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Dry Weather Threatens India Cotton Crop

07 August 2012
USDA Foreign Agricultural Service

INDIA - The 2012/13 area planted to cotton is expected to drop 200,000 hectares to 10.6 million hectares, significantly lower than the record 12.2 million hectares that were planted in 2011/12.

If rains do not improve during August, area could drop further. 2012/13 production is forecast at 30.0 million 170 kg bales, down 700,000 bales from the current USDA estimate.

Indian cotton continues to trade at a premium to the international market, prompting mills to increase their imports of cotton and exporters to sell stocks in the domestic market. Strong spinning margins are leading to robust mill consumption. 2012/13 exports are forecast 600,000 170 kg bales lower at 5.4 million 170 kg bales due to lower production prospects.

Area and Production Forecast Lower

According to official reports, cotton sowing had reached 8.3 million hectares across India as of July 20, 2012. The pace is 700,000 hectares slower than the year-ago pace when Indian farmers planted a record 12.2 million hectares. The Government of India is currently projecting planted area of 11.5 million hectares, significantly higher than the current USDA estimate of 10.8 million hectares.

Within India, two-thirds of cotton is produced in the central cotton growing zone in the states of Maharashtra, Madhya Pradesh, Gujarat and Odisha where much of the crop is rain-fed. The northern zone, which consists of the states of Punjab, Haryana and Rajasthan, produces cotton under irrigated conditions and accounts for about 15 per cent of production. In the south, the states of Andhra Pradesh, Karnataka and Tamil Nadu account for 20 per cent of production.

Trade and official sources indicate that farmers in Gujarat and Maharashtra (India’s largest cotton producing states) could still increase area if rains materialize in August, but yields will likely be affected due to late planting. Recent field travel to Gujarat indicates that cotton area is down by over 50 per cent due to dry conditions. Farmers are shifting to guar and are waiting to see if rains materialize in early August before deciding to plant castor, cotton or more guar. A significant shift to groundnuts is not expected because the crop requires relatively significant levels of water.

While August rains could spur farmers to plant more cotton, persistent dry conditions at this late stage suggest that planted area will drop further and 2012/13 area is now estimated 200,000 hectares lower at 10.6 million hectares based on lower estimated area in Gujarat and Maharashtra. Yields are also expected to drop further to 480 kg per hectare, lowering production to 30 million 170 kg bales (23.4 million 480 bales), down 700,000 170 kg bales (547,000 480 lb bales) from the current USDA estimate.

Further Reading

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