Cotton crop may go as low as 343 lakh bales: CITI

New Delhi, Apr 17 (KNN) Cotton Advisory Board (CAB) had estimated the Cotton Crop to be 361 lakh bales on 22nd November 2018. However subsequently based on the arrivals and crop situation, Confederation of Indian Textile Industry (CITI) feels that the cotton crop may go as low as 343 lakh bales.

Today, there is a great amount of uncertainty regarding the estimation of cotton crop situation in the country causing great hardship for value added textile industry, especially for the Spinning Industry, said Sanjay K Jain, Chairman, CITI.

There are rumors doing the rounds in the media indicating a very low crop estimation which is creating chaos in the market and prompting people to stock cotton in anticipation, he said.

Even if we assume the yield to be the worst in 12 years, the cotton crop would be at 348 lakh bales, he mentioned.

Chairman pointed out that drought in many cotton growing regions of Gujarat, a few regions of Maharashtra and a few areas in other cotton growing states has affected cotton yield.

Accordingly, CITI has revised the cotton crop estimates for 2018-19 based on the actual data collected from the cotton growing areas in the country to 343 lakh bales of 170 kgs.

Jain stated that though, we have a smaller crop size this year in comparison to last year, the cotton supply position is very comfortable with a big ending stock of 40 lakh bales. Thanks to a big opening stock, smaller exports and large imports, the production deficit is well covered. CCI has also started selling its stock, which will further increase liquidity in the cotton market.

He further stated that the prices started high in the season start, but later fell by 10% due to good availability of cotton in the market. The fall was limited due to the high MSP levels (due to steep increase in same by the Government).

He said that the high MSP levels have given confidence to stockists that market cannot fall beyond a point plus the hope that China-USA trade disputes may settle down soon, has led to the sudden spurt in prices despite an appreciating rupee.

This rise has been partly supported by the increase in international prices, however, Indian prices have increased much more (12% in just over a month) which is due to the news floating around that India will be severely short of cotton, Jain added.

CITI is fully confident that India will have no shortage of cotton in 2018- 19 despite an all-time low yield.

Jain observed that as far as crop situation for next year is concerned, the highly remunerative kapas prices during the current year and the monsoon projection would induce the Indian farmers to prefer to grow more cotton.

Chairman-CITI concluded by saying that International Cotton Advisory Committee (ICAC) the apex organization of Cotton in their report for April 2019 have projected an increase of 6% in global production for 2019-20 at 27.6 million tons.

They have projected a higher ending stock for 2019-20. Due to these factors, cotton prices are likely to remain steady and range bound. Early monsoon and import arrivals in India may create downward pressure on cotton prices from June 2019, he added. (KNN/JM)