Ample Rain in Parts of India Improves Outlook for Growers

By Jim.Robinson|September 2, 2010

Last year’s light rains in India’s cotton belt have prompted growers to shift their crop mix from soybeans to cotton, resulting in a 56 percent increase in cotton acreage — to a total of 2.7 million hectares — in the Vidarbha region. Yields are expected to be in the range of 325 kg per hectare. Soybean acreage has dropped about 25 percent since last year, from 3.3 million hectares to 2.4 million hectares, in the Amravati district. Although this year’s heavier rains are welcome, there are reports that fertilizer is in short supply. To date, however, the Indian government has not received any complaints of fertilizer hoarding.

Putting a greater emphasis on cotton has turned out to be a good move for most Indian growers. Although excellent crops are expected in several major exporting countries — including an excellent year in the United States, the world’s top exporter — the unusually low stocks worldwide have kept prices high, and the disastrous flooding in Pakistan should make India’s neighboring country a significant market for its cotton exports.

Sources report that Pakistan will need to import as much as 4.5 million bales of cotton to meet the demands of the local textile industry, and much of that demand will be met by Indian growers once the government ban on cotton exports is lifted on October 1.

However, Indian officials — under pressure from their own textile industry — have instituted a monthly cap on the amount of cotton that can be exported once the restrictions are lifted. The textile industry and cotton traders have agreed to limit exports to 4.95 million bales, 15 percent of which will be available for export in the first quarter.