India’s cottonexports are estimated to have dropped to a record low of 15.50 lakh bales (170 kg each) in the 2022-23 season that ended in September, the Cotton Association of India (CAI), the trade’s apex body, said on Monday.
Cotton exports were projected to be 30 lakh bales initially by the Committee on Cotton Production and Consumption (CCPC) but with the global economy, particularly China, being affected, the shipments got hit.
This is the lowest since the 2004-05 season when India exported 23.05 lakh bales, data from the US Department of Agriculture show.
Import too slip
CAI said the estimate is based on the outcome of its crop committee meeting on Saturday (October 7) and is equivalent to 16.27 lakh running bales of 162 kg each. During 2021-22, 43 lakh bales were estimated to have been exported by CAI as well as CCPC.
Imports, on the other hand, were also lower at 12.50 lakh bales (equivalent to 13.12 lakh running bales) against 14 lakh bales the previous season.
In view of the lower exports, the carryover stocks for the current season have been estimated at 28.90 lakh bales (equivalent to 30.33 lakh running bales of 162 kg each) against earlier estimates of 23.18 lakh bales. The carryover stocks last season were 24 lakh bales.
Difference in estimates
CAI at its crop committee meeting raised the cotton pressing estimate (crop projection) to 318.90 lakh bales against the previous estimate of 311.18 lakh bales. This is against the 2021-22 season production estimate of 299.16 lakh bales.
However, the CCPC has pegged the cotton crop estimated for 2021-22 at 311.17 lakh bales and for 2022-23 season at 343.47 lakh bales. The Ministry of Agriculture has also pegged the crop for the 2022-23 season at 343.47 lakh bales as per the third advance estimate.
Trade sources said there is a difference between the estimates of CAI and others, particularly the government. While CAI goes by the arrivals in the markets, the Centre goes by reports from field assessments made by State governments.
Holding back produce
Trade sources said there is a big difference between the estimates made by CAI and the government for the 2022-23 seasons as farmers held back their produce expecting better prices.
As farmers held back their produce and even stored them on their terrace and in their backyards, the trade, at one point in time, feared the crop was lower than expected.
However, growers brought more cotton between March 1 and September 30 as they feared prices could plunge. Arrivals during March 1-September 30 this year were a record 85.70 lakh bales against 36.14 lakh bales last year and 18.32 in 2021. During the Covid pandemic, the arrivals were about 60 lakh bales.
Current season estimate
Growers held back cotton last season as they received record high prices in the 2021-22 season with prices for a candy topping ₹1 lakh per candy (356 kg) in May 2021.
However, last season prices hovered above ₹60,000 a candy for most part of the season. High prices in the domestic market were also a deterrent to exports. Currently, Shankar-6 cotton, the benchmark for exports is quoted at ₹59,200.
Though CAI has not estimated the crop for the current season yet, Coimbatore-based Indian Cotton Federation has pegged the output at 330-340 lakh bales.
According to the Ministry of Agriculture, the area under cotton is lower this season at 123.87 lakh hectares compared with 127.73 lakh hectares a year ago.
The crop estimate for the current season is due anytime now with the Ministry compiling the data. Usually, the first advance estimate is released at the end of the pre-rabi conference, which ended two weeks ago.