India’s cotton output may moderate to 35 million bales in CY19, says ICRA

India’s cotton production is expected to moderate to 35 million bales in cotton year (CY) to September 2019 after a reasonably good CY2018 due to a decline in acreage to 114 lakh hectares for against 122 lakh hectares estimated for the previous crop year, ratings agency ICRA said in its latest report.

The decline in acreage is expected to be led by some key cotton growing regions in the Western and Southern belts, wherein pest attacks had caused sizeable losses to the cotton farmers during CY2018, resulting in a shift in farmer preference in favour of alternate crops such as soybean, the report said.

As for CY2019, while cotton sowing in the Central/ Western/ Southern belts is yet to commence, the Northern Belt comprising Punjab, Haryana and Rajasthan reported a tepid beginning, with area coverage under cotton being lower by almost 14 per cent this year (till May end), vis-à-vis the level normally witnessed till this time of the year, and almost 18 per cent below the level reported last year.

While on the one hand, water levels in reservoirs across the country are lower than the past 10-year average, on the other hand, water supply from some of the canals catering to Punjab, Haryana and Rajasthan has been erratic amid issues pertaining to contamination of water and closure for relining work.

The pick-up in sowing pace was particularly visible in Rajasthan, where 44 per cent of the area covered under cotton was sown in the last week of May 2018. The recent spurt in cotton sowing in Rajasthan (62 per cent YoY increase till May 2018), post a tepid beginning, is being driven by the increased preference of farmers for cotton vis-à-vis the prime alternate crop of guar gum, amid favourable cotton prices and expectations of normal monsoons.

In comparison, Punjab and Haryana have seen 26 per cent and 35 per cent lower sowing vis-à-vis last year, respectively. While there is an increasing possibility of some shift in favor of more profitable paddy crop vis-à-vis cotton in Punjab and Haryana considering expectations of a normal monsoon, ICRA does not envisage any major deviations in cotton acreage and output from the northern belt, the report said.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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