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Cotton yield may touch new low but not a cause of concern: CITI

FE Bureau
Cotton yield may touch new low but not a cause of concern

The cotton crop yield is expected to go as low as 343 lakh bales in the current cotton season. Though the cotton advisory board has estimated that crop yield to be around 361 lakh bales earlier, subsequently based on arrivals and crop situation, the yield may touch a low level in the current season, said Confederation of Indian Textile Industry (CITI).

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. Based on the information currently doing the rounds, CITI feels there is an indication for us to believe a low crop estimation, which will create chaos in the market and prompt people to stock cotton in anticipation, the apex textile body said. Analysing the crop situation during the past 12 years and an extrapolation based on different scenarios for 12 years, it clearly shows even if we assume the yield to be the worst in 12 years, the cotton crop would be at 348 lakh bales, CITI pointed out. CITI chairman Sanjay K Jain said drought in cotton-growing regions of Gujarat, a few regions of Maharashtra and a few areas in other cotton-growing states has affected yield.

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

Though, we have a smaller crop size this season as compared to last season, the cotton supply position is comfortable with a big ending stock of 40 lakh bales. Thanks to a big opening stock, smaller exports and large imports, the output deficit is well covered. The Cotton Corporation of India has also started selling its stock, which will further increase liquidity in the cotton market. With the opening stock of 36 lakh bales, coupled with the expected low yield of 343 lakh bales and import of 24 lakh bales, the closing stock is expected to be around 40 lakh bales after consumption and export of 363 lakh bales.