Cotton output set to dip by over 11 pct in current fiscal, due to low rainfall

The total cotton production is likely to decline by over 11 per cent to 328 lakh bales (of 170 kgs each) for the 2018-19 season, mainly low rainfall in many key cotton growing areas, the Cotton Association of India (CAI) Thursday said. In the last season (2017-18) the total cotton output stood at 365 lakh bales, CAI president Atul Ganatra told reporters here at 'Cotton India 2019'.

The main reason for the decline in the estimates of the crop is mainly low rainfall in many key cotton growing areas, he said. "Cotton sowing has taken place in around 123 lakh hectares this year. Particularly, states like Gujarat has rain deficit of 28 per cent and same time there was rain deficit in Karnataka, Telangana and Maharashtra. Due to shortage of rain there will be no third and fourth picking in most of these cotton growing states. In regular course in India farmers take 4 to 5 pickings," he said.

Further, Maharashtra and Telangana governments had instructed farmers to remove cotton plants by December 31, 2018, to avoid Pink Ball worm problems, he added. This is likely to give rise to imports by 70-80 per cent to about 27 lakh bales during this season compared to 15 lakh bales last year, he said.

"In case cotton rates shot up after June in the domestic markets, the import targets are close to achievable. Looking at the shortage in India is going to face after June 2019 cotton rates may further go up," he added.

The cotton price is ruling at Rs 42,000 per candy (1 candy is 356 kgs), which is over the minimum support price of Rs 41,000. The imports will mainly be from the US and African countries as the Australian and Brazilian stocks are sold out, Ganatra said.

Meanwhile, the exports is likely to decline by 27 per cent to 50 lakh bales compared to 69 lakh bales last year. "We are planning to sign a memorandum of understanding (MoU) with Bangladesh Trade Association and Spinner Association in two weeks to ease issues. This is likely to increase exports to Bangladesh by 30 per cent, who is our biggest importer. Last year we exported 20 lakh bales to the neighbouring country," he added.

Similarly, the exports to China is also increase to 15-20 lakh bales from 8 lakh bales last year, he said. "China produces 335 lakh bales but its consumption is 570 lakh bales. So the country imports to fill the demand and consumption gap. The trade war between the US and China is has not benefited India as every one is confused. But in the long run this scenario is likely to benefit India," he added.

Talking about exports to Pakistan, Ganatra said, the current border situation is not going to affect exports much. India had exported 8 lakh bales to the neighbouring country last year, he said. This year 6.5 lakh bales has already been exported and due to the current border situation the rest will be shipped once this situation is resolved, he added.

(With inputs from agencies.)