Column

MUMBAI: For the fourth straight year in 2007-08, India is poised to reap a bumper cotton crop and, for the first time ever, the output of this natural fibre is likely to breach the 300 lakh bale-mark.

With brisk off-take by the mill sector due to expanded spindle capacity and a successful foray in the overseas market for this produce, prices of cotton are expected to stay stable in the next season that commences in October.

Trade estimates regarding the size of the cotton harvest vary, ranging from 310 lakh bales to 325 lakh bales but there is consensus on one point, namely, that is certain to exceed 300 lakh bales.

This represents a considerable leap-forward, considering the fact that the production was a mere 158 lakh bales in 2001-02 and which had dropped even further to 136 lakh bales in the following year.

Since then, there has been no looking back — output jumped to 179 bales in 2003-04 and to around 240 bales in the subsequent two years. In 2006-07, there was an incremental growth of 39 lakh bales, taking the tally to 280 lakh bales.

In the current agricultural year, cotton economy is all geared to firm up the raw material base, with another leap in production to the tune of 20 lakh bales, if not more; this is good news for our textile industry which is still predominantly cotton-based.

The credit for these happy tidings should go largely to the favourable monsoon in the cotton-growing tracts of the country and the large-scale cultivation of hybrids and Bt seeds.

In all the major states - Gujarat, Maharashtra, Andhra Pradesh and Punjab - and other states likeHaryana and Madhya Pradesh which also make sizable contributions to the total harvest, weather conditions had remained favourable. This has led to an expanded coverage even as damage due to pests and diseases is relatively small.

This apart, significant productivity gains are also anticipated due to extensive use of genetically modified seeds and their area is likely to be around 60% of the total acreage under the crop. The trend towards acceptance and adoption of improved farm practices has also played a role in the augmentation of output during the on-going season.

Farmers too had diverted area from other crops to cotton in view of low risks and high returns associated with the cultivation of transgenic varieties.

The balance sheet for cotton in the next season is likely to make a happy reading.Aggregate supply may be adequate to meet mill and non-mill demand and even enable the country to resort to exports to the extent of 60 to 70 lakh bales.

Thus, even if the new crop is reckoned at 310 lakh bales, the closing inventory may be around 36 lakh bales. In the current cotton season also, supply was more than adequate to meet demand; with exports to the extent of 55 lakh bales, cotton prices ruled stable.

The index for raw cotton in the official wholesale price index had fluctuated between a low of 147 and a high of 176. thus far between October 2006 and July 2007.In the coming season, the price of raw cotton is likely to stay range-bound as the scenario may be broadly similar.

Viewed in perspective, there has been a veritable revolution in cotton which has gone unnoticed. Output had crossed the 100 lakh-barrier only in the late eighties and nearly another decade and half had to elapse before the harvest soared past 200 lakh bales.

But, the 300-lakh bale mark was hit in a matter of four years.This is easily explained. Only in 2002, commercial cultivation of Bt cotton was allowed.

Despite controversies, this move had generated, the use of these varieties became widespread and the result was striking gains in productivity - from less than 300 kgs per hectare in 2000-01 to more than 500 kgs now.

Another point to ponder over is the welter of conflicting estimates put out by the government and trade with regard to cotton production year after year. We have an official body in the Cotton Advisory Board which represents all sections of the cotton economy.

At least, its estimates should have a finality in this regard. But, the government machinery issues figures of cotton output that differ widely from those projected by the CAB.

For example, for 2006-07, while the CAB’s assessment was 280 lakh bales, the official machinery insists that the size of the harvest was only 227 lakh bales.

The story was the same in the earlier years, too. This confusion could have been avoided by a careful monitoring of ginning and pressing data, as cotton has to be necessarily ginned and pressed before being put to use.