Excess rain likely to drive up cotton prices

The escalating cotton prices in the Indian market might surge further as a result of delayed crop maturity due to the extended monsoon.

The early sowing varieties (J 34) in Punjab and Haryana that are harvested in early September would take two to three weeks to mature. The situation is similar in other parts of the country. Heavy showers and extended monsoon in Madhya Pradesh, Gujarat and Andhra Pradesh would also impact timely supply of the late sowing varieties (MECH in Gujarat and Madhya Pradesh, Shankar 6 in Gujarat, and MCU in Andhra Pradesh) of cotton.

According to agriculture scientists, the cotton flower requires bright sunshine to mature. Rainfall delays pollination. Cloudy and partial cloudy skies hinders maturing. Water logging has also affected early picking in the lower stems in Punjab and Haryana.

 

The trend may also impact the estimated yield of cotton of about 325 lac bales this year. The country recorded a cotton output of 295 lac bales last year.

Cotton prices shot up in the recent past (from Rs 2,600 per mond – 1 mond = 37.324 kg – to Rs 3,700 per mond in September) as a result of cotton being put under OGL from October 1.

Textile mills are facing short supplies and it can be delayed further.

Chairman cum managing director of Cotton Corporation of India S C Grover told Business Standard that their operations may also be deferred if the picking is delayed. He said they have exhausted their stock and cannot supply to the millers. Their procurement would be 8 per cent to 10 per cent of the total arrival of cotton. The CCI procured 90 lakh bales last year.

Jagtar Singh Mehma, a progressive farmer from Bhatinda said (the cotton belt of Punjab) witnessed delayed picking due to extended monsoon.

One of the largest yarn manufacturers of India said large players can manage till mid or end-November but it would affect small and medium players.

The millers are hard pressed to resort to polyester cotton blends and 100 per cent polyester spinning to utilise their capacities in such situations. Due to the lack of liquidity in cotton futures the consumers cannot rely on commodity markets.

It is premature to comment on the yield but the demand and supply gap of cotton would affect the the textile industry, said an expert.