Cotton M Staple

General Characteristics Cotton is the most important of all natural fibers, it accounts for half of all the world fibers used by the textile industry. Known also as White Gold Cotton enjoys a predominant position amongst all cash crops in India. Kapas (also known as raw cotton or seed cotton) is unginned cotton or a white fibrous substance (lint) covering the seed that is obtained from the cotton plant (Genus Gossypium) Ginning is a process, which separates the lint (about 1/3rd in weight) from the seed (about 2/3rd in weight). Lint, which is commonly known as rui in Hindi. Lint is pressed and bound in a bale form. Each bale weighs around 165-170 kg each. Bale cotton is the raw material for making cotton yarn or thread, which is further woven to make fabrics.

Global Scenario The world cotton area and production are estimated at around 30-31 million hectares and 20 million tons respectively. The biggest cultivators of cotton are America, India, China, Egypt, Pakistan, Sudan and Eastern Europe, with China, US and India being the three largest producers of cotton. US have a considerable share in world exports. India and China both fall short of their domestic requirement and are net importers. Among the consumers China leads the way being followed by India, Pakistan, US and Turkey.

World Cotton Supply And Distribution World Cotton Production and Consumption Year Beginning August 1 Production Consumption Exports Ending Stocks 2005-06 24.97 24.91 9.76 12.70 2006-07 26.74 26.64 8.12 12.70 2007-08 26.17 26.13 8.36 12.35 2008-09 23.5 23.0 6.2 12.9 Million Bales 2009-10 23.5 23.4 6.5 12.9 56

Cotlook A Index* 56.15 59.15 72.90 60 Source ICAC Cotlook A Index is Season Average cents per pound, 2009-10 is price projection by ICAC Indian Scenario

The northern region of India is the primary producer of short and medium staple cotton, while the southern states primarily grow long staples. The central region grows long and medium staples. India with an annual production of 30 million bales (1 bale=170 kg) is the World's second largest cotton producer. India also has the largest area under cotton. India produces around 20% of the world's cotton from 25% of the area. Despite having the largest area under cotton in the world, India ranks third in world output of cotton due to its abysmally low average yield of 550 kg against a world

average of 787 kg per hectare. Although cotton is cultivated in almost all the states in the country, the 9 states of Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Punjab, Haryana, Rajasthan, Tamil Nadu and Karnataka account for more than 95% of the area under and output. In India cotton is sown during March to September and harvested during September to April. The peak marketing season for the crop is during November to March. Indian textile and apparel industry is one of the largest in the world with US$ 19 billion of export and US$ 30 billion of domestic textile and apparel during 2006-07 (P). It accounts for nearly 14% of the total national industrial production, 4% of the GDP contribution. It provides direct employment to about 35 million people and another 56 million are engaged in allied activities. Cotton is the most important raw material for textile industry. Cotton accounts for more than 75% of the total fibre that is converted into yarn by the spinning mills in India and 58% of the total textile fabric materials produced in the country.

Market Influencing Factors Only one-third of the area is under irrigation, and this causes the cotton output to vary considerably from year to year in response to the vagaries of weather and pest attacks. More than 80 percent of the cotton produced is sold out by March 31 every year and the price starts firming up from April and starts easing only in September when the new crop starts arriving in the market. The Government of India fixes the Minimum Support Price for cotton and several Government agencies like Cotton Corporation of India, Maharashtra State Co-operative Cotton Growers' Marketing Federation procure cotton at this price. This sets the trend for the price initially. But the industry involves large number of players and the market forces determine the price soon. The imports of cotton into the country and exports from the country