As China, the world's biggest cotton buyer, restricts imports, the US aggressively competes with India for global market. Can India stay in the race and rescue its struggling cotton industry?
Tmarket in India is in a HE COTTON flux.The country is set to become the world’s largest producer of cotton in 2014-15. India’s cotton production was estimated to touch 6.8 million tonnes between September and December 2014, says a press release of the Cotton Advisory Board (cab) under the textiles ministry. But there is uncertainty about the bumper stock.With global stockpiles of cotton rising and prices falling in both the domestic and international markets, exports are likely to plummet. The fears are confirmed by China—the biggest importer of cotton from India and the US.
China has been cutting back on cotton imports since September last year. In 201314, the country allowed imports of 1.5-1.7 million tonnes. This year, it will reduce this to about 0.9 million tonnes.Such a measure is aimed at offloading its stockpile to an optimum level and boosting domestic demand in the long run. The Chinese government will also provide direct subsidies to cotton producers, announed an official of the National Development and Reform Commission in China in September 2014.
Struggling to find a market
China’s drastic measure is likely to impact the cotton markets both in the US and India,but the latter will struggle a lot more to compensate for the loss.This is evident from the latest report of the United States Department of Agriculture (usda).
According to the report,during 2013-14, 26 per cent of the US’cotton export went to China, while for India it was almost 55 per cent of its cotton exports.This also indicates that the US has a wider reach in the international market for cotton. Its share of global cotton exports during 2014-15 is estimated to be around 2.2 million tonnes as opposed to India’s 1.1 million tonnes. This is despite the fact that India produced almost double the amount of cotton than the US during 2013-14,claims usda.
This has raised concerns in India about finding new markets for its cotton produce. Sidhartha Rajagopal, executive director of
Although India is set to be the largest cotton producer, its share of global exports is lower than that of the US