Magazine Contents
Login | Register 
 
The Indian Textile Journal - December 2009 Viewpoint
Cotton's Tug of War

Cotton’s economic outlook is extremely dependent on the underlying macroeconomic assumptions. India's policy change always affects the outlook. Last year, the government announced an increase in cotton’s Minimum Support Price of 35 to 40%. However, as market prices declined, the government became the buyer for much of their production. There always is an ongoing debate between the various segments of India’s cotton industry as to the appropriateness of the higher support price. India’s export prospects are complicated by the current support price. With the higher support price, production in India is generally expected to be maintained near current levels. Some predicted that with only a slight recovery in mill use, India could return to the world market as a more significant exporter. Now, that the price is on a runaway growth, the mills are up in arms, screaming for immediate measures to curb it by temporarily suspending the registration of export contracts. The mills demand that the high level of registration of export contracts has to be viewed against the backdrop of high pitched speculation in international trading carried out by a handful of international commodity traders who are making huge profits leveraging on the possible decline in the cotton production globally. The industry fears that a similar meltdown that happened in the financial and oil markets in the recent times should not be repeated in cotton too.

The mills lobby feels that if calibrated export of cotton from India is undertaken, it will not affect the remunerative prices being given to the farmers since the demand for cotton in the coming months and years will be much more than what it is now. It is seeking to ship only the exportable surplus and consider it not as a regulation but as a well-accepted principle followed by several countries including the most developed ones. Such a move will boost the favourable sentiments in the economy and do good for the common man since it will contribute to make available affordable clothing and also create employment. The Government should analyse the situation and announce balanced measures so that the outcome of this tug of war is fair and fine.

view The Indian Textile Journal November 2009 Contents view The Indian Textile Journal Most Recent Issues
ViewpointFeaturesFeatures
A Raw Deal
China, the world's largest cotton importer, accounting for more than 60 per cent of total raw cotton exports from India, has upset the calculations of Indian cotton sector following a marked fall in demand from that country. Cotton exports from India have been
Testing the world's favourite fibre
Cotton is the world's favourite fibre, and a superb raw material for many textile end-uses. But it is by no means easy to work with - as a natural product, its many variabilities present some extremely complex challenges.
Arvind's fire protection solutions
Since 1931, Arvind Ltd stands tall as the flagship enterprise of the $14 billion Lalbhai group. Arvind has marked its presence throughout the apparel value chain - from fibre to retail. The company has recently made a strong foray
full viewpoint... more... more...
Table of Contents Most Recent Issues Write to Editor
Subscribe to ITJ | Write to the Editor | Rate Card | ITJ Ads | Tell A Friend | About Us | Contact Us  | Login | Register  | Home
Associated Portals:  | www.ipfonline.com | www.automotiveproductsfinder.com
IPFonline Limited, 2nd Floor, Shafika Building, 17/7 Kodambakkam High Road, Nungambakkam, Chennai - 600 034.
Tel: +91 44 42991234 (30 Lines). Fax: +91 44 42108441. Email: admin@ipfonline.com


"UA-1711812-1"; urchinTracker();