BackIndia seen passing China as world’s top cotton producer on area
The harvest is estimated at 39.63 million bales of 170 kilograms each, or 6.74 million metric tons, in the season starting 1 October
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Mumbai: India may topple China as the world’s largest cotton grower next year as farmers plant the the biggest area ever, boosting production to near-record levels, according to the Cotton Association of India.
The harvest is estimated at 39.63 million bales of 170 kilograms each (375 pounds), or 6.74 million metric tons, in the season starting 1 October, the association said in its first prediction for 2014-2015. That’s more than the 6.04 million tons estimated for India by the International Cotton Advisory Committee and the 6.22 million tons of Chinese output, said Dhiren Sheth, president of the Mumbai-based association.
Cotton futures fell 24% this year as expanding US and Chinese reserves increased global stockpiles to a record and rising supplies from India may further pressure prices. India’s crop may surpass initial estimates after a revival in the monsoon rains improved crop conditions, Sheth said. Chinese output may fall 24% in 2015 as the government ends direct purchases from farmers, according Cncotton.com.
Chinese production is seen lower as they are prioritizing food crops, Sheth said by phone from Mumbai. India’s crop will be substantially higher than estimates if the weather remains favorable, he said, referring to the 39.63 million bale estimate. The area will climb to a record, Sheth said.
Planting of cotton to soybeans and rice was delayed in June by a 43% deficit in monsoon rain, which accounts for more than 70% of annual precipitation. The shortage narrowed to 18% on Tuesday, accelerating planting, according to the India Meteorological Department.
Higher planting
The area under cotton increased 5.4% to 11.7 million hectares (28.9 million acres) as of 14 August, from the same time last year, according to India’s agriculture ministry. Acreage was a record 12.18 million hectares in 2011-2012, according to data from the Textiles Commissioner.
Export demand for the next season crop is not very substantial and not many contracts have been signed as China is going slow on purchases, Sheth said. Local consumption continues to grow.
Chinese output may drop to 5 million tons in 2015 from an estimated 6.6 million tons this year, according to Xi Jin, a manager at Cncotton.com, a researcher owned by China National Cotton Reserves Corp.
While futures rose 0.2% to 64.30 cents a pound on ICE Futures US today, they are 34% below a two-year high of 97.35 cents reached on 26 March. The contract for October delivery on the Multi Commodity Exchange of India Ltd. increased 0.3% to Rs18,340 ($302) per bale.
The Cotton Advisory Committee increased its estimate of global inventories at the end of the season started on 1 August to 21.69 million tons from 21.43 million tons predicted last month. World trade will drop 12% to 7.9 million tons, spurred by a 26% decline in imports by China, it said in a report e- mailed 1 August. BLOOMBERG
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