Cotton Output May Dip, But Prices Likely To Stay Low

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Mumbai, July 18: With the Northern and Western regions of the country in the grip of deficit rain fall, the industry fears lower cotton production during the next season.

However, despite expectations of lower production, cotton prices will remain under pressure due to oversupply in the global market.

Industry experts say that globally cotton prices are already under pressure and will further slide, as China has decided to stop import due to higher cotton supply in the domestic market.

In the domestic market, cotton average spot rates for variety S-6 is being quoted at Rs 6,580 per qtl, down from Rs 6,694 per qtl in June 04 and for H-4 variety it slid to Rs 6,271 per qtl from Rs 6,215 per qtl.

Sources in GTN Textiles told FE :”Textile industry is alert on deficit rainfall in the major cotton-growing states like Gujarat and Maharashtra. However, it is time for rain Gods to smile on cotton-growing state.”

Nath Group Chairman, Nandkishore Kagliwal, said: “Erratic rainfalls across the cotton belt in India is likely to bring down cotton production. Most of the Maharashtra and Gujarat districts are currently facing acute short supply of water and further, poor rainfalls or say no rain across to these region will seriously affect the cotton production.”

Hence, the farmers have to switch-over on other crops, like Bazara and Mung, if rains do no arrive in next 10 days.

One industry expert says that below-normal rainfall will not maintain adequate moisture reserves on soil, which will damage the growth of cotton seeds.

During the first week of July, widespread lower than expected rain has not maintained favourable growing conditions for cotton seeds.

Monsoon was more scattered during the second week of July across North, Western and Southern cotton growing areas. June’s monsoon rainfall was initially promising, however, the monsoon weakened significantly in July ’04.

The northern cotton zone mainly in Punjab, and Haryana, continues to experience extremely dry conditions. “The probability remains very low that the northern states will receive normal rainfall,” industry opines.

In the states like Maharashtra, Gujarat and Madhya Pradesh, monsoon rainfall was not adequate for sowing and it has not progressed as expected. However, sowing delays occurred in the southern states Andhra Pradesh, Karnataka, and Tamil Nadu, the result of very low rainfall during the month of June-July.