intervention to make commercial purchases, both for the requirement of domestic buyers as well as export commitments. However, there will be no need for CCI to undertake any price support operation for the farmers this year, as they will get prices much above the minimum support price during the 2003-04 cotton season because of better qualityof domestic cotton, good yarn demand and better price level as well as higher international cotton prices.

View on cotton contract farming:

Contract farming in cotton, which is in the interest of both farmers and the user-industry, is in the initial stages. Its objectives are to make available cotton of desired quality and quantity to the user-industry by improving production and productivity of the crop, and reducing the cost of cultivation.

CCI and the Government of India, through the Technology Mission on Cotton Mini Mission-II, are trying to impress upon the user-industry the need to enter into MoUs with farmers.

With the help of technology transfer and better supply of inputs (such as seeds, fertilisers, pesticides), farmers can increase productivity and the textile mills/ginning factories can get assured supply of better cotton.

So far, only a few mills in different parts of the country have come forward. But we are hopeful that in the coming years, more and more mills/ginners will see the benefits of this scheme.

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`Conditions ripe for growth in cotton exports'