Tuesday, April 30, 2013



The Agricultural Market Intelligence Centre (AMIC) of the Punjab Agricultural University (PAU) has analyzed the behaviour of the market prices of the cotton by keeping in view the national and the international cotton scenario. Dr Jagrup Singh Sidhu, Incharge, AMIC, PAU, has impressed upon the farmers to keep this cotton scenario in mind while planning their acreage under this crop.

Informing that the cotton prices, after jumping to record highs in 2010-11, dropped sharply in the current season, Dr Sidhu divulged, "The international market indicator, "Cotlook A Index" declined from a record high of US $ 2.34 per pound during 2011 to 0.80 in 2012 and again started increasing and reached US $ 0.95 per pound during March 2013." Consequently, the world cotton output is likely to decline by 11 per cent from 26 million tonnes in 2011-12 to 23.5 million tonnes in 2012-13, he observed. On the other hand, due to slow economic recovery from recession, the growth in global cotton mill use remained slow from 23.5 to 23.7 million tonnes. Due to high accumulation of cotton stock by China, the major cotton importer, the global cotton import dropped sharply by 20 per cent from 9.6 to 7.6 million tonnes, said Dr Sidhu. As a result, the world ending stock rebounded from 11.2 to 16.4 million tonnes, thus, resulting into the decline of the international cotton prices during 2012-13, he told.

Dr Sidhu further informed that due to scantly rainfall in some cotton growing areas, the cotton output in India has decreased by about 6 per cent from 373 lakh bales in 2011-12 to 351 lakh bales in 2012-13. He revealed, "The total cotton supply in the country including import and opening stock dropped from 435 to 419 lakh bales. The total national demand of cotton including export of 127 lakh bales, declined from 382 lakh bales to 275 lakh bales." Due to virtually no export and import of 15 lakh bales of cotton during 2012-13, the available cotton surplus rose to 148 lakh bales, he disclosed. Thus, the government is expected to continue to put cotton exports under Open General License category without any export restriction in coming cotton marketing season, he said.

In Punjab, the area under cotton during the current year decreased to 4.95 lakh hectares during 2012-13 from 5.20 lakh hectares during the last year. Consequently, the cotton production in the state declined to 16 lakh bales from the last year production of 18 lakh bales, told Dr Sidhu. The Indian Government had announced minimum support price of long staple cotton at Rs 3900 per quintal for the marketing season 2012-13 which is likely to increase further for the 2013-14 marketing season, he observed. Saying that the cotton prices in various cotton markets of Punjab remained in the range of Rs 4000 to 4860 during October 2012 to April 2013, he predicted that the above trends in the cotton balance sheet may induce the farmers throughout the world including India as well as the Punjab state to reduce the area under cotton during 2013-14. Consequently, the decline in production and stocks against the expected increase in demand from China may trigger some rally in cotton prices during 2013-14 marketing season.

In view of the expected trends in cotton production and trade, the AMIC has projected some increasing tendency in cotton prices during 2013-14 marketing season in the range of Rs 4500 to Rs 5000 per quintal for the long staple cotton. However, much will depend upon the cotton policy of importing and exporting countries to be followed during marketing year of 2013-14, said the expert.
News From: http://www.7StarNews.com

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