The Hindu Business Line : Cotton price

The 2 per cent downward forecast of the 2004-05 US crop is no more valid. The USDA have released its planting intentions on March 31 and the planting is at least 7 per cent more than last year and a similar increase in crop is estimated.

Moreover the report on the increase in China's crop does not revealing the effect it will cause in the cotton market. The 6.3 million tonne that the country is going to produce will make China less dependent on overseas cotton. The biggest loser on account of this is going to be the US which sold close to 6 million bales (1.2 million tonnes) of cotton to China this year. If the calculations come true, the US will have to look into new markets for selling this quantity, which is going to make the global market a buyer's market.

So, with an increased crop in the US and probably better crops in many major cotton producing countries, and an anticipated lower price for cotton in 2004-05, it will be a problematic year for the US Government, especially when it comes to payment of subsidies.

A. Ramani

Coimbatore

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