Cotton acreage may drop by 10% on falling yield, low price, says CAI

After recording the lowest ever production in the last 15 years at 29.41 million bales in the 2023-24 season, the next year might also not look particularly good for the cotton crop with overall sowing projected to drop by almost 10 per cent due to falling yields and low price realisation, an assessment done by the Cotton Association of India (CAI) showed.

Cotton marketing season runs from October to September, and the crop is largely cultivated during the kharif season after the advent of monsoons.

In the 2023 kharif season, as per government data, cotton crop was sown in around 12.38 million hectares, which was over 3 per cent less than the previous year.

“Cotton sowing has already dropped by an average of 18 per cent this year (2023-24) and I fear that if the sowing reduces, our cotton production may go down further,” said Atul Ganatra, the outgoing president of CAI at the Annual General Meeting of the association.

Ganatra was later re-elected as the President of CAI for another term.

CAI’s latest crop committee report shows that in the 2023-24 season, cotton production in India is expected to be eight per cent less than in 2022-23 at 29.4 million bales (1 bale=170 kg), which is the lowest in 15 years.

Ganatra said the biggest challenge the Indian cotton industry faces today is how to increase domestic production.

He said India has around 38 per cent of the world’s cotton acreage, which is around 12.5 million hectares out of the 33 million hectares globally.

But its per hectare yield is just around 396 lint (which is around 2.22 bales), while the world’s average yield is almost 675 kg lint per hectare (almost 41 per cent less).

“The main reason for this reduction in cotton yield is that our BT seed technology is very old. We now need new seeds. Climate change and the El Niño effect are also hurting India’s cotton crop in a big way, as 73 per cent of the area where cotton is grown is not irrigated. Also, attacks from pink bollworms are reducing yields,” Ganatra said.

In 2013-14, India’s per hectare cotton yields touched a high of 572 kgs, but since then, the yields have come down by almost 30 per cent as the technology has not been upgraded.

As per CAI’s assessment, if the Indian textile industry runs at full capacity, it would require around 41.4 million bales of cotton per year, while domestic production has dropped to around 29.4 million bales.

This is hurting the mills, and they are not able to run at 100 per cent capacity throughout the year.

Furthermore, due to the 11 per cent duty on cotton imports in India, mills are unable to import cotton to run their operations at full capacity,” the CAI chief said.

He said due to the favourable policy environment and subsidy given by various state governments, many spinning mills are increasing their capacity by 1.5-2.0 million spindles every year, and if the trend continues, India’s annual cotton consumption will jump from 41.4 million bales to 45 million bales.

“And if we fail to increase cotton production or fail to remove the duty, it will bring disaster,” Ganatra said at the AGM.

He also said that due to unfavourable rain in 2023, cotton yields have gone down by about 15-20 per cent, due to which farmers have suffered a double loss. Firstly, yields are less, and secondly, prevailing rates are below the Minimum Support Price (MSP),” he said.