India positive on cotton
02/10/2008
World cotton output is set to decline by 6% to 24.7 million tonnes following lower output, mainly in the US (due to land constraints) and to a lesser extent in Turkey, Brazil and Egypt, according to the Washington-based International Cotton Advisory Committee (ICAC).
This is likely to push prices higher, news that has been received very warmly in India, which says its crop is shaping up to be as good as last year’s, which produced 31.5 million bales. Reports from India say a small decline in the acreage farmers there devote to cotton and poor weather in July have not affected production prospects to any significant extent. In particular, the crop in Gujarat is said to be in excellent condition.
The debate in India centres on the amount of local cotton that the government should allow to go for export; if the government intervenes to keep prices low, more will remain in the domestic market. On the open market, if prices are higher, more Indian cotton will reach overseas mills.Share this story:
