Contrary to expectations of a fall in cotton productivity due to rains in September, the crop for the 2013-14 kharif season could exceed the initial estimate of 37 million bales (one bale=170 kg) and touch the 40-million-bale mark, if the weather remains favourable.
Though cotton arrivals have been affected in many regions, including Gujarat, Maharashtra and the southern states, the yield is set to rise. Observers say cotton prices might fall once arrivals pick up in November.
Talking to Business Standard, K N Vishwanathan, vice-president of the Indian Cotton Federation (formerly South India Cotton Association), said the crop might be higher than the association’s estimate of 37 million bales. Last year, production stood at 34.7 million bales.
“Cotton prices are hovering at Rs 47,000-48,000 a candy (one candy=355.6 kg), as mills currently have low stocks and are buying for their immediate needs. The price will come down in November, when arrivals pick up,” he said.
Dilipbhai Patel of the All Gujarat Ginners’ Association said this year, the quality of cotton would be good and the crop would be remunerative. “Last year, the prices ranged between Rs 33,000 a candy and Rs 40,000 a candy. This year, prices are likely to touch Rs 40,000, once the crop arrives in all states in large volumes. Since the export market is not very lucrative due to subdued demand from China, there would be price parity between international and domestic markets,” he said.
Gujarat was estimated to produce 13.5 million bales, Maharashtra 8.5 million bales, Andhra Pradesh seven million bales, Karnataka 1.5 million bales, Madhya Pradesh 1.8 million bales, the northern states 5.5 million bales, Tamil Nadu and Odisha eight million bales and the rest 1.3 million bales, said a trader. For the 2013-14 kharif season, the minimum support price of cotton stands at Rs 3,700 a quintal for medium staple and Rs 4,000 a quintal for long staple cotton.
A Cotton Corporation of India spokesperson wasn’t available for comment. Sources in the corporation said the Centre was yet to allocate funds for cotton procurement. The corporation might decide its procurement plans only after the government laid down the guidelines, the sources said.
Industry sources said though a few pockets in Maharashtra, Gujarat and Rajasthan might be hit by the excess rains, this might be compensated for by yields in other parts of the country.