While cotton acreage in the upcoming kharif season is likely to be higher than last year, sellers said the Bt cottonseed market is short on branded hybrid supplies, mainly in the central and south regions, because of excess rains last year. Due to which seed production was affected.
Unseasonal rains in April and May this year have triggered early sowing of cotton in the major producing states of Gujarat and Maharashtra, while sowing is nearing completion in the northern states of Punjab, Haryana and Rajasthan.
M Ramasamy, chairman, Rasi Seeds, said, “The movement of branded cotton hybrid seeds is fast and the market feels that there will be some tight supply situation in the central and southern regions.” As a result, all carry forward stock will be liquidated this year.
Ramasamy said the government in Maharashtra does not allow the sale of Bt cotton seeds before June 1. However, the sale has been happening for the past few days.
The area under cotton this season is higher by 130.49 lakh hectare (LH) and the yield is estimated at 439.34 kg/ha as against 445 kg/ha in the previous season.
Why has cotton prices come down in recent times?
minimum stock
The Bt hybrid cotton market in the country is estimated to be around 4-45 million packets of 450 grams and the industry usually has a carry-forward stock of 1-15 million packets.
"This year the carry-forward stock of last year's Bt hybrid was minimal and last year's seed production was affected by excess rains," Ramasamy said.
Despite the recent fall in cotton prices due to heavy arrivals in the market, seed traders are hopeful that the fiber crop will retain the interest of growers as other competing crops like maize and soybean show a bearish trend.
“There was good demand for maize last year around this time. Now that it is not there and it is expected that soya may also come down, cotton may be a preferred crop in the areas of Maharashtra bordering Madhya Pradesh.
Ram Kaundinya, director general of the Federation of Seed Industry of India (FSII), confirmed that the supply situation for Bt cotton seeds is tight.
“Cotton hybrids, especially popular products are in a tight spot due to increase in demand. Last year, production was affected due to rain and other reasons. Production has not happened as expected. He said Kaundinya estimates that the area under cotton may increase by about 8-10 per cent this year.
Cotton was sown in 130.49 lakh hectares in the Kharif 2022 season, which is higher than last year's 123.72 lakh hectares.
Satyendra Singh, CEO, Seed Business, Crystal Crop Protection Ltd, said the sentiment is good for cotton this year. "Last year there was a positive sentiment because of the price. This year it is not negative," he said.
no negative emotion
“The prices of competing crops have come down significantly. Cotton still has good returns compared to other crops. There is no negative sentiment, neither from business nor from farmers. Overall, the area may remain the same. Sowing has happened earlier in Gujarat as compared to last year, while in some parts of Maharashtra people have started sowing before June, he said. “There is a shortage of branded seeds. In particular, deficiency can be seen in specific hybrids," Singh said, adding that it was difficult to assess the deficiency.
Mithun Chand, ED, Kaveri Seed Company Ltd, expects cotton acreage to remain stable this year.
"I don't see much increase in acreage this year as compared to last year because other crops are doing well," Chand said in the post-earnings conference call.
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