Cotton production to dip by 33% in state: JAU study

Prices may remain stable on higher stockpiles globally

Junagadh Agriculture University (JAU) has estimated 33 per cent lower cotton production for Gujarat as compared to last year.

A recent agricultural economic study report of JAU noted that in spite of lower production, prices of cotton is expected to remain stable due to large stockpiles in China and at international level.

According to the study, cotton sowing in India during the current kharif season is estimated at about 11.6 million hectares and the production is expected to be 5 per cent lower than last year at about 33.4 million bales.

This is mainly due to lower rainfall in Gujarat, especially in the Saurashtra region - key cotton growing area.

"In Gujarat, cotton production is expected to be 33 per cent lower than last year at about 8 million bales from an area of 2.47 million hectares in current year 2012-13. However, cotton price is expected to remain stable due to large stockpiles in China and at the world level," said Maganlal Dhandhalya, associate research scientist at JAU.

The econometric analysis of cotton price in consultation with Domestic and Export Market Intelligence Cell (DEMIC) and Tamil Nadu Agricultural University (TNAU), Coimbatore revealed that the prices of cotton during November, 2012 to January, 2013 may remain in the range of Rs 800 to 940 per 20 kg.

"The cotton prices were quoted at around Rs 850 per 20 kg in the last season, and is expected to remain at the same level this year too. In Gujarat, prices may be a little higher as compared to other states, as cotton ginning millers have to import from other states," Dhandhalya said.

JAU study also noted that according to International Cotton Advisory Committee (ICAC) report, global cotton production is estimated to be around 25.63 million tonnes in 2012-13, which is 6 per cent less than the previous year and consumption is expected to be about 23.46 million tonnes.

Besides, there is also estimated to be a record carryover stock of 13.97 million tonnes of the last year 2011-12.

This will further lead to increased stocks at the end of this year to about 16.14 million tonnes.

Higher cotton stock around the world may result in low export of Indian cotton at about 7.5 million bales as against 12.7 million bales last year, the study noted.