Indian Cotton Crop Estimated at 34.1 Million Bales
January 24, 2017 India is estimated to produce 34.1 million cotton bales (170 Kgs each), this season (October 2016-September 2017).
Mumbai-based Cotton Association of India (CAI) released the estimate on January 23, as the country was experiencing a steady increase in cotton price. The total available supply this year will be 40.4 million bales.
While crop production is expected to increase this year by about 300,000 bales against last year, organized sector mill consumption will decrease to about 25.6 million bales. Last year, estimated mill consumption was about 27.5 million bales.
The current year will end with a surplus of about 11.4 million bales.
Given that production will remain almost same as last year and consumption is expected to be lower, price should not see a steady rise based on demand-side economics. However, the lack of supply during the current peak arrival timeframe is the main cause for such price volatility.
CAI President Nayan Mirani has stated that the arrivals during this season are estimated to be lower than those during the same timeframe last year. There is a consensus among marketers and mill people that farmers are stockpiling kapas cotton to realize more value, which is resulting in drastic price fluctuations.
Another issue that is causing concern among mills in the State of Tamilnadu is the quality of cotton due to some mix-up with comber noil and other waste cotton, according to a technical source from a reputed spinning mill. The quality issue is also affecting the price situation in India, added the source.
The southern state of Tamilnadu is home for over 2,000 spinning mills and has to depend on other states for its cotton supply.
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