Dear Members,
It gives me great pleasure to cordially welcome you all to this eighty-seventh Annual General Meeting of the Association. This is the first AGM I am addressing and my heart is filled with joy and emotion.
The Directors’ Report and the Audited Accounts which have already been circulated to you cover the working results and activities of the Association for the financial year ended 31st March, 2009.
Gentlemen, before I move the resolution on approval and adoption of Annual Accounts, I would like to present in brief the cotton scenario during the year 2008-09 as also important events and achievements during the year under reference.
Domestic cotton scenario
Cotton Season 2008-09
The season 2008-09 began with serious apprehensions and uncertainty arising out of the consequential implications of steep MSPs in the context of highly depressed global market. The steep MSPs vis-à-vis the highly depressed cotton prices in the global markets due to the economic melt-down across the world seriously impacted the Indian cotton economy. As compared to the 2007-08 season, when exports hit a record high of 88.5 lakh bales, the exports in 2008-09 dropped significantly to 35 lakh bales.
Our Association made various representations to the Government and requested for appropriate relief for the cotton sector.
Although there has been a surge in India’s cotton production in recent years due to the rapid expansion of area under Bt. cottons, the cotton production at 290 lakh bales was lower by 5% as compared to 2007-08 season. During 2008-09 season, Bt. Cotton area covered about 69 lakh hectares, i.e 75% of the total cotton area of 94.06 lakh hectares.
Estimates for 2009-10
With the satisfactory spell of late monsoon in the major cotton growing states, the overall area under cotton cultivation this year has hit the one crore hectare mark which is an all time record. This was possible due to remunerative prices realized by the farmers which encouraged them to grow more cotton.
The wide spread rains across the cotton belt of Central and Southern zone as also the higher acreage under Bt. Cotton is expected to lead to higher cotton production during the current cotton season 2009-10 as compared to last season. Despite delayed monsoon, current indications are that prospects for cotton crop in 2009-10 are good. In fact, CAB has estimated the cotton crop to be around 295 lakh bales. So far as the yield is concerned, it is likely to be around 495 kg/ha.
Demand for Ban on Exports of Indian Cotton
There is a movement by certain sectors of the cotton chain to demand restriction or even ban on cotton exports. It is highly inappropriate that when the spinning industry does not possess adequate capacity to process all the raw cotton produced in the Country it should propose any restriction on export of the available surplus. Such a step would only result in Indian farmer subsidizing the Indian spinners.
Our Association has made several representations to the concerned ministries followed by personal meetings with them opposing such unreasonable demands which have borne fruit. We shall continue to vigorously follow this issue.
World Cotton Scenario
The 2008-09 cotton season, which ended in July, had been distinct. It was a noteworthy season for the world cotton industry. Production declined to the lowest levels in many years in a number of Countries. World cotton mill use declined for the first time in a decade, due to a drop in demand for textile products caused by the global economic and financial crisis. The Cotlook A Index declined for the first time since 2004-05, from a 11-year high of 73 US Cents (USC) per pound in 2007-08 to 61 USC in 2008-09, driven by increase in the stocks-to-mill use ratio in the World-less-China.
As for the current 2009-10 season, it is expected to be a season of modest recovery for the world cotton industry.
Excellent Work of Technology Mission on Cotton
Good progress has been reported in bringing about modernisation and upgradation of the marketing and processing segments of the Indian cotton industry. Almost 1250 Ginning and Pressing Factories have been modernized and over 250 Market Yards have been developed/modernized. With the upgradation of processing facilities under TMC MM-IV, the overall scenario of total capacity of cotton to be processed through these modernized factories is estimated to be to the tune of more than 310 lakh bales which is almost the entire present crop.
Organic cotton:
In recent years, organic cotton is assuming great importance. The global demand for organic cotton and textile products therefrom is rising fast. There was a spurt in global production of organic cotton in 2007-08. Production during that year was placed at 1.46 lakh tonnes representing an increase of 152% over the previous year’s production and it was stated to have grown over an area of 1.61 lakh hectares spread over 22 countries across the globe.
The future thrust for promotion of organic cotton would be market development through greater consumer awareness stressing on health and environmental benefits, identifying optimum production technology, establishing internal certification agencies, extension of area in non-traditional tracts and better coordination between government and private agencies.
India now tops the Countries that produce organic cotton displacing Turkey from that position. India contributes exactly half of the world’s organic cotton output. Presently, the share of organic cotton in the total world cotton production is about 0.55%.
The Government has set up a separate Organic Cotton Advisory Board to monitor the growth and development of Organic cotton in the country. Our Association has also constituted an Organic Cotton Committee to assist the Government in this task.
Positive Role in International Fora
With the greater acceptability of Indian cotton in the international markets and record exports in the last few years, India is acquiring a greater importance in the global cotton markets. Our Association has been proactive in presenting its views effectively on various issues relating to international cotton trade and more effective role in various International Conferences and Seminars to promote Indian cotton.
In fact, our Association took up the matter concerning AQSIQ rules for registration of exporters of cotton to China, with CICCA and a delegation of CICCA members including CAI, met with the AQSIQ authorities. The outcome of the meeting was positive.
In the recently held ICAC Plenary meeting in South Africa, I made a presentation to the IFCP forum on cotton promotion activities being undertaken by our Association. In a breakout session, I made another presentation highlighting the Role and activities of our Association.
I would also like to inform the members that Shri Nayan C. Mirani, our Vice-President has been re-elected as the Vice-Chairman of IFCP. Further, the Private Sector Advisory Panel of ICAC has elected me as the Vice-Chairman of the Panel.
Rejuvenation of Committees
The Board has constituted several Committees to handle responsibilities in various areas of the affairs of the Association. The meetings of these Committees are now held regularly as per a fixed schedule. This has helped all the Committees to place a sharper focus on the issues handled by them consistently and on a regular basis thereby yielding positive results.
Training Programmes
As you all are aware, the Association held several one day training programmes under ‘Learn with CAI’ series. The main objective of the programmes was to provide holistic training in different topics relating to cotton trade. I am glad to mention here that all the programmes were successfully conducted and very encouraging response was received from the participants.
Expansion of Cotton Testing Services and Setting up of Cotton Testing Laboratories at various upcountry places.
You are all aware that the Association's Laboratory, which has been accredited with NABL Certificate, has been rendering valuable services in cotton testing. In order to meet the growing demand from the trade, the Association had set up one Laboratory at Rajkot last year. Two more Laboratories at Akola and Aurangabad have now been set up with a view to increasing the instrument based testing of cotton in India to be at par with the international standards by providing cotton testing facilities to all segments of cotton value chain in all parts of the country in a cost effective manner. Towards this end, our Association has very ambitious plans to expand the network of Laboratories and aims at setting up a Laboratory every few months in various other locations. It is our aim to make the testing results of CAI Laboratories a seal of approval with world wide acceptance.
Issuance of Certificate of Origin
Your Association has been authorized to issue Certificate of Origin and this service has already been commenced. The purpose of this is to serve all the stakeholders in cotton value chain better and more effectively. I request you all to avail of these services.
To establish Cotton School of international standard
I was motivated to set up a Cotton School of international standard in India when I attended international schools abroad. It is our vision to give opportunity to youngsters in India to develop flourishing cotton careers in India in a cost effective manner. I am glad to mention that the Cotton School Committee constituted by the Association is in active discussion on the various aspects of the project.
To undertake Cotton Promotion Projects
As you all are aware, the reducing market share of cotton vis-à-vis man-made fibre has been engaging our constant attention and with a view to provide focused attention to this issue, your Association has embarked on a cotton promotion campaign involving awareness building amongst all segments of cotton chain. The Association will take up this task to undertake cotton promotion projects in a phased manner.
To establish Cotton Museum
Our Cotton Green Building has great heritage value and needs to be treasured. We plan to create a Cotton Museum in India on the lines of that in Egypt to showcase the rich and varied cotton heritage of our Country.
Renovation of Survey Room
As you all know, we have inaugurated our renovated Survey Room recently enabling us to conduct our events and other major activities at the cotton exchange building itself. Here, I must acknowledge that it was at the initiative taken by our Immediate Past President, Shri P.D. Patodia to renovate the Cotton Exchange Building including the Survey Room and his rich contribution in this regard deserves to be fully appreciated. The Survey Room is available to members at a nominal fee and I urge upon you to avail of this benefit.
Several other renovation work including the renovation of toilet blocks at the ground and first floors have also been carried out at the Cotton Exchange Building for the convenience of the members.
Widening Membership Base of the Association
Increasing the membership base was one of our thrust areas and I am glad to inform you that during the last one year since we assumed office, we have been able to achieve an increase of 29 new members. In order to attract larger membership, we organized three Road Shows in Chandigarh, Aurangabad and Akola which are the cluster areas of the Textile mills and ginning and pressing factories. I strongly feel that we need to put maximum efforts to widen the membership base and urge all of you to help us in enrolling more members.
I would like to inform the members that the Board of Directors of the Association, in their meeting held on 10th December 2009 have resolved to derecognize the Association under the provisions of Forward Contracts (Regulation) Act, 1952 with immediate effect.
Acknowledgements
Before I conclude, let me take this opportunity to place on record my sincere thanks on behalf of our Association and on my personal behalf to all concerned like the Ministry of Textiles, Ministry of Agriculture, the Textile Commissioner and his office, the Ministry of Consumer Affairs, Food and Public Distribution, Forward Markets Commission, Cotton Corporation of India and Technology Mission on Cotton for their continuous support to the cause of Indian cotton economy. Our thanks are also due to all our Upcountry Cotton Trade Associations and the Co-operative Societies, which have extended their wholehearted support and assistance from time to time.
I would like to express my thanks and gratitude to all my revered predecessors including our Immediate Past President, Shri P.D. Patodia, who have laid down a strong foundation for the Association and left a rich legacy for me to take the Association forward.
I am also thankful to my esteemed colleagues on the Board of Directors, Members of various Committees and to all the members of the Association for their valuable support and guidance in taking our Association to a newer height. I also take this opportunity to appeal to all Committees to accelerate their functions and come out with valuable suggestions and recommendations for effective implementation of various projects at hand.
In particular, I would like to thank my two able Vice-Presidents, Shri Nayan C. Mirani and Shri Sanjay V. Udeshi who have always stood by me and have been a tremendous source of strength for me in handling the affairs of the Association.
I will be failing in duty if I did not convey my thanks to our Secretariat and the entire staff of the Association for carrying out their responsibilities with a sense of dedication and commitment.
Thank you.
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