No Major Shift Seen In World Cotton Prices

There is unlikely to be any major shift in world cotton prices for 1996-97 if one were to go by the revised estimates for cotton production and consumption.

The International Cotton Advisory Committee (ICAC) has raised its cotton output estimates for 1996-97 by 1,00,000 tonnes over its December projections.

Accordingly, the estimates as at the end of January 1997 stand at 18.96 million tonnes.

The projected increase is mostly accounted for by the United States and China.

According to ICAC , the United States is likely to emerge as number one producer of cotton in the world, displacing China (See table).

 

However, India is expected to retain its position as the third largest cotton producing country in the world.

The International Cotton Advisory Committee has also updated its world cotton consumption estimates and has raised the same by about 30,000 tonnes to 18,917 million tonnes.

This has narrowed down the gap between the production and consumption of world cotton and has left no room for any major changes in prices during 1996-97.

It is to be noted that one factor that has a major influence on world cotton prices is the magnitude of imports by China.

According to the International Cotton Advisory Committee , Cotlook A Index has averaged 77 US cents per pound during the first half of the current season, compared with an average of 89 cents during the corresponding period of 1995-96.

The main reason for the decline in prices is said to be reduced imports by China and lower expectations among exporters following higher prices recorded during the last two seasons.

The Cotlook A Index for the whole year 1996-97 is expected to average 80 US cents per pound, according to the International Cotton Advisory Committee .

On the exports front, International Cotton Advisory Committee says that the world export commitments for 1996-97 has gone up by approximately one million tonnes between mid-January and reached 4.4 million tonnes or 77 per cent of the projected total.

Though the export sales have shot up recently, the 1996-97 world export commitments as on mid-January are still said to be lower by 5,00,000 tonnes than the 1995-96 sales, and still lower by 8,50,000 tonnes than 1994-95. Cotton is known as a highly pest-prone crop all over the world. A major part of farmers' expenditure on raising the crop is spent on checking these pests.

According to information available, about 55 per cent of the total pesticide consumption on annual crops in India is accounted for by cotton. Among the major pests, boll warms are said to cause the maximum harm to the crop.

In the United States, apart from boll worms, boll weevils are equally serious pests.

India imports a sizable quantity of cotton from the United States.

In the past, because of fumigation of imported cotton, the country has been able to prevent the entry of boll weevils.

In the United States, boll weevils cause serious loss in production year after year.

To avoid this, the Boll Weevil Eradication Programme (BWEP) has been in progress for the past few years.

It is now learnt that through the implementation of this programme, boll weevils have been eradicated from more than 1.5 million hectares across the cotton belt in the United States. This programme is also likely to be extended further during 1997-98 season.