The total cotton supply including imports of 5 lakh bales (lb) and opening stock of 47.50 lb is expected to touch 407.50 lb against the total demand of 351 lb. Despite expectations of higher production, export estimate was retained at 70 lb.
Mr A.B. Joshi, Textile Commissioner, said the projected area under cotton cultivation for the new cotton season is estimated at 121 lakh hectares (lh) against 111 lha recorded in 2010-11.
In 2010-11, the area under cotton cultivation in the north zone including Punjab, Haryana and Rajasthan was down seven per cent at 13.57 lh. In central zone that includes Gujarat, Maharashtra and Madhya Pradesh it increased seven per cent to 72.15 lh, while in Andhra Pradesh, Karnataka and Tamil Nadu (south zone) it was up 20.50 per cent at 24.51 lh.
Cotton production in the north zone was down three per cent at 39 lb, it was up 12.85 per cent at 202 lb in the central zone and down five per cent at 68 lb in the southern zone. The contribution from Orissa and other States doubled to 2 lb each, leading to a total production of 313 lb.
Demand from the mills and small scale units were down marginally at 215 lb (219 lb) and 21 lb (23 lb) in 2010-11, largely due to higher prices.
International cotton prices touched a new high at the start of 2010-11 with sharp jump in demand. The Cotlook A index reached a record of $2.44 per pound on March 8, almost three times its value on August 1, 2010.
After setting new record, cotton prices started fluctuating between $2.14 and $2.28 per pound between March and April. It fell sharply to $1.73 per pound on April 20, as demand depressed due to a global economic slowdown.
On an average, the Cotlook A index averaged $1.64 per pound in 2010-11, higher by 112 per cent compared to the previous season.
“The large swing in prices had put spinners in a spot. Faced with high raw material prices and difficulty in accessing credit, spinners had to curtail their output as they were not able to pass on the increase in cost to end customers.
“Yarn prices were declining due to lower demand in the later half of 2010-11,” said an analyst.