Experts Call For Revamping Of Existing Cotton Estimation Process


Precise data and information is a vital input for any decision-making process and the same is assuming more significance at a time when disruptive technologies are sweeping across modern business environment. The role of agencies generating these data has become more crucial today than it was before.

These agencies need to be more responsible as they arrive at specific numbers.  Their inputs are the primary base for arriving at particular decisions and formulating policies that shape up businesses in particular directions at a time when the market has become fiercely competitive.

Despite one of the largest industries of the Indian economy, the domestic textile industry has often struggled to source right kind of data from domestic agencies responsible for generating the key information. A case in point is the annual cotton balance sheet  (numbers pertaining to production, acreage, yield, etc)  drawn up by  various agencies, ranging from Cotton Association of India (CAI), Cotton Advisory Board (CAB) under the office of the Textile Commissioner, GOI and the agriculture ministry. More than often it has been noticed that cotton output and availability estimations of all these agencies are highly divergent in nature and that creates confusion in the industry as it chalks out business plans and strategies.

The paradox lies in the fact that these agencies do share common platforms during forums like CAB meetings.  While CAB and the textile industry body like Confederation of Indian Textile Industry (CITI) estimations are often on the higher side, trade bodies like CAI tend to keep the output and total availability on the lower side for reasons best known to them (lower projections often lead to hardening of cotton prices in the market and thus ensures remunerative prices for traders). These vested interests and not-so-responsible approaches have kept the industry guessing and thus adversely impacted the outcome. Going forward, bearing of this is going to be more severe at a time when the global market is witnessing a major transition.

Also Read  Haelixa’s DNA Marker To Offer For Full Traceability Of Peru’s Pima cotton

“Our domestic agencies more often create doubts and confusions among the industry players who are already under severe pressure. Today, more than ever before we need accurate & convergence views that can help expedite our decision making process. It is high time that the government and various stakeholders come together and create a platform that the industry can rely upon,” says an industry expert.

“Such discrepancy becomes more amplified when competition is so intense today.There is very less scope for errors in the given situation.  It is high time the government and industry and trade bodies come together and come up with concrete solutions to these issues,” states another industry veteran. “Despite boasting one of the largest cotton-based textile industries, we often look to external/global agencies like ICAC and USDA for accurate estimation of cotton balance sheet. We have the requisite wherewithal but have not been able to use that in a right way. There is no way that we continue this way in future,” says a promoter of a south-based cotton mill.

Also Read  Credit Outlook For Cotton Spinners Positive Despite Capex: CRISIL

Meanwhile, CAI has recently released its April estimate of the cotton crop for the 2018-19 season.  The cotton crop estimated by CAI for 2018-19 crop year is now 315 lakh bales, which is lower by 6 lakh bales compared to its previous estimation of 321 lakh bales released in the month of April. The trade body has estimated total cotton supply till the end of the cotton season at 374 lakh bales, with an opening stock of 28 lakh bales and imports of 31 lakh bales. Domestic consumption estimated by the CAI for the entire crop year is 315 lakh bales, which is lower by 1 lakh bales as compared to its previous estimate made in April this year. CAI has estimated exports for the season at 46 lakh bales, which is lower by 23 lakh bales as against the previous year’s cotton exports estimates of 69 lakh bales. The carry over stock estimated at the end of the season is 13 lakh bales. The United States Department of Agriculture (USDA) which had estimated the Indian cotton crop estimate for the 2018-19 crop year at 345 lakh bales, has now (in its latest  report) reduced their  estimate by 20 lakh bales to 325 lakh bales. USDA has made this reduction in their latest estimate, released on May 10, 2019.

Also Read  High Cotton Prices Plague Indian Spinners

Following the CAI’s estimation in April this year, the apex industry body, CITI came up with its own estimation which put the cotton crop size at 343 lakh bales. While coming up with that estimation, Sanjay Jain, chairman, CITI has said that CAB had estimated the cotton crop at 361 lakh bales in November 2018. However, subsequently, based on the arrivals and crop situation, CITI felt that the cotton crop might decline to 343 lakh bales. “Today, there is a great amount of uncertainty regarding the estimation of cotton crop situation in the country causing great hardship for the value-added textile industry, especially for the spinning industry. There are rumours doing the rounds of a very low crop size, which is creating chaos in the market and prompting industry players to stock cotton in anticipation,” says the CITI chief.


Please enter your comment!
Please enter your name here