India’s cotton output is likely to rise nine per cent this year, to set a new record, on an increase in sowing following the late revival in monsoon rainfall in major producing zones. Total production is forecast at 35.5 million bales (170 kg each) for the cotton year 2011-12 (October-September), as compared to 32.5 million bales in the comparative period last year.
A B Joshi, the Union textile commissioner, forecast overall sowing to rise nearly 10 per cent to a record 12.1 million hectares (ha) this year, due to farmers’ speedy migration to cotton from less remunerative crops such as oilseeds and pulses. During the last season, the total area under cotton was 11.1 mha.
Since July 25, the date when the Cotton Advisory Board had its earlier meeting (it met on Tuesday), sowing has recovered significantly due to even distribution of the monsoon. Farmers were also encouraged by the record high price last year to sow more, amid speculation that the remuneratiion would remain high this year as well.
According to M B Lal, a veteran trader, the ;price would have an upward bias due to the higher intensity of crop damage in the US, the world’s largest producer, following the recent onslaught of Hurricane Irene. The crop in other leading producing countries, including China and Pakistan, is also not very encouraging. Consequently, the price is likely to range at $0.9-1.1 a pound through this year, Lal said.
Analysts have forecast cotton futures in New York to rise as much as 15 per cent by the end of December, to $1.20 a pound. Cotton futures for December delivery rose 0.6 per cent on Monday to $1.0492 on ICE Futures.
Since the government has allowed cotton exports under Open General Licence, Indian traders would be able to benefit from the higher global prices. This is an opportunity all traders would like to exploit, Lal added.
Meanwhile, the textile ministry has extended its export forecast for the current cotton year to seven million bales from the earlier restricted quota of 6.5 million bales. Consequently, the total closing stocks’ estimate is 4.75 million bales for 2010-11, as against the previous forecast of 5.25 million bales. Total export is likely to remain unchanged at seven million bales during the ensuing season of 2011-12. Joshi says they have raised the domestic mill consumption estimate to 26.4 million bales for the next season, as compared to 23.6 million bales during the current season.
Consequently, availability of cotton for 2011-12 is forecast at 40.75 million bales, which includes 0.5 million bales of import. Against that, total consumption is estimated at 35.1 million bales, resulting in an opening stock of 5.65 million bales for 2012-13.
