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Even as a large part of the cotton growing region in Gujarat faces pink bollworm infestation, casting a shadow on the crop outlook, the improved prospects in Maharashtra and Telangana, will help India retain its overall cotton output for the 2019-20 season at 354.5 lakh bales (each of 170 kg).
The apex cotton trade body, the Cotton Association of India (CAI), has retained its crop estimate in its November estimates.
"The crop estimate for Gujarat state, the top domestic producer, has been reduced by 4 lakh bales on account of crop damage due to heavy rains and pink bollworm infestation. About 10 per cent of the cotton farmers in the state have uprooted their cotton plants and wish to migrate to other competing crops," said Atul Ganatra, President, CAI, on Wednesday.
According to CAI estimates, Gujarat's cotton crop, earlier estimated at 100 lakh bales, has now been cut to 96 lakh bales. There is also a dip in the production estimated from North India, including Rajasthan and Punjab.
On the other hand, the output in Maharashtra and Telangana has been raised higher by 3 lakh bales each, to 83 lakh bales and 51 lakh bales, respectively.
The Crop Committee of the Cotton Association of India met on December 9 to discuss the crop outlook and market situation.
Cotton arrivals during October and November are estimated at 56.15 lakh bales. Import shipments from October 1, 2019, to November 30, 2019, which have reached Indian ports, are estimated at 5 lakh bales, while the balance 20 lakh bales is estimated to arrive in the ports between December 1, 2019, and September 30, 2020 (total imports estimated during the entire season is 25 lakh bales).
On the exports front, cotton shipments during October 1, 2019, to November 30, 2019, stood at 5 lakh bales. The total exports for the year are projected at 42 lakh bales.
However, the global consumption outlook remains bleak, which will keep global cotton prices under check, leaving little room for price movement in Indian cotton. At its 78th Plenary Meeting held in Brisbane, Australia, during December 2-5 2019, the International Cotton Advisory Committee (ICAC) noted that global economic growth is slowing, which will cap growth in cotton consumption during 2019-20.
"Trade barriers and trade disputes have weakened import and export growth and have positioned the global economy in a synchronised economic slowdown that has reduced the pace of manufacturing and investment. Trade disputes create uncertainty for businesses and lower investment activity and trade deals. Quick resolutions are, therefore, needed to return confidence to the market," ICAC noted.
Cotton prices in the domestic markets hovered around Rs 41,900 per candy (of 356 kg ginned cotton of 29 mm variety). Raw cotton prices hovered around Rs 4,300-Rs 5,150 per quintal in the Gujarat markets, against the minimum support price (MSP) of Rs 5,550 announced by the Centre.
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