Only Standard Cotton Varieties Should Be Grown

Textiles industries have to redefine their industries, strategies, competitive rules and the approach towards the consumer. India is perhaps the only country producing a large number of cotton varieties. This needs to be reduced to only certain standard varieties," said P D Patodia, managing director of ATL Textiles, in a interview with Devendra Vyas. Excerpts :

BS: Will the recent devaluation of the Indian Rupee really help the cotton yarn exports?

PD Patodia: It is a normal to expect export margins to be better with the devaluation of the local currency vis-a-vis the US$. But it is not that India is the only economy to be hit.

 

The setback in the South-East Asian economies and wide fluctuations in the currency levels of our neighbouring countries only make their products that much cheaper, rendering additional competitive edge for them.

Even though the Re has recently gained lost ground, the gradual slide of the rupee against the US$ will help cotton yarn exports from the country to remain competitive in the international market in the long run.

BS: How is the growth of exports of cotton yarns of both lower and higher counts. How does one accelerate it ?

PDP: The growth of cotton yarns of both lower and higher counts have been good. A few years back, the cotton yarn exports in the higher count ranges were quite negligible.

During the last few years, the cotton yarn exporting mills have modernised their production lines and absorbed state-of-the-art technologies in spinning.

With the result the overseas markets have acknowledged our capability as a qualitative supplier of cotton yarns in higher count ranges also.

The lower counts (coarse counts) of yarns with its usages in garment making are consumed faster, while the higher counts (fine counts) go for speciality fabrics.

The overseas buyers expect more stringent quality standards. The 100 per cent EOUs have mainly contributed in increasing the exports of coarse yarns. To accelerate further growth of cotton yarn exports, there should not be any quantitative restriction/ceiling on exports of cotton yarns.

With the increase in the spinning capacity in the country over the last few years, the domestic supply of yarns can still be kept up even if the quantitative restriction/ceiling on exports are removed.

I also feel that the mills require further modernisations to upgrade their product quality, absorb world-class technologies and improve their operational efficiencies before reaching for a further higher strata of the export markets.

BS: What have you to say on the governments cotton exports policy. Will it hamper yarn exports?

PDP : I am not averse to cotton exports if we have ensured enough cotton stocks for our mills requirements. The government should take a decision on export of cotton only if they are satisfied that we have sufficient availability of raw cotton to meet the requirements of the textiles mills.

Resorting to exports at the beginning of the season would be risky. Should the crop position deteriorate, it will only push up prices taking away the competitiveness of our exports.

The government should understand that export of yarns, fabrics and garments will bring more forex revenue than from the cotton exports.

BS: The contamination of cotton is a very serious problem for the yarn manufacturer. How does one overcome it. Is there any legal framework for the same?

PDP: The contamination of cotton basically starts from the field itself. The improper ginning and inadequate packing methods causes further damage. The ITMF study has indicated the Indian cotton as having the maximum contamination amongst cotton growing countries in the world.

I think the most important factor is to bring about an awareness on the damage caused due to contamination in the produce amongst the growers and agencies right from the crop stage to the packing of grinned cotton.

Further, though we have modernised the cotton yarn production lines to a world-class level, the ginning processes have remained almost neglected.

I think that adequate finances at cheaper cost must be made available under a scheme similar to the earlier Textile Modernisation Funds to the ginners to replacing their age-worn processes for latest ginning technologies.

Some regulatory measures -may be prescribed to curtail contamination, but the legal framework alone will not help unless the mind-set of the suppliers is changed.

BS: What is your opinion on the open-end yarn exports. Do we require a separate export quota for it.?

PDP: In view of the availability of cotton and ample production of cotton yarns, both in ring spinning and open-end process, I do not think there is any need for a separate quota for open-end yarn exports. In fact there should be quota-free exports.

These days when the quota regime is destined to end and the prospects of heavy competition in the international market is foreseen, a separate quota for OE yarn exports may not accelerate these exports .

BS: How would your tackle the problem of `anti-dumping duty to be imposed by the EU on the exports of unbleached fabrics?

PDP: Anti-dumping duty imposed by the EU on the exports of unbleached fabrics is an indirect way of restricting the export from the developing countries although it is exported under the quota system.

We should tackle this matter politically and through our diplomatic channels. We should also take up this matter with WTO.

B.S. How do you see the post-GATT scene in the textile industry by 2005 ?

PDP: At the level of competition post-GATT should opens us up. Mere high quality product is just not enough. It should be produced at reasonably lower cost.

I foresee the product quality being the price of market entry. Reaching a higher quality standard, cost-reduction and improving of the operational effectiveness demand constant upgradation of our technologies through modernisation of our production lines.

The textiles have to redefine their industries, strategies, competitive rules and the approach towards the consumer.

India is perhaps the only country producing a large number of cotton varieties. This needs to be reduced to growing only certain standard varieties.

Certain measures such as allowing duty-free import of machineries and making available - say a `textile exporters modernisation fund to those manufacturer-exporters exporting over 50 per cent of production at a cheaper rate of interest will certainly help in speedy absorption of world-class technologies.

We will also have to find out as to how to reduce our production cost. On the other hand, we also have to work out the per hectare increase of cotton production in the country with quality seeds so as to improve the cotton quality.

I feel the profitability should come through more production and not higher prices.

We have also to understand that many East European and CIS countries are coming up in competition to us. To reap the potential of post-GATT period fully, what is needed is a pragmatic approach with a five -year plan to meet the challenges. This 5-year period will be a period of adjustment and restructuring and we have to rise to meet the challenges.