Indian Cotton Crop Estimates Range From 321-378 Lakh Bales For This Season

Market News

Indian Cotton Crop Estimates Range From 321-378 Lakh Bales For This Season

The recent All India Trade Meet organised by the Maharashtra Cotton Ginner's Association has estimated the cotton crop size at 330-360 lakh bales for the 2016-17 crop season. It is estimated that in Maharashtra, the crop size may cross 90 lakh pressed bales.

Cotton arrivals are expected to pick up further from next month onwards. Ginners and spinners are expecting the quality of the crop to be better than previous years due to timely rains. Productivity levels have improved too, especially with drip irrigation which helped some farmers achieve productivity levels of 40 quintals per acre.

MCGA has pointed out that cotton prices may range between Rs 35000 a candy to Rs 43000 a candy. While international competition may put pressure on prices, the current demand levels may keep prices around Rs 38000-40000 a candy. Experts pointed out that Indian spinners would be able to sell yarn to exporters only if the cotton is available at Rs 35500-36300 a candy.

Ginners are hopeful of exporting cotton to China in the next three months. All India arrivals have increased to over one lakh bales. Spinning mills were reportedly booking more forward deals at lower prices. Also, exports to neighbouring countries have begun. Cotton to Pakistan could go via third country - in the first week of October, around 12000 bales of cotton were exported of which 2000 were bought by Oman.

First meeting of the Cotton Advisory Board (CAB) in the current season places the 2016/17 crop outturn at 351 lakh bales (of 170 kilos). Together with a carry-in of 43 lakh, and estimated imports of 17, total supply is foreseen at 411 lakh bales, down from 424 lakh in 2015/16. Mill consumption is expected to increase slightly, to 275 lakh bales, plus 28 lakh by small-scale industry and non-mill use of 10 lakh. The season's exports are predicted eventually to reach 50 lakh bales, compared with 69 lakh in 2015/16. A total disappearance is therefore indicated of 363 lakh, leaving a closing stock of 48 lakh.

CCI opens 120 purchase centres across country

The Cotton Corporation of India (CCI) has opened around 120 purchase centres across the country even as it has no plans at the moment to procure the fibre, senior officials of CCI said. Cotton prices are currently ruling at Rs 5,000-5,500 per quintal while the MSP is Rs 4,160 per quintal.

MM Chokalingam, director-marketing, CCI, said that the agency is not going in for MSP operations now since the market prices are much higher. The government has asked the agency to open purchase centres. Normally, CCI establishes 340 procurement centres every year.

Chokalingam expects arrivals to peak during November-December and says the rates are likely to come down then. CCI shall then assess the situation and accordingly may go in for commercial operations, he said. According to market sources, the central ministry has also indicated that the government would intervene if the prices fall below MSP at any point of time.

In Maharashtra, the Maharashtra State Cooperative Cotton Growers Federation (MSCCGF) is also in a state of readiness to begin cotton procurement if required. The agency has received permission from the state government to be able to commence procurement operations in case the cotton prices fall below MSP from November 15.