|Chennai||Rs. 24470.00 (1.37%)|
|Mumbai||Rs. 24900.00 (0.97%)|
|Delhi||Rs. 24200.00 (1.26%)|
|Kolkata||Rs. 24160.00 (0%)|
|Kerala||Rs. 24000.00 (0.63%)|
|Bangalore||Rs. 23800.00 (0%)|
|Hyderabad||Rs. 24140.00 (1.17%)|
India might have to revise its cotton crop estimates downwards for 2012-13, with low arrivals of the new crop. Two months ago, the Cotton Advisory Board had estimated the cotton crop for 2012-13 at 33.4 million bales (a bale is 170 kg). This could be lowered when it meets later this month. According to market sources, the revision would be 33.2-33.3 million bales.
A veteran trader and exporter cotton said that lower arrivals of cotton at this time indicates that the crop size will be lower than earlier estimates. Arrivals around this time are normally about 200,000 bales a day, while the present level is between 150,000 and 180,000 bales.
Cotton prices are ruling around Rs 33,000 per candy (356 kg) and with the rupee trading at 54-55 against the dollar, exports may be viable with thin margins. Arun Dalal, an Ahmedabad-based trader and exporter, said, “Exports could touch 150,000 bales by mid-December. However, exports are competitive and only help create only monetary liquidity as the margins are wafer thin.” He added that cotton imports are at a halt as the local crop has started arriving in the markets.
Area, production of cotton in india
|Year||Area (lakh ha)||Production (mn bales)|
|* Estimated on October; 1 bale = 170 kg
Source: Cotton Advisory Board
Not just in India, even globally cotton crop has been estimated to come down as competing crops such as soya have given better returns to farmers. According to Washington-based International Cotton Advisory Committee (ICAC), global cotton production will decrease by 11 per cent to 23.2 million tonnes in 2013-14 on lower cotton prices and increased attractiveness of competing crops.
This would be the second consecutive season of decline in cotton production and the smallest output in four years. Production is expected to fall sharply in the US and Turkey, where competition vis-a-vis grains and soya beans is strong. Smaller cotton crops are also projected in China, Pakistan, Central Asia and Francophone Africa. ICAC said, “Production is forecast only slightly down in India,” it said.
Global cotton mill use is expected to continue growing slowly in 2013-14, on the basis of a continued gradual recovery in global economic growth. The ICAC forecasts global cotton mill use to rise by three per cent to 24.2 million tonnes, driven by south Asia. World cotton trade could remain almost stable at 7.8 million tonnes, as a further drop in Chinese imports could be offset by increased demand from the rest of the world.
After three consecutive years of increase, global stocks could contract by 6 per cent from the record level of 16.6 million tonnes forecast in July 2013 to 15.6 million tonnes in July 2014. Most of this reduction in stocks is expected to take place outside of China.
China has been a major player in the cotton market. Apart from its own production, the country is a big importer of cotton and a big market for India. The market is anxiously looking at China’s next move, as the country is sitting on a huge stock of cotton.
ICAC said, “One major source of uncertainty regarding short-term global cotton supply and use projections stems from Chinese policies. The Chinese government has accumulated a national reserve of over seven million tonnes in the last 14 months by buying domestic and foreign cotton.” According to the ICAC, while this national reserve will likely continue growing until end-March 2013, it is not clear how it will be managed after that point. “International cotton prices are currently supported and stabilised by Chinese policies, but changes to these policies could have opposite results,” the ICAC noted.