Interview of the day: Atul Ganatra
By Venkatesh Raghavan
The cotton industry employs over 35 million people, and fetches nearly USD 7000 million in normal times. However, while India continues to be the largest exporter of cotton globally, quality issues that drag the cotton prices down and peg Indian cotton as the lowest priced are a worrying factor. Repeatedly cotton experts have shared their view on public platforms over the decades about resolving the image of Indian cotton exports.
In this exclusive interview, Atul Ganatra, President of the Cotton Association of India (CAI) – an apex body which deals with the various nodal ministries, farming communities and businesses involved in the cotton trade – talks about how the key contributor to the Indian export basket has been faring post the prolonged pandemic enforced lockdown, even as the norms are being eased. Excerpts:
Q: In the past, you had expressed concern over the quality of Indian cotton and inability of the exporters and consequently the farming community to earn attractive margins. What steps have been taken to remedy the situation?
A: Your query that dwells on the quality issue has a somewhat different take this year for the Indian cotton farmers. I agree that Indian raw cotton was faced with quality issues in the global market and that used to be the reason our cotton was lowly priced in comparison with other cotton producing countries. However, this year in particular, we are faced with the quality debacle owing to unseasonal rains in the month of October 2020. The quality was poor owing to the damage caused by these unseasonal showers when the cotton crops were ready for harvesting. Rather than any want of human effort, it’s the natural calamity that was majorly instrumental for poor quality of cotton crop this year.
Q: You say cotton prices have increased and farmers will be motivated to sow more cotton. What are the safeguards you have placed to ensure that the pink bollworm crisis does not recur?
A: I am upbeat about this year’s cotton prices as it currently rests at INR 6500 per quintal. It’s a good 15% higher than the Minimum Support Price (MSP). The high margins will attract greater numbers from the farming community to sow cotton plants, particularly in the states of Gujarat and Rajasthan.
I am also optimistic about the cotton farming community having successfully overcome the pink bollworm crisis. To a large extent, the epidemic has been greatly reduced in northern states like Punjab, Haryana, Rajasthan, Madhya Pradesh, besides Gujarat, Andhra Pradesh and Karnataka. The states of Maharashtra and Telangana are expected to deal with this crisis as it still stands unresolved in these regions.
Q: The increased price of cotton yarn has become an issue of concern for the spinning Mills. How do you plan to address this anomaly?
A: There is a bit of worrying to be done about this aspect. The price of cotton yarn has registered a sharp increase owing to the high price of cotton in the domestic markets. This has become a major cause of concern for the garment industry. From October 2020 till now the cost of cotton has increased by 17 to 20%. The corresponding increase in prices of cotton yarn ranges between 40 to 45%. The high pricing of yarn in the domestic markets might well render India’s garment exports less competitive in the international markets.
Q: There has been repeated emphasis to improve per hectare yield of Indian cotton. What steps have been taken in this direction?
A: Over the years our constant endeavour in this direction has improved things a lot for the cotton farmers. It is directly related to the area of cotton under cultivation. One other part that worried this sector was the area of cultivation under cotton. This gave rise to people who allayed the fear that it might have an adverse impact on the area of cultivation available for food crops. I am however confident on this count. Cotton yields have significantly improved in states like Gujarat and Rajasthan. I would also like to point out that the CAI has been pressing the government at the Centre to ensure provision of proper seeds and timely water supply besides power facility to the farmers growing cotton. However, nearly 75% of the farming area in our country is faced with lack of irrigation facilities. Their only hope is that the rain Gods don’t fail them.
Q: In view of the global markets facing crisis owing to Covid 19 pandemic, what are your assessments for the Indian cotton industry?
A: Dwelling on the impact of COVID-19 on the textile industry, it has to be understood that the entire value chain has suffered a lot due to the pandemic enforced lockdown. The lockdown period that lasted between March to September 2020 witnessed a total shutdown of all the spinning mills. This resulted in the cotton consumption of the spinning mills to be reduced by a whopping 85 lakh bales. Consequently, India was faced with a record breaking carry forward of 125 lakh bales at the beginning of the current cotton season, October 1, 2020. In addition, the spinning mills continued to suffer even after the closure norms were relaxed owing to reverse migration of many labourers. This issue will take time to resolve.
Q: What do you feel the current season will have for the farmers and spinning mills?
A: I wish to conclude on a very positive note. We are just a good harvest away to make it to the top.
