AP, Karnataka may drag cotton output to 350 lakh bales

GMT 10:48 2015 Tuesday ,17 March

Sriyadithatextile - AP, Karnataka may drag cotton output to 350 lakh bales

AP, Karnataka cotton
courtesy google

Reduced yield in the 2 States could result in lower output.The country's cotton production could be lower by at least 10-15 lakh bales (170 kg each) lower than initial estimates varying between 360 lakh bales and 365 lakh bales. According to Cotton Outlook, the cotton production and consumption scenario has changed since November, warranting pruning of projections of both.Cotton Outlook's estimate for global cotton production and consumption this month is the first that has pegged Indian production and consumption lower than estimates, including that of the Cotton Advisory Board (CAB). The CAB had initially pegged production at 360 lakh bales at its meeting in August and subsequently in November raised it to 365 lakh bales.The projection is against last year's record production of 325 lakh bales.Cotton Outlook, however, had not assigned any reason for the revision of the projection in its release.According to cotton trade analyst, Mr A. Ramani, there is a general feeling of lower production going by drop in arrivals. “The situation in Karnataka and Andhra Pradesh has created a fear of reduced yield. To certain extent, fears of production lower than estimates are true,” he said. The CAB had in its meeting on November 15 estimated that production in Andhra Pradesh would be 55 lakh bales against 53 lakh bales last year and in Karnataka 14 lakh bales (10 lakh bales). Business Line had, in its edition dated October 28, said that cotton production in Andhra Pradesh was likely to be affected in view of the yield being 50 per cent lower. The yield has been affected this year due to lack of irrigation in view of erratic power supply.According to cotton scientists, productivity in Maharashtra too has been affected due to dry weather during the crop's crucial growth period. “There has been lower arrivals of cotton in markets across the country. One reason could be farmers are holding back due to lower prices. But the other reason could be due to drop in production,” said Mr Ramani. Arrivals drop:According to the Cotton Corporation of India, cotton arrivals as of December 25 dropped to 88.10 lakh bales since the beginning of the current season on October 1 against 117.89 lakh bales during the same period a year ago.Arrival in Karnataka is down at 2.68 lakh bales (3.62 lakh bales a year ago) and in Andhra Pradesh it is lower at 13.04 lakh bales (18.51 lakh bales). In Maharashtra, the arrivals is down by nearly 50 per cent at 14.17 lakh bales (27.72 lakh bales). Cotton Outlook said that production in the US could also be lower at 3.44 million tonnes (mt) from initial estimates of 3.55 mt. The crop is likely to be lower at 1.94 mt (2 mt) in Brazil. Last year, the US produced 3.94 mt and Brazil 1.96 mt. Global scenario:Overall, global production estimates have been pruned to 26.80 mt from 27.1 mt projected in November. It would still be higher than last year's 24.17 mt.Consumption in the country, on the other hand, could be down to 424 lakh bales from initial estimates of 429 lakh bales. Last season's consumption has been pegged at 426 lakh bales. Consumption in China, too, is being estimated lower by half a million tonnes at 8.9 mt (9.5 mt last year). Overall, global consumption is projected at 22.71 mt against November estimates of 23.52 mt and 23.42 mt last year.That would leave the global market with a surplus of over four million tonnes, according to Cotton Outlook. “In India, mills are still finding it difficult with the current lower prices for cotton. But they are more comfortable than how they were in October,” said MrRamani.“The global situation is equally bad,” he said.Prices for Shankar-6 cotton that hit a record Rs 62,000 for a candy of 356 kg have dropped now to around Rs 34,100-34,400.Globally, cotton prices that hit a record $2.19 a pound have dropped to $0.8724 now.

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