Indian cotton eyes the centrestage

Considering the higher domestic output during this season, Indian cotton would wield the advantage of being the cheapest fibre in the international market, according to a survey carried out by Tamil Nadu Agricultural University (TNAU).

With export subsidy likely to further facilitate the Indian cotton price advantage, Korea, Taiwan and Indonesia, besides some international shippers, have evinced interest on importing from India, the survey said.

The cotton varieties that would get importers' inquiries were Shankar-6, Bunny, Brahma, Mech-1 and MCU-5, it said.

Quoting International Cotton Advisory Committee, it said that global cotton production was expected to reach 25.43 million tonne in 2004-05 from 20.66 million tonne in 2003-04, with world consumption to remain lower around 22.85 million tonne.

The excess production would contribute to further increase of stock, resulting in prices ruling weak over next several months, it said.

The increased domestic production in India, has lowered the estimate for the 2004-05 imports to 0.7 million bales as against 0.8 million bales during the last year.

Most imports were likely to be linked to extra long staple and specific purpose cotton, it said.

With cotton price fall continuing in tandem with the international cotton futures, a price offer of 44 to 45 cents per pound (FoB) for domestic cotton by the Indian exporters was possible this time and invited appreciable trade enquiries from international shippers, the TNAU survey said.

The government, to give shape to its offer of an export subsidy for raw cotton, may force some international cotton shippers and specific cotton consuming countries in the far-east to seriously consider sourcing Indian cotton, it claimed.

The Cotton Corporation of India has estimated trade volume committed for export range up to four lakh bales.

Saying the revival of the monsoon in August 2004, predominantly rainfed states of central and southern India resumed cotton cultivation energetically, it said the ability of the crop to withstand late sowing condition as compared to competing crops led to larger area than anticipated planting in Gujarat, Maharashtra and Andhra Pradesh.

The provisional planting estimate for 2004-05 has put the area under cotton at 8.97 million hectare, (accounting for 20 per cent of world area), a 12 per cent increase over last year.

Cotton production was estimated to be 240 to 245 lakh bale in the season, a record in India, the survey said.

Quoting trade sources, survey said that about 40 per cent of the farmers cultivated Bt cotton, resulting in improved yield prospects for 2004-05 crop.