Cotton output may rise to 40 mn bales in 2011-12: NCDEX

Cotton production is expected to be 6.8 million tonnes (40 million bales of 170 kg each) in 2011-12 as soaring prices could spur the farmers to boost planting, according to a report. 

Cotton production stood at 33.9 million bales in 2010-11 crop year (July-June), as per the government's second advance estimate released in February.

"The market expects the cotton output to reach a new high of 6.8 million tonnes (4 crore bales) in the next season as the rally in prices is expected to spur the farmers to boost planting," NCDEX, the country's second largest commodity exchange, said in its cotton overview for March 2011. 

According to Cotton Outlook (Cotlook), a cotton trade journal, cotton production in India for the 2011-12 season is estimated to be 5.9 million tonnes (MT), the report added.  

The area under cotton rose by 8.25 per cent to 11 million hectares in 2010-11 and experts believe that area would again rise this year as farmers received good remunerative prices last year.

The spot prices for cotton in the domestic markets rose dramatically to peak at Rs 1,270 per 20 kg for Kapas (seed cotton) in Surendernagar on February 10, 2011, the report said. 

The price of Shankar 6 variety, a superior variety of cotton, has doubled from around 30,000 per candy to 60,000 per candy (a cotton candy is equal to 350 kg) between August 2010 and February 2011, it noted.

"We expect the area under cotton crop in the country to increase by 15 per cent" Cotton Association of India President Dhiren Sheth said.

On global outlook, the NCDEX's report said world cotton output for 2010-11 season has also been revised from 25.1 MT in February 2011 to 24.9 MT in March.

Global consumption estimate has been maintained at 24.7 MT and the end stock has been marginally revised from 9.2 MT to 9.1 MT, it said.

According to the revised estimates of United States Department of Agriculture (USDA) cotton output is expected to go up in India in the 2010-11 season. According to USDA, the output for India, USA, Brazil, Australia and Uzbekistan is pegged at 5.44 MT, 3.98 MT, 1.91 MT, 1.02 MT and 0.98 MT, respectively for 2010-11.

Among the major cotton producers, production is expected to lower in China at 6.42 MT and in Pakistan at 1.91 MT, due to crop damage caused by inclement weather, the NCDEX report said. Global consumption is expected at 25.38 MT in 2010-11, as compared to the expected production of 25.02 MT in the same period, it said.