1. CAI forecast for 2016-17 cotton crop marginally higher than previous year

CAI forecast for 2016-17 cotton crop marginally higher than previous year

The Cotton Association of India (CAI) has placed the cotton crop for 2016-17 season at 341 lakh bales of 170 kg each, higher by 1% than the previous year.

By: | Updated: January 24, 2017 6:16 AM
cai-l The projected balance sheet drawn by the CAI estimated total cotton supply for the cotton season 2016-17 at 404 lakh bales while the domestic consumption is estimated at 290 lakh bales thus leaving an available surplus of 114 lakh bales.

The Cotton Association of India (CAI) has placed the cotton crop for 2016-17 season at 341 lakh bales of 170 kg each, higher by 1% than the previous year. The projected balance sheet drawn by the CAI estimated total cotton supply for the cotton season 2016-17 at 404 lakh bales while the domestic consumption is estimated at 290 lakh bales thus leaving an available surplus of 114 lakh bales.

According to Nayan Mirani, president, CAI, the arrivals of cotton during the ongoing 2016-17 crop year are estimated to be lower than those up to the same period last year due to holding back of seed cotton by farmers mainly on liquidity issues.
The Cotton Association of India (CAI) has released its December estimate of the cotton crop for the 2016-17 season beginning from 1st October 2016.

This should, however, rectify in a few days once arrivals improve, he said. Kapas prices touched R5,700 per quintal last week.
According to Mirani, the crop by itself is higher than the previous year at 341 lakh bales. “Since the arrivals have not picked up yet, farmers are in a position to demand higher rates. Once arrivals improve, prices should decline,” he felt.
The current production estimate of CAI is slightly higher that the last year’s estimate of 337 lakh bales.

Mirani, who has taken over as the new president of the association, said he would strive to address trader issues and work towards uniform trade practices across the country. According to industry experts, the methods of trading have changed over the years especially after trade has moved upcountry in hinterlands from metros.

Experts pointed out that when trade was conducted from metros, a certain code or uniform practices were implemented across the trade which changed once trade shifted to non-metros. Meanwhile, the production of cotton in the country which had reached a record high of over 400 lakh bales during the 2013-14 crop year fell to about 386 lakh bales in 2014-15, Dhiren Seth, former president, CAI had said earlier.

The production declined further during the 2015-16 crop year to around 338 lakh bales, the lowest during the last five years.
This drastic reduction in the crop during 2015-16 was mainly due to the white-fly attack especially in the northern region.
Productivity of cotton continues to remain well below the world average productivity mark. Cotton prices also sought lower levels almost during the entire 2015-16 cotton season, resulting in lower realisation of prices by farmers for their produce.

This has led to a reduction of over 10% in the acreage under cotton during 2016-17. According to market reports, prices have firmed up on slower arrivals impacted by demonetisation and fears of supply shortage despite estimate of increased cotton production by CAI.

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