'Prices may rise 5% this year'

EXPERT SPEAKS: J N Singh

on his outlook for the cotton crop. Excerpts:

What's your estimate of the cotton output in this kharif season?

I personally expect the production to touch 31.5-32 million bales this year.

Are cotton farmers getting the prices that they had anticipated?

Farmers, in general, are getting a good price for cotton. This has resulted in an increase in the acreage all over the country.

Except for some variation, depending upon the rate of arrival of raw cotton in mandis, prices have been consistently above the MSP, which in itself was higher than the previous year's.

Where do you see cotton prices headed?

One can reasonably expect a 5 per cent rise in prices over the next year. The domestic demand will not continue to grow at the 10-12 per cent level as in the last year.

However, this lower growth will be more than compensated by an increase in the international consumption. Besides, a likely 25 per cent decline in the US cotton output in 2007 will lift Indian cotton prices.

What's the picture on the consumption front?

Exports may increase to over 65 lakh bales in 2007-08. The domestic consumption has been growing at 8-10 per cent in the last 3-4 years. This year, however, the domestic market may slow down a little.

What is the contribution of Bt cotton and organic cotton to the total output?

The increase in production has to a large extent been due to the adoption of Bt cotton by Indian farmers. Now around 60 per cent of the area is under Bt cotton.

Looking at the high prices commanded by organic cotton internationally, the area under organic cotton is expected to grow substantially over the years.