Further, the International Cotton Advisory Committee (ICAC) has predicted that the average Cotlook A index (a barometer for overseas cotton prices) is likely to be around 58 cents per lb in 2000-01 and 66 cents per lb in 2001-02.

At any rate these projections imply that the days of getting cheaper imported cotton are over.

Already fresh transactions for cotton imports have come to a halt since mid-July. These are unlikely to be resumed under the current situation, when imported cotton has become costlier by about 5 per cent than the Indian fibre.

While going in for imports earlier despite large stocks of unsold domestic cotton, mills had argued that they had to resort on imports because quality of imported cotton was much better than that of the domestic fibre. This implies that the mills are more quality conscious than price conscious.

However, even when the quality of the imported cotton may be the same, the stoppage of fresh import indents clearly implies that the mills basically remain more price-conscious than quality conscious.

The reasons why overseas cotton prices are expected to rise in 2000-01 are not far to seek. According to the first estimate for the 2000-01 season issued earlier this month by the US department of agriculture (USDA), while the world production of cotton in the coming season will be nearly the same as in the outgoing season, global cotton consumption is expected to increase. On the other hand, the opening global stock for the new season would be lower than at the start of the previous season and the closing stock at the end of the new season is therefore, likely to shrink further.

These factors may impart firmness to cotton prices in 2000-01, according to the International Cotton Advisory Committee (ICAC). Unless by some chance prices for domestic cotton rise beyond those for imported cotton, mills may not be inclined to go in for foreign cotton either for quality or for supplier's credit, unless the price difference is marginal or nil.

According to the forecast made by the USDA, the world opening stock of cotton for the current season might be about 1,35,000 tonnes lower than in the previous season. It is therefore placed at 87,39,000 tonnes. On the other hand, the global production of cotton in 2000-01 might be unchanged around 19,023,000 tonnes.

Also, consumption is expected to rise by 44,000 tonnes to 20,133,000 tonnes. Naturally the ending stock will be lower by 195,000 tonnes at 7,653,000 tonnes. If the closing stock which has gone down in the earlier season is thus to move down further it can not but impart firmness to foreign cotton prices.

It was earlier expected by some that the US cotton production in 2000-01 might rise by 500,000 tonnes, but according to the latest assessment made by the USDA, the increase in the USA might be just around 30,000 tonnes.

Despite this improvement in the USA the overall world production of cotton will be almost unchanged in view of lower production elsewhere. Last season as cotton prices were subdued for many many months, natural fibre had an advantage over the chemical based polyester fibre. Now when cotton prices are hardening it remains to be seen whether the natural fibre is able to retain such advantage. Rising crude oil prices may adversely affect polyester's competitiveness against cotton.The situation is confusing at present.

In the case of domestic cotton, sowings have been completed almost everywhere. Industry sources say that the acerage in Punjab, Haryana, Gujarat, Madhya Pradesh and Andhra Pradesh is higher. Also, indigenous cotton production in the ensuing season should be much more than the current crop of about 155 lakh bales (170 kg each). However, there remains hesitancy as regards hazarding any guess either about the total acerage for cotton or about the likely cotton crop next season. With cotton imports halted domestic cotton growers are likely to benefit with higher prices, traders say.