Date:04/10/2006 URL:

http://www.thehindubusinessline.com/2006/10/04/stories/2006100403030800.htm

India 2nd largest global cotton producer

G. Chandrashekhar

Introduction of Bt seeds plays a big part

Mumbai , Oct. 3

India has emerged as the world's second largest cotton producer in 2006-07, edging past the US,
which held the second rank until recently.

China's is the world's leading cotton producer.

The US had held the position for long; but observers were convinced it was a matter of time
before India would push the US to the third spot. Since 2002, India's cotton production has
expanded phenomenally and has sustained for four seasons in a row.

Dramatic turnaround

The dramatic turnaround of the country's cotton fortunes means that from being an importer of
about 20 lakh bales, India is today an exporter.

In 2005-06, cotton exports totalled over 40 lakh bales and for 2006-07, the volume could further
expand to 50 lakh bales.

In no small measure has introduction of Bt cottonseed played a part in this success story. India's
cotton production for 2006-07 is currently estimated at over 260 lakh bales (170 kg).

The US Department of Agriculture (USDA) recently estimated Indian output at 4.572 million
tonnes, while the US itself will produce 4.430 million tonnes, down from previous year's 5.201
million tonnes. Interestingly, Asia dominates the global cotton sector in terms of both output
and use. China, India and Pakistan account for half of the world's cotton production and two-
thirds of world cotton consumption. Pakistan is the world's fourth largest producer and third
largest consumer.

Global production
World cotton production is projected at 25 million tonnes in 2006-07, with Asian majors China,
India and Pakistan combined expected to produce 13 million tonnes or over half of the global
output for the first time in history, Washington-based International Cotton Advisory Committee
(ICAC) pointed out.

World cotton consumption is expected to continue to rise in 2006-07, but at a slower rate than in
the previous two seasons, to 25.6 million tonnes. In other words, world output would trail
consumption during the year, making stock drawdown inevitable.

China, India and Pakistan together may consume 16.6 million tonnes or 65 per cent of the
projected world cotton use, up from 50 per cent in 2000-01, the ICAC said.

Stable consumption

With consumption in other parts of the world expected to remain stable, world trade in cotton is
projected to decline to 9.2 million tonnes (9.74 million tonnes), while ending stocks would be
down to 11.6 million tonnes (11.91 million tonnes).

The USDA has projected continued strong imports by China (4.25 million tonnes) to fuel its
textile industry needs.

According to the ICAC, the situation is unlikely to improve next year (2007-08) on current
reckoning, as output would continue to trail consumption need.

© Copyright 2000 - 2006 The Hindu Business Line