A law to strengthen statistical data on cotton trade is in the offing, said V. Srinivas, Joint Secretary, Union Textiles Ministry.
“The data for policy making should be accurate or near. There is consensus on statistical strengthening of cotton trade data across governments, industry and trade,” he said.
Srinivas was delivering the keynote address at a conference on ‘Challenges Facing the Cotton Industry 2013,’ organised by the Indian Cotton Association here on Saturday.
“Better data collection is important because right now there are differences in the production data presented by States, production data assessed by the Cotton Advisory Board with regard to consumption and stock, thus making it difficult for the Ministry to coordinate and identify on real-time basis, the actual position with data available. A Cotton Distribution Bill with monthly collection of data in public domain will therefore be highly beneficial,” he said.
“Several countries have a weekly collection of data for publication. But considering the size of our country and the data available, monthly collection should be good enough,” he said.
Reverting to contract defaults, Srinivas said that the International Cotton Advisory Committee has reported a sharp increase in contract defaults in 2010-11 at 10 per cent compared with 2 per cent in normal years. Significant defaults contribute to uncertainty. Initially ginners defaulted to traders anticipating higher prices, subsequently traders defaulted to textile mills in anticipation of higher prices.
By May 2011, textile mills defaulted on high value cotton contract with traders in anticipation of cheap cotton being available in the near future. There is therefore a need for further analytical work in this regard, the Joint Secretary said. He urged the Indian Cotton Federation to undertake an evaluation on contract performance in consultation with its members.