Cotton acreage may rise 7-10% in coming season

The acreage under cotton crop next season, starting August 2011, is expected to increase 7-10 per cent, following high prices and expectations of higher minimum support price (MSP) from the government.

Official sources said acreage may go up from 11.1 million hectares at present (this season ) to a high of 12 million hectares. “In fact, acreage under cotton reached a record level in 2009-10 following good prices,” said officials.

They explained the increased acreage is happening at the cost of other crops like paddy in the north, soybean, maize and groundnut in the west and tobacco and chilli in the south. “Land is limited and thus farmers are opting for cotton going by high prices both globally and in the domestic market,” official sources said.

 

Meanwhile, the production estimates are likely to hover around 31.2 million bales. In April 2011, the Cotton Advisory Board had revised the crop estimates downwards for the current crop season (2010-11) to 31.2 million, as against the earlier estimate of 32.9 million bales.

At the same time, the cotton acreage was reviewed upwards for the current season from 10.3 million hectares to 11.16 million hectares.

The output estimate was revised downwards due to unseasonal rain in December 2010, followed by extreme cold wave in the Saurastra region of Gujarat, Vidarbha, Marathwada and Khandesh in Maharastra and Adilabad and in the Warangal region of Andhra Pradesh.

The Committee for Agricultural Cost and Prices has also recommended a higher MSP for cotton, which was around Rs 2,500 a quintal for the last two years as against a recommendation of Rs 2,800 a quintal for the current season.

The market is witnessing low buying by mill users, whereas farmers are seen stocking on seeds fearing price rise as the season approaches. “Mill users are awaiting fresh arrivals and have been using existing inventory to avoid high prices at this point of time,” officials added.

During last month, domestic prices for the popular S-6 variety had been in the range of Rs 55,000-55,500 a candy as against Rs 58,000- 61,000 a candy in previous weeks.

Owing to the fact that the cotton season is almost at its fag end and until low seed cotton arrivals in various upcountry markets, the quality in current arrivals has been going down, officials said. Thus, deterioration in quality in present arrivals and low demand from mills due to lower off-take of cotton yarn has put pressure on the prices, sources said.

Officials also added that according to records till April 2011, world cotton acreage during 2010-11 is estimated to increase by 11 per cent to 33.37 million hectares as against 29.98 million hectares during 2009-10.

The world average yield in 2010-11 is projected up by one per cent to 733 kg per hectare as against 726 kg per hectare in 2009-10.

World cotton production during 2010-11 is expected to rebound by around 14 per cent to 24.46 million tonnes as against 21.85 million tonnes in 2009-10.