Although growing demand for raw cotton from major apparel importers such as the US and the European Union (EU) is a positive sign after a long period of lull, Indian cotton exporters are finding it difficult to cater to the soaring demand. Due to shortage in cotton production, leading to high prices of the commodity, Indian exporters are unable to export raw cotton. This crisis situation has led them to demand policy interventions to ensure that adequate fabric is available to be exported so that the cotton industry would not have to incur loses and nor would there be any unemployment issues in the industry.  

“The prices of cotton fabrics have surged by 50% in the last 4-5 months, thereby hampering competition in the global market. It has also created an imbalance between the demand and the production of raw cotton,” says Ashok Chauhan, manager of Sheetal Limited, a small-sized cotton export company in Udaipur.

Export activities hampered

According to the International Cotton Advisory Committee (ICAC), there will be a further 4.5% decline in the global production of cotton, which will supposedly be the lowest amount of cotton produced in the last 5 years. Owing to decline in the production of cotton, it is anticipated that the global demand of cotton is likely to surge by 2.16%, thereby heightening the need for exporting the commodity. These factors have led to a sudden rise in the prices of cotton yarn since the last 4-5 months.

“Considering the soaring prices of cotton, the industry had demanded the government to ban the export of raw cotton on a temporary basis,” says Neeraj Vora, proprietor of Streams Exports, a mid-sized cotton export company in Jamshedpur. However, the government declined to do so by stating that India presently has 30.5 bales of cotton, which is enough to cater to the domestic demand for about 24 million bales of cotton.

Sabrina Mitchell