By Swansy Afonso
India may topple China as the worldΆs 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 Oct. 1, the association said in its first prediction for 2014-2015. ThatΆs 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 percent this year as expanding U.S. and Chinese reserves increased global stockpiles to a record and rising supplies from India may further pressure prices. IndiaΆs crop may surpass initial estimates after a revival in the monsoon rains improved crop conditions, Sheth said. Chinese output may fall 24 percent 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. IndiaΆs 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 percent deficit in monsoon rain, which accounts for more than 70 percent of annual precipitation. The shortage narrowed to 18 percent yesterday, accelerating planting, according to the India Meteorological Department.
Higher Planting
The area under cotton increased 5.4 percent to 11.7 million hectares (28.9 million acres) as of Aug. 14, from the same time last year, according to IndiaΆs 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 percent to 64.26 cents a pound on ICE Futures U.S. today, they are 34 percent below a two-year high of 97.35 cents reached on March 26. The contract for October delivery on the Multi Commodity Exchange of India Ltd. increased 0.4 percent to 18,370 rupees ($302) per bale.
The Cotton Advisory Committee increased its estimate of global inventories at the end of the season started on Aug. 1 to 21.69 million tons from 21.43 million tons predicted last month. World trade will drop 12 percent to 7.9 million tons, spurred by a 26 percent decline in imports by China, it said in a report e-mailed Aug. 1.
