Cotton is a soft, staple fiber that grows in a form known as a boll around the seeds of the cotton plant, a shrub native to tropical and subtropical regions around the world, including the Americas, India and Africa. The fiber most often is spun into yarn or thread and used to make a soft, breathable textile, which is the most widely used natural-fiber cloth in clothing today.

The chemical composition of cotton is as follows:
Cellulose 91.00%; water 7.85%; protoplasm, pectin 0.55%; waxes, fatty substances 0.40%; mineral salts 0.20%

Cotton Production in India

Consumption in India y After achieving a sustained growth in cotton consumption during Xth Plan period. domestic cotton consumption increased by about y 7% in the year 2005-06 y 9% during 2006-07 y 6% in 2007-08 .


y The different sectors of Textile industry accounts for 20% of the industrial production.5 lakh bales in 1995-96 which constitutes a 460 percent increase.1m.5% of the GDP and provide employment to about 27 million persons. Country.Cotton role in Indian economy y Cotton fibre accounts for almost 70% of the raw material mix of the textile industry.15 lakh bales in 1996-97. . y Textile industry contributes about 32% of the Foreign exchange earnings of the y Out of 8. ha of cotton area only 1/3 is under irrigation y The production of cotton which was 27.9 lakh bales only in 1947-48 has made spectacular progress to reach the level of 156. y The import of cotton to meet the needs of the Indian mills which was a regular feature till 1978-79 and now India is a net exporter of cotton exports about 5. 7.

Russia. Japan.Cotton imports may rise to 1 million bales.Import y During 2008-09. cotton imports into the country are estimated at 7 lakh bales. y A/c Journal Cotton Statistics And News . Taiwan. he largest non-producing importers are Korea. and Hong Kong .


Exports y In 2005-06. cotton exports totaled over 40 lakh bales and for 2006-07. the volume could further expand to 50 lakh bales.430 million tonnes . y The US Department of Agriculture (USDA) recently estimated Indian output at 4.572 million tonnes. while the US itself will produce 4.


International Trade Scenario of the Cotton .

INTERNATIONAL TRADE The largest producers of cotton. In Africa cotton is grown by numerous small holders. with annual production of approximately 34 million bales and 24 million bales. Tennessee. based in Memphis. textile manufacturing having moved to developing nations in Eastern and South Asia such as India and China.000 small farmers who grow cotton for it. Neither area has a significant domestic textile industry. Dunavant Enterprises. most of this production being consumed by their respective textile industries. Africa's share of the cotton trade has doubled since 1980. are China and India. respectively. It operates cotton gins in Uganda. Mozambique. In Zambia it often offers loans for seed and expenses to the 180. as well as advice on farming methods. Cargill also purchases cotton in Africa for export. and Zambia. currently (2009). . is the leading cotton broker in Africa with hundreds of purchasing agents.

since 2000 their ratio has been above 80%. .6% a year during the 1950s and 3% in the 1980s. in 2010 they would absorb almost 94% of global cotton output. Their share in global consumption has become even more significant since the beginning of 2000s. world cotton consumption has increased at an average annual growth rate of about 2% (roughly the same as production). according to projections based on ICAC figures. Developing countries have absorbed much of global cotton output since the end of WWII. with an average growth rate of 4. Growth in the demand for cotton was comparatively higher in the 1950s and 1980s.Cotton consumption Since the beginning of the 1940s. Developing countries accounted for approximately 78% of global cotton consumption between 1981and 1999.

China.Global consumption World cotton consumption is expected to continue to rise in 2006-07 to 25. world trade in cotton is projected to decline to 9.6 million 2006tonnes. India and Pakistan together may consume 16.6 million tonnes (ICAC said) With consumption in other parts of the world expected to remain stable.2 million tonnes .

Cotton remains nevertheless by far the most important natural fiber of the 20th century. according to the International Cotton Advisory Committee .2 tons per hectare (t/ha) to 0.ICAC) .in 1960 the part of cotton was of 68.Cotton Production A declining trend of cotton's share in textiles fibers since the 1970s compare to the chemical textiles (branched off oil) was stated.8 tons per hectare. Much of the growth of cotton production since the end of the Second World War (WWII) was due to improved yield (output per hectare more than multiplied by four quadrupled between 1945/46 and 2006/07. cotton is crucially important for income and employment provided in its production and processing.7% in 2002.7% and 57.8% for chemical textiles and at the opposite the percentages were respectively of 39. In a development context.3% against 21. from 0.

global output increased by 30% between the seasons 1983/84 and 1984/85. . If we added Uzbekistan and Brazil. has to be put into perspective by considering the impact of domestic policy reforms in the largest cotton producing countries. Most of the growth came from China. six countries would account for 83% of world cotton production. the four main producing countries were China.In 2007.6 million tonnes in 1983/84 to 6. as well as climatic and sanitary contingencies. This concentration in cotton production. which appears to increase for several years. For example. rising to 19. India.3 million tonnes in the 1984/85 season) were prompted by incentive measures taken by the Government. where increases in production (Chinese production edged upward from 4. the USA and Pakistan and accounted for approximately three quarters of world output. cotton was grown in 90 countries.2 million tonnes up from 14. In 2006/07.5 million tonnes.

2 million bales Egypt5.1 million bales Syria1.2 million bales Australia1.7 million bales Turkmenistan1.4 million bales Uzbekistan4.0 million bales Pakistan9.5 million bales India24.0 million balesSource .8 million bales Turkey1.Top cotton producers 2009 Second largest cotton producer (according to a study done by International Service for the Acquisition of Agri-biotech Application (ISAAA) Top ten cotton producers 2009 (480-pound bales) People's Republic of China32.3 million bales United States13.

(2) India. Japan. and (5) Australia. y In India. the state of Texas leads in total production while the state of California has the highest yield per acre in the world . Gujarat (17. (4) Brazil. The largest non-producing importers are Korea.these states have a predominantly tropical wet and dry climate.63%).75%) and also Madhya Pradesh are the leading cotton producing states. y In the United States. Russia.96%) and Andhra Pradesh (13. and Hong Kong. (3) Uzbekistan. the states of Maharashtra (26.y The five leading exporters of cotton in 2009 are (1) the United States. Taiwan.


Being the implementing agency for Mini Missions III and IV of Technology Mission on Cotton (TMC).e. good quality. Supplementing the efforts of the Ministry of Agriculture in achieving higher production and productivity of cotton And improvement in its quality by involving ourselves with the activities of Mini Missions II of TMC through our Extension programmes and developmental activities. .Extending necessary marketing support to the cotton growers in selling their kapas produce at most competitive prices in the various market yards in all cotton growing States through timely intervention ± beginning from day one of the kapas arrivals till the end of season. Facilitating the Indian Textile Industry in sourcing their raw material requirement i. procuring the entire quantity of kapas offered to prevent distress sale by the farmers. contamination free cotton for production of quality yarn to meet international competition. In the case of support price operations. VISION Achieving the twin visions of (a) rendering help to the cotton farmers by way of social services and (b) endeavouring to attaincommercial gain by sustained growth of the Corporation. procurement operations spread over more than 225 market yards in the country. MISSION Helping cotton farmers by ensuring them remunerative price for their produce and thereby protect their interest. to bring improvement in the marketing infrastructure of cotton and in the quality of ginning and pressing of cotton through modernisation and technological upgradation of existing ginning and pressing factories in the country.

y To make 100% payment to farmers against kapas purchases within 10 days. export. the objectives of which are improvement in the marketing infrastructure and modernisation/technological upgradation of existing ginning and pressing factories in India for improvement in quality of cotton. Organising field training for farmers.Details of Business being Transacted by the Corporation y To act as the Government agency for implementation of the Minimum Support Price operations so as to help the farmers in ensuring remunerative price/price stabilisation and also to prevent distress sale by farmers.e. y To act as the Implementing Agency for Mini Missions III and IV of Technology Mission on Cotton (for which the Ministry of Textiles is the Nodal Agency). y To provide Godown Storage Facility to the Corporation's regular mill clients by maintaining ultra modern godown complex at places like Kalamboli (Navi Mumbai) etc. y To undertake commercial operations. such as Village Adoption programme. productivity and its quality. domestic as well as international i. Integrated Pest Management programme. Distribution of quality seeds and Genuine pesticides. . at our own risk and responsibility in competition with other sectors of cotton as also to remain competitive in the cotton market. y To undertake developmental activities in a small way through extension programmes to help improve cotton production. Promotion of cotton cultivation in non-traditional areas etc.

List of Concessions Granted by the People¶s Republic of China to the Republic of India 1) Bilateral Agreement with China : 22-02-2000 Negotiations for the Accession of the People¶s Republic of China to the World Trade Organization in terms of Article XII of the Agreement Establishing the World Trade Organization The Government of the People¶s Republic of China and the Government of the Republic of India had concluded their bilateral market access negotiations. For the Government of the Republic of India Minister of Commerce and Industry For the Government of People¶s Republic of China Minister of Foreign Trade and Economic Cooperation .. Done in Beijing on February 22. The people¶s Republic of China also grants to the Republic of India Initial Negotiating Rights for goods negotiated with the Republic of India as identified in Column 6 of Appendix I at the rate which the People¶s Republic of China binds in its Schedule. 2000.

070. NE exceeding 8.29 but not less than 232.2) With the support of WTO The bilateral trade between India and Taiwan grew at a rate of 5.375 2. non Commodities with significant growths compared. NM exceeding 14 but not exceeding 43.631 48. not carded or combed 5.067 1. Growth of India¶s exports to Taiwan in June 05 was negative at -29. which registered a growth of 2.123 . of uncombed fibres.56. 1.66% whereas Taiwan¶s exports to India during June 2005 grew by 47.458 -65.39's). Cotton yarn-single of uncombed fibers.79% during the month. cotton yarn.989.27's but not exceeding 25.84 India¶s main exports to Taiwan during April 2005 included: Products of. cotton yarn (48%).144.43% in the month of June 2005 faster than the overall trade growth of Taiwan. single.694. unbleached (DTEX less than 714. negative growth India¶s Export to Taiwan in April 2005 1) 52010000007 Cotton.431 2) 52051200107 Cotton yarn.

63 Cotton Raw : Combed/ Uncombed . India's Import of Principal Commodities from Tanzania Value in US$ Million April-December 2002 48.3) Trade Promotion Programme .Focus: Africa WITH THE SUPPORT OF WTO.354 April-December 2003 76.030 Growth/ Decline 65.

. Three main areas of action for cotton were identified immediately: ‡Obtaining fairer trade conditions on international cotton markets ‡Helping countries to consolidate the competitiveness of their cotton sectors ‡Measures to mitigate the impact of price fluctuations.4) The cotton action plan In February 2004 the EU adopted an action plan to help developing countries dependent on basic products. This plan was discussed and adopted on July 5th-6th 2004 at the Forum on cotton. at the end of which a steering and monitoring committee (COS cotton) was set up.

consuming and trading) y y y y y y The Cotton Textiles Export Promotion Council of India International Cotton Association (ICA) The State Trading Corporation of India Ltd. The Cotton Corporation of India Ltd. National Cotton Exchange (NCE) Alexandria Cotton Exporters Association .Regulatory Authorities y Minister of Textiles y International Cotton Advisory Committee (an association of governments of cotton producing.

as required in the 1 August 2004 decision sometimes called the July Package covering all the WTO negotiations. y The agreement to create a body to focus specifically on cotton is part of WTO member governments response to proposals from four African countries Benin. Chad and Mali to tackle the sector. Burkina Faso. .ROLE OF WTO y Doha Development agenda y The Cotton Sub-Committee :WTO members on 19 November 2004 set up a body to focus on cotton.

At regional level. supplies of seeds and farming practices in general.by enhancing the capacities of cotton producers and negotiators so that they are better able to defend their interests. Legal framework This involves improving the legal and regulatory environment in order to protect the interests of growers and cotton merchants. . Technological innovation This involves improving soil fertility. strengthening and improving institutions in the cotton sector (growers and merchants). which will be the framework for financial support for the cotton sector. National and regional strategies Cotton-producing countries are drawing up national cotton strategies. 3. It also involves capacity strengthening to facilitate decisions concerning genetically modified cotton. International trade The policies involves initiative regarding cotton at the WTO at the level of negotiations . this involves coordinating national strategies and linking them with the regional sectors.CONTRIBUTION OF THE POLICIES & WTO TO COTTON TRADE: 1. 2. 4.

SWOT Analysis .

‡Industry has Manufacturing Flexibility that helps to increase the productivity. ‡India is one of the largest exporters of Yarn in international market and contributes around 25% share of the global trade in Cotton Yarn.Strengths: Indian Textile Industry ‡is an Independent & Self-Reliant industry. ‡Growing Economy and Potential Domestic and International Market. ‡The Apparel Industry is one of largest foreign revenue contributor and holds 12% of the country s total export. ‡Availability of large varieties of cotton fiber ‡India has great advantage in Spinning Sector and has a presence in all process of operation and value chain. ‡Abundant Raw Material availability that helps industry to control costs and reduces the lead-time across the operation. . ‡Industry has large and diversified segments that provide wide variety of products. ‡Availability of Low Cost and Skilled Manpower provides competitive advantage to industry.

Power and Interest Rates. ‡There is Declining in Mill Segment. . ‡Lack of Trade Membership. ‡Unfavorable labor Laws. Transaction Time at Ports and transportation Time. ‡Lack of Technological Development that affect the productivity and other activities in whole value chain. ‡Lacking to generate Economies of Scale.Weaknesses: ‡Indian Textile Industry is highly Fragmented Industry. ‡Higher Indirect Taxes. which restrict to tap other potential market. ‡Infrastructural Bottlenecks and Efficiency such as.

‡Greater Investment and FDI opportunities are available. ‡Large. . Handicraft and other segments of the industry. ‡Product development and Diversification to cater global needs. ‡Emerging Retail Industry and Malls provide huge opportunities for the Apparel. Potential Domestic and International Market. ‡Elimination of Quota Restriction leads to greater Market Development. ‡Purchasing Power of Indian Customer opens New Market Development.Opportunities: ‡Growth rate of Domestic Textile Industry is 6-8% per annum.

. ‡To balance the demand and supply. ‡International labor and Environmental Laws. ‡Geographical Disadvantages. especially China.Threats: ‡Competition from other developing countries. ‡To make balance between price and quality. ‡Threat for Traditional Market for Powerloom and Handloom Products and forcing them for product diversification. ‡Continuous Quality Improvement is need of the hour as there are different demand patterns all over the world. ‡Elimination of Quota system will lead to fluctuations in Export Demand.


However. although for the time being the fair trade certification applies to cotton production. In principle there are checks to ensure that the companies concerned apply strictly international agreements on the rights of workers (according to the ILO convention). spinning. unlike other fair trade products such as coffee. is subject to numerous processing operations involving several operators between the producer and the end consumer. etc. the clothing industry. but a certain number of limits are already apparent. .CONCLUSION: The limits of fair trade cotton ‡Fair trade cotton is a fairly recent initiative. ‡Cotton is a product which. it does not apply to the following stages: ginning. transport to factories.

weigh on the remuneration of producers or on the competitiveness of cotton. when the sector¶s development is no longer supported by development aid. ‡The certification body and textile operators do not guarantee purchases of cotton from one season to the next. unlike traditional national cotton companies. . Demand may fluctuate considerably depending on the habits of consumers.‡The high certification costs (carried out at the level of producer organisations) may eventually.

y In addition to concerns over subsidies. or find it difficult to compete with developed countries. and "take appropriate steps to remove the adverse effects or withdraw" the mandatory pricecontingent subsidy measures. regulations. The international production and trade situation has led to 'fair trade' cotton clothing and footwear. fair fashion or so-called 'ethical fashion'. users and/or exporters of upland cotton. the world's second largest cotton producer. as well as legislation.SUGGESTIONS: y The consolidated framework should aim at fair international trade which is the biggest challenge facing cotton trade . Fair trade y Cotton is an enormously important commodity throughout the world. y On 8 September 2004. and any other assistance to the US producers. The Environmental Justice Foundation has campaigned against the prevalent use of child labor in cotton production in Uzbekistan. . y This has led to an international dispute: y On 27 September 2002 Brazil requested consultations with the US regarding prohibited and actionable subsidies provided to US producers. grants. many farmers in developing countries receive a low price for their produce. However. Mali and Senegal. statutory instruments and amendments thereto providing such subsidies (including export credits). the cotton industries of some countries are criticized for employing child labor and damaging workers' health by exposure to pesticides used in production. The fair trade system was initiated in 2005 with producers from Cameroon. the Panel Report recommended that the United States "withdraw" export credit guarantees and payments to domestic user and exporters. users and exporters of upland cotton. joining a rapidly growing market for organic clothing.

statistics) on the Infocomm site of the UNCTAD http://r0. http://www.pdf.pdf The International Cotton Advisory Committee (ICAC): The ICAC (International Cotton Advisory Committee). Tanzania.icac.forum-coton. world market.gret.org/ Common Agricultural Policy The site devoted to the reform of the cotton sector. (dir.unctad. 2008.htm WTO. including 11 ACP countries (Burkina. Cameroon.europa. Uganda.org/french/tratop_f/agric_f/cotton_subcommittee_f.Source General General information on cotton (production. TN/AG/GEN/4 http://www. Togo and Zimbabwe).org/publications/ouvrages/infoomc/fr/accueil_fr. Directory of customs duties applied by the WTO member states http://www.wto. Mali. Sudan. Chad. http://www.europa.wto.org/docs/negociationOMC-fr.org/english/res_e/booksp_e/tariff_profiles08_e.eu/agriculture/capreform/cotton/index_fr. World Tariff Profile. Cotton and the WTO Publication of the NGO GRET on the implications of negotiations at the WTO for African agriculture: Agriculture et OMC: Comprendre pour agir. Côte d¶Ivoire.eu/fr/actu/communiques/cp06/aff/cp060068fr. created in 1939. Lebret MC and Alpha A. http://ec. press release of 7 September 2006 http://curia.htm Reduction of poverty: sectorial initiative in favour of cotton. producers and consumers of cotton. 2007 http://www.html The WTO sub-committee on cotton. now brings together 41 countries.pdf . WTO document No. Nigeria.org/infocomm/francais/coton/plan.).htm CJEC ruling on cotton.

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