Thursday, July 11, 2013

Strong monsoon may not boost Indian cotton output


The strong start to the monsoon may not boost India's cotton production thanks to the appeal of switching to other crops which offer better returns.

India's monsoon - critical for the country's agricultural prosperity, and therefore the important rural economy as a whole – has beaten expectations by running 27% ahead of normal since starting early last month.

It has also reached the whole country in record time, nearly one month ahead of schedule.

The rains have boosted prospects for sowings of the range of so-called kharif crops for which the monsoon is particularly important, with plantings of oilseeds quadruple those of a year before, as of July 5.

'Above-normal rainfall'

Planting of cotton too, of which India is the second-ranked producer and exporter, also "continues to gain momentum, given favourable weather and adequate rain over major growing regions", the US Department of Agriculture's New Delhi bureau said.

"All the major cotton-growing regions have received above-normal rainfall, which has advanced cotton planting."

Nonetheless, the bureau stood by a forecast of Indian cotton output up only 500,000 bales year on year at 27.0m bales in 2013-14, citing the appeal to growers of using the better rains to diversify from cotton, one of the more drought tolerant crops.

In the US, traders' rule of thumb is that it takes 35 inches of water to grow a grain crop, but only 20 inches for cotton.

Crop rivalry

"While rains have been good, farmers are reportedly considering other planting options that could curb the potential for even higher planted area," the bureau said.

In Punjab, farmers have reportedly shifted "some" area to basmati rice, encouraged by a government programme to boost output of the grain at the expense of water-intensive paddy varieties of the grain.

In Haryana and upper Rajasthan, "farmers may are shift some area to guar, in anticipation of better price realisation", the bureau said, keeping its estimate for Indian cotton area at 12.0m hectares, on a harvested basis.

"Meanwhile, Maharashtra may see a slight shift towards soybeans."

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