Farmers in India, the worldΆs second-largest cotton grower, may plant more of the crop than estimated after monsoon rains covered the main growing regions early, easing a drought that cut production the previous year.
The area under the crop in the 12 months starting Oct. 1 may match 11.77 million hectares (29 million acres) in 2012-2013, said Dhiren Sheth, chairman of the Cotton Association of India. That compares with an estimate for a 6.5 percent decline to 11 million hectares in a Bloomberg survey published on April 8.
Prospects for better yields and a jump in inventories may boost IndiaΆs exportable surplus, potentially pressuring prices in New York that climbed 13 percent this year, the biggest gain among the 24 commodities tracked by the Standard & PoorΆs GSCI Spot Index. Global output will drop 4.8 percent in the season starting Aug. 1, while demand climbs 2.3 percent, the International Cotton Advisory Committee estimates. Dry weather is hampering crops in Texas, the biggest U.S. growing state.
“The monsoon is fairly cooperative and the progress has been good,” A. Ramani, secretary of the Indian Cotton Federation, which represents 350 spinners, ginners and traders, said by phone from the southern Indian city of Coimbatore. “We should see a normal crop next year.”
Farmers have sown 1.17 million hectares as of June 7, compared 1.18 million hectares a year earlier, according to data from the Agriculture Ministry. The harvest dropped about 4 percent to 34 million bales of 170 kilograms each this season, the state-run Cotton Advisory Board said on April 17. Exports may total 9.5 million bales this year, more than the governmentΆs estimate of 8.1 million bales, Sheth said.
Monsoon Progress
Monsoon, which accounts for more than 70 percent of the countryΆs annual rainfall, reached Maharashtra and Gujarat states at least five days earlier than normal, according to the India Meteorological Department. Showers, which have been 12 percent more than a 50-year average since June 1, were as much as 40 percent above average in Gujarat and 106 percent more in Maharashtra, the departmentΆs data showed. The states are the nationΆs top growers, representing almost 50 percent of the crop.
“In certain areas such as Gujarat, the farmers planting intentions suggest that they will plant less, but this will be compensated by higher area in other states such as Andhra Pradesh, Maharashtra and Karnataka, where the rains have already arrived,” Ramani said.
The area may be lower by 100,000 hectares in Gujarat this year as farmers will shift to more profitable crops such as peanuts and guar, said Hasmukhbhai Raval, chairman of the Gujarat State Co-operative Cotton Federation Ltd.
Craze Missing
“During the harvesting season last year prices of cotton were less, so the craze for it has gone down,” Raval said. “Rains have just begun, but there is not enough water to drink, leave alone farming. So sowing may be delayed by a month.”
Cotton for December delivery lost 0.8 percent to 85.18 cents a pound on ICE Futures U.S. in New York yesterday. Futures tumbled 18 percent last year, extending a 37 drop in 2011.
“΅If the rains continue positively, than it will be positive not only for cotton but for other crops also,” Sheth said. “Planting looks promising. We have to see how the next three months go.”
Monsoon rainfall during the four months through September may be 98 percent of a 50-year average, a level considered normal, according to the weather department. The precipitation was 8 percent below average last year and reduced water for crops in Maharashtra, Gujarat and Karnataka, cutting cotton and sugar cane harvests.
