You are here: Home » Reuters » News
Business Standard

India's cotton output may hit 9-year low, curb exports

Reuters  |  MUMBAI 

By Jadhav

MUMBAI (Reuters) - India's annual cotton output could drop 12 percent to the lowest in nine years as limited rainfall in the top two producing states has slashed crop yields, potentially cutting exports from the world's top producer, industry officials said.

Lower cotton shipments from will allow rivals such as the United States, and to increase cargoes to key Asian buyers such as and It may also support global prices that have fallen 16 percent since hitting a four-year peak in June.

could produce 32.5 million bales in the 2018/19 marketing year that began on Oct. 1 - the lowest since 2009/10 - as farmers in the western states of and are reporting poor yields, said Chirag Patel, at major exporter Jaydeep Cotton Fibres Pvt Ltd.

Rains in and Maharashtra, which account for more than half of India's cotton production, were nearly a quarter below normal during the June-September monsoon season.

"Many farmers had to uproot plants after first cotton picking. There won't be a second or third picking like every year," Patel said.

produced 37 million bales in 2017/18 and was expected to harvest 36.1 million bales this year, according to the

"Despite higher prices, supplies are not picking up. The crop is lower than estimated," Patel said.

New season cotton supplies usually start from October and peak in November and December. But spot supply in the past two months only reached around 7 million bales compared to 10 million bales a year ago, said Atul Ganatra, of the (CAI).

Pink bollworms also hit plantation in Maharashtra, he said.

Indian farmers have adopted genetically-modified seeds known as Bt cotton that are resistant to bollworms, but it hasn't stopped the infestations. Pink bollworms consume the fibre and seeds inside a cotton plant's boll, or fruit, and yields fall.

LIMITED SURPLUS

In June, traders were expecting India to export as much as 10 million bales amid strong demand from due to the trade dispute between and

But smaller crop size will limit surplus for overseas sales and lift local prices, said Arun Sekhsaria, of Cotton.

"We could export 5 to 6 million bales. Export demand is likely to pick up in coming months as Indian cotton is cheaper than other origins," Sekhsaria said.

Indian cotton is being offered around 84 to 85 cents per lb, cost and freight, to buyers in and Vietnam, versus around 90 cents for those from the United Sates and Brazil, dealers said.

In the current season, traders have contracted to export around 2.5 million bales and have shipped around 1 million bales, said Ganatra of CAI.

(Reporting by Jadhav; Editing by Manolo Serapio Jr.)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, December 06 2018. 16:03 IST
RECOMMENDED FOR YOU