Agri Business

CAI trims cotton output estimates to 330 lakh bales

Our Bureau Ahmedabad | Updated on May 25, 2020

Farmers avoid last picking of cotton crop to take up rabi cultivation

India’s cotton production has been revised downward to 330 lakh bales (each of 170 kg) for 2019-20, which is 24.5 lakh bales (lb) lower from the earlier estimate and about 18 lb higher than the output estimate of 2018-19.

Releasing its cotton crop estimate for the season October 2019 to September 2020, Cotton Association of India (CAI) said the farmers preferred rabi crop sowing over continuing with the existing cotton crop and uprooted cotton plants, which were due for the fourth or last picking around January.

Rabi advantage

“Due to better availability of water for the rabi crops, many farmers preferred rabi cultivation and uprooted their cotton plants without waiting for the last picking. This will result in reduced output of cotton,” said Atul Ganatra, President, CAI.

Amid lower realisations from the fibre crop and pest (pink bollworm) menace in some pockets, farmers in Gujarat turned to rabi crops, which included spices, pulses and wheat.

The CAI also noted that due to the lockdown, ginning factories remained shut from March 23 to April 30 and thereafter, they were operating at 20 per cent capacity. “This has resulted in huge production loss,” it said.

Labour shortage

It also stated that labour shortage has hit the ginning and pressing activity big time. “Even now, there is labour shortage in ginning factories due to the lockdown. The monsoon is expected to begin on June 10 or 15. Due to this, lots of kapas (raw cotton) will be carried forward in the hands of farmers for the next season,” CAI said.

State-wise impact

The maximum reduction in cotton production will be seen in Gujarat at about 11 lb, followed by Maharashtra with a decline of 8.5 lb, Karnataka with 2 lb, Andhra Pradesh and Haryana with one lb each and Punjab and Upper Rajasthan with a decline to the tune of 50,000 bales each.

“Gujarat gets 15-20 lakh bales of cotton from States, but because of direct procurement by the Cotton Corporation of India at MSP rates in these States, cotton arrivals from there to Gujarat will be impacted,” CAI said in a statement.

Ganatra said domestic cotton prices have been lower than the international prices. This has improved India’s prospects for cotton exports. CAI has increased cotton export projections by 5 lb to 47 lb from the earlier estimate of 42 lb on favourable currency situation and domestic cotton prices.

On May 22, COTLOOK A index was quoting equivalent to ₹40,073 per candy (each of 356 kg of ginned cotton), as against the domestic price range of ₹33,000-36,000 per candy.

Per trade estimates, cotton shipments of 32.5 lb have already been shipped, while another 4-5 lb are expected to happen by the month end and some more quantities will get exported by June taking the advantage of the favourable currency situation.

However, there is no clarity about how much crop is currently held with the farmers. Of the total estimated 330 lb of the fibre crop, CAI has estimated total arrivals during October 2019 to April 2020 at 285.09 lb.

The closing stock as on September 30, 2020 is estimated by Crop Committee of the CAI wil be 50 lb.

Published on May 25, 2020

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