MUMBAI (Commoditiescontrol) - India is likely to produce around 370 lakh bales (170kgs each) of cotton in the marketing year (MY) 2015-16, as per U.S. Department of Agriculture’s (USDA) latest attache report.
Lower production estimate is attributed to deficient rains in the latter half of the monsoon season. Poor monsoon in the current season led to slow boll development and maturation. Additionally, sources report instances of pest pressure (pink bollworm in areas of Gujarat and white fly in Punjab).
As a result, yield in 2015-16 is estimated at 524 kg per hectare, marginally lower than the five year average of 527 kg per hectare.
During June 1- August 26, the country witnessed rainfall deficit of 12 percent, according to the latest weather report released by the central government. Selected areas in northern Karnataka have been declared as drought affected and cotton acreage in these regions has reduced drastically as farmers shifted planting area to pulses, coarse grains, and cereals due to low price realization from cotton crop last season.
As of August 27, the overall water stored in reservoirs in Southern India was 34 percent of the total capacity compared to 61 percent during the corresponding period last year.
Domestic consumption is seen at 250 lakh bales as mill use is expected to remain weak as fabric offtake is low due to poor export demand. Mills are currently operating below capacity and are expected to maintain current levels next season, USDA said.
USDA forecast cotton exports from India in 2015-16 at 47 lakh bales due to sluggish demand from the world’s leading consumer, China. Indian cotton exports over the new crop year. Although the Indian currency has weakened two percent since June, overall exports have remained weak as there is hardly any uptake of cotton.
However, sources indicate that the currency change has provided exporters an opportunity to ship cotton, albeit in a small quantum of shipments, to new markets such as Turkey, Thailand and Indonesia in July and August. Bangladesh remains the top export destination for Indian cotton.
Cotton imports in 2015-16 by India is estimated at 8 lakh bales as mills are expected to limit imports of cotton to extra-long staple varieties as availability of a newer crop is expected to provide coverage on the supply side. Cotton ending stocks are pegged at 128 lakh bales for 2015-16 season.
(By Commoditiescontrol Bureau; +91-22-40015532)
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