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India’s cotton production to increase while consumption to decrease: CAI

 

Indias cotton production to increase while consumption to decrease CAIAt its recent meeting, Cotton Association of India (CAI) increased its cotton production estimates for the 2019-20 season by 19 lakh (1.9 million) bales to 354.50 lakh (35.45 million) bales of 170 kg each. The committee increased its production estimate for the North zone by 3 lakh (0.3 million) bales, Central zone by 13 lakh (1.3 million) bales and Southern zone by 3.25 lakh (0.325 million) bales. This increase in production estimate is a result of higher pressing of cotton bales due to aggressive buying by CCI that induced farmers to bring their kapas to the market.

However, CAI predicts a decline in cotton consumption during the current year by 30 lakh bales (3.0 million) to 250 lakh (25 million) bales as against previous estimates of 280 lakh (28 million) bales. This reduction in consumption is estimated due to the disruptions caused on account of lockdown and shortage of labor. Upto July 31, cotton consumption in India is estimated to have been around 206 lakh bales (20.6 million) of 170 kg each.

Exports to rise by 8 lakh bales

CAI has also increased estimates for cotton exports from India by 3 lakh (0.3 million) bales. Compared to previous estimates of 47 lakh (4.7Indias cotton production to increase while consumption to decrease million) bales, the association now expects India to export 5 lakh (5.0 million) bales during the current year. This estimate is higher by 8 lakh (0.8 million) bales compared to estimates for 2018-19 crop year. The association expects upto 43 lakh (4.3 million) bales to have been shipped upto July 31 and the remaining 7 lakh (0.7 million) bales are expected to be shipped during the months of August and September 2020.

Imports estimates falls by 50 per cent

CAI has also increased its estimate for cotton imports during the year by 1 lakh (0.1 million) bale to 16 lakh (1.6 million) bales compared to its previous imports estimate of 15 lakh (1.5 million) bales. However, this estimate is half of the previous year’s import estimate of 32 lakh (3.2 million) bales as cotton is now easily available in the domestic market at cheaper rates. India is estimated to have imported around 15 lakh(1.5 million) cotton bales upto July 31 and remaining 1 lakh(0.1 million) bales are expected to arrive in August and September 2020.

India to add 2 mn bales to cotton stock

Upto July 31, Indian spinning mills held upto 15 million (1.5 million) bales of cotton stock of 170 kg each This is an approximately 25 days’ consumption by mills at their current pace of cotton consumption this season. On the other hand, stock with CCI/Maharashtra Federation, MCX, MNCs, Ginners, etc. upto July 31, 2020 is estimated to be around 128.40 lakh(12.84 million) bales which is equivalent to about 136 lakh(13.6 million) running bales of 160 kg each totaling to 143.40 lakh(14.34 million) bales of 170 kg each.

The CAI;’s crop committee estimates total cotton stocks upto September 30, 2020 to reach 402.50 lakh (40.25 million) bales of 170 kg each as against 382.50 lakh(38.25 million) bales estimated in the previous month. This total stock includes opening stock of 32 lakh (3.2 million) bales on October 01, 2019, production estimated now at 354.50 lakh (35.45 million) bales and imports estimated at 16 lakh (1.6 million).

This is equivalent to about 109 lakh (10.9 million) running bales of 160 kg each. All the members of the Crop Committee from across the country will closely monitor cotton arrivals, consumption, imports, exports, etc before meeting again in September to estimate the final crop numbers and the cotton balance sheet as at the close of the 2019-20 crop year.

 
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