The Cotton Advisory Board (CAB) on Wednesday revised crop estimate lower by seven per cent to 330 lakh bales (lb) against 355 lb achieved last year. CAB had estimated a production of 334 lb in its meeting held in October.
The area under cotton crop is expected to increase marginally to 117.73 lakh hectares (lh) against earlier estimation of 116.14 lh, with a lower area reported in Punjab and Karnataka.
The CAB has introduced a two-tier meeting for arriving at crop estimate. It involves a consultative meet with the industry members for collecting the input. Then an 18-member team of Government officials will meet separately to arrive at the estimates.
Anil B. Joshi, Textile Commissioner, said though a small variation in production estimates is normal, there are reports of bollworm infesting Bt cotton crop across the country, but largely in few regions of Maharashtra and Rajasthan.
Mill consumption is expected to increase to 234 lb (223 lb) on the back of good demand. Cotton arrivals have touched 139 lb as of Tuesday against 148 lb logged in the same period last year.
CAB has revised the opening stock for this year to 40 lb due to ‘competitive inaccuracy’ that needed to be corrected, he said. The last year closing stock, which should have ideally been reflected as opening stock for this year, was 29 lb.
Imports are seen higher this year at 20 lb against 12 lb shipped last year. Besides long staple and branded variety, availability of cotton at lower prices in the international market – especially in Pakistan will drive imports this year, he said.
CHINA BUYS YARN
The strong demand for yarn from China has been driving cotton demand and holding domestic prices steady. Demand for yarn is expected to touch 900-1,000 million kg (mkg) against 700 mkg shipped last year, said Joshi.
With expectation of higher demand for yarn, cotton exports may plunge to 80 lb (130 lb). CAB had estimated an export of 70 lb in its last meeting. Till December, registration for exports has touched 35 lb, of which 24 lb have already been despatched.
Of the total cotton exports, China accounted for 30 per cent, while Bangladesh’s share slipped by 6-8 per cent. This may be due to slowdown of demand in Bangladesh or they may be buying from other countries, he said.
China has been buying cotton despite holding an inventory of 10 million tonnes, enough to meet its entire demand for a year. The millers in China may be offloading their old inventory and buying fresh stock in the market, he said.
The global cotton supply is estimated at 40.01 million tonnes (mt) with a production of 25.97 mt (of 5.88 lakh bales) and opening stock of 14.04 mt. Consumption and exports are estimated at 23.53 mt and 7.98 mt, leaving a closing stock of 16.48 mt.