2013-14 cotton acreage likely to stand at last year's levels

The International Cotton Advisory Committee (ICAC) has scaled up its cotton crop estimate for 2013-14 by 4,80,000 tonnes to 25.09 million tonnes (mt). However, in 2013-14, global output is expected to be lower than last year's output of 26.36 mt

With the monsoon expected to be normal this year, fears of a fall in cotton acreage have subsided somewhat.

According to the Cotton Advisory Board, in cotton year 2012-13 (October-September), area under the crop stood at 11.77 million hectares, compared with 12.17 million hectares in 2011-12. The board had estimated last year's production at 34 million bales (1 bale=170 kg), compared with 35.5 million bales in 2011-12.

"So far, rains have been on time, due to which we are expecting the area under cotton to be the same as last year. However, it is still too early to predict," said D K Nair, secretary general of the Confederation of Indian Textile Industries.

Globally, too, cotton acreage was expected to see a drop. However, acreage rose last month. The International Cotton Advisory Committee (ICAC) has scaled up its cotton crop estimate for 2013-14 by 4,80,000 tonnes to 25.09 million tonnes (mt). However, in 2013-14, global output is expected to be lower than last year's output of 26.36 mt.

In a note, ICAC said, "In India, cotton planting this season has been normal, but the monsoon will determine if last season's area can be maintained. In 2013-14, the cotton area is projected at 11.9 million hectares, up 51 per cent from 2003-04; cotton production is projected at 6.2 mt, more than double the three mt of production in 2003-04."

In north India, sowing was already underway, but due to heat waves, the crop was damaged. As a result, farmers had to sow again. Last year, Maharashtra, India's second-largest cotton producer, faced a drought. Therefore, this year, cotton acreage in the state is expected to fall.

Following a rise in the US market, cotton prices have been increasing; now, cotton is being traded at about Rs 19,000 a quintal on MCX futures, five per cent higher compared to a month ago. In Andhra Pradesh, kapas, which fell below the minimum support price (MSP) of Rs 3,900 a quintal, is now trading at Rs 4,650 a quintal. This would encourage farmers to sow cotton.

In Gujarat, kapas is being traded at Rs 4,750 a quintal, while the MSP is Rs 3,900 a quintal.

ICAC has said in the near term, cotton prices in international markets may remain subdued. At the end of May, the Cotlook A Index fell to about 90 cents a pound, while the China Cotton Index (Type 328) fell to 19,350 yuan a tonne, or 142 cents a pound.

Assuming China maintains its reserve policy, as was announced by the government of that country, the Cotlook A Index is projected to stand at an average of 88 cents a pound in 2012/13 and 115 cents a pound in 2013/14. China is not encouraging cotton imports; it has told its industry to import yarns.