Cotton output to hit new peak China’s position as world’s No 1 producer is now under serious threat. IF agro-climatic conditions continue to be favourable, Indian cotton production is expected to reach above 400 lakh or 40 million bales (nearly 403 lakh bales) in the 2014-15 season and the overall acreage may jump by 12-14 per cent against last season, as per the latest cotton sowing progress estimate of seed suppliers cited by the Indian Cotton Federation (ICF). As per the latest data available from the government departments and industry sources, total cotton sowing in the country stood at 122.5 lakh hectares this year (2014-15) compared with about 115 lakh hectares last year (2013-14). If these figures are attained, India would certainly pose a serious threat to China’s numero uno position in global cotton production. Interestingly, China grows about 400 lakh bales of cotton. Analysts attribute this record surge in India’s cotton sowing to genetically modified or BT cotton. There has actually been a sharp increase in cotton acreage in Gujarat, Maharashtra, Karnataka and Andhra Pradesh. Cotton consumption in the country has also increased, which in turn has attracted more farmers to choose the fibre crop over others. Consider this. Cotton sowing in Gujarat alone has been over 30 lakh hectares this kharif season, up 10.5 per cent from the three-year average of 27.17 lakh hectares. Gujarat, incidentally, is the largest producer of cotton in the country. Eventually, Gujarat alone is expected to contribute nearly 144 lakh bales to the overall cotton basket of 403 lakh bales. As per the union agriculture ministry, farmers across the country seem to have shifted to cotton crop this kharif season because of stable prices and better yield last year. On the pricing front both domestic and international cotton prices have come under pressure. The international cotton advisory committee (ICAC), in its latest report, said that in 2014-15, the global cotton industry may witness its fifth consecutive surplus season. World production is forecast to decline by 4 lakh tonnes to 26.05 million tonnes while consumption could grow by 4 per cent to 24.4 million tonnes, resulting in a surplus of 1.65 million tonnes, ICAC said. Even within the country, cotton prices have been under pressure as domestic production next season is seen at a new high of over 400 lakh bales. Once domestic prices drop to the levels of Rs 36,000, Indian cotton could turn competitive in the global market, analysts feel. At present, minimum support price (MSP) on cotton (raw) is fixed at Rs 4,000 per quintal or Rs 36,000 per candy (one candy equals 356 kg). In the eventuality of excess production, the Cotton Corporation of India (CCI) would have to be prepared to intervene if prices fall below Rs 4,000 and would possibly have to purchase from farmers at the MSP. There are also experts who feel that even if there is surplus cotton, it will get exported to other countries like Bangladesh, Vietnam and Korea. The China situation may not impact cotton consumption in the long run. When it comes to the cost of cotton production, domestically it was around Rs 22,000 per hectare in rain-fed regions, Rs 28,000 per hectare in areas with canal-based irrigation and Rs 33,000 per hectare where farmers were using drip irrigation system, analysts pointed out. Now with global prices of cotton having dropped below domestic rates, India’s cotton imports this season, which ends this month, is expected to be at a 12-year high. The imports will mostly be from Australia and Africa.
Posted on: Mon, 08 Sep 2014 07:17:34 +0000
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