BUSINESS
According to the Cotton Advisory Board, the production of this natural fibre is set to scale a new high of 325 lakh bales during 2010-11.
Amid the general expectations that a record kharif harvest is in the offing, the first definitive word has come about cotton.
According to the Cotton Advisory Board, the production of this natural fibre is set to scale a new high of 325 lakh bales during 2010-11.
In the preceding season, the country had reaped 295 lakh bales — five lakh bales higher than in 2008-09 - despite the monsoon being one of the worst in recent years.
A section of the trade feels that, the actual size of the crop could be even larger in view of the exceptionally favourable weather factors and incidence of pest attacks and diseases which was within acceptable limits. A level of even 330 lakh bales is not an impossibility.
What ever be the outcome, one thing is beyond doubt: the cotton economy has turned the corner.
For the second time that the output of cotton has surpassed the 300 lakh bale -mark and, with an inventory of over 40 lakh bales, more than adequate to meet the domestic demand . In fact, the CAB reckons that, after factoring in exports of 49.50 lakh bales in the ensuing crop year, the season may close with a comfortable carry-over of 55 lakh bales.
Right from the commencement, the cotton tracts have been blessed with opportune and adequate rains, leading to an increased coverage and, more important, in productivity.
CAB estimates the area sown under cotton at 106.12 lakh hectares this year - up 2.7% from the preceding season’s 103.29 lakh hectares but the anticipated incremental jump in production is of the order of 10.3%.
This implies that the yield is poised to spurt from 486 kgs per hectare to 521 kgs.
In the Central zone which comprises Gujarat, Maharashtra and Madhya Pradesh, the harvest is set to rise from 176 lakh bales to 202 lakh bales.
But, while in Gujarat, rising yields have played a big part, in Maharashtra, there have been significant gains in productivity too.
In the Northern zone, a setback in harvest is envisaged by the CAB in a big way in Rajasthan - to 6.46 lakh bales from the preceding season’s 11 lakh bales - and marginally in Haryana at 13.84 lakh bales.
Punjab may be an exception, where despite a drop in area, output is expected to go up to 16.47 lakh bales from last season’s 14.25 lakh bales.
All the three states in the Southern zone - Andhra Pradesh, Karnataka and Tamil Nadu - are expected to fare better this year, and take the cumulative harvest of this zone to 82.54 lakh bales from the earlier 66 lakh bales.
With the bumper crop, the rising trend in cotton prices is likely to be reversed soon. The mills have sought a ban on cotton exports during the peak marketing period of October -December.
But, this is unlikely to cut much ice with the growers or the government who has already hiked the minimum support prices for the crop and may be averse to curb overseas sales in view of the favourable demand- supply equation, which permits substantial exports too.
There is an added risk of losing markets already established for Indian cotton and creating an image of India being an unreliable supplier.
CAB’s export projections too are conservative, being only 49.50 lakh bales for the next season as against the current year’s 83 lakh bales, although the output is projected higher by 30 lakh bales.
Meanwhile, the production revolution in the cotton country, thanks to the cultivation of hybrids on a vast scale and the use of Bt seeds, is still underplayed by the
government.
This is reflected in the wide divergence between the estimates issued by the CAB- a body representative of all the stakeholders in the cotton economy - and the department of agriculture.
If one were to rely on the official data, we are yet to reach the level of 300 lakh bales - the highest being 259 lakh bales in 2007-08 - though this feat was accomplished in that year, as per the CAB figures.
That the government figures are suspect in regard to this fibre is underscored by the fact, that in the current crop year, now in its last leg, output was only 239.35 lakh bales; this is less than the total consumption of 250 lakh bales.
Under this scenario, there can be no exports at all or even the year-end stocks of over 40 lakh bales.
The government perhaps relies on crop-cutting experiments to arrive at its estimates while the CAB has the resources and expertise of all sections of the cotton - growers, trade and industry - as well as access to records of ginning and pressing data to rely upon.
The government would do well to adopt the CAB data rather than release its own set of figures than only create confusion in one key area of cotton economy - production - on which so much else depends.
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