Cotton output may fall 20 per cent as rains turn patchy

There was no rain after the sowing of cotton, which has already wilted, said Purushottam Kale, a farmer from Akola in Maharashtra state.

“Now I have to plant either pulses or soybean,” Kale said. Monsoon showers in Gujarat and Maharashtra, which together account for about 60 per cent of India’s cotton output, were as much as 70 per cent less than normal, weather office data showed.

In the northern parts of India, cotton acreage is already down 300,000 hectares to 1.4 million hectares, said B. Monga, an official of the Central Institute for Cotton Research.

Irrigation could have helped in some states but lower water levels in reservoirs are also a cause for concern, Monga said.

Water levels in India’s main reservoirs in the week to June 28 were at 16 per cent of capacity, down 11 per centage points from the year ago period.

Any drop in output will cut exports in the 2012-13 season, traders said.

Due to the bumper harvest of 2011-12, traders believe India’s cotton exports will hit an all time of 13.5 million bales in the current season that ends in September 2012.

China, the top buyer, already has a huge stockpile of cotton, which could damp any surge in global prices, even if India exports less next year, said Arunbhai Dalal, a trader based in Gujarat.

China, the main buyer of Indian cotton, is renegotiating prices and has defaulted on many import contracts following a sharp fall in the price of cotton in the United States.

The benchmark December cotton on the ICE was trading down 0.41 per cent at 72.30 cents per lb by 0952 GMT.

Source: http://economictimes.indiatimes.com/news/economy/agriculture/cotton-output-may-fall-20-per-cent-as-rains-turn-patchy/articleshow/14689187.cms

You may need:

• Cotton prices from CME Group
• Cotton prices from Intercontinental Exchange (ICE)
• Cotton prices from Zhengzhou Commodity Exchange, China (CZCE)