India’s Cotton Harvest Could Be Delayed by Unusually Heavy Monsoon

Unusually heavy monsoon rains could delay this year’s cotton harvest in India, potentially driving prices even higher worldwide. The country is one of the world’s top cotton producers, and with worldwide stocks very low and demand surging, already-elevated prices could be boosted even higher in the short term.

Total rainfall in India since June 1 is only about 1 percent higher than normal, but could end up being 3 percent higher for the year, thanks to the extended monsoon season.

The rainy weather typically starts to move out of the northwestern parts of the country by Sept. 1, but it is expected to stay for an additional two to three weeks this year, forecasters say. Rains during the week of Sept. 8 were 26 percent higher than normal, and they were 16 percent higher than normal the previous week. Although there are about 235 million farmers in India, only 40 percent of them use irrigation. The remaining 60 percent rely exclusively on rainfall.

Although experts are forecasting an exceptional Indian cotton crop that could approach 33 million bales (170 kg each) this year, yields could drop if the excessive precipitation extends into late September.Those concerns have prompted the country’s textile industry to seek a ban on cotton exports until January 1, 2011. Indian government officials have already announced a prohibitive tax on cotton exports over 5.5 million bales, starting October 1, but the domestic textile industry is pushing for a US$216 tax on all cotton exports, whenever they begin. Representatives of the textile industry say that they will be forced to cut production — and thus reduce the number of people they employ — if the government doesn’t take action.
 

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