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Newsline-National | April 2016

India to produce less cotton this year
By Seshadri Ramkumar, Texas Tech University, USA

India is expected to produce less cotton this season ending in September, 2016. This year, India will produce about 3 million bales less than last year. Globally, commodity market is not doing well, with cotton being no exception. In the case of oil, more supply and weak demand is causing global concerns. The demand situation is similar for cotton with not much buying by China, the world’s leading importer. Additionally, cheap oil price impacts polyester raw material costs that have direct influence on the consumption of cotton by spinning mills.

Mumbai-based Cotton Association of India presented its latest cotton production number for this season (October 2015-September 2016), that shows India will produce 35.3 million bales (170 kg each) this year. This estimate is 3 million bales less than last year’s production estimate of 38.3 million bales.

A striking point is that, this season India has an opening stock of 7.36 million bales as against 5.39 million bales in the last season that began in October of 2014. This year, as the mill consumption is expected to remain at the same level, less production this year will somewhat offset the excess opening stock.

Deficit rainfall in the Kharif season, which is the main cotton growing season stretching between June and September in India, has resulted in less cotton arrivals in the new season. While it is too early to predict, cotton production in the next season (October 2016 to September 2017) may see an uptick and could reach about 38 million bales. The market will also see an uptick in the next season with price expected to be about Rs 34,000 to 35,000 per candy of 356 kg.

Price of Sankar-6 cotton ranges between Rs 32,500 and Rs 33,500 per candy of 356 kg. The decrease in production in India might stabilise the Indian market along with uptick in buying from Asian countries such as Pakistan, Bangladesh and Vietnam, stated the cotton source, optimistically.

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