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Cotton acreage for the 2024 kharif season has fallen by 9% to 110.49 lakh hectares, with a projected increase to 113 lakh hectares. The CAI cites high production costs and shifting farmer preferences as key factors. Cotton exports have surged, leading to a tighter balance sheet and potential shortages. The CAI anticipates a challenging season ahead with limited carry-forward stocks and uncertain crop predictions.

Highlights

Acreage Decline: Cotton acreage for the current kharif season has decreased by 9% to 110.49 lakh hectares, down from 121.24 lakh hectares last year. The Cotton Association of India (CAI) expects a rise to around 113 lakh hectares this year compared to 127 lakh hectares previously.

Farmer Shift: CAI President Atul Ganatra highlights a shift of cotton farmers to other crops due to lower yields and high production costs. This shift reflects ongoing concerns over economic viability in cotton farming.

Uncertain Crop Outlook: Ganatra indicates difficulty in predicting the 2024-25 season's crop outlook due to altered monsoon patterns and increased rainfall variability. This variability has negatively impacted cotton yields, decreasing from 600 kg to 410 kg per hectare.

Increased Exports and Tight Balance: Cotton exports to Bangladesh have surged from 15 lakh bales to 28 lakh bales this year. The CAI anticipates a tighter balance sheet for next year due to higher exports, with a reduction in carry-forward stocks expected.

Current Stock Levels: The CAI reports existing stocks of 70 lakh bales, including 25 lakh bales with spinning mills, 15 lakh bales with ginners, and 20 lakh bales with the Cotton Corporation of India. An additional 10 lakh bales are expected by September, but a delay in the new crop could lead to shortages.

Consumption Trends: Cotton consumption across India is estimated at 360 lakh bales, with regional breakdowns showing North India at 90-95 lakh bales, South India at 125 lakh bales, and Central India at 145-150 lakh bales. Mills operate at 90% capacity, indicating a consumption level of around 325 lakh bales.

Market Predictions: Ganatra projects the pressing of cotton to reach 322-325 lakh bales by September 30, with actual production for 2023-24 being 300 lakh bales. He warns that the absence of carry-forward stocks will impact crop estimates for the upcoming season.

Conclusion

The significant 9% drop in cotton acreage and the shift of farmers to alternative crops reflect ongoing challenges in the cotton industry. With rising production costs and unpredictable weather patterns affecting yields, the outlook for the upcoming season remains uncertain. The surge in exports, particularly to Bangladesh, has exacerbated supply tightness, potentially leading to shortages. As the new season approaches, stakeholders will need to navigate these constraints carefully and consider adjustments in crop estimations to manage market demands effectively.

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