Agri Business

Cotton output for 2019-20 projected at 354.5 lakh bales

Our Bureau Ahmedabad | Updated on November 08, 2019

CAI releases its first estimates amid reports of crop damage in cotton pockets

Declaring its first cotton crop estimate for the latest season, the Cotton Association of India (CAI) on Friday said the country is likely to produce 354.5 lakh bales in 2019-20.

The output for the season beginning October 2019 is estimated to increase about 42.5 lakh bales to 354.5 lakh bales (each of 170 kg), against the 312 lakh bales reported in 2018-19, it said.

The increase is attributed to higher acreage under cotton than the previous season. Government data show the total cotton cultivation for the current kharif season stood at 127.67 lakh hectares, about 7 lakh hectares more than last year’s 121 lakh hectares.

“Moreover, the CAI estimates yields to be higher as the country has received a good rainfall this year,” said CAI President Atul Ganatra in a statement. “However, there are reports of damage to the crop in some pockets due to flooding. Keeping this in mind, the increase in crop is restricted to 13.62 per cent.” The cotton-growing districts of Gujarat — including Saurashtra, North Gujarat and Kutch — witnessed heavy flooding and unseasonal rains, which dampened the prospects for a good crop. The arrivals have already been delayed by about 20 days across the West, Central and South due to the extended monsoon.

In the new season, total cotton arrivals for October are estimated at 13.40 lakh bales. Raw cotton prices hovered in the range of ₹4,300-5,400 a quintal in the Gujarat markets. The prices have slipped below the minimum support price (MSP) of ₹5,255 set for Kharif 2019-20.

The yearly balance-sheet estimates total cotton supply for the season ending September 2020 at about 403 lakh bales.

The opening stock at the beginning of the season is at 23.5 lakh bales, while imports are estimated at 25 lakh bales.

Domestic consumption

Domestic consumption is estimated at 315 lakh bales, while exports are estimated at 42 lakh bales. The carryover stock estimated at the end of the season is 46 lakh bales.

The CAI has clarified that there is still room for changes in the crop numbers. They are likely to be reset once the climate stabilises and the extent of damage due to unseasonal rains and flooding is reported.

In its estimate on India’ cotton crop, the US Department of Agriculture (USDA) had last month projected the crop size at 305 lakh US bales (each of 217.7 kg), or about 390 lakh India bales (each of 170 kg).

“Production in India — the leading cotton producer — is forecast at 30.5 million bales, 15 per cent above 2018-19 and the second highest on record, as both area and yield in 2019-20 are expected higher,” the USDA had stated in its ‘International Outlook on Cotton Crop’ report released on October 15.

Meanwhile, the current price levels indicate a downward trend following a projected higher crop size. Ginned cotton of 29 mm variety quoted around ₹41,900 per candy (of 356 kg each) while ICE Futures for December was stable at 60.83 cents for a pound.

Published on November 08, 2019

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