January 20, 2012

In the marketing year that started October 1, India's cotton output is likely to fall below the estimate of a record 35.6 million bales as erratic rains have hit crop yields, but production will still be higher than last year, industry executives said Thursday (Jan 19).

"The biggest decline [in yields] will be in [the states of] Andhra Pradesh, Maharashtra and Karnataka," said A. Ramani, secretary of the Indian Cotton Federation.

Maharashtra and Andhra Pradesh are the second and third-largest producers, respectively, of the fibre crop in India. The country produced about 32.5 million bales of 170 kilogrammes each in the 2010-2011.

The drop in output may arrest a plunge in Indian cotton prices since March 2011. Also, a lower production will likely reduce exports from the world's second-largest producer.

The Cotton Advisory Board will meet Tuesday to review latest production estimates, said Ramani, a member of the board which has representatives from the government, growers, industry and trade associations. Two other members of the board confirmed the meeting schedule.

The current estimate was based on higher cotton acreage, but late sowing and erratic rains that caused a drop in soil moisture have affected the crop, said a senior executive at the Maharashtra State Co-Op Cotton Growers Marketing Federation.

"I am not much sure whether production [in Maharashtra] will touch last year's figure," said the executive, who didn't want to be named.

In 2010-11, the western Indian state produced about 8.2 million bales and the projection for this year was 8.5 million bales.

However, there won't be any major drop in output compared with projections in Gujarat state, the largest producer, Ramani said.

The state is estimated to produce 11.5 million bales in 2011-12.