At a time when cotton output estimates in India have been lowered to 34.5 million bales (170 kg each), the production of short-staple variety of cotton in most parts of the country is likely to fall on unfavourable weather conditions during sowing season.
India, the second largest cotton grower after China, may have to depend on imports of short-staple variety of cotton this year as domestic production in key growing areas including Gujarat, Maharashtra and Andhra Pradesh may witness a steep fall. Short-staple cotton comes with shorter length of less than 1 inch.
"Gujarat, is the largest producer of cotton, but this year the output of short-staple variety may fall by around 50% to 400,000 to 500,000 bales. The loss in output is mainly due to extended monsoon during sowing season and climatic fluctuations during early winter days," said N M Sharma, managing director, Gujarat State Cooperative Cotton Federation (Gujcot).
HIgher Bt cotton crop is also responsible for lower short staple cotton output as Bt crop is of similar length and midium staple.
Cotton Advisory Board (CAB) has put India's cotton production estimate at 34.5 million bales for October-September 2011-2012 season. Gujarat's cotton production is estimated at 11.4 million bales, of which Bt cotton production is pegged at 10.8 million bales, while the rest is would be short-staple variety of V-797 cotton (better known as Kalyaan in Gujarat). In Maharashtra, the short-staple cotton variety is known as Y-1, while in South India, the variety is known as H-420 and Jaidhar, which has fibre length less than an inch.
Due to its coarse nature of fiber, short-staple cotton is mainly used for thick textile materials including denim.
"The share of short-staple cotton to the total cotton production is coming down in India. Since there are increased denim capacities in the country, there is a huge demand for short-staple cotton. This year, the production scenario looks grim across the country and there could be increased imports of such variety of cotton to meet millers' requirements," said D K Nair, secretary, Confederation of Indian Textile Industry (CITI).
According to industry estimates, country's cotton imports in the current season would be around 300,000 to 400,000 bales. "Already around 300,000 bales of short-staple cotton has been contracted for imports from Pakistan. We may have to import more if domestic production falls," said a leading cotton trader and exporter from Ahmedabad.
Increasing dependence on imported short-staple variety of cotton is feared to put additional cost pressure on denim making companies including Arvind Ltd, Aarvee Denims & Exports Ltd, KG Denim and Alok Industries Ltd.
"Imports will prove costlier for denim makers as over an above cotton prices, there will be additional burden of import costs like freight and insurance cost for the companies," informed Nair adding that denim makers are increasingly depend on imported short-staple variety of cotton.
Currently, cotton V-797 is priced in the range of Rs 26,000 to Rs 27,000 per candy (each weighing 356 kg) in Gujarat markets, while Shankar - 6 variety or Bt variety hovers in the range of Rs 36,500 to Rs 38,000 per candy in the spot market.
Experts maintained that an absence of Bt seed for extra long as well as short staple variety of cotton is causing such situation. "This year, cotton imports may stand at 600,000 bales, of which around 400,000 bales would be extra long variety of cotton, while the rest would be short-staple. There is an absence of Bt seed for short staple, however efforts are being made by private as well as government agencies to develop Bt seed for short staple variety," said Nair.