| General Characteristics |
- Cotton is essentially grown for its fibre, which is used the world-over to make textile.
- Cotton fibre is one of the most important textile fibres, accounting for around 35% of the world's total textile fibre used.
- Cotton's strength, absorbency, and capacity to be washed and dyed also make it adaptable to a considerable variety of textile products.
- Cotton is used for thousands of things, including clothes, space suits for astronauts and ingredients in the food we eat.
- Cotton is classified according to the staple, grade and character of each bale—staple refers to the fibre length; grade ranges from coarse to premium and is a function of colour, brightness and purity; and character refers to the fibre's strength and uniformity.
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| Global Scenario |
- Cotton production and trade is widely spread across the world, with more than 80 nations cultivating the crop. However, its production, consumption and trade are dominated by a few nations.
- The world cotton production in 2010-11 marketing year (July – August) is forecasted to be 24.95 million tonnes (million MT) (147.7 million bales of 170 kg each) as against 22.1 million MT (129.7 million bales of 170 kg each) in 2009-10 marketing year.
- The world's four largest cotton-producing countries are China, India, the USA and Pakistan, which together account for nearly 79% of the world production. Other major producers include Brazil, Uzbekistan and Turkey.
- The top three consumers of cotton are China, India, and Pakistan, which together account for two-thirds of the world consumption (est. 24.5 million MT). Turkey, Brazil and the USA are the next largest consumers.
- The global trade in cotton in recent years has been around 7-8 million MT.
- The USA is the largest exporter of cotton, accounting for over one-third of global trade in raw cotton, which is estimated to be 7.7 million MT in 2010-11. While China is the largest importer of cotton.
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| Indian Scenario |
- India's annual production of cotton has been showing a steady increase in the recent years supported by a rise in acreage, better GM seeds and improved practices.
- India is estimated to have produced 31.2 million bales of cotton from an acreage of 11.16 million hectares and a yield of 475 kg/ha in 2010-11 (October – September), as against a production of 29.5 million bales, acreage of 10.3 million ha and yield of 486 kg/ha in 2009-10.
- Interestingly, while India has the largest area in the world under cotton cultivation, its yield is one of the lowest at around 500 kg/ha as against the world average yield of 740 kg/ha.
- In India, cotton is a predominantly a monsoon-season crop. It is planted from the end of April through0 September, and harvested from October to January, based on the time of sowing.
- Cotton is produced in three zones, the Northern zone comprising the states of Punjab, Haryana and Rajasthan, the Central zone comprising the states of Maharashtra, Madhya Pradesh and Gujarat and the Southern zone comprising the states of Andhra Pradesh, Karnataka and Tamil Nadu. Cotton cultivation is also gaining momentum in the state of Odisha.
- The states of Gujarat, Maharashtra and Andhra Pradesh are the major producers of cotton, accounting for about 75% of the total production.
- India has been a major exporter of cotton, since 2005-06. It is currently, the world's second largest exporter. It exported 5.5 million bales of cotton in 2010-11.
- India mostly imports Long and Extra Long Staple (ELS) cotton from the US, Egypt, and West Africa.
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| Market Influencing Factors |
- The domestic demand supply scenario, inter-crop price parity, cost of production and international price situation are the major factors that influence prices in the market.
- Weather, pests, diseases and other risk factors associated with agricultural crops are also important for cotton.
- Government policies with relation to import, export and Minimum Support Price are significant influencers.
- Cotton yarn accounts for around 70% of the total yarn production in India. Thus, price of cotton is a very important factor influencing the health of India’s textile industry. And Government usually considers both these sectors (cotton & the Textile industry)while deciding on its polices.
- Cotton yarn prices at different markets across the country show a high correlation of above 90% with India’s raw cotton prices.
- Global trade is particularly important for cotton. In addition to around 30% of global cotton fibre production being traded, it is also traded indirectly as yarn, fabric and clothing.
- As cotton is used primarily in manufacturing products such as clothing and home furnishings, the overall health of associated industries and economic well-being of the final consumer are important.
- New developments in the textile industry, with regard to development and adoption of new technology, fibres, mechanisation, and so forth impact cotton prices in the long run.
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