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Cotton has made tremendous advances at the global level during the last five decades. Although there has not been much change in world cotton area, production and productivity have more than doubled. And so has world cotton consumption. With consumption rising in most countries including those which depend on imports, world cotton trade has also doubled during the last five decades. The march of world cotton from the 1960s to 2000s can be seen from the data on decennial averages presented in the following table.

As may be seen, world cotton area has shown little change and has been hovering between 32 and 33.5 million hectares. It is well known, India leads the world in cotton area, with over 10 million hectares or nearly a third of the world total having been planted during 2009-10. China comes a distant second with an area of 5.6 million hectares followed by US with 3.1 million hectares.

The average world cotton yield has doubled from 339 kg. per hectare during the 1960s to 695 kg. in the first decade of the current century. It was a record 792 kg. in 2007-08 but came down to 726 kg. in 2009-10. A number of factors have contributed to the boost in productivity. Some of these include the introduction of new production technologies, expanded use of the existing techniques and shifts in areas devoted to cotton cultivation. The average yield in different countries vary widely and the range is from as low as 152 kg. in Mozambique in South Africa to the highest level of 2028 kg. per hectare harvested by Australia. Some of the other countries which have high yield levels are Israel (1800 kg.), Brazil (1500 kg.), Turkey (1357 kg.), Mexico (1328 kg.) and China (1207 kg.). Some of the African countries have the lowest average yield in the world.

India also used to be among the countries with lower range of yield levels a few decades ago. However, the development of hybrid cottons during the 1970s led to some appreciable improvement in yield but the real breakthrough came since 2002-03 after the introduction of bollworm resistant Bt. cottons. The highest national average yield reached so far was 554 kg. per hectare in 2007-08. Although the national yield is still low compared to the world average, not to speak of some leading countries with very high yield, some of the States do have fairly high yields. For instance, the average yield in Tamil Nadu was 850 kg. in 2008-09 although the area was small, just about a lakh hectares. Gujarat recorded an average yield of 651 kg. in 2008-09 over an area of 23.5 lakh hectares. It is expected that with intensive efforts for cotton production and productivity being maintained, especially under the Technology Mission on Cotton, average yield is bound to go up further in the coming years.

Mainly due to the increase in productivity, world cotton production more than doubled from 11 million tonnes during the 1960s to 23.1 million tonnes in the 2000s. The top ranking cotton producer continues to be China whose crop placed at 8 million tonnes amounted to 34 per cent of the world total in 2008-09. It was only slightly lower in 2009-10 at 6.8 million tonnes or 31 per cent of the world crop estimated at 22.2 million tonnes.

Next in order comes India whose production is placed at 5.2 million tonnes or about 23 per cent of the world total in 2009-10. Thus, China and India account for more than half the world cotton production.

Along with production, world cotton mill use has also gone up by 112 per cent from 11 million tonnes during the 1960s to 23.3 million tonnes in the 2000s. Consumption reached a peak of 26.5 million tonnes in 2007-08 but fell to 23.2 million tonnes in 2008-09 and 23.8 million tonnes in 2009-10, mainly due to the negative impact of the global financial crisis since the latter half of 2008 which brought down the demand for textiles. With the gradual recovery in economic growth witnessed recently, it is expected that the world cotton mill use will bounce back. The International Cotton Advisory Committee has projected mill consumption higher at 24.2 million tonnes in 2010-11.

One of the notable developments in the last few decades has been the growth of the textile industry in countries which do not produce cotton on any significant scale. They import cotton and yarn for adding value by manufacturing fabrics and garments especially the latter. With a relatively lower wage structure and due to the high employment potential, these countries find garmenting highly beneficial particularly because of the good demand from the developed countries. Even a leading cotton producing country like China goes in for sizable import of cotton since its domestic production falls short of the mill requirements. India also resorts to import since it is deficient in the production of extralong staple cotton although there is a large exportable surplus in the other staple categories. All these have given a boost to the world trade in cotton with exports/imports doubling from 3.7 million tonnes in the 1960s to 7.4 million tonnes in the 2000s. While China is the leading importer, US continues to be the leading exporter. During 2008-09, India could also export large quantity to emerge as the second highest exporter in the world.

In its December 1 release, the International Cotton Advisory Committee (ICAC) had forecast that world cotton prices may be higher in 2009-10 compared to the previous year. The recent trend in world cotton prices seems to be substantiating this forecast. In fact, the average Cotlook A Index has been moving up since June 2009 as may be seen from the following figures published in Cotton Outlook :

It is also observed that the daily value of Cotlook A Index touched a peak figure of 78.60 on December 17. According to the ICAC, global cotton ending stocks are expected to fall by 13 per cent to 10.7 million tonnes at the end of 2009-10. This would be the largest decline since 2002-03, it is stated. Half of the decline is expected to take place in China and half in the rest of the world. The global stocks-to-use ratio is also forecast to drop from 53 per cent in 2008-09.

Taking all the relevant factors into consideration, ICAC had forecast the Cotlook A Index to average 69 US Cents per pound in 2009-10, an increase of 13 per cent from the 2008-09 average of 61.2 Cents per pound.

The Government's mid-year review is reported to have claimed that the Indian economy is well on course to return to high growth trajectory. However, this broad based recovery is likely to be accompanied by somewhat higher inflation mainly on account of food price rise. The forecast for GDP growth is about 7.8 per cent during 2009-10 as against 6.7 per cent in 2008-09.

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The country's infrastructure sector expanded by 5.3 per cent in November driven by robust growth in steel and cement industries, indicating that revival in the industrial growth will continue to be strong, says a report. The growth of the core sector was only 3.8 per cent in October. The six core sector industries contribute 26.7 per cent to the overall Index for Industrial Production (IIP).

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