Advisory Board To Review Cotton Situation

The Cotton Advisory Board will meet on February 24 at Mumbai in order to review the cotton crop situation for 1996-97 and discuss the present export quota position as well as the fabric and yarn policy.

According to sources, the government has declared an export quota of 12.20 lakh bales (one bale weighs 170 kg), of which staple cotton accounts for 10.65 lakh bales.

Assuming the countrys crop for the season at approximately 160 lakh bales, the export quota constitutes about 7.6 per cent of the total crop.

However, despite the release of the large export quota of raw cotton well in time, the declining trend in cotton prices has not been arrested.

Sources attribute this to the sluggish demand in the domestic textile industry.

Cotton mills, which used to cover cotton requirements for about three to four months are now covering for only 15-30 days at a time because of the liquidity crunch, said sources.

They added that the mills are in dire straits as cotton yarn purchases by the powerloom sector for weaving have slowed down and the turnaround of money is still very poor.

There has also been a change in the pattern of yarn production, with medium and coarse yarns being increasingly produced at the expense of finer yarns which are comparatively expensive.

The arrivals of cotton from the producing centres to the markets has increased significantly this year, with the arrivals upto December 1996 numbering 56.06 lakh bales, an increase of almost 10 lakh bales over the figure of 46.66 lakh bales for the corresponding period in the previous year.