CAI Cuts Current Year Crop Estimate To 330 Lakh Bales

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The Cotton Association of India (CAI) has pruned production estimates for the current season (October 2019-September 2020) by nearly 25 lakh bales (of 170 kg each). Releasing its April estimate last month, CAI reduced the cotton production to 330 lakh bales from 354.50 lakh bales estimated earlier. This is against 312 lakh bales during 2018-19 season. CAI president Atul S Ganatra said that with the textile industry coming to a near standstill during the nationwide lockdown, over 25 lakh bales of cotton had got held up with the farmers.

“Now, since the Centre has announced the higher minimum support price of Rs 5,515 per quintal against Rs 5,255 last year, growers will not bring the held over crop to the market this year. By bringing it after October, they stand to gain. That’s why we have taken out that amount from the production figures,” the CAI president explained. Ganatra said the cotton that had been left out of the calculation would be reflected in next year’s production as growers would be bringing them for sale then.

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The CAI president said production could be lower than estimated also because some farmers pulled out their crop in February without completing the third picking. Usually, growers pick cotton bolls thrice during the crop period. Another explanation given was ginning factories, which process raw cotton into lint, were shut due to the nationwide lockdown from 23 March to 30 April. After that, they operated at 20% capacity.

Thus, a huge quantity of raw cotton will be left with farmers, who would carry it over to the next season. One of the problems faced by the industry as well as the traders in getting a clear picture of the crop is that the Cotton Advisory Board (CAB), comprising representatives from the government, industry, trade and growers and convened by the Textiles Commissioner’s Office, has not met after November last year.

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The CAB meeting, which takes place around the month of March, has not taken place mainly due to the pandemic situation. In the November meeting, the CAB had pegged Indian cotton production at 360 lakh bales. In March this year, the United States Department of Agriculture (USDA) had pegged its revised estimate of the Indian cotton crop for the current season at 375 lakh bales.

In the coming season, besides the additional cotton carried over by the farmers, lower consumption this year will also see opening stocks at record levels. With CAB unable to meet and make a revision, traders providing different estimates and the USDA giving a different figure, the industry has been left a little confused on the production figure.

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