Union Budget 2023-24: Push for ELS cotton yield to reduce imports

The Budget proposal of enhancing the productivity of extra-long staple (ELS) cotton through public-private partnership is meant to lower the import dependence of a growing cotton variety that is in demand and can produce high-quality yarn, industry said.

Union Finance Minister Nirmala Sitharaman said in her Budget speech. “To enhance the productivity of extra-long staple cotton, we will adopt a cluster-based and value chain approach through Public Private Partnerships.

This will mean collaboration between farmers, state and industry for input supplies, extension services, and market linkages.”

ELS cotton usually comprises those that are 32-36 mm.

But in India, of the nearly 33 million bales (1 bale = 170 kg) produced in the 2022-23 season, which started in October, the ma­j­o­rity is 26-30 mm. Of this almost 80 per cent is 29 mm, which is considered medium-grade.

In India, of the domestic consumption of around 31 milli­on bales, ELS cotton accounts for just around 1 million. But here too the domestic production of ELS cotton, according to industry players, is 350,000-400,000 bales.

This means 600,000 bales need to be imported annually.

It is this import that the Budget announcement seeks to cut through boosting domestic production.

Egypt, the US, and Australia are the largest producers of ELS cotton. In India ELS cotton is priced 35-40 per cent more than normal cotton because of its high quality.

“ELS cotton gets a good price because it is used to produce good-quality 60-120 count yarn, which is used to make high-value sarees, bed-sheets, etc.,” Atul Ganatra, president of the Cotton Association of India (CAI), told Business Standard.

The price of ELS cotton in India is around Rs 70,000 a candy (one candy is 356 kg) while it is sold globally at around Rs 1.5 lakh a candy. “If ELS cotton production rises, our textile industry will save a lot of foreign exchange and it will benefit farmers too,” Ganatra said.

He said as part of the Budget announcement of involving the private sector in boosting the productivity of ELS cotton, the Central government could fund states, which, in turn, would provide financial assistance to clusters, farmer producer oganisations, and even individual farmers adopting its production.

Another industry player said: “The plan also seems is to encourage farmers to adopt contract farming of ELS cotton.”