The effects of MFA quota elimination on Indian fibre markets (original) (raw)

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 This section starts with the graphical representation oflhe potential Impacts of the MFA quota ellmlnaUon on the Indian and world cotton markets. The graphical analysis presented In Fig. 1 show.; the expected directional changes to the Indian and worid cotton markets, In a price-quantity space, duelo MFA quota elimination. As shO'Mlln Fig. 1, panels (a) and (b) rEpresent IndIan textile and cotton market respectively. Panel (d) represents the rest of lIle world (ROW) cation market, Whereas panel (c) shows the market clearing mechanism at the world Jevel by equating excess supply with excess demand. Transportalfon cost effects are Ignored for sJmplldty.