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The Cotton Association of India (CAI) has reduced its production estimate of cotton for the 2014-15 season to 38.27 million bales (of 170 kg each) from the previous estimate of 39 million bales released in March this year.
"The projected balance sheet drawn by the CAI for 2014-15 estimates total cotton supply at 45.36 million bales while domestic consumption is estimated at 31 million bales, thus leaving an available surplus of 14.36 million bales," said Dhiren Sheth, president, CAI. According to the Association, by the end of May, domestic mills consumption has reached 27.4 million bales against 26.66 million bales in the same period last year. Talking about monsoons, Sheth said: "Prediction of a below-normal rainfall is a cause of concern but not a cause of panic."
Meanwhile, CAI urged Cotton Corporation of India (CCI) to push sales internationally. " CCI should liquidate its stock faster. If the CCI continues to liquidate its stock at the current pace, it would be stuck with a stock of about three million bales at the end of the season."
This augurs badly for the new season as it will trigger a massive support price operation in the new season also. This will result in a big hit to the cotton farmer. Until now, the CCI has not sold a single bale in the international market. In order to liquidate its stock, the CCI should sell at least some cotton in the international market.
