Another bumper cotton year likely

India is heading for yet another bumper output in the coming cotton year (October 2011-September 2012) on the back of a gradual ramp-up in sowing area, following the progress of monsoon rainfall this season.

Total output in the coming season might surpass last year’s revised record estimate of 32.5 million bales (1 bale = 170 kg), textiles commissioner A B Joshi on Monday said on the sideline of a Cotton Advisory Board (CAB) meeting here. Rainfall has covered almost all major crop-growing areas in the last fortnight, raising hopes for a recovery in acreage this year. “We believe the sowing area will also surpass last year’s figures of 11.14 million hectares (ha), since farmers had been incentivised immensely by record high cotton prices early this year,” Joshi added. In 2009-10, the total area under cotton was reported at 10.31 million ha.

Cotton prices surged to Rs 63,000 a candy (Shankar 6) early in the pre-sowing season this year. Although the commodity is trading at around Rs 34,000 a candy now, farmers are encouraged to bring more area under cotton. Oilseeds like castorseed, sunflower and groundnut are reported to have lost some area to cotton. The actual sowing scenario, however, is yet to become clear. “We can see cotton prices moderating in coming weeks.”

As on July 24, area under cotton reported a marginal decline of 3.45 per cent at 9.35 million ha, as against 9.70 million ha around the same time last year.

CAB, under the chairmanship of the textile commissioner, raised its own February estimates of output from 31.2 million bales to 32.5 million bales. The total output of the cash crop was recorded at 29.5 million bales in 2009-10.

With this, the total availability has shot up to 37.50 million bales, considering the opening stock of 4.05 million bales and imports of 500,000 bales. During the last season, however, the total availability was recorded at 37.35 million bales. CAB maintained this level in its meeting on Monday.

Factoring the ongoing demand slowdown across the world, CAB revised domestic mill consumption amid expectations that textile mills have huge inventory piled. The consumption market is currently slowing, with the ongoing economic uncertainty in Europe and the US — India’s largest consumer markets. Consumption from domestic markets have also been looking down. CAB has, therefore, cut overall mill consumption estimates from 25.8 million bales earlier to 23.6 million bales. As a result, total demand in the country is estimated to fall to 31.8 million bales from the earlier estimate of 33 million bales.