In Conversation With Sri Atul Ganatra, President of Cotton Association Of India
Cotton Association is occupied with giving a wide scope of administrations to the whole cotton value chain since its fuse in 1921.
All fragments of the cotton exchange and material industry of the nation including Mill Buyers, Growers and Growers Co-agents, Ginners, Brokers, Merchants, Importers and Exporters, and so forth are addressed in CAI.
17 Regional Cotton Associations and 4 Co-employable Marketing Societies addressing all heartland cotton creating areas of the Country are subsidiary with CAI and addressed on its Board as Associate Directors.
Addressed on different International Cotton Fora for example ICAC, ICA, CICCA, IFCP, ITMF and a few other International Cotton Associations.
- Journey of CAI Presidentship
I am serving my 4th year as an Elected President in CAI. The journey has been enriching with good learning experience. I am extremely glad and honoured to be the President of this huge prestigious association. Our Association is now entered into its 100th year. Association has started in the year 1922 with the name of East India Cotton association. We have all cotton value chain as our members like farmers, ginners, spinners, brokers, traders, exporters and Govt agencies.
During my Presidentship tenure, we have done a lot of good work for cotton industry. We have organised 4 domestic conferences and one International conference. Recently, we have started farmers training school in our cotton exchange building. Our cotton testing lab has been enhanced. We have purchased 2 new cotton testing machines. Our association has cotton testing lab in almost all cotton growing states and our testing charges are very nominal compared to private testing labs; as an Association we want to serve to the trade.
- Cotton Industry Update
This year as per CAI the size of Indian crop is 360 lakh bales and per CAB, 371 lakh bales out of this (upto 25th April) around 337 lakh bales have arrived. Now approximately 25-30 lakh bales cotton on all India level is lying unsold with the farmers. But due to increase in covid 19 cases most of the ginning factories in India are closed so the farmers have to wait to sell.
Indian markets are steady at Rs. 42000 to Rs.47000 / bale spot price according to the quality. But if there is a strict lockdown, like last year, then the price of cotton will reduce because as of today, there is no buying at all from Indian spinning mills. As mills have covered cotton for 3 to 4 months and now mills want to wait and watch to see how their production will be, in the coming months and also in India is a big amount of unsold cotton stock lying with government agencies, ginners, traders and MNCs.
Price on 1st October 2020 for cotton variety of 29 mm was Rs. 40,000 per candy. Slowly the demand picked up, and the rate has increased to 46,000 spot, also International cotton market has gone up 73 cent to 88 cent in the same time.
- Future of cotton growing farmers
Future of cotton looks very bright. Because GOI every year has been increasing Minimum Support Price (MSP) of cotton; which as on 30th April, 2021 is 5825 per quintal. And MSP likely to increase 3-4 percent in June 2021. Govt. agency like CCI and Maharashtra Federation is buying around 100 lakhs from last 2 years from farmer on MSP rate. So farmers are feeling very secure by growing cotton in India. due to increase in MSP price and continuing purchase of government agencies from farmer at MSP price.
In India, near future cotton prices are likely to maintain in between Rs. 42,000 to 48000 per candy as per quality. At present, Shakar 6 cotton with 29 mm 75 RD rate is Rs. 46,000 per candy. Cotton growing farmers saved during lockdown time in last year 2020 due to government agency continuous purchase of cotton on MSP rate.
- Effect of Covid 19 on Cotton Ginning and Spinning industry
Definitely, there has been a great effect seen of covid 19 pandemic on both this industries. Actually last year 2020 cotton ginning factories were almost closed from April to July 2020. The Indian spinning mills have also suffered huge production loss. The consumption of cotton by spinning mills in India reduced from 330 lakh bales to 250 lakh bales. Also last year cotton prices were dropped from Rs. 42,000 to Rs. 32,000 per bale due to lockdown.
Cotton Brokers also had a very tough time during lock down, entire business was closed. But once covid effect reduced, business for traders and brokers improved, as cotton demand increased and India and international markets. Last year from 25th March to 25th July exports shipment was shut down.
The last 6 months was a very good period for Indian spinning mills, because there was a huge shortage of cotton yarn, due to last year’s lockdown and big demand of yarn has come from Indian and international markets. So spinning mills have performed well. From Sept. to March 2020 as pandemic was under control, ginning and spinning performed very good but again from April 2021 due to second wave of covid 19, Now, most of the State ginning factory are closed, spinning mills production reduced to 10 percent to 50 percent State-wise due to migration of the labourand fear of strict lockdown like last year in the coming days. If the labours go back to their houses then spinning mill production will be hit and the consumption of cotton will also reduce. Actually last year, Indian cotton consumption was reduced by 80 lakh bales from 330 lakh bales to 250 lakh bales with the same reason of lockdown so everyone in the trade have to keep a watch over the pandamic.
- Views on the fluctuation of Indian Cotton yarn prices
Cotton yarn price was Rs. 170 per kg for 30’s hosiery count in June 2020 but after lockdown, the demand of yarn has been increased and price has slowly increased and touched to Rs. 280 per kg. As Demand came from domestic and International and yarn market has gone up by 45-50 percent during Sept. 2020 to March 2021. Spinning mill has made losses in lockdown but luckily recovered losses of lock down period during last 6 months. It was a good time for the entire industry like ginning. spinning, weaving and garmenting. Cotton yarn prices also was up from Rs. 34,000/ Pc on 1st August which is increased to Rs. 48,000 on 31st March 2021.
- Update on “Kasturi Cotton India” brand made for Indian Cotton
The Brand is still at the beginning stage, at present brand is only considered for a variety of 30 mm cotton, which has only 5 % production in India. CAI has suggested to the textile ministry and GOI to add 29 mm product variety also in this brand which is catering to 75 percentage of cotton variety produced in India.
- Update on ELS (Extra Long Staple) Fibres
Indian spinning mills required 15 lakh -18 lakh bales of ELS cotton every year. ELS cotton has 33 mm to 35 mm variety of cotton. Currently, India is producing around 5 lac bales of this type of cotton. We are importing from USA, Egypt and Australia.
On import of ELS cotton we are spending our hard earned foreign exchange. In order to increase ELS production in India, Cotton Association of India has given suggestions to agriculture and textile ministry as under:
1) Farmer are not getting good quality of ELS cotton seed for sowing in India; so duty free import of good quality cotton sowing seed for ELS should be allowed for farmers.
2) To encourage Indian farmers to grow ELS cotton our MSP price should be announced at higher rate at Rs. 9000 per quintal, before the new season cotton sowing starts.
3) With higher MSP of Rs. 8000 to Rs. 9000 per quintal, Government agency like CCI has to buy cotton from farmer.
If the above recommendations are implemented then we can save on foreign exchange by importing ELS cotton.
- Around 9 countries including Bangladesh has put a ban on India. What will be the effect on cotton export and how much export do we do to Bangladesh?
Yes, the news has come that many countries have put a ban on India due to the rise in corona cases. But we have to confirm that this ban is only for travel ban or on goods as well which includes cotton and cotton yarn. We export 40% of our total export of 60 lakh bales to Bangladesh which is 25-30 lakh bales in a year.
- There is uncertainty on the cotton market, What is your view on cotton prices in the coming days?
As far as cotton prices are concerned, India always follows USA ICE prices and as of now ICE is 88/89 cent which was 78 cent last month. ICE has gone up, because there is less rain in Texas area.
As the foreign markets are strong, our markets are also steady at present. But we have to wait and watch and have to monitor how the spinning mill production will be and how the corona cases will be in the coming days . Everything will depend on this for the ups and downs of the market.
- Future Projects of CAI
We have many projects to do in future, We are planning to celebrate the 100th year of our Association. We want to increase activity in farmer training school, increase on cotton testing laboratories in India and many more projects. Once we will come out of pandemic, we will complete our all pending projects.