Cotton Scenario in India


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A report by Amitabha Sen

Overview Five-year Cotton  Balancesheet
Cotton area, production, yield World  Cotton Supply and Distribution
Production, consumption, imports, exports, ending stocks of world's major cotton countries (1997-98 to 2001-02) World cotton area, yield and production
Minimum Support Price (MSP) for Indian farmers   USDA Estimate



OVERVIEW

INDIA, the second largest cotton growing country in the world after China, is estimated to have produced 31 million bales of cotton during  2007-08 (provisional estimate) compared with 28 mn in the previous year, according to Cotton Corporation of India (CCI).  India accounts for little over 26 percent of total global production of cotton and accounts for 28.18 percent of global cotton area. According to the USDA,  in terms of global production. with 21.80 mn bales India ranks second (China topping the list) in cotton production closely followed by US (with  21.58 mn tonne) in cotton year 2006-07.  China's cotton production stood at 35.50 mn bales in 2006-07. Compared with 2005-06, India's cotton area in 2006-07 stands larger at 9.53 mn hectares compared with previous year's 9.14 mn hectares. The yield per hectare works out at 553 kilogram against 521 kg per hectare in 2005-06, according to CCI. India's cotton year is October-September. 

The USDA's provisional estimate for 2007-08 (Report, February 2008) indicates about 2.45 percent lower global cotton production in global cotton year  (August-July) 2006-07. Production in 2007-08 stood at 119 mn bales compared with 122 mn bales in 2006-07. Consumption of cotton in 2007-08 is estimated to have increased by 2.21 percent to stand at 126.32 mn bales compared with estimated 123.58 mn bales in 2006-07. Global ending stocks of cotton are estimated higher at 60.71 mn bales at the end 2006-07 from estimated 57.35 mn bales at the end of 2005-06.

According to International Cotton Advisory Committee's latest report (March 2008)  the gap between world production and consumption, world cotton ending stocks are projected to decline during 2007-08 by 1.1 million tons (9 percent) to 11.5 million tons. World mill use is projected to exceed production again in 2008-09, and a further reduction in world ending stocks could take place to an estimated
10.7 million tons (-7 percent).

ICACís preliminary projections for 2008-09 suggest an increase in world production to 27.1 million tonne and in world mill use to 27.8 million tonne. Consequently, world ending stocks are expected to decline further in 2008-09, to 10.6 million tonne.  

World cotton prices has further strengthened in 2006-07 compared with previous cotton year.

Among the cotton growing states in India Gujarat takes the lead for 2007-08 with 11.0 mn bales followed by Maharashtra's 6 mn bales, Andhra Pradesh 4.3 mn bales and Punjab 2.4 mn bales

World Cotton Outlook (2004-05 to 2007-08)
(In 1000 480-Lb bales)

      2004-05 2005-06 2006-07 2007-08
    Production 122168 117727 122071 119208
    Imports 33435 44288 37277 406315
    Consumption 108896 116359 123583 126323
    Exports 34993 44969 37398 40053
    Beginning Stocks 44301 57184 60177 60713
    Source: USDA Report (February, 2008)
    E: Estimated
    F: Forecast


India's seven-year cotton balance sheet  (2001-02 to 2007-08)
(In lakh bales*)

    Items 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
    SUPPLY

    Opening stock

    40.00

    40.00 24.00 21.00 72.00 52.00 47.50

    Crop size

    136.00

    136.00 177.00 232.00 244.00 280.00 310.00

    Imports

    16.00

    17.67 7.21 6.00 4.00 5.53 6.50

    Total supply

    192.00

    193.67 208.21 259.00 320.00 337.53 364.00
    DEMAND

    Mill consumption

    146.00

    142.42 150.39 168.00 182.00 194.89 207.00

    Small Mill Consumption

    11.00

    11.63 13.00 17.00 20.00 21.26 23.00

    Ex-factory consumption

    11.50

    14.78 10.57 13.00 15.00 15.88 15.00

    Total consumption

    168.50

    168.83 173.96 198.00 217.00 232.03 245.00

    Exports

    0.50

    0.84 13.25 12.00 47.00 58.00 65.00

    TOTAL DISAPPEARANCE

    169.00

    169.67 187.21 210.00 264.00 290.03 310.00

    1996-97

    Includes 6 lakh bales of loose cotton not accounted for in statewise production in 1996-97

     

    Opening stock is based on verification of stock by the office of the Textile Commissioner

     

    Since 1996-97 crop year changed from Sept.1 to October 1

    1997-98

    Includes 5.75 lakh bales of loose cotton not accounted for in statewise production in 1997-98

    1998-99

    Includes 8.25 lakh bales of loose cotton not accounted for in statewise production in 1998-99

    1 lakh = 100,000
    1 bale =  170 kilogrammes

    Source:
    Cotton Corporation of India

India's cotton area, production and yield

    Year

    Area in lakh hectares Production in lakh bales 
    (1 bale : 170 kg)
    Avg. Yield in Kg. per hectare Consumption
    (In lakh bales)

    1950-51

    58.80

    32.80

    95

    42.10

    1960-61

    76.10

    56.80

    127

    61.10

    1970-71

    76.10

    53.50

    120

    67.70

    1980-81

    78.20

    78.00

    170

    84.80

    1990-91

    73.90

    117.00

    269

    115.50 

    1996-97

    91.66

    177.90

    330

    170.16

    1997-98

    89.04

    158.00

    302

    159.01

    1998-99

    92.87

    165.00

    302

    165.36

    1999-00

    87.91

    156.00

    304

    173.36

    2000-01

    85.76

    140.00

    278

    173.03
    2001-02 87.30 158.00 308 171.76
    2002-03 74.10 136.00 312 168.83
    2003-04 76.30 177.00 394 177.10
    2004-05 80.60 232.00 440 195.03
    2005-06 86.77 241.00 472 217.10
    2006-07 91.42 280.00 521 232.03
    2007-08* 95.30 310.00 553 245.50

    1 bale : 170 kilograms
    Source:
    Cotton Corporation of India
    * Estimated


India's state wise cotton area, production*

    States 2007-08 2006-07 2005-06
      Area in lakh hectares Production in lakh bales* Area in lakh hectares Production in lakh bales* Area in lakh hectares Production in lakh bales*

    Punjab

    6.48 24.00 5.88 26.00 5.57 20.00

    Haryana

    4.78 16.00 5.33 16.00 5.83 12.00

    Rajasthan

    3.68 9.00 3.50 8.00 4.71 9.00

    Gujarat

    25.16 110.00 23.90 101.00 19.06 89.00

    Maharashtra

    31.91 60.00 31.24 52.00 28.75 35.00

    Madhya Pradesh

    6.62 21.00 6.30 18.00 6.20 19.00

    Andhra Pradesh

    10.96 43.00 9.62 35.00 10.33 33.00

    Karnataka

    3.71 8.00 3.70 6.00 4.13 6.00

    Tamil Nadu

    1.23 5.00 1.33 5.00 1.40 5.00
    *1 bale:  170 kilograms
    Source: 
    Cotton Corporation of India
    * Cotton Advisory Committee's estimate for 2006-07 as on August 9, 2007

Minimum Support Price for Indian farmers
(In Rs. per quintal)

    Variety  2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
    Bengal Desi 1250 1250 1285 1310 1310 1320 1350
    V797 1560 1560 1605 1640 1640 1665 1770
    J-34 1675 1675 17251725 1760 1760 1770 1850
    LRA-5166 1750 1750 1800 1835 1835 1835 1900
    H-4 1875 1875 1925 1960 1980 1990 2030
    JKHY-1 1800 1800 1850 1885 1885 18951 1935
    S-6 1840 1860 1910 1960 1985 2005 2055
    DCH-32 South 2075 2075 2130 2170 2200 2430 2700
    Suvin 3000 3000 3080 3135 3135 3400 3800
    Support prices are for Fair Average quality Kapas
    Source:
    Cotton Corporation of India

WORLD COTTON SUPPLY AND DISTRIBUTION (As on March 2008)

      2006-07 2007-08 2008-09 2006-07 2007-08 2008-09

    (In million tonne)

    (In million bales)

    Production

    26.75

    26.1

    26.6

    122.9

    120

    122.1

    Consumption

    26.62

    27.5

    27.5

    122.3

    126

    126

    Exports

    8.17

    9.1

    8.7

    37.5

    42

    40.1

    Ending Stocks

    12.76

    11.4

    10.7

    58.6

    52

    48.9
    Source:  International Cotton Advisory Committee



Production, Consumption, Imports, Exports, Ending Stocks of world's  major cotton countries (2001-02 to 2006-07 season beginning August 1)
(In million bales)

    Countries 2003-04 2004-05 2005-06 2006-07    2007-08 (Feb) 
    PRODUCTION
    China 22.30 31.00 29.50 35.50 35.50
    United States 18.25 23.25 23.89 21.72 19.03
    India 14.00 19.00 19.05 21.80 24.50
    Pakistan 7.84 11.14 10.16 9.90 8.60
    Brazil 6.01 5.90 4.70 7.00 7.20
    Turkey 4.10 4.15 3.55 4.02 3.30
    Uzbekistan 4.10 5.20 5.55 5.35 5.50
    Other 18.74 22.52 21.32 16.95 15.57
    Total 95.26 120.31 114.13 116.71 119.2
    CONSUMPTION
    China 32.00 38.50 45.00 50.00 54.00
    India 13.50 14.80 16.50 18.00 18.70
    Pakistan 9.60 10.75 11.75 12.20 12.00
    United States 6.26 6.69 5.88 5.00 4.60
    Turkey 6.00 7.10 6.90 6.70 7.10
    Brazil 3.95 4.20 4.05 4.05 4.50
    Bangladesh 1.72 1.87 2.20 2.30 2.50
    Other 24.99 24.89 17.18 16.59 16.92
    Total  98.07 108.89 116.35 123.31 126.32
    IMPORTS
    China 8.83 6.38 19.28 10.58 13.50
    Turkey 2.37 3.40 3.40 4.00 3.75
    Indonesia 2.15 2.20 2.20 2.20 2.25
    Pakistan 1.80 1.75 1.61 2.29 3.20
    Bangladesh 1.70 1.85 2.21 2.40 2.45
    Thailand 1.67 2.28 1.89 1.95 1.80
    Russian Fed. 1.47 1.45 1.42 1.42 1.42
    Other 9.85 9.60 8.37 8.82 8.46
    Total 34.01 33.43 44.28 37.21 40.31
    EXPORTS
    United States 13.75 14.43 18.03 15.70 15.70
    Uzbekistan 3.10 3.95 4.80 4.60 4.50
    Australia 2.15 2.00 2.88 2.12 1.30
    Greece 1.22 1.17 1.35 1.25 1.15
    Brazil 0.96 1.55 1.97 1.30 2.40
    Burkina 0.95 0.97 1.40 1.35 0.85
    India 0.70 0.66 3.45 5.30 5.70
    Other 8.12 8.29 8.61 6.56 6.18
    Total 33.22 34.99 44.96 37.80 40.05
    ENDING STOCK
    China 14.95 15.06 20.31 18.71 17.13
    Brazil 4.57 5.03 3.81 5.68 6.48
    India 4.18 8.76 8.26 6.56 7.51
    United States 3.45 5.49 6.05 7.10 8.20
    Pakistan 3.13 4.69 4.41 4.32 3.95
    Turkey 1.47 1.79 1.71 2.25 1.80
    Other 11.59 15.04 14.14 12.11 11.04
    Total 44.30 57.18 59.96 60.32 57.33
    1/ Includes Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.
    2/ Includes Benin, Burkina, Cameroon, CAR, Chad, Cote d'lvoire, Mali, Niger, Senegal, and Togo.
    E : Estimate
    F : Forecast


    Source:
    Cotton Report, FAS/USDA, February 2008
     



Production, consumption, imports, exports, ending stocks of world's major cotton countries (2001-02 to 2006-07 season beginning August 1)
(
In million tonne)

    Countries 2003-04 2004-05 2005-06 2006-07 2007-08
    PRODUCTION
    China 4.85 6.75 6.42 7.72 7.72
    United States 3.97 5.06 5.20 4.70 4.14
    India 3.04 4.13 4.14 4.74 5.33
    Pakistan 1.70 2.42 2.21 2.15 1.87
    Brazil 1.31 1.28 1.02 1.52 1.56
    Turkey 0.89 0.90 0.77 0.87 0.71
    Uzbekistan 0.89 1.13 1.20 1.17 1.19
    Other 4.08 4.90 4.64 3.69 3.91
    Total 20.76 26.59 25.63 25.58 25.95
    CONSUMPTION
    China 6.96 8.38 9.79 10.88 11.75
    India 2.93 3.22 3.59 4.05 4.07
    Pakistan 2.09 2.34 2.55 2.61 2.61
    United States 1.36 1.45 1.27 1.07 1.00
    Turkey 1.30 1.54 1.50 1.61 1.54
    Brazil 0.87 0.92 0.95 0.98 0.98
    Bangladesh 0.37 0.40 0.47 0.52 0.54
    Other 4.13 4.04 3.76 3.74 3.68
    Total 21.35 23.71 25.33 26.84 27.50
    IMPORTS
    China 1.92 1.39 4.19 2.30 2.93
    Turkey 0.51 0.74 0.74 0.87 0.81
    Indonesia 0.46 0.47 0.47 0.49 0.49
    Pakistan 0.39 0.38 0.35 0.50 0.69
    Bangladesh 0.37 0.40 0.48 0.52 0.53
    Thailand 0.36 0.49 0.41 0.42 0.39
    Russia 0.32 0.31 0.31 0.31 0.31
    Other 4.13 4.04 3.76 3.64 1.84
    Total 7.40 7.28 9.64 8.10 8.77
    EXPORTS
    United States 2.99 3.14 3.92 2.83 3.41
    Uzbekistan 0.67 0.86 1.04 0.98 0.98
    Australia 0.47 0.43 0.62 0.46 0.28
    Greece 0.26 0.25 0.29 0.27 0.25
    Brazil 0.21 0.33 0.42 0.28 0.52
    Burkina  0.20 0.21 0.30 0.29 0.18
    India 0.15 0.14 0.75 1.15 1.24
    Other 1.79 1.80 1.87 1.42 1.34
    Total 7.23 7.62 9.79 8.23 8.72
    ENDING STOCKS
    China 3.25 3.28 4.42 4.07 3.73
    Brazil 0.99 1.09 0.83 1.23 1.41
    India 0.91 1.90 1.79 1.42 1.63
    United States 0.75 1.19 1.31 2.06 1.78
    Pakistan 0.68 1.02 0.96 0.94 0.86
    Turkey 0.32 0.39 0.37 0.49 0.39
    Other 2.52 3.27 3.08 2.63 2.40
    Total 9.64 12.45 13.05 13.13 12.48
    Source:  Cotton Report, USDA/FAS, November, 2007
     


World cotton area, yield and production

(1980-81 to 2003-04)

    MARKETING YEAR HECTARES ('000) YIELD (KG/HA) PRODUCTION
    ('000 480-Lb bales)
    1980-81 32358 426 63334
    1981-82 32927 455 68824
    1982-83 31392 460 66312
    1983-84 30920 467 66273
    1984-85 33723 572 88656
    1985-86 31582 552 80102
    1986-87 29358 522 70338
    1987-88 30876 574 81443
    1988-89 33766 552 84168
    1989-90 31556 522 79704
    1990-91 33160 572 87141
    1991-92 34784 597 95310
    1992-93 32647 549 82325
    1993-94 30712 550 77522
    1994-95 32222 582 86111
    1995-96 35986 567 93668
    1996-97 33736 580 89894
    1997-98 33743 594 92031
    1998-99 32851 566 85358
    1999-2000 32346 590 87612
    2000-01 32001 604 88850
    2001-02 33737 637 98744
    2002-03 30447 631 88444
    2003-04 32133 643 95352
    2004-05 35798 732 122168
    2005-06 34883 724 117727
    2006-07 34715 715 122071
    2007-08 33756   119208
    Source: FAS/USDA/
    February 2008

World Cotton Prices (In US Cents per LB)
Cotlook 'A'  & USDA Adjusted World Prices

(1994-95 to 2007-08)

    YEAR COTLOOK  'A'  INDEX
    1994-95 91.08
    1995-96 85.52
    1996-97 78.60
    1997-98 72.15
    1998-99 58.90
    1999-2000 52.88
    2000-01 57.34
    2001-02 41.82
    2002-03 55.89
    2003-04 69.18
    2004-05 53.53
    2005-06 56.05
    2006-07 59.00
    2007-08 70.00
    Source: USDA/FAS


The monthly average Cotlook A 
Index (2001-02 to 2004-05)

    In US cents per LB
    Month 2004-05 2005-06 2006-07 2007-08
    Index  A

    Index  A

    Index  A Index A
    August  51.91 53.23 59.88 66.62
    September  55.03 53.94 58.82 68.12
    October 50.89 57.74 57.03 68.93
    November 47.71 55.87 57.39 54.56
    December 47.51 56.09 59.43 53.93
    January 50.23 58.36 59.06 57.47
    February 48.69 59.66 57.86  
    March 55.34 57.59 58.42  
    April 55.99 56.23 57.13  
    May 54.90 54.35 55.57  
    June 52.66 55.14 60.61  
    July 53.17 55.42 67.84  
    Source: Daily Cotton Outlook

 
Improvement in Staple  Quality of Indian Cotton
(In lakh bales*)

    Year 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
    Short   18.64 16.25 10.00 11.50 9.50 9.50 9.50 9.00 7.95 10.44
    Medium 77.00 87.54 72.50 77.00 81.50 74.00 87.00 72.00 85.85 112.52
    Long   70.69 68.45 71.00 71.50 60.00 52.00 58.00 51.00 83.20 109.04
    Extra Long 3.87 5.66 4.50 5.00 5.00 4.50  3.50 4.00
    Total 170.2 177.9 158 165.00 156.00 140.00 158.00 136.00 177.00 232.00

Updated on March 7, 2008


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