21-12-2012, 03:16 PM
COTTON MARKET AND SUSTAINABILITY IN INDIA
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EXECUTIVE SUMMARY
Cotton is an important agricultural commodity, both globally as well as domestically. In many developing and underdeveloped countries, cotton exports are not only a source of vital foreign exchange earnings, but also account for a substantial proportion of their GDP and tax income, leading to significant economic and social development.
About 70% of the global cotton production comes from 4 countries, which include China (27%), India (22%), USA (13%) and Pakistan (8%). In the current year 2011-12, world cotton production is expected to rise by 7% to 26.7 million MT over last year (being the largest crop since 2004/05). The production increase will be driven primarily by China, followed by India and Pakistan. According to the USDA estimates, China’s production is expected to rise by 8% to 7.2 million MT, India’s by 6% to 5.9 million MT and Pakistan’s by 17% to 2.2 million MT in 2011-2012 1.3
India is a major producer of cotton and is also the 2nd largest exporter after the USA. It accounts for around 59% share in the raw material consumption basket of the Indian textile industry. Thus, cotton plays a major role in sustaining the livelihood of an estimated 5.8 million cotton farmers and about 40-50 million people engaged in related activities, such as cotton processing and trade. India has the largest cotton cultivated area, which constitutes about 30% of the global cotton area. India’s cotton production has increased at a CAGR of 8.5% from 2003 to 2010. In 2001, India was a net importer of cotton. Within 7 years, five million Indian cotton farmers have made India the world’s second largest producer and second largest exporter of cotton (ahead of USA, behind China), by doubling India’s cotton production.
Globally, demand for cotton has led to more than threefold increase in its production since 1950s. However, this increase in production has been achieved through intense input application, use of which has most often overlooked environmental impacts. Some of these unsustainable production practices include indiscriminate use of pesticides and fertilisers, inefficient use of irrigated water, with no regard to water quality or water use. Agriculture accounts for 83% of total water usage. While cotton is a water intensive crop, it’s the quality of the water that is most affected by its cultivation, due to leaching and run off chemicals in ground and surface water. These environmental impacts associated with cotton production are increasingly coming into focus and reiterating the need for sustainable production systems.
[b]INTRODUCTION[/b]
member of the order Malvales, family Malvaceae, genus Gossypium consists of 50 wild and cultivated species, out of which only four are grown on a commercial scale in the world. G. hirsutum and G. barbadense account for about 95% and 3% of world production respectively, while G. arboreum and G. herbaceum account for about 2% of world production. Extra long staple cotton -Egyptian, Pima (American Egyptian) and Sea Island- belong to the species G. barbadense. Roughly about 90% of world cotton production is accounted in the Northern hemisphere with more than 100 countries growing cotton.
Cotton is an important agricultural commodity, heavily traded in more than 150 countries. In many developing and underdeveloped countries, cotton exports are not only a vital source for generating foreign exchange earnings, but also account for a significant proportion of their GDP and tax income, leading to significant economic and social development. Today, 37 of the 53 African countries produce cotton and 30 of them are exporters.
GLOBAL COTTON PRODUCTION
Prior to 2008, the world cotton
industry had been experiencing robust demand growth and rising yields. Over the last 60 years, cotton production once almost quadrupled, from 7 million tons in 1950/51 to 27 million tons in 2006/07, but declined thereafter to 22 million in 2009/10. The introduction and adoption of new technologies and expansion of the area under cotton has resulted in significant production gains in the world.
About 70% of the global cotton production comes from 4 countries, which include China (27%), India (22%), USA (13%) and Pakistan (8%). In the current year 2011-12, world cotton production is expected to rise by 7% to 26.7 million MT over last year (being the largest crop since 2004/05). The production increase will be driven primarily by China, followed by India and Pakistan. According to the USDA estimated, China’s production is expected to rise by 8% to 7.2 million MT, India’s by 6% to 5.9 million MT and Pakistan’s by 17% to 2.2 million MT in 2011-2012.3 .
INDIAN COTTON SCENARIO
Cotton has around 59% share in the raw material consumption
basket of the Indian textile industry. It plays a major role in
sustaining the livelihood of an estimated 5.8 million cotton farmers and about 40-50 million people engaged in related
activities, such as cotton processing and trade4. India has the largest cotton cultivated area which constitutes about 30%
of the global cotton area.
The planting period in India takes place from March to September, while harvesting takes place from October to February.
Cotton is produced in 3 zones, the Northern zone, comprising the states of Punjab, Haryana and Rajasthan, the Central
zone, comprising Maharashtra, Madhya Pradesh and Gujarat and the Southern zone, comprising Andhra Pradesh,
Karnataka and Tamil Nadu.