Even as cotton acreage in India has witnessed a decline this kharif season due to erratic monsoon, the country would have about 15 million bales (each weighing 170 kg) of surplus cotton in cotton year 2012-13 (October-September). According to latest estimates by the Cotton Association of India (CAI), India's cotton production this year is expected to be close to 35 million bales, of which consumption is estimated to be around 26.5 million bales, leaving a sizeable surplus of about 15 million bales.
“Although the acreage under cotton has witnessed a three per cent decrease as compared to last year, the crop looks promising due to good rains received in Andhra Pradesh and Maharashtra in the latter part of the monsoon,” Dhiren Sheth, president of CAI, noted in his speech at the annual general meeting of the association today.
“Cotton production this year is expected to be not less than 35 million bales while cotton consumption is likely to be around 26.5 million bales, leaving a sizeable surplus of about 15 million bales,” he said.
Internationally too, cotton is likely to be in excess supply. According to recent data from the International Cotton Advisory Committee (ICAC), Washington, global cotton production and mill consumption are forecast at 25.9 million tonnes and 23.4 million tonnes respectively, for 2012-13, resulting in an oversupply of 2.4 million tonnes.
“After an unexpected jump in 2011-12, global cotton trade is expected to fall by 21 per cent to 7.7 million tonnes this season due to lower Chinese demand. However, imports by the rest of the world could rebound by 18 per cent,” Sheth added.
World cotton prices have been on the decline since April 2012, when international cotton prices quoted at 100.1 cents per pound. According to the monthly average of Cotlook A Index, cotton prices quoted at 80.87 cents per pound for the month of November, 2012.
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However, in the domestic market, cotton prices remained range-bound. In April 2012, spot prices quoted at around Rs 34,600 per candy (each weighing 356 kg), up from Rs 34,100 per candy in November, 2012.
Providing an wrap-up of the cotton sector in India, Sheth said cotton acreage in India has increased substantially to 12.178 million hectares in 2011-12 from 8.73 million hectares in 2001-02.
“At a time when performance of the agriculture sector as a whole was not so impressive, cotton has been one of the major success stories of the country. Cotton production in the country was 15.8 million bales in 2001-02 but it has increased to more than double that figure in the last 10 years. Productivity level has also seen a marked improvement from 308 kg per hectare in 2001-02 to close to 500 kg per hectare in 2011-12,” said Sheth.
Meanwhile, estimates by the Cotton Advisory Board (CAB) showed that production for cotton year 2012-13 (October-September) will be around 33.4 million bales. The area under cotton crop is estimated at 116.14 for 2012-13.
At the 90th annual general meeting of the association, Sheth said India’s total export earnings from cotton, had soared to Rs 14,000 crore in the year 2011-12, up from Rs 44 crore in 2001-02.
“These remarkable achievements have enabled the country to achieve the distinction of having the largest acreage under cotton and becoming the second largest producer, consumer and exporter of cotton in the world,” he said in his speech.