CITI has estimated production of the Indian crop for the cotton season 2017-18 at 373 lakh bales (170 kg each) which is 8.11% higher from the previous year because of the increase in area under cotton cultivation by almost 13%, i.e., from 108.45 lakh hectares to 122.59 lakh hectares.
Mr. Sanjay K. Jain, CITI Chairman, has stated that the estimated balance-sheet for 2017-18 shows production at 373 lakh bales, imports at 15 lakh bales and exports at 70 lakh bales. Further, consumption is estimated to be 316 lakh bales, including non-mill consumption of 19 lakh bales, against 306 lakh bales in 2016-17.
He says that the high prices of cotton domestically and internationally would further force consumption to either remain stagnant or slightly on the lower side. Hence, consumption figures should not exceed 316 lakh bales, including non-mill consumption of 19 lakh bales. Even the figure of 316 lakh bales is already higher than the estimated cotton consumption of 309 lakh bales based on the consumption of the first seven months of the cotton season 2017-18 as reported by the Textile Commissioner. Consumption of the 2016-17 season was 306 lakh bales, including non-mill consumption of 17.50 lakh bales.
CITI has arrived at this conclusion after doing an extensive analysis of the production of yarn data reported by the Office of the Textile Commissioner from October 2017 to April 2018, export figures and feedback from the member-mills spread across the country.
Mr. Jain has also pointed out that CITI has kept the opening stock of cotton for 2017-18 at 47.81 lakh bales as decided by the Cotton Advisory Board (CAB) at its meeting on December 12, 2017. He feels that as this figure was arrived after two months of the opening stock date, i.e., October 1, 2017, there was no need to revisit the figure. The opening stock figure was arrived at by CAB after considering the balance sheet of last year (2016-17), the actual number of mills stock available with the TXC office as on October 1, 2017, stock with CCI as on September 30, 2017 and the estimated stock with trade as on October 1, 2017.
Thus the closing stock will be around 49.81 lakh bales which is quite sufficient for the textile sector to smoothly run the units throughout the year.
There has been a lot of rumours that the recent increase in cotton prices in India is due to shortage of cotton. However, Mr. Jain has stated that this increase was due to the recent increase in cotton prices across the globe, led by China and US weather fears impacting the 2018-19 crop size negatively. It has nothing to do with shortage of cotton as feared.
Further, it’s heartening that a normal monsoon is predicted and hence a good crop as in 2017-18 can be expected for 2018-19.