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Updated: March 21, 2011 22:33 IST

No cotton shortage feared

Special Correspondent
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There will be no shortage of cotton in the next season as production is expected to be higher than consumption in 2011-12, according to International Cotton Association (ICA) President Ray Butler.

He was speaking at a seminar, organised by the Southern India Mills' Association and the South India Cotton Association here on Monday.

Mr. Butler told presspersons that production was expected to be 27.65 million tonnes in 2011-12 (August-July), nearly three million tonnes more than the output in 2010-11. Consumption was expected to be 26.4 million tonnes in the next season.

There should be no shortage of cotton in the next season, provided there were no natural disasters. Brazil, Australia and the U.S. were expected to see increased production. The new season would commence with low stocks. The prices were expected to be higher than what they were in the middle of last decade, Mr. Butler said.

In the current season, the price level and lack of adequate supply had an impact on consumption. “There is a ‘demand destruction' taking place now.”

However, the high prices were motivating production. The total area under cotton was expected to be 10 per cent higher in 2011-12. The prices would not come down until the new crop arrived, said ICA first Vice-President Antonio Esteve. Speaking at the seminar, the ICA delegates, including its Managing Director Kai Hughes, said the international organisation was prepared to offer training programmes in India on contract rules.

It was important that every one had a good understanding of the rules when they signed contracts.

At present, there were four Indians who were arbitrators. The ICA was also working on a scheme for accreditation of laboratories across countries for testing cotton.

It was also looking at ways to reduce the cost of arbitration. This year, it would introduce a case management system. Anyone would be able to access their case online.

“We are working with all sections of industry. We want to work closely with other associations such as the SIMA and SICA,” Mr. Butler said.

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