The country may witness a bumper cotton crop of around 325 lakh bales (each of 175 kg) for the new season 2007-08 (October-September), thanks to increased usage of Bt seed in major cotton producing states.
Among the top producing states, Gujarat is expected to produce over 100 lakh bales while Maharashtra and Andhra Pradesh are expected to produce around 80 lakh and 36 lakh bales, trade sources said.
In August, the Cotton Advisory Board (CAB) estimated crop of 310 lakh bales for the new season, higher by 10% over actual crop size of 280 lakh bales estimated for the season 2006-07.
Fresh arrivals in North region (Punjab, Haryana and Rajasthan) have gradually started picking up. Total arrivals of J-34 raw cotton are reportedly about 13,000 bales. Arrivals of J-34 in Punjab were 7,000 bales, Haryana 5,000 bales and Rajasthan 800 bales. Local mills are the main buyers for September delivery but there are no forward sellers for November-December delivery, sources said.
?Moderate to heavy rains were reported all over Andhra Pradesh and Karnataka early this week but there are no reports of crop damage. However, arrivals may be delayed. There are reports of moderate rains in some parts of Maharashtra, Madhya Pradesh and Gujarat. In fact, it is beneficial to the crop in Maharashtra,? a local broker said.
Arrivals in Andhra Pradesh are expected after third week of October. Due to good quality seeds used this year, crop is estimated at 15% higher than last year.
?Overall the market trend is steady to slightly firm. But looking at a bumper crop of about 325 lakh bales, current firm prices should not sustain for long time and they may witness downward trend from next month onwards, once arrivals reaches pick level,? a leading exporter said.
Currently, ginners in Gujarat and Maharashtra are reluctant to sell forward there are hardly any buyers for new crop cotton. Southern mills are bearish and exporters are staying away as the rupee is strengthening against Dollar again, he said.