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Kapas - Commodities Info

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General Characteristics

  • Kapas is unginned cotton or the white fibrous substance covering the seed that is obtained from the cotton plant.

Global Scenario

  • The world cotton area and production are estimated at around 30-31 million hectares and 20 million tons respectively.
  • The biggest cultivators of cotton are America, India, China, Egypt, Pakistan, Sudan and Eastern Europe, with China, US and India being the three largest producers of cotton.
  • US has a considerable share in world exports. India and China both fall short of their domestic requirement and are net importers.
  • Among the consumers China leads the way being followed by India, Pakistan, US and Turkey.

World Cotton Supply and Distribution

(Million Tons)
(Million Tons)
Consumption21.14521.51 21.8697.1298.8100.4
Exports7.1296.58 6.9332.7430.231.8
Ending Stocks7.9969.079.2036.7341.642.3

Indian Scenario

  • India with an annual production of 15-16.5 million bales (1 bale=170 kg) is the World's third largest cotton producer. India also has the largest area under cotton. India produces around 11% of the world's cotton from 20% of the area.
  • The Ministry of Agriculture estimates India's cotton production in 2003-04 at 123.9 lakh bales. However, other agencies peg the production at 140-160 lakh bales.
  • Despite having the largest area under cotton in the world, India ranks third in world output of cotton due to its abysmally low average yield of 300 kg against a world average of 550 kg per hectare.
  • Although cotton is cultivated in almost all the states in the country, the 9 states of Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Punjab, Haryana, Rajasthan, Tamil Nadu and Karnataka account for more than 95% of the area under and output.
  • In India cotton is sown during March to September and harvested during September to April. The peak marketing season for the crop is during November to March.
  • Cotton is the most important raw material for India's Rs. 1,50,000 crores textile industry, which accounts for nearly 20% of the total national industrial production and provides employment to over 15 million people.
  • It also accounts for more than 30% of exports, making it India's largest net foreign exchange industry. India earns foreign exchange to the tune of $10-12 billion annually from exports of cotton yarn, thread, fabrics, apparel and made-ups.
  • Cotton accounts for more than 75% of the total fibre that is converted into yarn by the spinning mills in India and 58% of the total textile fabric materials produced in the country.

Market Influencing Factors

  • Only one-third of the area is under irrigation, and this causes the cotton output to vary considerably from year to year in response to the vagaries of weather and pest attacks.
  • More than 80 percent of the cotton produced is sold out by March 31 every year and the price starts firming up from April and starts easing only in September when the new crop starts arriving in the market.
  • The Government of India fixes the Minimum Support Price for cotton and several Government agencies like Cotton Corporation of India, Maharashtra State Co-operative Cotton Growers' Marketing Federation procure cotton at this price. This sets the trend for the price initially. But the industry involves large number of players and the market forces determine the price soon.
  • The imports of cotton into the country and exports from the country.

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