Cotton output in India, the world’s biggest grower, may increase to a three-year high as some farmers have planted more of the fiber on better returns compared to other crops. Production is expected to climb to 37.5 million to 38 million bales in the harvesting season starting October 1, from 34.1 million bales a year earlier if the monsoon is normal in main growing areas, says Nayan Mirani, President, Cotton Association of India.
In India, domestic prices are still offering favorable returns for farmers. A bigger Indian crop will add to an expected decade-high harvest in the US, the top exporter, and a forecast increase in output in Australia just as China continues to unload inventories. That’s prompted global prices to drop 4.4 per cent this year after climbing 12 per cent in 2016.
Mirani says, it’s the right thing for the farmer to be in as long as the monsoon is normal and on time also it’s more a function of what the farmers earned compared with other crops.
According to the Cotton Association of India benchmark spot cotton prices were 3.7 per cent higher as compared with a year earlier. The November and December cotton contracts on the Multi Commodity Exchange of India are trading at a discount to the July contract, indicating production will increase and prices will start falling when harvesting begins in October, says Aurobinda Gayan, VP, research at trader Kotak Commodity Services.
