Indian Cotton Federation (formerly The South India Cotton Association – SICA) has estimated the 2012-13 cotton crop at 337 lakh bales.
ICF’s estimate is marginally lower than the Cotton Advisory Board’s (April 17{+t}{+h}) assessment. (CAB has estimated at 340 lakh bales).
Speaking about the competitiveness of Indian cotton in global markets, ICF President J. Thulasidharan said Indian benchmark cotton – Shankar 6, which is ruling around Rs 43,000 currently costs more than 97 cents for an overseas buyer.
This is not a competitive price.
With December Futures hovering around 84 cents, an ideal price for Shankar 6 would be 89-90 cents.
This means, Indian prices will have to fall by seven-eight per cent. This can happen only if the rupee weakens and (or) the prices drop in India.
Else, export volumes will drop or be limited.
Firming of the rupee would also contribute to the adverse parity of Indian prices, he said.
Sharing the crop report for the 2013-14 season, Thulasidharan said timely monsoon in all the cotton growing areas have signalled good progress in planting. ‘Farmers in Punjab, Haryana and Rajasthan are expected to maintain the size of the crop.
(ICF has estimated the 2012-13 crop at 57 lakh bales from these three States).
‘Besides these States, Maharashtra, Andhra Pradesh and Karnataka have also reported improved crop. This should ensure a comfortable supply position, particularly for the spinners,’ he said.
On China, he said ‘China is believed to hold 8.33 million tonnes of cotton in reserve. This is against their normal annual consumption of 8.02 million tonnes.’
revathy.lakshminarasimhan@thehindu.co.in