Shri Pravesh Sharma, Principal Secretary, Government of Madhya Pradesh and our Chief Guest for this Conference, Shri S.C. Grover, Chairman and Managing Director of Cotton Corporation of India, our Special Guest, Shri Narendra Agarwal, President, The Cotton Merchants Association, Burhanpur, other dignitaries present and dear delegates.

It is my proud privilege and great honour to extend to you all a very cordial and warm welcome to this All India Cotton Conference, being, the first Conference of the current season 2008-09 under the aegis of Cotton Association of India (CAI).

I would like to join Shri Narendra Agarwal, President, CMA, in extending my hearty welcome to our Chief Guest, Shri Pravesh Sharma and our Special Guest Shri S.C. Grover.

It is my pleasure to welcome the President and other office bearers of CMA and express my heart felt thanks to them for hosting this Conference.

I also welcome delegates from various parts of this region representing all segments of cotton chain and I am sure, their active participation in today’s Business Sessions will make the Conference vibrant and stimulating.

Today’s Conference takes me down the memory lane to the year 1998 when a similar Conference of CAI (then known as East India Cotton Association) was held in this great city of Indore. That Conference was a grand success and I have no doubt in my mind that this Conference will be another landmark and will go a long way in strengthening the bond between CAI and CMA.

Friends, we have a galaxy of renowned speakers at this Conference who have been kind enough to spare time from their busy schedules to share their views on various topics and I am delighted to extend a hearty welcome to all of them.

Theme of the Conference

I would now like to briefly touch upon the theme of the Conference.  As we all know, the current cotton season 2008-09 began on a highly anxious note with a  significant rise in the Minimum Support Prices (MSPs) announced by the Government. This was further compounded by a global economic meltdown thereby seriously impacting the demand of Indian cotton both in domestic as well as international markets.   The steep MSPs vis-à-vis highly depressed prices in the global cotton markets created a stalemate in the cotton trade in India.  The wide disparity between the steep MSPs and the prevailing much lower market prices: led to total clogging of supply of cotton in the market which brought the domestic trade and exports to a virtual halt.  Such disparity in prices also prompted massive MSP operations by Governmental procurement agencies.

CAI made several representations to various Ministries and other concerned authorities to save the cotton sector by granting appropriate urgent relief to all segments of cotton economy.  We are extremely grateful to the Government for appreciating the difficulties of the cotton trade and granting some relief to cotton exporters.  Looking at the importance of this issue, we have planned a Panel Discussion exclusively to discuss the issues and solutions in relation to the MSPs in the post lunch Session.

Our dismal experience of the current season so far leads to several challenges for the future of the cotton sector.  The theme of this Conference, i.e. “Future Trends in the Cotton Sector”, will place a special focus on certain key issues that needs to be extensively deliberated with a view to work out strategic solutions to ensure a better future for the cotton sector in India. 

I am looking forward to exciting and stimulating deliberations at the Business Sessions during the course of the day and request all of you to take full advantage of the rich and valuable experience of the eminent speakers present here by your active participation in various sessions and make the deliberations fully interactive.

 Cotton Scenario in India

There has been a surge in India's cotton production in recent years, mainly due to greater adoption of Bt technology, scientific cotton cultivation practices, efficient pest management, enhanced farmers education etc.  During 2008-09, Bt cotton is estimated to have covered about 69 lakh hectares, or 74 percent of the total cotton area of the country. During last four years from 2004-05 to 2007-08, cotton production in the country has climbed about 30%, from 243 lakh bales to 315 lakh bales. Significantly, most of this rise was accounted for by an increase of 21 percent in productivity, from 470 kg to 567 kg per hectare.

As per the latest estimate made by Cotton Advisory Board for the current season, cotton production is likely to decline by about 7 percent to 290 lakh bales and productivity by the same margin to 526 kg, as compared to the last season, because of erratic rainfall conditions, pest attacks in some part of the Country etc.

Evidently, we need to make consistent efforts to reduce our dependence on the weather God and create irrigation facilities in more and more cotton areas which are presently rain-dependent.

So far as demand and prices of cotton are concerned, I have mentioned  earlier about the adverse impact the current MSPs had on these two factors.  As against export of about ten million bales as per the trade estimates, we have hardly been able to export about 7.00 lakh bales so far with registrations of export contracts being pegged at about 12.8 lakh bales as of now.  The MSPs have also impacted the mills because of the non-availability of cotton at reasonable prices.  I hope, relief granted to the exporters by the Government and the bulk discount scheme launched by CCI recently, would mitigate, to some extent, the hardships being faced by the cotton sector.

 Global Cotton Scenario

The global recession has severely hit businesses across the world and cotton is no exception.  The market conditions in international cotton markets have been very depressing with demand suffering serious erosion.  Demand in China, the largest consumer of cotton in the world, is reportedly down by as much as 40%. The price situation is no better with prices sliding almost 50% on NYBOT.   As per ICAC reports,  there has been a 9 percent decline in the  world cotton mill use in 2008-09 primarily due to fall in cotton consumption arising out of drop in end use consumption of cotton products caused by a slowdown in world economic growth as well as price competitiveness of cotton Vs man-made fibres.  World cotton production is also forecast to decline by 10 percent owing to a drop in world cotton area, mainly in US, as a result of migration of cotton crop to other more profitable commodities like soybean and corn.

Organic Cotton

In recent times, a lot of emphasis is being placed, particularly by western countries, on environmental implications of cotton cultivation. Products made from organic cotton are gradually assuming importance. 

Since 2005-06, the world production of organic cotton has risen six fold to 2.25 lakh tones in 2008-09. India is the largest producer of organic cotton in the world, contributing more than half of the world production.  Organic Cotton production in India holds tremendous potential since 65% of the area is rain-fed and characterized by the use of 20% fertilizers and 15% pesticides compared with conventional irrigated cotton.

Although, Organic cotton production in India is just 1.4% of the total conventional cotton produced in the country, it is an excellent niche area for development.

We have to place a sharper focus in this area.  The importance of Organic cotton is clearly evident from the fact that the Government has chosen to constitute a separate Cotton Advisory Board  for Organic cotton.

We will have ample opportunity to discuss various issues relating to Organic Cotton during a Panel Discussion on the subject slotted during the second half of the day.

Instrument Testing of Cotton

The conventional method of testing cotton by visual inspection has now given way to HVI testing of cotton across all cotton producing and consuming countries of the world.  CAI  strongly supports the promotion of HVI testing of cotton and intends to promote this across all cotton growing States in India.  Our Association is an active participant in the activities and deliberations of the Commercial Standardisation of Instrument Testing of Cotton (CSITC) Committee and both our Laboratories at Mumbai and Rajkot regularly participate in the CSITC Round Trials.  We have very ambitious plans to substantially expand our network of Laboratories and have the vision of setting up our own Laboratories in all important cotton growing zones in various States across the country. In this regard, I solicit your co-operation and collaboration for this region.

Future Plans of CAI

The Board of CAI has undergone some changes in last December post our Annual Election of Directors and a young energetic and enthusiastic team of office bearers is now in place with lots of progressive ideas for future development of the Association.

Although, in the first Business Session, Shri Kunal Thakkar is going to make a presentation on the future plans of CAI, I would just like to make a mention of some important projects as follows :

While I have tried to flag some of the important issues, I am confident that eminent speakers at the Conference will deal with them in greater detail.

In conclusion, I would once again like to thank all of you for being present here in large numbers and specially thank The Cotton Merchant Association, Burhanpur for hosting this Conference with meticulous planning and very warm hospitality.

Thank you and Jai Hind.

*******