TY - JOUR
T1 - The effects of MFA quota elimination on Indian fibre markets
AU - Chaudhary, Jagadanand
AU - Mohanty, Samarendu
AU - Misra, Sukant
AU - Pan, Suwen
PY - 2008/5
Y1 - 2008/5
N2 - This article examines the effects of multi-fibre arrangement (MFA) quota elimination on Indian fibre market. The partial equilibrium Indian fibre model was developed using a theoretically consistent framework and incorporated regional supply response, substitutability between cotton and man-made fibres, and appropriate linkage between cotton and textile sectors. Baseline projections were developed for supply, demand and prices of cotton, man-made fibres and textiles under a set of exogenous assumptions. The effects of MFA textile quota eliminations were introduced into the model by conducting three scenarios, i.e. increasing textile exports by 10, 20 and 30% from the baseline level. The results suggest that on an average, cotton imports rise by 4-8% annually, while the man-made fibre exports from India decline with the opening of textile markets in the developed countries. The higher domestic cotton prices encourage acreage expansion in cotton in all the three regions in India, but not enough to meet rising mill demand under the scenarios of higher textile exports. The rise in cotton imports from India has little effect on world cotton prices.
AB - This article examines the effects of multi-fibre arrangement (MFA) quota elimination on Indian fibre market. The partial equilibrium Indian fibre model was developed using a theoretically consistent framework and incorporated regional supply response, substitutability between cotton and man-made fibres, and appropriate linkage between cotton and textile sectors. Baseline projections were developed for supply, demand and prices of cotton, man-made fibres and textiles under a set of exogenous assumptions. The effects of MFA textile quota eliminations were introduced into the model by conducting three scenarios, i.e. increasing textile exports by 10, 20 and 30% from the baseline level. The results suggest that on an average, cotton imports rise by 4-8% annually, while the man-made fibre exports from India decline with the opening of textile markets in the developed countries. The higher domestic cotton prices encourage acreage expansion in cotton in all the three regions in India, but not enough to meet rising mill demand under the scenarios of higher textile exports. The rise in cotton imports from India has little effect on world cotton prices.
UR - http://www.scopus.com/inward/record.url?scp=42549145608&partnerID=8YFLogxK
U2 - 10.1080/00036840600771205
DO - 10.1080/00036840600771205
M3 - Article
AN - SCOPUS:42549145608
SN - 0003-6846
VL - 40
SP - 1083
EP - 1099
JO - Applied Economics
JF - Applied Economics
IS - 9
ER -