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Will India turn into a cotton importer?

posted Jul 12, 2011, 2:55 AM by NAVYUG Info

India may turn into an importer of Cotton if the domestic textile industry grows by 15-20% a year until the current capacity doubles, says B.K.Mishra, Managing Director Cotton Corporation of India. However he ruled out the possibility of the same happening over a year or two.

Mechanisation of farm holdings in India and employing machines to pick cotton is not feasible as most holdings are small and owned by individual farmers who may not have the sufficient financial muscle to bring in machines, added Mishra. R.C. Jain, Chairman and Managing Director of TT Limited--an integrated textile company--concurs Mishra’s view, but disagrees that India may turn into an importer. Textiles also include polyesters and there is a shift from cotton to polyesters by customers, R.C. Jain says. “Besides, cotton acreage and productivity is also increasing.” he argues.

As per the Ministry of Agriculture, cotton has been sown on 21.65 lakh hectares of land as on June 17 as compared to 15.42 lakh hectares last year. But cotton supply scenario in India is already constrained. Cotton Advisory Board expects the closing stock to be 27.5 lakh bales by the end of current season which will last only for a little over a month given the average monthly consumption of 22 lakh bales by textile mills in India. Cotton year runs from October to September in India with arrivals beginning only in January. Cotton Corporation of India (CCI) reported 30.2 million bales of cotton arrival as of June 19th, 2011 amounting to mere 4% increase over the last year. For 2009-10, India’s cotton consumption stood at 230 lakh bales which increased to 258 lakh bales in 2010-11.

“The domestic textile industry is one of the largest industries in the country and has witnessed a phenomenal growth in the last two decades in terms of installed spindlage and yarn production. The significant features of this growth include installation of open-end rotors and setting up of export-oriented units. The mushroom growth of spinning industry and its modernization has led to sustained growth in cotton consumption specially during the years when country harvested good crop production.” says Cotton Corporation of India website.

After achieving a sustained growth in cotton consumption during Xth Plan period, domestic cotton consumption in last few years barring 2008-09 has been increasing steadily.