India: Cotton Keeps Growing

Matt Hopkins Posted by Matt Hopkins|18 March 2008

Production estimates for India were raised a bit to yet another record crop, this year to reach a forecast 24.4 million bales, or 2.6 million bales more than last year’s record crop. The US Dept. of Agriculture’s Foreign Agriculture Service (USDA-FAS) has based the revised estimate on strong market arrivals, which support a higher than anticipated crop estimate in the central and southern states.

Market arrivals through February 23 reached 18.4 million bales (4 million tons) compared to 16.4 million bales (3.6 million tons) for the same period last year. The Cotton Advisory Board is estimating the 2007/08 crop at 24.2 million bales, while estimates from different industry sources range from 22 to 25 million bales (28.0 to 32.0 million Indian bales of 170 kg).

Market arrivals of cotton during the current year are very strong in the central and southern Indian states. Current arrivals are estimated at 74,000 to 78,000 bales per day vs. 63,000 to 66,000 bales per day a year ago. With improving prices, farmers are reportedly holding higher stocks of seed cotton than last year on the expectation of higher late season prices.

Although the pace of arrivals has begun to slow, late season arrivals are expected to be stronger than last year in Gujarat, Maharashtra and Andhra Pradesh.

The 2007/08 record cotton crop is attributed to another significant increase in area under Bacillus thuringiensis (Bt) cotton and overall favorable weather across the country. Industry sources report that the area under officially approved Bt cotton seeds this season reached 6.2 million hectares (Ha), an increase of 63% over last year. Some industry sources believe there is an estimated 1.5 million Ha under unapproved Bt cotton seeds, as well.

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These figures indicate that Bt cotton now accounts for over 80% of the total cotton area. The increased share of Bt cotton in overall plantings has augmented the current season’s record yield by limiting losses due to pests along with the higher yield potential of hybrid Bt cotton compared to traditional varietal cotton. Industry sources also report that the new Bt cotton hybrids have higher ginning outturn compared to the traditional varieties.