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Even as the industry is ruling out a glut-like situation, the Powerloom Development and Export Promotion Council (PDEXCIL) has cautioned that the record cotton cultivation could lead to a chaotic situation if measures are not taken.
The council, set up by the Ministry of Textiles, has stated that the oversupply emerging out of record high cultivation of around 12.5 million hectares which will result in cotton arrivals of over 41 million bales will impact farmers. What's more, PDEXCIL is also estimating a fall in cotton prices to around Rs 30,000 per candy of Rs 356 kg.
"We have written to the government seeking measures to increase cotton exports. If urgent measures are not taken, there will be a chaotic situation in the country and farmers will suffer due to fall in cotton prices which could go down to Rs 30000 per candy levels due to oversupply by December," said Bharat Chhajer, immediate past chairman and Vishwanath Agrawal, chairman of PDEXCIL.
Quoting the example of yarn and grey fabric prices, Chhajer of PDEXCIL said, "Within a month, grey fabric prices and yarn prices have fallen by 30 per cent and 10 per cent, respectively. This is due to fall in export orders, especially from China. Hence, measures need to be taken to ensure increase in exports of cotton and its value chain."
Breaking all the previous records, the area under cotton cultivation in India has reached a record high of 12.25 million hectares and is expected to go up further to 12.5 million hectares as the sowing is still on in states like Andhra Pradesh and Karnataka. The all time high cotton acreage is all set to push India's cotton production to a new level as well. PDEXCIL is hoping the pending new Foreign Trade Policy may help push for cotton exports.
"Last year, the cotton supply was around 39 million bales of which 10 million was exports but this year the exports are likely to be less than when supply will be higher at over 41 million bales. But the Government of India is seriously thinking of improving exports through the new Foreign Trade Policy," Chhajer added.
