India gaining greater importance in global cotton markets: EICA

Mumbai, July 16 (UNI) With a record export of cotton in 2005-06, India is acquiring greater importance in the global cotton markets, according to Mr K F Jhunjhunwala, president of the East India Cotton Association (EICA).

''It is expected that the buoyancy in exports will continue in future,'' he told UNI here.

India has, therefore, to be proactive in presenting its views more effectively on various issues relating to international cotton trade, he said. In this connection the association, which has always been active in various international fora, is gearing up to play a more effective role and is presently engaged in formulating appropriate strategies to be adopted at the forthcoming 65th Plenary Meeting of International Cotton Advisory Committee (ICAC) scheduled to be held at Goiania, Brazil, in September.

He has urged members to give their views and suggestions in this regard so that India's interests are adequately protected and promoted.

Referring to the Doha Development Round, which is now entering the crucial stage of negotiations, he said that at the WTO meeting in Geneva, deliberations on agricultural and industrial tariff cuts will take place. It appears that the developed countries are halting in their commitment to slash trade - distorting domestic support and export subsidies in the agricultural sector to which the livelihood of millions of farmers is linked. Bloated subsidies given by developed countries on agricultural commodities, including cotton, are restricting market access by developing countries. Let us hope that satisfactory solution would be reached during the negotiations, he said.

The Association has been making persistent efforts to rejuvenate future trading in cotton. As mentioned in the Directors' Report, the Association has decided to join common trading, clearing and settlement platform being envisaged by Federation of Indian Commodity Exchanges (FICE) of which the association is a member.

He said that the Centre proposes to amend the Forward Contracts (Regulation) Act, 1952, in order to make the Commodity Exchanges much more transparent and effective. The Forward Markets Commission (FMC), which is the regulatory authority for all commodity exchanges, is proposed to be given more independence and powers. For the first time, options in goods or commodity derivatives are proposed to be introduced. Mr Jhunjhunwala feels that this is a step in the right direction.

The FMC envisages corporatization of Commodity Exchanges.

Further, it also contemplates that there should be demutualization of functions between the Association and the Commodity Exchange.

This will call for radical modifications in the Association's Memorandum and Articles of Associations, he added.

Mr P D Patodiya, vice president of the Association, informed that it proposes to convene All India Cotton Trade Associations' Conference in Mumbai on August 5. The theme of the conference will be ''Strengthening the Cotton Economy through Sustained Exports''.

A session on ''Cotton Future Trading'' has also been included in the agenda of the conference to create more awareness on the subject.

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