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Suresh P. Iyengar

Mumbai, Sept. 10 Barring India, major cotton producing countries such as China, the US and Pakistan are set to report lesser output compared with last year, thereby maximising the scope for exports.

According to the International Cotton Advisory Committee (ICAC), the world cotton production is likely to fall by 6 per cent at 24.7 million tonnes (mt) in 2008-09 against 26.24 mt recorded last year.

China has decided to cut the area under cotton cultivation from 27 million mu (1.8 million hectares) to 20 million mu (1.33 million hectares) in order to free up more land for animal pasturage.

Xinjiang, which accounts for 40 per cent of China’s cotton output, will reduce the area devoted to cotton by 26 per cent over the next five years.

“Authorities have banned open grazing as overgrazing has destroyed much of the choice pasturage in China’s northern grasslands and western deserts. Moreover, cotton farmers had a difficult time last year as prices in China fell steeply due to a bumper production,” said an analyst.

China is forecast to produce 35.5 million bales this year against 35.8 million bales the previous year, according to the US Department of Agriculture.

In US, cotton output is expected to fall by 1.2 mt due to erratic weather conditions. Similarly, in Pakistan, one of the major competitors of India in the global market, production has been hit by unexpected rains.

The country is set to produce about 35 million bales on the back of ample rain in the cotton growing States such as Gujarat, Punjab, Haryana, Rajasthan and Maharashtra. A larger crop may create a cotton surplus in India of 1.02 mt.

“Though the area under cotton cultivation has come down marginally to 8.6 million hectares, the yield is expected improve due to use of hybrid variety seeds,” Mr Vijay Trivedi, Vice-President, Commodity and Trade News.

The hike in cotton MSP (minimum support price) for long staple to Rs 3,000 a quintal from Rs 2,030 a quintal last year and medium staple cotton prices to Rs 2,500 from Rs 1,800 a quintal is likely to benefit the entire cotton eco-system in the long run.

“Though the industry will be forced to buy cotton at a high price, there is a good export opportunity which will more than compensate price paid to farmers,” said Mr Trivedi.

More Stories on : Cotton | Exports & Imports

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