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Next Year’s Indian Cotton Crop to Remain Flat

The Indian cotton crop for the next season beginning in October is expected to remain at the same level as the current year.

Mumbai-based Cotton Association of India (CAI) estimates that production for the 2016-2017 cotton crop (October to September) will be 33.6 million bales (170 Kgs each). CAI had estimated the current year’s crop production to be 33.8 million bales, which tallies with the recent estimate by the Indian government’s cotton advisory board.

However, a 10% acreage reduction is anticipated for next year, which will be offset by increased productivity, according to CAI.

Next year’s domestic consumption is expected to remain at the same level of about 30.8 million bales. According to CAI estimates, imports next year will rise slightly, and the total import is estimated to be about 2.0 million bales versus 1.5 million bales this year.

However, an analysis of the cotton supply and demand situation pegs India’s current year cotton exports at 6.8 million bales. This will leave an opening balance of 4.4 million bales for the new season beginning this October.

A telephone conversation with an experienced cotton analyst from India revealed that India might import more than what is reported if China reverts back to improving its inventory during next season or if the weather situation is not favorable. With China starting to import and if India has to maintain its current export level or enhance it, certainly its stocks will be lowered. These situations may lead to a tight supply situation during the second half of the new cotton season, according to the analyst.

According to a media report, Nagpur-based CICR – India’s premier cotton research institute – has estimated that next year’s crop will be only about 30 million bales due to fly infestation, monsoon pitfalls and production shifts to other crops such as pulses and oil seeds.

 

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