The steady monsoon so far this season is expected to raise the cotton production in the country to 35 million bales, the highest ever. The average production is around 30 million bales, having touched 32 million two years ago.
Cotton acreage this year increased three per cent, particularly in Andhra Pradesh and southern states. A few tradesmen believe the increase could even be seven percent. Last year, cotton was sown in 10.2 million hectare and this year it is likely to touch 11 million hectare. This increased acreage would result in additional cotton production of about 2 million bales.
The production of Bt cotton seeds dropped 25 to 30 per cent last year due to unfavourable agroclimatic conditions. Each acre gives about 300 packets of 450 gram each. The yield last year was around 250 packets per acre. Though the productivity in Andhra Pradesh remained high at 400 packets, this is low compared with the average 500 packets produced in the state.
“There is no shortage this year. We can say the situation is just enough,” said N Prabhakar Rao, chairman of NSL Group, owners of Nuziveedu Seeds Private Limited. The company claims a 30 per cent market-share in Bt cotton seeds.
However, the increase in acreage and the fall in productivity is reducing the demand-supply ratio, he said.
Cotton during 2009-10 fetched an average of Rs 29,000 to Rs 30,000 per candy (355 kg). This prompted more farmers to take to cotton farming. The price during the year did not go below Rs 27,000 per candy.
Cotton pricing is based on international trade. Also, the international demand for cotton from India is likely to sustain this year too mainly for two reasons - the crop failure in Pakistan and the increase in demand from China, which accounts for 70 to 80 per cent of cotton exports. The exports this year is likely to be around 10 million bales.
Moreover, the US is shifting from maize to cotton in view of the cotton prices. There is no scope for capacity addition in China. The product and yield in the US will command a better value, say industry experts.
The cotton sector is unorganised but is among the largest provider of employment. It is estimated that one bale of cotton needs 40 man-days.
According to a representative of a seeds company, sowing is nearing completion in most of the areas as the monsoon has been active. The crop has a cycle of five to six months and the yield could be gauged in 90 days. “We are optimistic of a good crop this year in view of the good rains,” he said.