Price for cotton to soar

Rising cotton prices in global markets are likely to brighten up India's export prospects, which are expected to grow 30 per cent during 2007-08 marketing year, an industry body said. "An attractive price for Indian fibre is driving our exports," Confederation of Indian Textile Industry Chairman P D  Patodia stated. He attributed the price rise to a supply and demand mismatch and said "this gap has really boosted our exporters out here".

According to market sources, an increase in orders were contracted for exports in March, including shipments to China, Pakistan, Turkey, Bangladesh and South Asian countries. Even the US Department of Agriculture forecast over 20 per cent increase in the India's cotton exports for this year.

The International Cotton Advisory Committee (ICAC) recently projected the world cotton production at 122 million bales and the demand at 126 million bales, saying the resultant gap is spiking the global cotton prices. In February, Cotlook A index rose to 81 cents per pound from 72 cents per pound, the highest level since August 1997.

"Looking at the price trends during the first seven months of 2007-08, cotton prices continue to remain higher," ICAC said, adding that the world ending stocks are expected to fall further during 2008-09, with the result that an upward trend in cotton prices is expected to continue.

The mission of the ICAC is to assist governments in fostering a healthy world cotton economy. The Committee achieves its mission by providing transparency to the world cotton market, by serving as a clearinghouse for technical information on cotton production and by serving as a forum for discussion of cotton issues of international significance. The role of the ICAC is to raise awareness of emerging issues, provide information relevant to the solving of problems and to foster cooperation in the achievement of common objectives. By serving as an objective statistical observer and by bringing together both producing, consuming and trading countries and all segments of the cotton industry, the ICAC serves a unique role as a catalyst for constructive change.

Image: Cotton T-shirt