Better output: Industry works on expansion plans

Increase in cotton production coupled with favourable weather conditions this year have prompted factory owners to chalk out expansion plans and raised hopes of the Indian textile industry.

Farmers, traders, cotton factory owners, yarn manufacturers and garment manufacturers are ecstatic over the production estimates at 32.5 million bales (2010-11) as compared to 29.5 million bales last year.

The chairman of Vardhman group, S P Oswal is confident of smooth implementation of his expansion plans. Vardhman consumes about one million bales of cotton (almost 3 per cent of the country’s total production of cotton) in a year and has new projects in the pipeline.

Like Oswal, the entire supply chain of cotton textile industry in India is optimistic over the prospects of better cotton harvest this year.

While the pre-monsoon showers (result of cyclone Phet) in Punjab and Haryana helped the farmers by saving the crop from excessive heat, farmers in the coastal areas of Gujarat benefited as they can sow the crop in advance, said Arun Dalal a trader from Gujarat.

Jagtar Singh Mehma, a progressive farmer in the Bhatinda belt of Punjab (with large tracts of cotton fields) said rain will help in dissolving salt accumulation in the soil that arrests sappling growth. The temperature at an unprecedented 45 degrees in the northern states, which contribute about 12 per cent of the country’s cotton output, was adversely affecting the crop. The ginning factory owners expect to scale up their capacity utilisation by 10-15 per cent this year because of a better cotton crop.

According to sources in Ministry of Agriculture, the area under cotton is likely to increase by 8-10 per cent across the country. This can be attributed to the premium (of 20-25 per cent) for the cotton crop over and above the minimum support price of cotton. The farmers in Madhya Pradesh, Gujarat and Maharashtra are planning to harvest cotton instead of soya bean and groundnut because it fetches better returns.

According to officials in the Ministry of Textile, the Cotton Advisory Committee would give its report for the projected export of cotton next month.

The increase in output would help to bridge the gap between the opening surplus of 7.15 million bales and the present surplus of 3.6 million bales. The estimated consumption of cotton mills in India is 26 million bales per annum.