Cotton body seeks clarity on crop production figures

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Pune | Published: April 20, 2019 1:47:48 AM

The highly remunerative kapas prices during the current year would induce the Indian farmers to shift to cotton.

cotton, cotton sector, cotton industry, economyCotton sowing has begun in Northern belt, mainly areas where the mustard crop has been harvested.

Expressing concern over the current panic in the market and the firming up of cotton prices, the Indian Cotton Federation (ICF) has approached the ministry of textiles to intervene and direct the Cotton Advisory Board ( CAB) to re-assess the cotton crop situation in the country.

In a memorandum submitted to Sanjay Sharan, textile commissioner, ministry of textiles, J Thulasidharan, president, ICF pointed out that an artificial panic has been created in the market leading to an unnecessary increase in cotton prices, thereby affecting the already struggling textile and clothing trade and their exports. The industry has urged the government to come out with its own official production estimate to clear the ambiguity caused by differences in estimates prepared by the Cotton Association of India (CAI), which represents traders and the Indian Cotton Federation, which represents cotton consumers.

“CAB met last on November 22, 2018, and had estimated the cotton crop at 361 lakh bales. Now, there is a great amount of uncertainty regarding the cotton crop situation, creating hardship for the cotton trade and the spinning industry. Many sources are giving reports of a further lower crop estimate on recent developments like drought in cotton producing states,” he said.

Also read: 800 Gujarat ginning factories facing acute shortage of cotton

“The data of the past 12 years shows that even during the worst drought years, cotton production was 348 lakh bales. The ambiguity over production estimates has caused panic in the market,” he said.

“Though we have a smaller crop, the cotton supply position is very comfortable with a big ending stock of 46 lakh bales. Thanks to a big opening stock, smaller export and larger imports, the global situation is also very comfortable with high stock to use ratio. The sliding cotton price during February and March clearly reflects the surplus cotton availability. Kapas arrival, till now, is around 295 lakh bales. However, farmers, expecting a higher than MSP price, are reluctant to sell, which is slowing down the kapas arrival,” he pointed out.

According to Thulasidharan, the federation had earlier, in November 2018, estimated cotton crop for the year 2018-19 at 373 lakh bales. “The drought in many cotton growing regions of Gujarat, few regions in Maharashtra and in few areas in other cotton growing states had affected cotton yield. Accordingly, we have revised our cotton crop estimates for the year 2018-19 based on the actual data collected from the cotton growing areas in our country. The closing stock of cotton in 2018-19 will be 46 lakh bales according to the ICF, against the CAI’s estimate of 13 lakh bales.

“International Cotton Advisory Committee (ICAC), the apex cotton body in their April 2019 report, have projected a 6% rise in global production for 2019-20 at 276 lakh tonne. They have projected a higher ending stock for 2019-20. Due to these factors, cotton price is likely to remain steady.Early monsoon in India would impact the cotton price, during June 2019,” he said.

The highly remunerative kapas prices during the current year would induce the Indian farmers to shift to cotton. Cotton sowing has begun in Northern belt, mainly areas where the mustard crop has been harvested. We expect an earlier crop from such areas, he said.

To overcome this artificially created market condition, the association has urged the government to organise the second meeting of the Cotton Advisory Board so that a clear picture will be known and the official estimate of the Cotton crop based on the current situation will help to avoid such speculative reports of lower cotton crop by different agencies, he said.

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