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New Delhi - India's cotton production may rise about 10% in the next marketing year as farmers, encouraged by high returns, are planting the crop in more areas than last year, a senior government official said Wednesday.
Output in the world's largest cotton grower after China may rise to around 32 million bales of 170 kilograms each in the marketing year starting Oct. 1, compared with an estimated 29.2 million bales in 2009-10, he told Dow Jones Newswires on condition of anonymity.
The official is a member of the government's Cotton Advisory Board, which estimates cotton output among others. The board will likely release its cotton output forecast for 2010-11 Friday.
There is also a slight chance for production to exceed the 32-million-bale estimate, he added.
The area under cotton has gone up by 18% year-on-year until July 22 at 9.50 million hectares, according to latest government data. In India, cotton sowing usually starts with the arrival of the monsoon in June and picks up as the rains progress. The crop is harvested from September.
Higher production in India, also the world's second-largest exporter, may reduce local prices and give more leeway to the government to ease controls over the commodity's exports, helping the fiber's largest buyer--China.
Also, lower prices many help local textile mills cut raw-material costs, an industry executive said, adding that the prices may come down to below INR28,000 per candy of 356 kg each by October. Local cotton prices have surged around 30% to INR29,500 per candy since October, because of a surge in exports.
The government imposes a tax of INR2,500 a ton on cotton exports and also regulates the shipment by insisting that traders get its approval before signing any contracts with foreign buyers.
Earlier last month, a senior government official told Dow Jones Newswires that the export tax on cotton may be withdrawn from the next marketing year as output from the summer-sown crop is expected to be higher.
28 July, 2010 by admin