Credit Rating Information Services of India Ltd (Crisil) has forecast that the record profits registered by the cotton textile industry will be reversed on account of the bearish trend in international cotton prices, spiralling prices of domestic cotton and pressure on cotton yarn prices.
It may be recalled that the cotton industry registered record profits in 1996-97 and in the first half of 1997-98.
The world cotton production is expected to exceed consumption by about 5,00,000 tonne in 1997-98. According to Crisil, the above average crop prospects in United States and China, two of the largest cotton producing countries, would more than offset the decline in production from India.
On the domestic front, Crisil estimates the cotton crop for 1997-98 season at about 155 lakh bales, down from 175 lakh bales in the previous year. The crop in major cotton producing areas in North India, namely Punjab, Haryana and Rajasthan, is expected to be lower by about 10 lakh bales.
