The Cotton Association of India has estimated production for the ongoing 2017-18 season at 365 lakh bales which is higher by 5 lakh bales from its previous estimate released in May.
By: Nanda Kasabe | Pune |
June 13, 2018
The Cotton Association of India (CAI) has estimated production for the ongoing 2017-18 season at 365 lakh bales which is higher by 5 lakh bales from its previous estimate released in May. This includes 3 lakh bales (of 170 kg each) in Gujarat, 1 lakh bales in Karnataka, 50,000 bales in Andhra Pradesh and 25,000 bales each in Madhya Pradesh and Tamil Nadu. However, a low carryover stock of cotton at the end of 2017-18 crop year (beginning October 1, 2017) has been estimated at 16 lakh bales. A very low closing cotton stock at the end of the season has become a matter of worry for us, CAI president Atul Ganatra told FE, declining to divulge into details.
The total cotton supply up to May 31, 2018 has been projected at 378.50 lakh bales which consists of the opening stock of 30 lakh bales at the beginning of the season on October 1, 2017, the arrival of 340 lakh bales up to May 31, 2018 and imports which the Committee has estimated at 8.50 lakh bales up to May-end.
According to Ganatra, the estimated rise in production figures is mainly due to the realisation of higher yields, particularly in Gujarat. The Statistic Committee of the CAI held its meeting in Mumbai, which was also attended by over 30 representative from various upcountry associations, MNCs, ginners, exporters, importers, textile mills, among others, to review the current cotton scenario.
Further, the Committee has estimated cotton consumption for 8 months — from October, 2017 to May, 2018 — at 216 lakh bales at an average of 27 lakh bales per month while the export shipment till May 31, 2018 has been estimated at 62 lakh bales. The stock at the end of May, 2018 is estimated at 100.50 lakh bales, including 58 lakh bales with textile mills, while the remaining 42.50 lakh bales are estimated to be held with Cotton Corporation of India (CCI) and others (MNCs, traders, ginners, etc).
The projected yearly balance sheet for the 2017-18 season, drawn by the CAI, has estimated total cotton supply till the end of season, September 30, 2018, at 410 lakh bales of 170 kg each, including the opening stock of 30 lakh bales at the beginning of the season. The CAI has estimated domestic consumption for the season at 324 lakh bales while the exports for the season are estimated by the CAI at 70 lakh bales.
“We can end the season with exports of 70 lakh bales,” Ganatra said earlier, adding that higher international prices would drive up shipments. The country has exported 62 lakh bales so far in the marketing year that started on October 1, he added. According to Alli Rani,CMD, CCI so far 320 lakh bales have arrived in the market and the season is likely to go on for another 30 days.
Arrivals have slackened to 0.5 lakh bales a day and therefore prices are up. According to cotton ginners, market sentiment is up because of speculation that demand from China is going up because the country’s buffer stock has reduced. China earlier had a buffer stock for one and half years and this has now reduced to a year’s stock which is why they could be turning to India for cotton, market experts said.
It may be noted that the crop size of 365 lakh bales of 170 kgs. each is equal to 388 lakh running bales of 160 kgs. each and the estimated arrival of 340 lakh bales 170 kgs. each upto 31st May, 2018 is equal to 362 lakh running bales of 160 kgs. each. Around 93 % of the total crop for the season has already arrived in the market upto 31st May, 2018. (Source: financialexpress.com)