Area under cotton production across the world is expected to fall by one per cent to 30 million hectares, which is the lowest since 2009-10, when the planted area was 29.7 million hectares. On the other hand, the cotton consumption forecast remained unchanged from 2015-16 at 23.8 million tonnes, but is projected to exceed production by 1.3 million tonnes.
The drop in area is expected to be compensated by the increase in average yield, which improved by nine per cent to 753 kg per hectare (global average) and overall production is expected to increase by seven per cent to 22.6 million tonnes, says International Cotton Advisory Committee (ICAC).
Cotton production area in India, one of the largest cultivators in the world, contracted by eight per cent, to little under 11 million hectares. Competition from other crops such as maize was one of the key reasons. This is expected to be offset by the nine per cent increase in the average yield to 526 kg/ha and production is expected to remain stable at 5.8 million tonnes.
Prices will persist at the high 60 cents per lb mark as the new crop harvest flows into the hands of the trade, increasing incrementally into 2017 on tightening fundamentals, says Rabobank's report.
According to Cotton Association of India (CAI), in 2015-16, cotton supply was 42.1 million bales and, in 2016-17, this is expected to fall to 39.8 million bales (170 kg each), while demand is expected to fall to 30.9 million bales from 37.7 million bales in 2015-16.
CAI has estimated the cotton crop in India for 2016-17 season (starting October 2016) at 33.60 million bales.
India's cotton consumption is projected by ICAC to remain stable at 5.2 million tonnes, as mills increase the share of other fibres in cotton-blended yarns, says ICAC. Exports from the United States are projected to increase by 26 per cent to 2.5 million tonnes, while exports from India, the second largest exporter, are forecast to fall by 35 per cent to 820,000 tonnes.
Area under Bt cotton has not declined as expected. However, northern states were expected to shift to native seeds for cotton but that has not happened despite the extensive damage caused to the Bt cotton crop last year in the states of Punjab and Haryana. About 30 per cent fall in cotton acreage has been registered in Punjab this year as many farmers lost their entire crop due to widespread whitefly pest attacks last year. Neighbouring Haryana has also recorded cotton acreage lower by 11 per cent over the last year due to the same reason.
Non-availability of native variety seeds and inclination of farmers for Bt sowing has marred the shift of area from Bt to non-Bt cotton. The textile mills demand Bt cotton as it has a longer staple and finer count than the native cotton, so Bt is commercially more viable, said Harwant Singh, a farmer from Bathinda.
As Bt cotton is not resistant to pest attacks like whitefly that blighted the cotton crop in the vast tracts in these states, the state governments, on the recommendation of the joint action committee, has decided to cut area under Bt cotton cultivation.
Sources in the Haryana government informed that there was an estimated target of increasing area under native cotton by 15 per cent, but seeds cannot be developed in a short span so there may be 20,000-30,000 hectare increase in area under native variety.
As a result of crop loss of cotton last year, farmers have diverted land towards other kharif crops and paddy is the highest gainer. In Haryana, the area under cotton this year is 5.15 lakh hectare, against 5.16 lakh hectare last year.
The drop is more conspicuous in Punjab as cotton sowing area has shrunk from 3.9 lakh hectare last season to 2.56 lakh hectare this season.