Cotton prices continue to inch higher. For the month of August it has seen gain of 5 percent and in this year despite making an all-time highs in the Indian markets, we are trading nearly 25 percent on the higher side.
The cotton crop season has almost come to an end. The cotton sowing this Kharif has been 7 percent lower, so to know how the season has been and the outlook for the industry, CNBC-TV18 caught up with Atul Ganatra, Cotton Association of India.
Ganatra said as per for agriculture department up to August 30, cotton sowing is less by around 7 percent compared to same time last year, but as per the trade report from all 10 states of cotton growing this year, the standing crop condition is very excellent due to proper rain and the trade is expecting 10 to 20% more yield this year compared to last year state wise. So, definitely, we are not only expecting better crop but also very good quality in the coming season this year, said Ganatra.
With regards to the quantity of the crop size, he said it would be difficult to give a number at present and one would have to wait for one more month. "However, as of today, for the last three years our average has been 360 lakh bales, and looking to the standing crop, we will definitely reach that number," he added.
According to him, last one year was very good for cotton ginners or cotton traders, and exporters - everyone has done good profitable business. “For Indian cotton spinning mill, the last 12 months was a golden year and maybe also best year of the last 50 years of spinning mill history. We can see that reflecting on the stock markets. So, the last one year was excellent for the entire textile value chain,” he reiterated.
Last year Cotton Corporation of India (CCI) bought nearly one crore bales.
When asked if CCI perhaps will not need to intervene in the market this year as well, Ganatra said, “As per the CCI CMD, the statement he has given of cotton stock for the year ending on September 30, will be around 65 to 70 lakh bales and as for CAI it is around 80 plus lakh bales on 30th September."
The Indian mill position will also be very comfortable with the cotton stock, and they might have 45 to 60 days average stock inside the mill, and around 20 to 25 lakh bales unsold cotton stock will be carried forward with the CCI traders or exporters. "So overall, we have enough cotton stock for the Indian mills on September 30,” specified Ganatra.
For the entire discussion, watch the video