Seasonal arrival of cotton declines 11% in FY16

Arrival of cotton during the ongoing season for 2015-16 has declined by 11 per cent so far as compared to last year. According to cotton industry, this is because of lower production of the commodity and higher expectation of farmers.

Latest data of Cotton Association of India (CAI) shows that between October 2015 and February 2016, arrival of cotton was 24.50 million bales (a bale is equal to 170 kg), which stood at 27.62 million bales in the same period last year. The Association has also revised cotton production estimate to 34.5 million bales as against previous estimate of 35.50 million bales.

"The arrival of cotton during the ongoing 2015-16 season is not matching up with the arrival figures of last year. This reduction in the arrivals is an indication of a lower crop," said Dhiren Sheth, president of CAI.

Read more from our special coverage on "COTTON"

• Arrival of cotton falls by 11% in the ongoing season
• Cotton global stocks shrinking: ICAC
• Cotton farmers plan march over non-payment of dues
• Haryana, Punjab may cut Bt cotton sowing

CAI has placed its February estimate of the cotton crop for the 2015-16 season at 34.5 million bales. The projected balance sheet drawn by the CAI estimated total cotton supply for the season 2015-16 at 43.26 million bales while the domestic consumption is estimated at 30.40 million bales thus leaving an available surplus of 12.86 million bales.

Industry believes that, since the beginning, farmers expecting higher returns for their produce also restricted arrivals during the season so far. Farmers who have holding capacity are still expecting that price of cotton may go up further and as a result, arrival is still limited.

Anand Popat, managing director of Jalaram Cotton and Proteins Limited from Gujarat said: "Since past few years, it has been seen that farmers are not willing to sell their cotton at lower prices, which, in turn, affects arrivals. Though we expect that supply will increase after the Holi festival."

During March, cotton prices have declined by Rs 500-700 to Rs 32,700-33,200 per candy of 355 kg because of fall in demand. Daily arrival has also declined from 125,000 lakh bales around the first week of March to 90,000 bales at the moment across India.