The Committee on Cotton Production and Consumption (CCPC), a government-constituted body comprising all stakeholders of the textile industry including farmers, has estimated cotton production for the current season till September at 337.23 lakh bales (170 kg each). The projection of the CCPC headed by the Central Textiles Commissioner on Thursday is against the estimated 341.91 lakh bales in November last year.
“There are various estimates of cotton crop rounding, but the CCPC estimate reflects the reality,” said a business source in a multinational company (MNC). As per CCPC estimates, the area under cotton this season is over 130.49 lakh hectare (LH) and the yield is estimated at 439.34 kg/ha. In the last season, cotton was cultivated in 119.10 lakh hectares and the productivity was 445 kg/ha.
Production in the northern region including Punjab, Haryana and Ganganagar areas of Rajasthan is estimated at 47.25 lakh bales (44.44 lakh bales a year ago). The production in the central region of Maharashtra, Gujarat and Madhya Pradesh is estimated at 184.16 lakh bales (160.20 lakh bales). The southern region formed by Telangana, Tamil Nadu, Andhra Pradesh and Karnataka is estimated to produce 98.30 lakh bales (100.85 lakh bales). 7.52 lakh bales (6.54 lakh bales) are expected to arrive from other parts of the country.
The problem with crop estimates this year is that people have gone by the earlier trend of market arrivals. We are passing through an unusual year when farmers have withheld their produce. He had never done this before in Karnataka and Maharashtra.
According to the Southern India Mills Association (SIMA), farmers and traders have withheld cotton this year due to a shortage in the availability of the raw material. This year, farmers have not been able to get more than Rs 9,000 per quintal, though they are above the minimum support price of Rs 6,080. Currently, the model price (the rate at which most of the trades take place) is hovering around ₹8,000.
According to agriculture ministry data, cotton arrivals in the country during March 1 to April 21 stood at 33.72 lakh bales, as against 22.45 lakh bales in the same period a year ago. “If the cotton production forecasting agencies were allowed to control market conditions, we would not have had such confusion,” said an expert in the textile industry in the southern region. CAI's forecast of a 14-year low crop has pushed cotton futures on MCX up to ₹64,020 per candy (356 kg) for delivery in June. The spot price of Shankar-6 cotton, a benchmark for exports, is currently quoted at ₹63,000 per candy. The price has gained more than ₹2,500 this week.
In the global market, cotton for May delivery was trading at 79.05 cents per pound (Rs 51,350 per candy) on the Intercontinental Exchange in New York. This has resulted in Indian cotton enjoying a premium and in turn hurting its export prospects. The US Department of Agriculture has forecast India's cotton production to fall to a 19-year low this year.
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