Cotton carryover seen at 5-year high of 55.5 lakh bales

Amid Covid-19 disruptions, India will witness record cotton carryover stock in the past five years at 55.50 lakh bales (each of 170 kg) for the crop year 2019-20 (October-September).

Trade body Cotton Association of India (CAI) has estimated the carryover stock of 55.50 lakh bales (lb) at the end of the season on September 30, 2020, which indicates the next season will start with a five-year high carryover stock.

Per the CAI data, in 2014-15 the carryover stocks of the fibre were reported at a high of 67.23 lb.

A higher carryover stock will lead to increased stock position, thereby influencing the prices in the new season, which begins from October 1. The kharif sowing for cotton is already 22 per cent higher so far at 118 lakh hectares as against 96.35 lakh hectares last year. An increased acreage under the fibre crop will result in a higher output thereby adding to the already record high opening stocks.

Balance sheet

The CAI has estimated domestic consumption for the entire crop year till September 30, 2020 at 280 lb. The consumption for 2019-20 was earlier estimated at 331 lb prior to the Covid-19 outbreak. “But the same was later reduced by 51 lakh bales due to the lower consumption of cotton on account of disruptions caused by the Covid-19 pandemic in the country on account of lockdown and the shortage of labour,” Atul Ganatra, President, CAI said.

Exports for the season are estimated at 47 lb against 42 lb considering favourable conditions.

The CAI has also increased its cotton crop estimate for 2019-20 to 335.50 lb as against an earlier estimate of 330 lb. The crop size was estimated at 312 lb in 2018-19. The increase is seen in Haryana, Rajasthan (additional output of 50,000 bales for each State), while Maharashtra is estimated to have 3.5 lakh bales more and Madhya Pradesh to have 50,000 more output. Andhra Pradesh and Karnataka, too, are seen adding 25,000 bales each.

Till June 2020, a total of 327.02 lakh bales have arrived to the markets.