At a time while the ability utilisation degrees of fabric spinning mills had been reduced to well underneath 40 in line with cent, the speculation about cotton crop estimate appears to have aggravated the scenario. The lower ability utilisation is in most cases due to two motives — negative off-take of yarn and labour shortage.

“Investment bankers and traders have began speculating at the fee the front, whilst ginners are preserving on to large inventory of costly cotton. This is good neither for farmers nor for the enterprise,” said an enterprise insider.

Stating that the cotton state of affairs is right globally, J Thulasidharan, Managing Director of Coimbatore-based Rajaratna Group of Mills, said: “In India, there has been a slight shift to use of synthetic fibre. Consumption of cotton, consequently, is anticipated to be much less, other than the drastic cut within the utilisation levels by using many turbines.”

“Speculation approximately the cotton crop by way of special bodies does not augur nicely at this juncture. The Cotton Advisory Board (CAB) has no longer met within the last six months. The Board in the ordinary direction will meet as a minimum 2-3 times between December and May to assess the crop state of affairs. The Government has failed in its responsibility and that is affecting the farmer and the industry,” stated Thulasidharan, who’s additionally the President of Indian Cotton Federation (ICF)

The Cotton Association of India (CAI) in its April estimate has pegged the crop for 2018-19 season (beginning October 1, 2018) at 315 lakh bales. This is far lower than the CAB’s estimate of 361 lakh bales (on November 22, 2018) and the Confederation of Indian Textile Industry’s (CITI) estimate of 343 lakh bales (on April 15, 2019).

Questioning the veracity of CAI’s estimate, industry sources stressed the want for placing a complete stop to such hypothesis and enforcing the April 26, 2017 notification issued via the Ministry of Textiles on submission of all associated records (from producers and investors of textile gadgets) to the Office of the Textile Commissioner.

“Even after a yr of the difficulty of this type of notification, it keeps to remain on paper, not been enforced,” stated G Selvaraju, Secretary General of the Southern India Mills Association (SIMA).

Official records on the cotton crop show the inventory pile up at the start of the season (October 1, 2018) at 47.12 lakh bales, whereas the CAI estimate has put it at 28 lakh bales.

This distinction, coupled with fall in production estimate, has simplest caused confusion. “Changing Government statistics may be misleading. How can they (CAI) tinker with the opening stock?”.

According to Selvaraju, this uncertainty and panic have driven the mill sector right here to import the white fibre. “Mills have already reduced in size to import round 18 lakh bales as worldwide fees are appealing. Rising imports will have an unfavourable effect at the crop acreage next year. That’s now not all. As the home cotton is priced high (compared to international fee), exports will slide; expanded deliver and drop in intake will result in inventory pile up,” he stated, adding that “a conservative estimate of the cotton balance sheet indicate that we are able to be left with abundance on the end of the season, nearly at the 2014-15 ultimate stock degree of 66.23 lakh bales, if not greater.”

A comparison of the records on cotton arrivals suggests a drop of eight lakh bales at 278 lakh bales during the present day season in opposition to 286 lakh bales throughout the corresponding length of the earlier season. This corresponds with the drop in manufacturing estimates from 370 lakh bales in 2017-18 season to 361 lakh bales in 2018-19 season, the SIMA Secretary General said, adding that “there were first-rate issues due to pink bollworm infestation last 12 months, however the best of cotton has been superb this season. Drought did effect the crop in the Maharashtra and Gujarat cotton belt, however it become not big.”

Sanjay K Jain, Chairman, CITI, entreated industry stakeholders now not to panic, as the deliver function could be very comfy. “Thanks to a massive opening inventory, massive imports and smaller exports, the manufacturing deficit is well protected. India will haven’t any scarcity of cotton in 2018-19.”

Thulasidharan impressed upon the want to bring in coverage modifications. “The authorities must recollect a coverage for relieving the financing norms. The quantity required could be around ₹70,000 crore to ₹eighty,000 crore. Rising fees will gain traders and multinationals. While some mills have the wherewithal to cowl cotton throughout the season, the have-nots generally tend to suffer. The Cotton Corporation of India have to come up with a coverage for the have-nots.”