Cotton trade body alleges USDA to issue misleading stock figures

Cotton trade overall body Cotton Affiliation of India (CAI) has raised critical objection more than

Cotton trade overall body Cotton Affiliation of India (CAI) has raised critical objection more than the US Office of Agriculture’s (USDA) assessment of India’s cotton inventory positions alleging a deceptive portrayal of India’s cotton current market in the international current market.

In its India-precise Cotton and Products update for June 2020, the USDA has believed a cotton carryover inventory of 19.eight million US bales (every of 480-lb) as on July 2020. This will work out to an equivalent to about 244 lakh bales (of 170 kgs every). The CAI termed it ‘astronomically high’ figure from the reality.

“The carryover inventory believed by USDA is astronomically significant which is producing a notion in the international current market that there is a glut in Indian cotton. Owing to this, prospective buyers get perplexed and unwilling to invest in,” claimed Atul Ganatra, President, CAI.

This is not the initial time when the CAI has raised an objection to USDA’s estimates. Past 12 months, the CAI experienced objected to USDA’s cotton crop estimates, which projected India’s cotton crop at 345.twenty five lakh bales for the 12 months 2018-19, as towards CAI’s individual crop estimate of 321 lakh bales.

In a letter to USDA, Ganatra knowledgeable that equally the Cotton Company of India (CCI) and CAI have believed the carryover inventory of Indian cotton at 50 lakh bales as on September thirty, 2020 as towards the inventory estimates of 200 lakh bales by the USDA. The Cotton Advisory Board (Taxi) has also believed the carryover inventory as on September thirty, 2020 at forty eight.forty one lakh bales. He requested the USDA for reconciliation of the carryover inventory knowledge of USDA with CAI.

The claimed deceptive USDA cotton inventory figures are claimed to have frustrated the Indian cotton selling prices main to a loss for the farmers.

Looking for govt intervention

The CAI has also prepared a letter to the Union Textile Ministry searching for an intervention in the subject and conduct an training of reconciling the carry-more than inventory with USDA to prohibit the injury.

In the letter dated July eight, Ganatra mentioned that the USDA’s figures are “..fully misplaced and artificially depressing the selling prices of Indian cotton in the international markets. Indian cotton, which, on an common, utilised to trade at a quality of about 200 factors on ICE, is at the moment buying and selling at a low cost of more than 600 factors on ICE.”

“We apprehend that this fake propaganda of exhibiting excessively significant carry‐over inventory of Indian cotton appears to be to have been undertaken with the ulterior motive of depressing and derailing the selling prices of Indian cotton. This apprehension, if true, will result in a substantial injury to the entire cotton and textile value chain of India,” Ganatra alleged.

Ganatra included that the frustrated selling prices of Indian cotton are resulting in substantial losses to all stake holders of the Indian cotton value chain. Farmers are holding about ten lakh bales of raw cotton (kapas), Ginning & Pressing factories and the governing administration businesses are holding the inventory of more than 102 lakh bales procured underneath MSP operations.

He mentioned that the cotton selling prices past 12 months were being quoted at ₹45,000 for each sweet of ginned cotton (every of 356 kg) when the imported cotton quoted at all over ₹42,000.

Decline to textile mills

“However, this 12 months, the problem is unique. Indian cotton selling prices are quoting at down below ₹35,000 for each sweet – which is a discounted charge by more than ₹7,000 as towards the imported cotton selling prices. So, in comparison to past 12 months, Indian cotton selling prices are now more affordable by more than ₹10,000,” claimed Ganatra, adding that as towards a quality on ICE, Indian cotton are at the moment buying and selling at hefty low cost.

The frustrated cotton selling prices are also adversely impacting yarn selling prices and resulting in losses to the Indian textile mills and garment brands who are also struggling losses in export current market.