Cotton crop set to shrink

India's cotton production was forecast at 16.2 million bales (including 1.2 million bales of loose cotton) from 8.5 million hectares during marketing year (MY) 2004-05 from August to July, against 16.6 million bales from 8 million hectares in MY 2003-04.

Cotton planting in MY 2004-05 was tipped to increase in response to high cotton prices. Per hectare yield was unlikely to reach the record MY 2003-04 level.

Production of extra long staple (ELS) cotton was forecast to rise to 250,000 bales, the Global Agriculture Information Network said.

Cotton output rose 22 per cent in MY 2003-04 following perfect weather and increased usage of high yielding varieties. ELS production suffered from two consecutive droughts in Karnataka and Tamil Nadu.

The Government of India (GoI) had approved commercial planting of only four genetically engineered Bt. varieties in central and southern states. No Bt. varieties for northern states had been approved.

However, several unapproved Bt. varieties were illegally being planted in some states. Bt. cotton MY 2004-05 planting was projected at 700,000 hectares, including 300,000 hectares of approved varieties and 400,000 hectares of illegal varieties.

It stood at 290,000 hectares in MY 2003-04, with 90,000 hectares approved and 200,000 hectares of illegal use.

Resurgence in textile demand at home and abroad and expected lower cotton prices were expected to lift 2004-05 April-March cotton textile production by 3-4 per cent over 2003-04.

Cotton consumption in MY 2004-05, forecast at 17.1 million bales, was expected to benefit from low cotton prices and improved domestic and export demand. Only competition from man-made-fibers (MMF) could temper growth.

Cotton prices during MY 2004-05 were expected to be lower than the previous year's level due to large carryover stocks, higher production and expected weak world prices. Prices were firm in MY 2003-04 following strong international prices. Manmade fibre and filament yarn consumption ate into cotton's share.

Cotton imports in MY 2004-05 would decline to 1.2 million bales though ELS imports would rise to 270,000 bales, driven by improved demand for fine yarn, fabric and made-ups. Cotton exports could dip to 400,000 bales.

MY 2003-04 cotton imports could fall to 1.3 million bales from previous year's 1.6 million bales. US cotton would account for 35-40 per cent, other major suppliers being west Africa, Egypt, Greece, Sudan and Brazil.

ELS imports, mostly from Egypt, USA, and CIS countries, could fall because of strong international prices and stagnant demand. After a gap of 5 years, India was back in the export market in MY 2003-04 with 700,000 bales.

Major markets were China, Pakistan, Bangladesh, Indonesia, Philippines, Thailand, and Taiwan.