Decrease in cotton output to help local farmers

NEW DELHI: Indian cotton exporters who are expecting 20 per cent rise in exports and a 10 per cent increase in prices will be highly benefited by a fall in cotton production in the US।

India produced has reached 280 lakh bales in October 2006-September 2007 compared to the previous season, while the production of cotton in the US has declined by 29 lakh bales to 277 lakh bales for the same period।

India recently became the second largest producer of cotton in the world after China। Due to the fall in cotton production in the US, Indian cotton exporters are anticipating an increase in cotton exports to China and other Asian nations in the current season on account of the expected fall in global cotton production. The reduced output in the US gives an edge to India to further intensify cotton exports.

Cotton exports from India have increased by 27 per cent to 60 lakh bales in 2007 compared to 47 lakh bales in 2006। The demand for Indian cotton is expected to grow further in the coming months.

Cotton farmers in the US shifted from cotton to grain crops to ease the rising prices of grain, resulting in fall of cotton acreage in the country।

The surge in Indian cotton export has also been fuelled by the diminishing price difference for the domestic cotton in the global market। Indian cotton is getting better price in the global market. The difference has narrowed down to 1-2 cents from the earlier 6-7 cents.

Indian cotton is accepted worldwide and cotton yield in India has risen significantly over the last couple of years, which will prompt more exports in the coming months।

The increased use of Bt cotton has also contributed to the rise in cotton production by reducing input costs and growers losses. The increase in the value of the rupee by 11 per cent against the US dollar this year is likely to affect profits of the exporters, experts said.