Pune: Ambiguity over cotton production estimates has created panic in the market driving up prices. The industry has now demanded that the government should come out with its own official production estimate to clear the ambiguity caused by differences in estimates prepared by the Cotton Association of India (CAI), which represents traders and the Indian Cotton Federation, which represents cotton consumers.
The Indian Cotton Federation (ICF) has pegged the country’s cotton production during 2018-20 at 35.2 million bales, about 10 per cent higher than the CAI’s production estimate of 32.1 million bales.
The federation has urged the central government to intervene, saying that ambiguity over cotton production had caused panic in the market. “The data of the past 12 years shows that even during the worst drought years, cotton production was 348 lakh (34.8 million) bales. The ambiguity over production estimates has caused panic in the market,” said J Thulasidharan, president, ICF. The CAI largely represents traders while ICF has representation of spinners, brokers and traders. The Cotton Advisory Board (CAB), which conducts surveys and announces the cotton crop situation of the country, had last met in November 2018.
The industry has written to the government, asking it to call a meeting of the CAB to clear the ambiguity over production figures.
“Now there is a great amount of uncertainty regarding the cotton crop situation, creating hardship for the cotton trade and the spinning industry,” the ICF said.The closing stock of cotton in 2018-19 will be 4.6 million bales according to the ICF, against the CAI’s estimate of 1.3 million bales.
“Though we have a smaller crop, the cotton supply position is very comfortable with a big ending stock of 46 lakh bales. Thanks to a big opening stock, smaller export and larger imports, the global situation is also very comfortable with high stock to use ratio,” said ICF.
Source: Economic Times