A secure weave for cotton

For centuries, cotton — the white gold — has been a critical cash crop for our country. Given the nature of utilisation, cotton may be called an industrial crop. Its importance has increased in the last 15 years with massive expansion in planted area and output.

India is currently No. 1 in area planted (13 million hectares) and production (36-37 million bales), and No. 3 in export of cotton (behind the US and Brazil).

Despite recent gains, there’s tremendous scope for further increases in productivity levels. At roughly three bales, or 500 kg, a hectare, our yields are below the global average of over 750 kg/ha and just a third of those in major producers like China and Brazil.

Newer challenges may stymie the growth of India’s cotton sector. Land constraints, water shortage and climate change are hurdles the sector will have to overcome.

Some crystal gazing

In the next 8-10 years, world cotton production is expected to grow at a slower pace than consumption. Cotton yields are set to grow more slowly as production gradually shifts from high-yield origins such as China to relatively low-yielding ones in South Asia and West Africa. World cotton use is set to grow at less than one per cent due to slower economic growth and population growth.

Raw cotton processing in China will continue its long-term downward trend. At the same time, higher mill use is envisaged in India, Vietnam, Bangladesh, Indonesia and Turkey. The ongoing shift in world trade towards value-added cotton yarn and manmade fibres will continue. Competition from synthetic fibre will make cotton less competitive.

Crude oil rates will impact synthetic fibre prices. Research by this writer shows that over the next 8-10 years, crude oil prices will gradually weaken as fossil-fuel consumption demand begins to shrink.

Falling crude oil price will reduce agricultural production costs including cotton in industrialised economies. This can potentially impact India’s competitiveness if not addressed soon.

Where does India stand? Barring years of drought, India will remain the world’s largest cotton producer. According to OECD-FAO projections, by 2029, India is expected to contribute 41-42 million bales or close to 25 per cent of the projected world output.

India’s mill consumption will become the world’s largest with over 40 per cent increase to about 38 million bales by that time. Consumption will be driven by income increases, demographic pressure and current low per capita usage.

The emerging scenario poses a challenge for all stakeholders in the cotton value chain to ensure that domestic demand is fully met and genuine export surplus is created. Remunerative prices alone will keep growers motivated.

Infusion of multiple technologies is the way forward for Indian agriculture in general and for cotton in particular in order to leverage the record area under cultivation. Adoption of information technology, agri-biotechnology, satellite technology, nuclear agri-technology and nanotech can deliver improved farm productivity as well as quality. Precision agriculture using these multiple techs should be promoted.

The potential of agri-tech market can be segmented into: supply chain and output market linkages; financial services; precision agriculture and farm management; quality management and traceability; and farm input market linkages.

Increased digitalisation

Going forward, there’s likely to be increased digitalisation of the supply chain. Automation, robotics, artificial intelligence, block-chain tech for export-import trade, will all receive a boost. These will advance traceability and compliance needs, providing end-to-end solutions.

The user industry must de-risk itself from the vagaries of production, quality and price. The recently enacted law to promote contract farming is an opportunity for the user industry to establish backward linkages.

Contract farming will free the user industry of market price volatility and quality issues. Contracting with FPOs (farmer producer organisations) will provide economies of scale and encourage adoption of technologies.

Although cotton currently faces challenges from synthetics, the world is decidedly moving towards ‘green’, ‘natural’, ‘renewable’ and ‘biodegradable’ materials. So, cotton as a natural fibre will continue to enjoy consumer support. The world market is increasingly looking for green products.

Cotton as a natural fibre can help advance many of the Sustainable Development Goals (SDGs) adopted by the United Nations. Cotton can contribute to advancing as many as 10 of the UN’s 17 SDGs.

Indian cotton and products must become globally competitive, meaning ‘the ability to produce globally acceptable quality at globally comparable cost’.

As India enjoys varied agro-climatic conditions and other natural resources, a natural fibre such as cotton is an extraordinary gift of nature. So, let us make cotton and cotton-based products ‘India’s gift to the world’.

Based on a speech delivered by the writer, a policy commentator and agribusiness specialist, at a webinar organised by Union Textile Ministry, TEXPROCIL and CITI for the launch of Kasturi brand of Indian cotton

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