Commodities

Cotton closing stock hits a 5-year low of 15 lakh bales

Our Bureau Ahmedabad | Updated on September 11, 2019 Published on September 11, 2019

But 2019-20 season appears promising amidst signs of a bigger crop size

The closing stock of cotton at the end of the 2018-19 season on September 30 will be the lowest in at least five years, at 15 lakh bales (of 170 kg each). The Cotton Association of India (CAI) has cited the small crop size and very tight cotton balance sheet for the smaller closing stock.

However, cotton stakeholders said that the overall crop scenario for the 2019-20 season appears promising and points to a higher crop. “There will be no impact on the availability of cotton even if the closing stock appears low. This is because in North India and in other cotton growing regions, the cotton crop looks good and promising,” said Pawan Kumar Nagor, Treasurer, Indian Cotton Association.

He also stated that arrivals of the new crop in Punjab and Haryana have started. “The crop condition is very good and we believe this year the harvest will be better than last year.”

While there is no official estimate on the crop size for 2019-20, the overall sowing and the monsoon progress in the cotton growing region has brightened the prospects of the cotton crop.

At its meeting in Mumbai, the Cotton Association of India (CAI) retained its cotton crop estimate for the year 2018-19 at 312 lakh bales, sharply down from the 365 lakh bales reported in the previous year.

The carry-over stock for the next season is estimated at 15 lakh bales. It stood at 67 lakh bales in 2014-15, 44 lakh bales in 2015-16, 30 lakh bales in 2016-17 and about 28 lakh bales last year.

Imports seen at 29 lakh bales

Total cotton supply for the period October 2018 to August 2019 is projected at 363 lakh bales, which includes the opening stock of 33 lakh bales, market arrival of 307 lakh bales upto August 31, and imports of about 23 lakh bales upto August 31. Total supply by the end of the season in September 2019 will be about 374 lakh bales.

Atul Ganatra, President, CAI, commented that the imports at the end of the season on September 30, as estimated by the CAI, will be 29 lakh bales, about 2 lakh bales lower than the earlier estimate but 14 lakh bales higher than the previous year’s import estimate of 15 lakh bales.

The Cotton Association of India has estimated consumption during the months of October 2018 to August 2019 be at 288.75 lakh bales, while export shipments of cotton (excluding cotton waste) up to August 31, 2019 are estimated to total 43 lakh bales.

The CAI has pegged domestic cotton consumption in 2018-19 at 315 lakh bales, while exports (excluding cotton waste) are estimated at 44 lakh bales, down 25 lakh bales from the 69 lakh bales of exports estimated last year.

CAI clarified that export of cotton waste was inadvertently included in its export estimate last month. “This mistake has now been rectified and the export estimate has now been lowered by 2 lakh bales to arrive at the export estimate of only cotton (excluding cotton waste).”

Published on September 11, 2019
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