India's cotton output may hit 9-year low, curb exports - trade

Bombay Dyeing And Mfg

06/12/2018 10:26

* Fewer rains hit crop in top growers Gujarat, Maharashtra
    * Output seen at 32.5 mln bales vs 37 mln bales yr ago
    * Exports seen at 5-6 mln T vs earlier forecast of 10 mln T
    * India is world's top cotton producer

    By Rajendra Jadhav
    MUMBAI, Dec 6 (Reuters) - India's annual cotton output could
drop 12 percent to the lowest in nine years as limited rainfall
in the top two producing states has slashed crop yields,
potentially cutting exports from the world's top producer,
industry officials said.
    Lower cotton shipments from India will allow rivals such as
the United States, Brazil and Australia to increase cargoes to
key Asian buyers such as China and Pakistan. It may also support
global prices  CTc2  that have fallen 16 percent since hitting a
four-year peak in June.
    India could produce 32.5 million bales in the 2018/19
marketing year that began on Oct. 1 - the lowest since 2009/10 -
as farmers in the western states of Gujarat and Maharashtra are
reporting poor yields, said Chirag Patel, chief executive at
major exporter Jaydeep Cotton Fibres Pvt Ltd.
    Rains in Gujarat and Maharashtra, which account for more
than half of India's cotton production, were nearly a quarter
below normal during the June-September monsoon season.
    "Many farmers had to uproot plants after first cotton
picking. There won't be a second or third picking like every
year," Patel said.
    India produced 37 million bales in 2017/18 and was expected
to harvest 36.1 million bales this year, according to the
state-run Cotton Advisory Board.
    "Despite higher prices, supplies are not picking up. The
crop is lower than estimated," Patel said.
    New season cotton supplies usually start from October and
peak in November and December. But spot supply in the past two
months only reached around 7 million bales compared to 10
million bales a year ago, said Atul Ganatra, president of
the Cotton Association of India (CAI).
    Pink bollworms also hit plantation in Maharashtra, he said.
    Indian farmers have adopted genetically-modified seeds known
as Bt cotton that are resistant to bollworms, but it hasn't
stopped the infestations. Pink bollworms consume the fibre and
seeds inside a cotton plant's boll, or fruit, and yields fall.

    LIMITED SURPLUS
    In June, traders were expecting India to export as much as
10 million bales amid strong demand from China due to the trade
dispute between Beijing and Washington.  urn:newsml:reuters.com:*:nL4N1TN01Q
    But smaller crop size will limit surplus for overseas sales
and lift local prices  MCOTc1 , said Arun Sekhsaria, managing
director of exporter D. D. Cotton.
    "We could export 5 to 6 million bales. Export demand is
likely to pick up in coming months as Indian cotton is cheaper
than other origins," Sekhsaria said.
    Indian cotton is being offered around 84 to 85 cents per lb,
cost and freight, to buyers in Bangladesh and Vietnam, versus 
around 90 cents for those from the United Sates and Brazil,
dealers said.
    In the current season, traders have contracted to export
around 2.5 million bales and have shipped around 1 million
bales, said Ganatra of CAI.

 (Reporting by Rajendra Jadhav
Editing by Manolo Serapio Jr.)
 ((rajendra.jadhav@thomsonreuters.com; +91-22-6180-7153 ;
Reuters Messaging:
rajendra.jadhav.thomsonreuters.com@reuters.net))