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Cotton output to decline next season on poor rains |
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The Cotton Association of India (CAI), the domestic traders’ body, on Tuesday forecast the country’s production of the fibre to drop in the next season starting October 1 on deficient rains. Lower output may drive up domestic cotton prices in 2015-16 and further dent exports, as local prices are already ruling above the global levels.
CAI president Dhiren Sheth said India’s output could touch 37.7 million bales for 2015-16, compared with 38.3 million bales in the current marketing year.
One bale equals 170 kg.
The cotton crop has been affected by deficient monsoon rains, which have dropped 14% from the benchmark long-period average so far this year as per latest data.
Interestingly, while Gujarat and Karnataka could witness smaller harvests in 2015-16 than a year before, drought-hit Maharashtra is projected to have a bigger harvest next year than 2014-15, according to the CAI. However, it’s noteworthy that parts of Maharashtra, the country’s second-largest cotton grower, were hit by drought in 2014 as well.
Meanwhile, domestic cotton consumption is forecast to rise to 32.5 million bales in 2015-16, up 3.2% from a year earlier.
While cotton imports are projected to remain unchanged (1.2 million bales in 2015-16), exports are expected to suffer in view of a slowdown in largest buyer China.
The country is going to end the current season with stocks of 7.87 million bales, up from 5.89 million bales a year before, according to the CAI. So the country is expected to have a surplus cotton of 14.27 million bales in 2015-16, thanks to the huge stocks to be carried forward from this year.
India’s cotton exports have been badly hit as China, which usually accounts for over 70% of India’s cotton exports, has cut down on purchases massively.
Even the depreciation of the rupee against the dollar isn’t going to help Indian textile exporters much, as the recent yuan devaluation by China has made its imports more expensive, according to senior textile industry executives.
Source : financialexpress.com
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