The Cotton Association of India (CAI) expects cotton output to fall five per cent this year to 354 lakh bales (lb) of 170 kg against 373 lb last year

The total supply including imports of 10 lb and opening stock of 53 lb works out to 417 lb, said a CAI press release issued on Monday.

With the domestic consumption of 266 lb (excluding exports), the country will have a surplus of 151 lb to tap the export market, it said.

Despite weak global demand, the country exported 127 lb last year.

The cotton crop looks promising this year despite three per cent reduction in acreage.

This was largely due to late revival of monsoon in Andhra Pradesh and Maharashtra, said the release.

CAB ESTIMATE

Contrary to CAI estimates, the Cotton Advisory Board (CAB) meeting held last month estimated the output much lower at 334 lb.

The estimate was lower by five per cent compared to 353 lb registered last year.

CAB expects export to fall 45 per cent to 70 lb (128 lb) due to the global economic slowdown, especially in China which accounts for nearly 65 per cent of the total shipments made from India.

The high global carryover stock of 139 lb may also put pressure on Indian exports.

EASED EXPORTS

Though the Government is fully geared to meet the challenge of buying cotton at minimum support price, the burden can be drastically reduced if exports are facilitated through friendly policies, said CAI.

MSP HIKE

Anticipating a sharp fall in prices, the government last week increased the MSP for cotton.

The move will stabilise cotton prices which have already witnessed a decline.

The MSP of medium staple cotton was hiked to Rs 3,600 a quintal from Rs 2,800 and that of long staple cotton was marked up to Rs 3,900 a quintal from Rs 3,300.

suresh.iyengar@thehindu.co.in

(This article was published on November 12, 2012)
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