India cotton production at comfortable level

Posted on May 6, 2013 by Ramachandran

NEW DELHI – The Cotton Advisory Board (CAB) has estimated production of cotton in the 2012-13 (October-September) season at 34 million bales while exports have been pegged at 8.1 million bales, the Lok Sabha was told.

“The CAB in its meeting on April 17, 2013, estimated a crop size of 34 mln bales (170 kg each), consumption of 27million bales and exports of 8.1mln bales,” Minister of State for Textiles Panabaaka Lakshmi said in a written reply.

There is adequate cotton available in the country for domestic consumption, prices remain stable and no supply side disruptions have been observed, she added.

In the last cotton season, cotton output stood at 35.2 mln bales and exports were to the tune of about 12.7 million bales.

COLUMN-Cotton back in favour globally after two years of losses

Posted on April 12, 2013 by Ramachandran

By Naveen Mathur

Following two consecutive years of losses, Cotton has once again become the preferred commodity of market participants’ world over in 2013. A glut caused due to demand erosion and record high stocks for two consecutive years in a row led international cotton prices to touch their 10 year average price of 65-66 cents per pound. Nevertheless, with the largest importer on a buying spree and expectations of drop in planting area in the largest exporting nation, Cotton prices witnessed a sharp rebound and touched a one year high of 93.93 cents per pound in March 2013.

With the demand supply situation of 2012-13 already factored in, market participants’ world over have now started eying the fundamentals of next season. Globally, cotton prices are influenced by three nations, viz- China India and US. The foremost factor that starts giving cues of the next season is the planting intention data of US. The USDA’s National Agricultural Statistics Service (NASS) releases annual prospective plantings towards the end of March which provide survey-based estimates of the planting intentions of U.S. farmers.

The US holds a significant share of around 40 percent in world exports and accounts for over 11-12 percent share in the world cotton acreage and production. Thus, this preliminary data from the world’s largest exporter and the third largest producer of Cotton after China and India holds a tremendous importance in deciding Cotton price trend.

For 2013, NASS has released the Prospective Plantings report on 28th March 2013 wherein Cotton acreage is expected to decline next year as a price slump and demand erosion has pushed growers to shift in favour of more remunerative crops. Based on a survey of 83,500 farmers, USDA estimated upland cotton plantings would drop by 19 percent to 4.1 million hectares. With an expected drop in US acreage, world cotton acreage and thereby output may be adversely hit in 2013-14.

According to International Cotton Advisory Committee, Cotton production will drop by around 9.7 percent to 23.47 million tonnes in the year 2013-14 starting Aug 1, 2013. Global consumption will reach 23.71 million tons in 2013-14, marginally higher than 23.41 million estimated for the 2012-2013 season and thus stockpiles would tighten next season to 16.44 million tonnes from record high levels in 2012-13.

As far as the global stocks are concerned, although world is forecast to see a record surplus by the end of the crop year in July 2013, more than half of this surplus is held by China and thus considered unavailable to the global marketplace. Cotton balance sheet outside China is tightening thus supporting an upside in the cotton prices. Nevertheless, with the bulk of China’s cotton supply being held by the government, imminent decisions about the release of reserve cotton and import quota may have a significant impact on world Cotton prices.

On the domestic front, fundamentals for 2012-13 season (October-September) seems to be comparatively stable for domestic cotton markets. Record high exports in 2011-12 season have exerted pressure on the domestic stock piles. Further, domestic cotton production is also pegged lower by 7 percent at 33 million bales. Despite of lower supplies, ending stocks for 2012-13 are estimated to increase on the back of lower exports.

After exporting record 12.95 million bales of Cotton during the crop year 2011-12 (October-September), Indian exports are estimated to decline to 8 million bales in 2012-13. In the recent development, the textile industry has asked government to liquidate stocks from the state reserves. However, the agriculture ministry is opposing the same as offloading stocks may drag down prices below their Minimum Support Prices.

Considering the domestic as well as international scenario, Cotton seems likely to remain in positive territory in the coming months.

India revises cotton support prices upwards

Posted on November 3, 2012 by Ramachandran

New Delhi - The Indian government has decided to increase the minimum support price (MSP) of cotton by up to 29 per cent and said it planned to buy 90 lakh bales in the 2012-13 season.

The MSP for medium staple cotton has been hiked by 29 per cent to Rs 3,600 a quintal from Rs 2,800 and by 18 per cent to Rs 3,900 for the long staple variety, the Textiles Ministry said in a statement.

It said the Cotton Advisory Board has estimated cotton production in the country at 334 lakh bales, consumption at 260 lakh bales and an exportable surplus at 70 lakh bales. Although domestic consumption is showing increasing trends, the sharp decline in global trade and increase in world stocks have imposed a downward stress on cotton prices, which is reflected in Indian cotton markets also. Domestic prices have touched MSP levels in some places of the State of Andhra Pradesh and are close to MSP levels in Maharashtra, Punjab, Rajasthan and Madhya Pradesh, it added.

the government has formulated a contingency plan for procurement of 90 lakh bales of cotton under MSP operations in cotton season 2012-13 by operationalizing 288 procurement centers in nine cotton growing States.

The Cotton Corporation of India has already raised working capital requirement upto Rs. 15000 crores for MSP operations. The distribution of cotton procurement centers has been firmed up in consultation with State Governments. Cotton Corporation of India will operate 20 procurement centers in Punjab, 14 procurement centers in Haryana, 28 procurement centers in Rajasthan, 47 procurement centers in Gujarat, 55 procurement centers in Maharashtra, 17 procurement centers in Andhra Pradesh, 13 procurement centers in Karnataka and 7 procurement centers in Orissa, the statement added.

The criteria for selection of a procurement center include expected arrivals of 50,000 quintals, existence of a functional market yard, availability of a weighbridge in the market yard, availability of ginning and pressing factories and availability of fire fighting facilities.Three procurement centres have already become operationalised in Andhra Pradesh, the statement said.

Research body attempting high density planting system for cotton

Posted on June 8, 2012 by Ramachandran

The Central Institute for Cotton Research is working on high density planting system for cotton using short duration varieties in the Vidarba region of Maharashtra and the results would be known soon, K R Kranthi, director of the institute said.

“All over the world they are taking to early maturing varieties and we are also trying the new system which is meant for rain-fed regions,” Kranthi said while speaking at a panel discussion on Agriculture and Technology.

He said agriculture in rain-fed states like Maharashtra was becoming a problem and the country needs to evolve technologies which fit into specific regions. There was need to learn from countries like Brazil, which too was rain-fed, but their yields remained very high.
He said in the last decade everything about agriculture, including cotton where yields have more than doubled, has changed and the effort should be to increase productivity of all crops.

“If a technology is good it cannot be stopped. The farmer has accepted technology. It is all a question of placement of right technologies at the right place,” Kranthi, who has done extensive research on cotton and has patents to his credit in India, South Africa and China, said at the discussion organised by IndoAsiancommodities.com.

Dr Kranthi said several advances like herbicide resistant cotton technology and inter culture operations were improving the crops and helped in saving on labour costs and keeping the fields clean.

“We do not have any agriculture land which can be brought forward. In Brazil only 18 percent of land area is used for agriculture, in South America huge land area is untapped,” he said adding that in the absence of land availability increasing productivity through technology was the answer.

He said India should have its own mechanism to utilize the large amount of technology that is available until the harvesting stage and still remained unutilised. Kranthi said the country would need to knit these available technologies in the most appropriate and economic manner to suit specific conditions and for the farmer to obtain optimum results.

The government in a report on ‘State of Indian Agriculture’ presented to parliament in February emphasized the need to bridge the yield gap in low productivity regions by technology, inputs and other interventions. It said raising productivity also assumes significance in view of the demand for land growing for industrialization, infrastructure and housing.

Use technology at every step to ensure farm progress :Experts

Posted on June 6, 2012 by Ramachandran

India needs to utilise technology at every stage from seed to harvest to emerge as a global leader in agriculture over the next few years, eminent experts and scientists said at an interactive discussion in Mumbai today.

They said the country would need to knit these available technologies in the most appropriate and economic manner to suit specific conditions and for the farmer to obtain optimum results.

The panel discussion at the Mumbai Press Club was chaired by Dr K R Kranthi, Director, Central Institute for Cotton Research, Nagpur and the distinguished panelists included Dr J S Pai, Executive Director of Proteins Foods and Nutrition Development Association of India.

Use of biotechnology and adoption of modern concepts could considerably reduce farmer’s woes and lift his income, they told the workshop organised by IndoAsiancommodities.com, a website devoted to in-depth analysis and opinions on commodities, farm technology and metals.

India is on a growth path and there is nothing like a laggard farmer, you give him the technology and he will grab it and prove it,” said Dr Kranthi.

He said in the last decade everything about agriculture, including cotton where yields have more than doubled, has changed.

He dismissed theories being floated around about the harmful effects of biotechnology and said scientific experiments have proved that these claims were baseless.

Dr Pai, an authority on food technology, said technology in agriculture is nothing but applied science and application of concepts like biotechnology was nothing new.

“Biotechnology which is properly tested and utilized should be introduced,” he said adding that even common food that we eat can have safety issues.

He said several safety panels in the state and government sector are examining these issues very minutely.

Pai said Bt cotton has been a success story after proper tests and hopefully in the coming years clearance will come for the commercialization of Bt brinjal and other food crops which are under various stages of testing.

‘Adopt biotechnology’

He said there were several genes of crops which were being tested all over the world and India has also reached a stage where adoption of biotechnology for productivity and prosperity is necessary.

Dr Kranthi said several advances like herbicide resistant cotton technology and inter-culture operations were improving the crops and helping in saving on labour costs and keeping the fields clean.

He said rain- fed agriculture in states like Maharashtra was becoming a problem and we need to learn from countries such as Brazil which too is rain-fed on how it improved production and yields.

Dr Kranthi said the institute was trying high density planting system for cotton with use of early maturing seeds in the Vidarbha region of Maharashtra with use of technology and the results should be known soon.

“We do not have any agriculture land which can be brought forward. In Brazil only 18 percent of land area is used for agriculture, in South America huge land area is untapped,” he said.

Within a short period some of these countries will be providing for India if we are unable to knit the technologies in a proper manner, Kranthi said.

He said India should have its own mechanism to utilize the large amount of technology that is available until the harvesting stage and still remains unutilised.

Experts also stressed on the need to adopt modern farm technology to step up productivity and ensure farmers prosperity while India’s economy is on a downward spiral and the agro-based country is on the threshold of a second green revolution.

Several suggestions to bolster agriculture growth through utilization of better seeds, cut input costs and provide assured income to the vast farming community which is under great stress on account of a weak rupee, high interest costs and growing debt were stressed during the lively workshop.

‘Technology as a Driver of Growth: Ensuring Farm Prosperity’, is the fifth in a series of media workshops and panel discussion on the importance of farm technology being organised by IndoAsiancommodites.com. The first such event was held in Jaipur and chaired by Dr Swapan Datta, Deputy Director General, Indian Council for Agricultural Research. The other events were held at Bhopal, Ahmedabad and Hyderabad.

Participating in the discussion the panelists said science and technology could be used to ensure value addition in crops and for evolving techniques for plants to withstand environmental and climate induced changes like droughts, floods and temperature fluctuations.

Cotton exports: The sting may well lie in the tail

Posted on April 30, 2012 by Ramachandran

By Staff Correspondent

NEW DELHI – After nearly two months of suspense, India lifted curbs on cotton exports by allowing fresh registrations by traders.

The move brings down curtains on a policy flip-flop that had left everybody wondering about what the government’s intentions were — at least in the near term.

India will probably be able to ship out an additional 1.5 million bales of cotton in the marketing year ending Sept 30. because local prices are around 10% cheaper than international rates.

So far, the country has exported 10.6 million bales so far in 2011-12, while a further 900,000 bales are to be shipped in the next few weeks.

The commerce ministry had imposed a ban on cotton exports on March 5, saying that the quantity shipped out had exceeded its estimates, and therefore it was taking the decision to prevent any domestic shortage.

But it revoked the ban within a week, as soon as Agriculture Minister Sharad Pawar objected to the decision on grounds that it would deprive farmers from getting better prices. Two other large cotton producing states, Maharashtra and Gujarat, also echoed Pawar’s viewpoint.

What followed was a bizarre chain of events. The trade ministry launched a scrutiny of all cotton export permits issued since January and kept on hold registration of fresh permits.
The reason: It suspected China was buying cheap cotton from India and building up its raw material supplies for its textile mills.

However, the government has probably backtracked as it realized the cost of angering a key coalition ally and displeasing farmers would be something it could ill afford.
Plus, the country would have more than adequate surplus with the production expected to touch 34.7 million bales, while the domestic consumption was pegged at 24.5 million bales in the current marketing year.

With the aim of pleasing the textile lobby, it has asked the Cotton Corporation of India to create a reserve of one million bales that can be used between June to August to bail out any Indian textile mill that faces a supply squeeze – a necessity as most of them have run out of cash after blundering with purchases of expensive cotton a year ago.

But the sting may well lie in the tail – the government has announced it will review the cotton exports scenario again in two to three weeks.