India has beaten China for the first time to become the world’s largest cotton producer in the 2014-15 marketing year, and the gap in production with the neighbour is set to widen considerably in 2015-16, reports Banikinkar Pattanayak in New Delhi.
According to latest estimates from the International Cotton Advisory Committee (ICAC), India produced 6.5 million tonnes (mt) of cotton in 2014-15 against China’s 6.4 mt. However, since China has been reducing the area under the crop consistently, its production could go down further to just 5.4 mt in 2015-16, compared with 6.4 mt in India, the ICAC has forecast.
So despite a projected 2% decline in India’s output in 2015-16 from a year earlier, thanks to a deficient monsoon, the country’s share in the global cotton production is set to rise to 27% from almost 25% in 2014-15. In India, the cotton marketing year runs from October through September.
But surplus local production in 2015-16 despite a deficient monsoon could worsen a domestic glut and further dent local prices, as exports have plunged.
According to the Cotton Association Of India (CAI), a traders’ body, exports of cotton may remain negligible in 2015-16, compared with 6 million bales in 2014-15, thanks to a massive fall in purchases by China, which typically accounted for over 70% of India’s outbound shipments of the fibre. One bale equals 170 kg. Despite surplus output, India is projected to import roughly 1.2 million bales of cotton in 2015-16 — the same as 2014-15 — mostly of some varieties that are not produced in the country.
However, higher output doesn’t mask the stark reality that India’s cotton yield is just above a third of China’s and much lower than the global average. The massive plunge in China’s cotton production has not been caused by any fall in yield but by a sharp drop in areas under under the crop, as the government there has been offloading stocks from its huge reserves and also trimming subsidy support to cotton farmers for over a year now. China, the world’s largest cotton consumer as well as importer, has been attempting to move away from labour-intensive sectors like garments to more capital-intensive ones, as wage costs have been soaring.
This brings to the fore the moot point that despite the introduction of the Bt cotton in the country more than a decade ago, which catapulted the productivity level from just 302 kg per hectare in 2002-03, a lot still needs to be done to catch up with China.