AGRICULTURE AND FOOD SYSTEMS

COTTON
Presented By:Manjunath Arakeri
Saurabh Kumar
PGDM-A(2015-17)

Flow of presentation

Introduction
World scenario
Indian scenario
MSP
Bt Cotton
COC of cotton
Marketing chain
Products derived from cotton
Ginning Mill
Processing chain
Marketing agencies
Policy and scheme

Introduction
Cotton -genus Gossypium in the family of Malvaceae

Cotton is known as King of Fibre(white gold)

Cotton is the most important fibre crop not only of India but of the entire
world.
Cotton is a kharif crop which requires 6 to 8 months to mature. Major
cash crop of India, basic raw material (cotton fibre) to cotton textile
industry.
Indian textile industry is one the most important industries for the Indian
economy. It accounts for around 4% of GDP(80 bn US$), 14% of the
industrial production and 17% of the countrys total export earning.
Its seed (binola) is used in Vanaspati industry and can also be used as
part of fodder for milch cattle to get better milk.

World scenario
MT/YR

2011-12

2012-13

2013-14

2014-15

Beginning
stock

9.52

14.52

17.09

19.77

Production

27.75

26.97

26.25

25.92

consumption 22.46

23.11

23.61

24.33

Ending
stocks

17.09

19.77

21.60

14.52

Total textile export was 295 bn US$ in 2012 and clothing export was 413 bn
US$.
Total textile export of India was 15 US$(5%) in 2012 and clothing export
was 14.3 bn US$(3.4%)
Sources-CCIL & ITS 2012, WTO

World Area and Productivity(TOP 5)

Area in mh

14

Productivity in kg/ha

1600
1400

12

1200

10

1000

2011-12

2012-13

2011-12
2012-13
2013-14
2014-15

800

2013-14

6
600
4

400

200

0
India

China

USA

Pakistan

Brazil

India

China

USA

Pakistan

Brazil

China accounts only 15 % world area and 30 % world production.

Brazil accounts only 3.1% world area and 9% world production.
China follows intensive agricultural methods for cultivating cotton crop.
Brazil follows HDPS method for cultivating cotton crop.
Sources-USDA-Foreign Agricultural Services

World Production and Consumption in MT (TOP 5)

Production

Consumption

2011-12
2012-13
2013-14
2014-15

2011-12
2012-13
2013-14
2014-15

0
India

China

USA

Pakistan

Brazil

China

India

Pakistan

Turkey

Brazil

Sources-USDA-Foreign Agricultural Services

Indian scenario
State-wise
production of cotton in India (MT)
3
2.5

2.61
2.19

2
1.92
1.5
1

1.92
1.66 1.61

1.56

2.14

1.51

1.63
1.32

Gujarat
Maharashtra
Andhra Pradesh

1.06

0.5
0

2011-12

2012-13

2013-14

2014-15

India produces around 11% of the world's cotton from 25% of the
area.

India earns foreign exchange to the tune of $10-12 billion annually

from exports of cotton yarn, thread, fabrics, apparel and made-ups.

Row cotton market ~US$ 4 b

CAGR- 11% (since introduction of Bt Source:
cottonMinistry
in 2002)
of Agriculture,Govt. of India & CCI

Supply of Cotton in India

12

10

9.49

9.01

9.54

9.21

8.83

6.81
6.31
6

5.71

5.41

5.08

4.73

6.45

6.42

6.19

4.24

(MT)

2.56

2.712.71

2.5
2.362.36

1.7

2.81

2.682.68

2.532.53
2.01

1.02

0.87
0.13
0

0.25

2010-11
2011-12
Beginning Stocks
Production

0.14

2012-13
Imports

0.25

2013-14
Total Supply
Mill Use

0.21

2014-15
Exports

The Twelfth Five Year Plan, the market size of technical textile
industry is expected to touch Rs.1,585.40 bn by the end of
FY17 registering a projected average growth of 20% on a y-o-y
basis.

Source: USDA-Foreign Agriculture Services & Dun & Bradstreet

MSP for medium and medium long stable

4500
4000
3500
3000

Rajasthan
Haryana
MP & MH
KA & TN

2500
2000
1500
1000
500
0
2010-11

2011-12

2012-13

2013-14

MSP for cotton is INR 4050(2014-15).

SOURCE-Indiastat.com

Bt-Cotton
WHAT IS Bt COTTON ??!!
It is genetically modified variety of cotton that produces insecticide
Bt-Bacillus Thuringiensis ,introduced in the year 1996 at U.S.A
It is bacteria which contains cry1A protein act as endotoxin

In India
It was introduced in India at 2002
For 11th five year plan Bt cotton was cropped in 10.8 mha
Decline in insecticide use was from US$ 160 million in 2004 to US$ 25 million in
2013-14 as 85% decrease
Cotton yield increased from 308 kg/ha in 2002 to 550 kg/ha in 2013-14

Cost of Cultivation per ha in Rs.

4000; 11%

3600; 10%
15000; 43%

7000; 20%

2000; 6%

Field prepration

Seed

Fertilizer

3200; 9%

Irrigation

Pesticides

Labur

Most of the Bt cotton hybrids are of medium and long staple cotton(26-32mm

Declining production of short staple(below22mm) and extra long staple (35mm

Imports mainly ELS and SS cotton.

Cotton Marketing Chain in

India

Source-Dun and Bradstreet

Products derived from cotton

42%

Seed cotton

Lint

Cotton
Lint
uses

Seed

100%
Textile

58%

40%

3%

Fibre

Meal

42%

Hulls

15%

Oil

Hulls
Seed
uses

Feed
for
animal
s

100 kg of seed
cotton

Mulch &
soils
conditions

Bran

30-45 kg Lint
55-65 kg cotton seeds

Oil

other
Synthetic
Rubber
Petroleum
SOURCE-CICR

GINNING MILL

The investment cost for setting up a ginning mill of 24 gins will be around Rs.
9.64 Crore and the break up of the cost is tabulated below.

The minimum economic capacity of the ginning mill is about 24 Gins.

Source-APTICO LTD

Cotton Processing Chain Flow

Farmer

Aggregat
or

Ginning
&
pressing

Raw
cotton

Spinning
Mills

Yarn

Weaving
&Knitting
Industry

Dyeing &
Finishing

Fabric

Garment
manufacturi
ng

Garment

Dyeing
&
Finishi
ng
TEXTILE PRODUCTS
Source-Yes bank report

Marketing agencies

Private sector comprising traders, owners of ginneries operating as

individual business proprietors, partnership
firms and private limited companies

Public sector agencies like the Cotton Corporation of India (CCI)

Co-operative sector
Approximately 80% of the marketed surplus of kapas and lint is handled
by the private marketing channels and the remaining 20% by the
institutional marketing channels including co-operatives and Cotton
Corporation of India (CCI).
More then 90% of yarn is produced in the organized sector.

SOURCE-USDA

Policy and scheme

TEXPROCIL- Cotton Textiles Exports Promotion Council
National Textile Policy 2000
Textile Export Quota policy
The Cotton Corporation of India (CCI)'s procurement the cotton. It
expects to purchase over 75 lakh bales this year.
National Agricultural Cooperative Marketing Federation of India
(NAFED) is also an additional central agency for procurement of
cotton
TUFS-Technology Upgradation Fund Scheme
Zero excise duty on ready garments made from cotton.
Bt cotton subject to GMO regulatory guideline of Ministry of
Environment.

Scheme for Integrated Textile Parks (SITP):

SITP was approved in July 2005, provides the textile industry with
infrastructure facilities for setting up their textile units.

SITP has sanctioned 61 new textile parks based on a public private

partnership model where the Government of Indias share is restricted
to 40 percent of the project cost or $7.3 million (Rs. 400 million)
whichever is lower.

An additional grant of $1.8 million (Rs. 100 million) will soon be

available to each new project to assist firms in the apparel sector.