Cotton, one of the major crops cultivated in India, accounts for around 81 per cent of the total fibre consumption in spinning mills and around 66 per cent of the total fibre consumption in the textile sector. In the last four decades, cotton production rose from 30 lakh bales (1950-51) to 177.90 lakh bales (1996-97 -- including loose cotton of 6.40 lakh bales).

There has also been an increase in the area under cultivation from 58.91 lakh hectares in 1950-51 to 91.22 lakh hectares in 1996-97. The average yield per hectare has also risen from 88 kgs in 1950-51 to around 332 kgs in 1996-97. However, there has been a fall in production and productivity as also a slight decline in the area in 1997-98.

For the cotton season (1997-98), cotton production has been estimated at 158 lakh bales and the area at 88.09 lakh hectares. The average yield per hectare works out to 305 kgs.

The low yield is mainly because 65 per cent of the area under cultivation is still rain-fed. Cotton production has been estimated at 161.50 lakh bales (inclusive of 6.25 lakh bales of loose cotton), area at 91-12 lakh hectares and, the average yield per hectare at 301 kgs.

With a view to reversing the downtrend in cotton yarn exports, the Indian Government has announced a number of measures. These include delinking of cotton yarn exports from hank yarn obligations although the obligation continues without reduction of level, operational flexibility to 100 per cent EoUs producing cotton yarn to export cotton yarn without any count/domestic cotton use restriction upto 31st December, 1999 and, a higher ceiling of 200 million kgs for export of cotton yarn of 40s and below counts.

The government has succeeded in getting a favourable verdict from the Textile Monitoring Body under the WTO in the matter relating to Colombia’s safeguard action against import of denim fabrics inter-alia from India. Anti-dumping proceedings on import of unbleached cotton fabrics from India were also dropped by the European Union.

The 1998/1999 world outlook in December 1999 included some increases in production, consumption, trade and, ending stocks. Ending stocks are forecast to be up 301,000 bales resulting in a world stocks-to-consumption ratio of 49.0 per cent. The 1999/2000 world forecast features slight increases in production, consumption, exports, and ending stocks.

Increased production was the result of increases in the US and India, which were not completely offset by decreases in Argentina and Brazil. Increased imports are forecast for Pakistan and Brazil. Ending stocks decreased to 191,000 bales resulting in a world stocks-to-consumption ratio of 46.8 per cent.

Regarding USA, the 1999/2000 US forecast indicates higher production and exports, unchanged consumption and, lower ending stocks compared to last month. The production forecast was increased 344,000 bales to 16.875 million, based on a crop production survey by NASS which showed higher yields in Texas and California. While consumption remained unchanged, the export forecast was raised 500,000 bales to 6.2 million, reflecting higher sales in recent weeks. Ending stocks were reduced 100,000 bales to 4.5 million resulting in a stocks-to-use ratio of 27.4 per cent.

The seasonally adjusted daily rate of US cotton consumption in October amounted to 39,606 480-lb bales, compared with September’s level of 38,098 bales. A total of 831,308 bales was consumed during the four weeks in October, compared to 985,165 bales in September (5 weeks). The seasonally adjusted annualised consumption rate for October was 10.34 million bales, up from September’s 9.94 million bales.

World Cotton Highlights Market reports in the last month note increased production forecasts for Uzbekistan and India, and a modest production decline for Tajikistan.

The US was the leading exporter of cotton in the marketing year 1998-99. With exports of 4.3 million 480-lb bales, the US captured 18 per cent of the total world exports. Uzbekistan exported 3.8 million bales claiming a marketshare of 16.2 per cent. Australia exported 3 million bales for a marketshare of 13 per cent, while China’s exports of 675,814 bales represented 2.9 per cent of total world exports.

Despite the US lead in marketshare, Australia dominated exports to key Asian markets such as Indonesia, Japan, Thailand, Pakistan, and China, and also outpaced the US in the Italian and Spanish markets.

Uzbekistan continued to capture markets in several Eastern European countries such as Russia and Poland, with gains in Brazil, Germany, South Korea and Vietnam. China’s main markets were South Korea, Hong Kong, Indonesia, United States, Taiwan and Thailand, with modest exports to Bolivia and Peru. Five countries, Canada, Japan, Korea, Mexico and Taiwan purchased nearly 60 per cent of US exports in the marketing year 1998-99.