CAI lowers cotton crop estimate to 29.8 million bales for 2022-23 season
3 min read . Updated: 11 May 2023, 11:46 PM IST
PremiumCAI has retained its cotton import projection at 1.5 million bales compared with 1.4 million bales recorded last year.
Cotton Association of India (CAI) on Thursday further lowered its cotton crop estimate by 465,000 bales for the 2022-23 season to 29.8 million bales as production is expected to decline in Maharashtra, Telangana, Tamil Nadu and Odisha. The latest estimate of cotton crop is the lowest since 2008-09 season which was 29.0 million bales.
In the beginning of the season, the association estimated cotton crop production to be 34.4 million bales compared with 30.7 million bales last season. CAI’s latest crop downward revision is against its March 31.3 million bales estimate.
The continuous cut in the estimates has been attributed to less picking of cotton due to changes in weather patterns. “As many as 3-4 pickings of cotton were expected in states like Maharashtra, Gujarat, Madhya Pradesh and Telangana. However, only two pickings have taken place so far, a Mumbai-based industry expert said, seeking anonymity.
Further, it is also anticipated that farmers are holding their produce back in hope of remunerative prices like last year. Prices of cotton in 2021-22 season exceed ₹100,000 a candy (1 candy = 365 kilogram). Currently, cotton is being traded in the range of ₹59,000-62,000 per candy in key markets of Rajasthan, Maharashtra, Telangana and Andhra Pradesh, and ₹61,900 a candy on the Multi Commodity Exchange.
Due to less attractive prices than last year, this year’s arrivals fell to 17.86 million bales so far in the ongoing season started October as against 24.4 million bales during the corresponding period last year.
“Domestic ginners and spinners are operating under the hand-to-mouth situation as farmers are bringing less produce. This is the reason why the market is in the range-bound position. Prices are not going either up or down," said Ajay Kedia, director of Kedia Commodities, a financial service providing firm on commodities.
Prices should go up amid the shrink in the production of cotton as far as the demand-supply dynamic is concerned. “Despite the fall, prices of cotton in the domestic markets have not gathered pace because of sluggish demand amid recession fear," Kedia added. “In the last six months, demand from China, Bangladesh and Pakistan subdued because of concerns over recession. This, too, kept prices of cotton in the domestic market." Bangladesh is the largest buyer of Indian cotton.
CAI has retained its cotton import projection at 1.5 million bales compared with 1.4 million bales recorded last year. About 700,000 bales have arrived at Indian ports so far this year, as per data by CAI. The exports, on the other hand, are seen 500,000 bales lower to be 2 million bales in 2022-23 (October-September) season.
Estimated domestic cotton consumption for this season is around 31.1 million bales as against 31.8 million bales in the previous year. Total availability of cotton is projected to be 34.5 million bales, including opening stock of 3.2 million bales and imports of 1.5 million bales. This, however, excluded the estimated production of 29.8 million bales. The carryover stock at the end of the season is predicted to be 1.4 million bales.