By Thomas Kutty Abraham
Cotton output in India, the second- biggest grower, may surge as much as 19 percent to a record next year as farmers boost planting, helping the nation partly ease curbs on exports, the world’s biggest denim maker said.
Production may climb to 33 million to 35 million bales of 170 kilograms each in the year starting Oct. 1, compared with 29.5 million bales this season, Sanjay Lalbhai, managing director of Arvind Ltd., said a telephone interview yesterday. Mills may boost raw cotton consumption to 27 million bales from 24 million this crop season, he said.
A bigger crop may help the country ease curbs on overseas sales to China, the top buyer, and increase competition with the U.S., the biggest exporter, and Uzbekistan. Prices, which advanced 30 percent in the past year, may decline on a bigger harvest, reducing costs for companies such as Arvind and Gokaldas Exports Ltd., which supply Gap Inc., Wal-Mart Stores Inc., VF Corp., Levi Strauss & Co., Abercrombie & Fitch Co. and Calvin Klein Inc.
“The increase would be predominantly because of higher acreage and it augurs well for local mills,” said Lalbhai, whose company has an annual capacity of 130 million meters. “Yield-per-hectare increased after farmers switched to BT cotton.”
BT cotton is a genetically modified strain that produces toxins lethal to bollworms, which are among the most serious threats to the crop. India’s average per-hectare yield has doubled since the nation allowed farmers to use modified seeds for the first time in 2002.
Cotton for December delivery rose 3.3 percent to 83.55 cents a pound on ICE Futures U.S. in New York yesterday, the most since April, after the U.S. forecast that shipments will surge 25 percent this year.
Acreage Boost
India may boost cotton acreage to at least 10.5 million hectares (25.9 million acres) next season, Textiles Commissioner A.B. Joshi said last month. Farmers planted the crop across 10.4 million hectares as of Aug. 5, up 9 percent from a year earlier, according to the farm ministry.
The South Asian nation may continue with some restrictions on exports in the next crop season to ensure raw cotton supplies to domestic mills remain adequate, Lalbhai said. The government is likely to cap exports at 4 million bales, he said.
“If you allow free exports, it may not be feasible to have a reasonable closing balance” between domestic supply and demand, he said. “A ban helps local industry to some extent, in that at least they have raw material.”
India, which curbed exports in April to rein in prices and bolster supplies, will end curbs on overseas sales in the new crop year, textile commissioner A.B. Joshi said on July 1.
Cotton prices may trade between 70 cents and 80 cents a pound as global inventory is low and textiles demand is recovering, he said.
“We believe that demand will remain strong,” he said. “If there is further bad news from the supply side, then prices can go up even further.”
