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Cotton output may rise 7% to a record high

Cotton output may rise 7% to a record high
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First Published: Thu, Jun 14 2007. 12 46 AM IST
Updated: Thu, Jun 14 2007. 12 46 AM IST
Mumbai: Cotton output in India, the world’s third largest producer, may rise 7% to a record high in the year starting October as farmers increase the use of genetically altered seeds to boost yields.
Production may rise to 29 million bales of 170kg (375 pounds) each as planting of modified cotton expands to cover two-thirds of the nation’s 9 million hectare (22 million acre) growing area, executive director of the East India Cotton Association, O.P. Agarwal, said.
Record output in India may weigh on prices that rose to a one-year high in New York this week amid planting delays in the US, the biggest exporter, and improve sales for Monsanto Co., the world’s biggest developer of genetically engineered crops.
“What will help higher output is the rising yield from the use of genetically modified seeds,” Agarwal said on Tuesday by phone from Mumbai. “There are indications of the crop being 28-29 million bales next year.”
Farmers in the northern Indian states of Punjab, Haryana and Rajasthan planted modified cotton seeds, including Monsanto’s Bollgard II variety, on at least 10% more land, according to C.S. Teotia marketing director at the state-run Cotton Corp. of India.
Bollgard seed contains a protein from a soil microbe called Bacillus thuringiensis, or Bt, that protects the crop from bollworms and requires less pesticide. India’s average per-hectare yield has risen by two-thirds to 501kg since cotton farmers first planted modified seeds in 2002. Output has almost doubled to 27 million bales, according to the country’s Cotton Advisory Board.
Indian mills have exported 4.7 million bales so far this year because of higher global prices, with more than 60% going to China. India may surpass Uzbekistan this year as the world’s second biggest exporter of the fibre, East India’s Agarwal said.
“Better quality Indian cotton due to use of Bt seeds has helped push exports,” he said. “Chinese buyers are shifting partly to Indian cotton.”
Cotton futures for December delivery fell 45 cents, or 0.8%, to $57.29 a pound on the New York Board of Trade on Tuesday. The contract rose to 57.74 cents a pound on 11 June, the highest closing price for a most active contract since 12 June 2006.
Still, late rains can damage the Indian crop. “A lot will depend on the rains the cotton-growing states such as Gujarat and Maharashtra receive,” said D.K. Nair, secretary general of the Confederation of Indian Textile Industry. “More than two-thirds of our cotton crop is still rain-fed.”
India’s monsoon rains may cross into Maharashtra and Gujarat, the biggest cotton-growing states, later this week, the weather bureau said on 11 June.
The four-month season, which provides four-fifths of the nation’s total rainfall, will be 95% of the long-term average, a level deemed normal, the bureau said on 19 April.
BLOOMBERG
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First Published: Thu, Jun 14 2007. 12 46 AM IST
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