Lower international prices lead to surge in shipments
Import of cotton in the 2018-2019 cotton season is expected to be 22 lakh
bales, almost seven lakh bales higher compared with the previous season.
The Cotton Advisory Board, which met on Tuesday, estimated (provisional)
cotton production this season (October 2018 to September 2019) to be 337
lakh bales of 170 kg each.
“Though the area under cotton has been almost the same for the last two
years, productivity has dropped. The board, in its previous meeting,
estimated production in the current season to be 361 lakh bales. However, it
is learnt that farmers did not go in for the fourth or fifth pickings for various
reasons. Hence, the production estimate was revised,” said K. Selvaraju,
secretary general, Southern India Mills’ Association, who took part in
Tuesday’s meeting.
“In our estimate, the actual imports can be between 28 lakh bales and 30
lakh bales when the season ends. The board has estimated it to be 22 lakh
bales,” he added.
The international price of cotton is lower compared to the domestic price. It
is not just the mills, but traders are also importing, especially African cotton.
There are offers for American cotton too, added J. Thulasidharan, president
of Indian Cotton Federation.
Meanwhile, cotton consumption (total demand) during the current season is
expected to be lower at 361.5 lakh bales as against 386.65 lakh bales last
season. Exports are expected to be just 50 lakh bales though the board earlier
estimated it to be 65 lakh bales. Consumption of cotton by the domestic
textile mills has dropped as yarn production has reduced, Mr. Selvaraju said.
Prices of cotton in the domestic market have remained largely stable though
it is higher than international prices, and the season is likely to end with
adequate closing stock (neraly 40 lakh bales). If all the cotton- growing areas
are covered by the monsoon rains by the first week of July, production next
year will be good, Mr. Thulasidharan said.
Source: The Hindu, India Wednesday, 19 June 2019