Cotton production in the country is expected to be lower at 35 million bales in cotton year (CY) 2019 (October to September) due to decline in area and an expected 10 per cent rise in prices, a report said today.
"The domestic cotton crop output is expected to moderate to 35 million bales in CY 2019 after a reasonably good CY 2018, owing to a decline in domestic cotton acreage to 114 lakh hectares, compared with 122 lakh hectares estimated for CY 2018," rating agency Icra said in the report.
The Cotton Association of India in its April estimate had pegged the production for CY 2018 at 36 million bales.
Icra said decline in cotton output, improvement expected in domestic consumption and global cotton deficit expectations for CY 2019 are likely to keep cotton prices firm by 10 per cent.
Moreover, the agency said, the decline in acreage will be led by key cotton growing regions in the west and south, where farmers are shifting to alternate crops like soybean as they suffered huge losses due to pest attacks in CY 2018.
As for CY 2019, while cotton sowing in the central, western and southern belts is yet to commence, the northern belt including Punjab, Haryana and Rajasthan reported a tepid beginning, with area under cotton being lower by 14 per cent this year till May end, it said.
It is 18 per cent below the level reported at the same time last year.
"Besides this being too early to conclude from the sowing pattern so far, lower acreage in the northern belt appears to be an aberration caused by water-availability related issues in some of the states where the sowing has commenced," said Jayanta Roy, senior vice-president and group head, corporate sector ratings, Icra.
With water availability issues starting to get addressed, the agency expects the pace of cotton sowing in the northern belt to pick up in the coming weeks, in line with trends witnessed in recent weeks.
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