13
361555/2022/Cotton
ANNEXURE-VII
COTTON SECTOR
1. INTRODUCTION:
Cotton is one of the most important commercial crops cultivated in India and accounts for around
25% of the total global cotton production. It plays a major role in sustaining the livelihood of an
estimated 6 million cotton farmers and 40-50 million people engaged in related activity such as
cotton processing & trade. The Indian Textile Industry consumesa diverse range of fibres and
yarns and the ratio of use of cotton to non - cotton fibres in India is around 60:40 whereas it is
30:70 in the rest of the world.
Apart from being the provider of a basic necessity of life i.e. clothing which is next onlyto
food, cotton is also one of the largest contributor to India’s net foreign exchange by way of
exports in the form of raw cotton, intermediate products such as yarn and fabricsto ultimate
finished products in the form of garments, made ups and knitwear. Due to its economic
importance in India, it is also termed as “White-Gold”.
2. NATIONAL SCENARIO:
2.1 Acreage under cotton and yield:
India got 1st place in the world in cotton acreage with 120.69 Lakh Hectares area under cotton
cultivation i.e. around 36% of world area of 333 Lakh Hectares. Around 67% of India’s cotton
is grown on rain-fed areas and 33% on irrigated area. In terms of productivity, India is on 38 th
rank with yield of 510 kg/ha. Area, Production and yield of cotton for the last 5 years is at
Annexure-I.
Year Acreage Yield
(in lakh hectares) (Lint in Kg/ha)
2016-17 108.26 542
2017-18 125.86 500
2018-19 126.14 449
2019-20 134.77 460
2020-21 (P) 130.07 462
2021-22 (P) 120.69 510
Source: As per Meeting of the Committee on Cotton Production and Consumption(COCPC)
held on 12.11.2021, P-Provisional
2.2 Production and consumption of cotton:
India is the country to grow all four species of cultivated cotton G.arboreum and Herbaceum
(Asian cotton), G.barbadense (Egyptian cotton) and G. hirsutum (American Upland cotton).
G.hirsutum represents 94% of the hybrid cotton production in India and all the current Bt cotton
hybrids are G. hirsutum. In India, majority of the cotton production comes from ten major cotton
growing states, which are grouped into three diverse agro-ecological zones, as under:-
i) Northern Zone - Punjab, Haryana and Rajasthan
ii) Central Zone - Gujarat, Maharashtra and Madhya Pradesh
iii) Southern Zone - Telangana, Andhra Pradesh, Karnataka and Tamil nadu
India is having 1st place in the world with estimated production of 362.18 lakh bales (6.16
Million Metric Tonnes during cotton season 2021-22 i.e., 23% of world cotton production of
1555 lakh bales (26.44 Million Metric Tonnes). India is also the 2nd largest consumer of cotton
in the world with estimated consumption of 338 lakh bales (5.75 Million Metric Tonnes i.e.
22% of world cotton consumption of 1507 lakh bales (25.63 Million Metric Tonnes).
14
361555/2022/Cotton
The details of production and consumption of cotton during the last 5 years is given below:-
Year Production (in lakh bales) Consumption (including Mill, SSI
and Non Textile)(in lakh bales)
2016-17 345 310.41
2017-18 370 319.06
2018-19 333 311.21
2019-20 365 269.19
2020-21 (P) 353.84 334.87
2021-22 (P) 362.18 338.00
Source: As per Meeting of the Committee on Cotton Production and Consumption (COCPC) held
on 12.11.2021, P-Provisional
2.3 Import and Export of cotton:
3rd largest exporter of cotton with estimated export of 45 lakh bales (0.76 Million MT) i.e. 8%
of world export of 597 lakh bales (10.15 Million MT) in 2021-22. Although India is a leading
producer and exporter of cotton, some quantity i.e. less than 10% of the total consumption of
cotton in India is imported by the textile industry to meet their specific requirement. The
following table gives the import and export figures for the last 5 years:
Year Import Export
(in lakh bales) (in lakh bales)
2016-17 30.94 58.21
2017-18 15.80 67.59
2018-19 35.37 43.55
2019-20 15.50 47.04
2020-21 (P) 11.03 77.59
2021-22 (P) 10.50 45.00
Source: As per Meeting of the Committee on Cotton Production and Consumption (COCPC) held
on 12.11.2021, P-Provisional
2.4 Balance Sheet of cotton for last 5 years is given below:
(Quantity in lakh bales of 170kgs)
Particulars 16-17 17-18 18-19 19-20 20-21(P)* 21-22(P)*
SUPPLY
Opening stock 36.44 43.76 42.91 56.52 120.79 73.20
Crop (Production) 345.00 370.00 333.00 365.00 353.84 362.18
Imports 30.94 15.80 35.37 15.50 11.03 10.50
Total Supply 412.38 429.56 411.28 437.02 485.66 445.88
DEMAND
Mill Consumption 262.70 280.11 270.78 233.70 297.45 299.00
S.S.I Consumption 26.21 26.18 22.43 20.49 22.42 23.00
Non Textile Consumption 21.50 12.77 18.00 15.00 15.00 16.00
Total consumption 310.41 319.06 311.21 269.19 334.87 338.00
Exports 58.21 67.59 43.55 47.04 77.59 45.00
Total Demand 368.62 386.65 354.76 316.23 412.46 383.00
Closing Stock 43.76 42.91 56.52 120.79 73.20 62.88
Source: As per Meeting of the Committee on Cotton Production and Consumption(COCPC)
held on 12.11.2021, P-Provisional
15
361555/2022/Cotton
3. INTERNATIONAL SCENARIO:
3.1 As per ICAC Journal ‘Cotton This Month’ – February 2022”, Global production for 2021/22 is
currently forecasted to increase by 9% from the previous season, while global cotton
consumption is estimated at 25.6 million tonnes, almost at par with previous year. Production
for the 2021/22 season will continue to be revised and adjusted as the season progresses.
3.2 History has shown that when cotton prices are elevated farmers will increase planted area. As a
result of projected increases in planted area and the anticipation of lower abandonment rates due
to higher prices, supply for the 2021/22 season was forecasted to increase. Proposed agricultural
reform in India was postponed for 18 months to allow more time to negotiate with farmers. As
a result of the delay, the ICAC believed that planted area in India would remain approximately
the same for the 2021/22 season with the potential for some minor expansion in the largest
cotton-producing areas of India such as Maharashtra, Telangana and Gujarat.
3.3 Details of major country-wise area & productivity, production, consumption, export and import
are as under:-
Area & Productivity (Yield)
(Area in Thousand Hectare and productivity in Kgs/Hectare)
Countries 2018-19 2019-20 2020-21 2021-22
Area Yield Area Yield Area Yield Area Yield
World Total 33300 780 34494 758 31511 772 32745 808
India 12614 449 13477 460 13007 462 12069 510
USA 4040 989 4654 932 3347 950 4035 951
China 3367 1794 3300 1758 3170 1864 3028 1892
Pakistan 2370 704 2527 522 2000 445 2110 467
Brazil 1620 1717 1666 1802 1371 1719 1547 1752
Source: World: ICAC Journal ‘Cotton This Month’ – February 1, 2022, India: COCPC
Production:
(Quantity in Million Metric Tonnes)
Countries 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
World Total 23.38 27.00 25.98 26.13 24.32 26.44
India 5.87 6.29 5.66 6.21 6.02 6.16
China 4.90 5.89 6.04 5.80 5.91 5.73
USA 3.74 4.56 4.00 4.34 3.18 3.84
Brazil 1.53 2.01 2.78 3.00 2.36 2.71
Pakistan 1.66 1.80 1.67 1.32 0.89 0.98
Source: World: ICAC Journal ‘Cotton This Month’ – February 1, 2022, India: COCPC
Consumption:
(Quantity in Million Metric Tonnes)
Countries 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
World Total 24.90 26.35 26.01 22.69 25.66 25.63
China 8.28 8.50 8.25 7.23 8.40 8.20
India 5.28 5.43 5.29 4.58 5.70 5.75
Pakistan 2.22 2.35 2.36 1.98 2.15 2.15
Brazil 0.69 0.68 0.73 0.57 0.69 0.70
USA 0.71 0.70 0.63 0.47 0.52 0.56
Source: World: ICAC Journal ‘Cotton This Month’ – February 1, 2022, India: COCPC
16
361555/2022/Cotton
Exports:
(Quantity in Million Metric Tonnes)
Countries 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
World Total 8.29 9.14 9.28 9.20 10.60 9.96
USA 3.33 3.64 3.37 3.47 3.63 2.96
India 0.99 1.15 0.74 0.80 1.32 0.77
CFA Zone 1.00 1.06 1.16 1.07 1.18 1.36
Brazil 0.61 0.91 1.31 1.95 2.40 2.10
Uzbekistan 0.38 0.22 0.16 0.10 0.01 0.01
Source: World: ICAC Journal ‘Cotton This Month’ – February 1, 2022, India: COCPC
Imports:
(Quantity in Million Metric Tonnes)
Countries 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
World Total 8.09 9.04 9.22 8.68 10.05 9.96
China 1.10 1.32 2.10 1.60 2.80 2.20
Bangladesh 1.41 1.67 1.54 1.50 1.69 1.69
Vietnam 1.20 1.52 1.51 1.41 1.55 1.70
Turkey 0.84 0.96 0.79 1.02 1.16 1.17
Indonesia 0.74 0.77 0.66 0.55 0.50 0.54
Source: World: ICAC Journal ‘Cotton This Month’ – February 1, 2022, India: COCPC
4. INCENTIVES FOR PROMOTING COTTON PRODUCTION
4.1 Minimum Support Price (MSP) Operations:
Every year before the commencement of the Cotton Season (Oct. to Sept.), the Ministry of
Agriculture based on the recommendations of Advisory Board viz., Commission for
Agricultural Costs and Prices (CACP) fixes the MSP with a view to give incentives to the
Cotton farmers of the country. Accordingly, taking into consideration of the recommendation
of CACP the Ministry of Agriculture is being fixed MSP for two basic varieties of cotton viz.
Medium Staple length cotton having staple length of 24.5 mm to 25.5 mm with micronaire
value of 4.3 to 5.1 and long staple length having staple length of 29.5 to 30.5 mm with
micronaire of 3.5 to 4.3 of new crop of seed cotton (kapas) of Fair Average Quality (FAQ). The
MSP fixed by Ministry of Agriculture for the last five years and current year is given below:-
(Rs. In quintal)
Cotton Medium Staple Long Staple
Season (Staple Length 24.5 to 25.5 mm (Staple Length 29.5 to 30.5 mm &
& micronaire value 4.3 to 5.1) micronaire value 3.5 to 4.3)
2016-17 3860 4160
2017-18 4020 4320
2018-19 5150 5450
2019-20 5255 5550
2020-21 5515 5825
2021-22 5726 6025
Based on the Support Price of these two basic varieties of Seed cotton (Kapas) and taking into
account the quality differential, normal price differential and other relevant factors, the MSP
for other classes of Seed cotton (Kapas) of Fair Average Quality (FAQ) is fixed by Textile
Commissioner.
17
361555/2022/Cotton
The MSP for other varieties of cotton for Cotton Season 2021-22 (Oct.-Sept.) as fixed by the
Textile Commissioner of India is given below:
Fibre Quality Parameters Suggested
Minimum Support
Sr. Classes of cotton and name of Basic Staple Length
Miconaire Price (MSP) for
No. indicative varieties used by the trade (2.5% span length)
value 2021-22 in
in mm
Rs/Qntls
Short Staple (20.0 mm & below)
1 Assam Comilla -- 7.0-8.0 5226
2 Bengal Deshi -- 6.8-7.2 5226
Medium Staple (20.5 mm-24.5 mm)
3 Jayadhar 21.5-22.5 4.8-5.8 5476
4 V-797/ G.Cot.13/ G.Cot.21 21.5-23.5 4.2-6.0 5526
AK/Y-1(Mah&MP)/MCU-7 (TN)/
5 SVPR-2(TN)/ PCO-2 (AP& 23.5-24.5 3.4-5.5 5576
Kar)/K11(TN)
Medium Long Staple (25.0 mm-27.0 mm)
6 J-34 (Raj) 24.5-25.5 4.3-5.1 5726
7 LRA-5166/ KC-2 (TN) 26.0-26.5 3.4-4.9 5826
8 F-414/ H-777/ J-34 Hybrid 26.5-27.0 3.8-4.8 5876
Long Staple (27.5 mm-32.0 mm)
9 F-414/ H-777/ J-34 Hybrid 27.5-28.5 4.0-4.8 5925
10 H-4/ H-6/ MECH/ RCH-2 27.5-28.5 3.5-4.7 5925
11 Sankar-6 /10 27.5-29.0 3.6-4.8 5975
12 Bunny/ Brahma 29.5-30.5 3.5-4.3 6025
Extra Long Staple (32.5 mm & above)
13 MCU-5 / Surabhi 32.5-33.5 3.2-4.3 6225
14 DCH-32 34.0-36.0 3.0-3.5 6425
15 Suvin 37.0-39.0 3.2-3.6 7225
The Cotton Corporation of India Ltd. (CCI) has been nominated by the Government of India
for undertaking MSP operations in the event when prices of seed cotton (kapas) fall below the
MSP level for procuring entire quantity of kapas offered by the cotton farmers in various APMC
market yards at MSP rates without any quantitative limit. Following initiatives have been taken
for effective & smooth MSP operations to protect the interest of cotton farmers in the country:
Set up adequate infrastructure on pan India basis i.e. 17 branches and more than 450
procurement centres in 143 districts.
CCI Officials remain present at procurement centres right from the beginning of the cotton
season till end to ensure minimum support prices to the cotton farmers wherever prevailing
prices of FAQ grade kapas fall below MSP.
Disseminating the necessary information regarding MSP rates to cotton farmers by
displaying banners in APMCs, Advertisements in newspapers, Cott-Ally app, etc.
Developed Cott-Ally mobile app to have direct interaction and outreach with the cotton
farmers and to keep the cotton farmers updated about variety-wise MSP rates of cotton,
nearest procurement centers of CCI along with contact details, payment tracking, complaint
redressal, weather condition, crop situation & best farm practices etc, in regional languages.
For monitoring MSP operations, MSP cell has been constituted at CCI Corporate Office
and branches in all the cotton growing states.
Implemented ERP system from procurement of kapas till its sale.
MSP operations are conducted directly from the cotton farmers only in APMC market yards
of State Government.
18
361555/2022/Cotton
Registration of farmers with their Aadhar no. into ERP system.
To ensure genuinity of cotton farmer, live photograph is captured on takpatti (bill) at the
time of procurement.
All purchase documents to be signed by APMC Official, CCI Official and Farmer.
Introduced scientific assessment system through modern gadgets (Digital moisture meter,
Micronnaire tester etc) to ensure quality based price.
Implemented 100% online payment of cotton purchased under MSP to the cotton farmers
directly into their account through RTGS within 72 hours.
Procurement under MSP by CCI during last 5 years are given below:
Cotton Production Procurement under MSP
Season (Qty in Lakh Operations by CCI
Bales) Qty in %age of
Lakh Bales Production
2016-17 345.00 No MSP -
2017-18 370.00 3.90 1%
2018-19 333.00 10.70 3%
2019-20 365.00 105.15 29%
2020-21 353.84 91.89 26%
2021-22 362.18 No MSP -
In 2016-17, the farmers were selling their produce above MSP and they were not require
CCI interventions for MSP. In current cotton season 2021-22 also, farmers are getting
better price above MSP and so far MSP intervention is not required. However, CCI is ready
to meet any eventuality to undertake MSP operations to safeguard the cotton farmers.
Normally, MSP operations of cotton are cyclic and happened once after every four to five
years. There were no major MSP operations consecutively for two years in the past.
However, cotton season 2019-20 & 2020-21 were exceptional, due to global pandemic.
During these two pandemic years when there were no takers of farmers’ cotton, CCI
safeguarded the cotton farmers from distress sales by undertaking MSP operations of more
than two crore cotton bales and more than Rs. 62000 crore were disbursed to about 45 lakh
cotton farmers all across the country directly into their bank account.
4.2 Government’s Policy on Cotton Distribution:
Ministry of Textiles endeavours to ensure adequate availability of cotton for the consumption of
domestic spinning industry keeping in view accelerated investment which has gone into this
sector, while the imports and exports of cotton remain free. In order to monitor this, availability
and requirement of cotton for domestic consumption is assessed by the Ministry of Textiles on
regular basis. The Committee on Cotton Production and Consumption (COCPC) assesses the
production, consumption, imports and exports of cotton at regular intervals. It estimates the
supply and demand of cotton in a cotton season (1st October to 30th September) and draws up
the Annual Cotton Balance Sheet on the basis on the inputs received from Ministry of
Agriculture, DGFT, industry association etc. This Balance Sheet defines the estimated
production, consumption and carryover to the next cotton season.
