Output may reach 40 million bales in 2011-12
Cotton output in India, the world’s second-largest producer, may rise to a record for a second straight year as a rally in prices spurs farmers to boost planting, traders said.
Output could reach 40 million bales in the 2011-2012 season, said Parth Mehta, joint managing director of Bhadresh Trading Corp, the nation’s top cotton exporter. India will produce its biggest ever crop in the current season that began October 1, according to a Cotton Advisory Board estimate.
Cotton in New York, a global benchmark, has more than doubled in the past year, peaking at an all-time high of $2.1 a pound on March 7, as global supplies shrank. Supplies and consumption will reach a record in the 2011-2012 season, industry researcher Cotlook Ltd said last month. “Price is by far the biggest incentive for the farmer to go ahead and plant more cotton,” said Mohit Shah, director of Mumbai-based Gill & Co, which has been trading cotton for more than a century. “It will come at the cost of soybeans, it could come at the cost of rice up in the north and chilis and tobacco down south.” Shah forecast next season’s crop at 35 million to 36 million bales.
Cotton futures surged 92 per cent in 2010, the biggest gain since 1973. The fibre is the top-performing commodity on the S&P GSCI Commodity Index in the past 12 months, ahead of silver and coffee. Prices slumped by the exchange limit of seven cents to $1.9 yesterday on signs demand from China may ease.
‘Huge crop’
Production in India is forecast to rise to 31.2 million bales in the current season, the Cotton Advisory Board predicted in February. That compares with 29.5 million bales last year and the record 30.7 million bales set in the 2007-2008 season. Farmers sowed 11.16 million hectares of cotton this season, the biggest ever crop.
“We expect a crop easily of 40 million bales, which is huge,” in 2011-2012, said Bhadresh’s Mehta. A bale in India weighs 375 pounds, or 170 kg.
Farmers may boost crop area by 15 per cent to 20 per cent in the 2011-2012 season because of higher prices, said Dhiren Sheth, president of the Cotton Association of India. The area planted with cotton in Pakistan, the fourth-biggest grower, may widen 10 per cent in the new season, Muhammad Atif Dada, chairman of the Karachi Cotton Association, said at a conference in Dubai on Tuesday.
“Cotton has performed much better in comparison with other commodities or other agri-products,” he said in an interview in Dubai. Farmers “are excited about cotton for sure,” Sheth said.
