Indian cotton output to recover slower than expected

Indian cotton output to recover slower than expected

Cotton production in India, the world’s top grower, will recover less rapidly than previously thought, as weak rains limit yield recovery, US officials say

Yields will tick up, after a decent monsoon across many areas, but by barely by enough to outweigh the sharp drop in sowings.

“Despite a generally good monsoon, below normal rains in some cotton-specific growing areas is expected to lead to yields that are lower than the USDA official forecast,” the USDA’s Delhi bureau warned.

A scant recovery

The US Department of Agriculture’s bureau in New Delhi saw the country’s cotton crop at 26.50 million bales, barely higher than the six-year lows touched last season.

The USDA’s official forecast had the crop recovering to 27.00 million bales, from 26.40 million bales in 2015-16.

Cotton plantings in India are forecast to fall to a seven-year low of 11.00 million hectares, down from 11.90 million hectares in 2015-16.

Fall in sowings

“Higher input costs and better price realization for competing crops has prompted farmers to move away from cotton and pushed acreage downward from a year ago,” the bureau said.

The decline is not universal, as lower plantings in Gujrat and Telagana outweigh higher plantings in Madhya Pradesh and Maharashtra.

“The area in state of Telangana has been lowered as farmers have opted to plant more area in pulses, maize and paddy,” the bureau said.

Last week the International Cotton Advisory Committee forecast Indian cotton sowings at 11.2 million hectares, noting that “better prices for competing crops, the late arrival of the monsoon and yield losses from pest pressure last season discouraged farmers”.

Bigger ending stocks

The Delhi bureau forecast consumption and imports in line with the official USDA forecasts, at 24.0 million bales and 1.0 million bales respectively.

“Interactions with mills in southern India indicates that cotton consumption is expected to remain relatively flat as mills focus on manufacturing blended yarns and fabrics with a higher percentage of man-made fibre to offset cotton price volatility,” the bureau said.

But the bureau has a bigger carryover estimate, leading to larger ending stocks, which are seen at 11.23 million bales, compared to the official USDA number of 10.66 million bales.

www.agrimoney.com


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