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Continued erratic weather in parts of the cotton growing regions in Gujarat, Maharashtra and Andhra Pradesh is likely to hamper the earlier projections for a bumper crop this season.
While traders had estimated an all-time high crop of around 40 million bales (each of 170 kg), the government has put a comparatively conservative estimate of 35.3-37 mn bales. Trade bodies are now cutting their earlier estimates.
The climatic uncertainty even made the Cotton Advisory Board (CAB) postpone a meeting scheduled this Thursday on crop projections. The cotton associations and trade bodies had reportedly asked it to do so, due to the threat of a cyclone along the Andhra coast. The state produces a fifth of the country’s crop.
“There are unexpected factors such as prolonged rain in Gujarat and Maharashtra and cyclone in Andhra Pradesh. These are likely to affect cotton production and quality. A large crop but with poor quality would be of no use,” said K Selvaraju, secretary general, Southern India Mills’ Association.
“There is a threat of a loss of around 10 per cent. But due to rains, we expect yield to improve. The total sowing area was 11.4 mn hectares, so a small increase in yield would compensate the loss in production, if any,” said Arun Dalal, a cotton expert. The agriculture ministry projected a crop of 35.3 mn bales against the traders’ anticipation of around 40 mn. Recently, the textiles ministry projected 37-37.5 mn bales in the 2013-14 season. Trade bodies are refraining from a guess in the current uncertain weather conditions.
“Even if there are rains in growing regions, there is no reported loss so far. The only concern is that the crop is delayed somewhat. Even if there is a five to 10 per cent loss, we feel the crop will be much more than the government estimates,” said Arun Sekhsaria from Brijmohan Seksaria & Co, also a board member at Cotton Association of India.
Beside production, quality is an issue. “The rains would affect quality. Thin arrivals have started in some markets but there is high moisture in the cotton,” Selvaraju said.
Trade bodies are cautious about the impact on prices. “Presently, quality is a major issue. Due to weather extremities, we see cotton prices to stay high till November 16. After that, fresh arrivals will increase and prices might soften,” said Rakesh Rathi, president of the North Indian Cotton Association. He says he expects a crop of 35-37 mn bales this season.
