CAI pegs 2019-20 cotton estimate at 354.50 lakh bales

The Cotton Association of India (CAI) has released its July estimate of the cotton crop for the 2019-20 season beginning from October 1, 2019. CAI has increased its cotton crop estimate for 2019-20 by 19 lakh bales to 354.50 lakh bales of 170 kg each compared to its previous estimate of 335.50 lakh bales made during the last month. A statement containing the State-wise estimate of the cotton crop for the season and the balance sheet as on September 30, 2020 with the corresponding data for 2018-19 are enclosed.

The total cotton supply estimated by the CAI during the months of October 2019 to July 2020 is 392.40 lakh bales of 170 kg each which consists of the arrival of 345.40 lakh bales upto July 31, 2020, imports of 15 lakh bales upto July 31, 2020 and the opening stock estimated by the CAI at 32 lakh bales at the beginning of the season on October 1, 2019.

Further, the CAI has estimated cotton consumption during the months of October 2019 to July 2020 at 206 lakh bales of 170 kg each while the export shipments of cotton estimated by the CAI upto July 31, 2020 are 43 lakh bales of 170 kg each. Stock at the end of July 2020 is estimated at 143.40 lakh bales including 15 lakh bales with textile mills and the remaining 128.40 lakh bales with CCI/Maharashtra Federation and others (MNCs, MCX, traders, ginners, etc.).

The Crop Committee of the CAI has estimated total cotton supply till end of the season i.e. up to September 30, 2020 at 402.50 lakh bales of 170 kg each (as against 382.50 lakh bales estimated in the previous month). Total cotton supply estimated now comprises the opening stock of 32 lakh bales at the beginning of the season on October 1, 2019, crop for the season estimated now at 354.50 lakh bales and imports estimated by the CAI at 16 lakh. The imports estimated for the 2019-20 crop year are just half of the previous year’s import estimate of 32 lakh bales.

Domestic consumption now estimated by the CAI for the entire crop year i.e. up to September 30, 2020 is 250 lakh bales of 170 kg each. There is a reduction of 30 lakh bales in the consumption estimate made now compared to that estimated earlier due to the lower consumption of cotton on account of disruptions caused by COVID-19 pandemic and the labour shortage resulting therefrom.

CAI has estimated export for the season at 50 lakh bales which is higher by eight lakh bales than that estimated for the previous season due to the favourable conditions now existing for export of cotton from India. The carry-over stock at the end of the season i.e. on September 30, 2020 is estimated now at 102.50 lakh bales. Highlights of the deliberations of the CAI Crop Committee on production, consumption, exports, imports, etc. are summarised below.

Consumption
CAI has pegged down the consumption of cotton during the current crop year by 30 lakh bales i.e. 250 lakh bales as against its previous estimate of 280 lakh bales). This reduction in consumption is estimated due to the disruptions caused on account of lockdown and shortage of labour. Up to July 30, consumption is estimated at 206 lakh bales of 170 kg each.

Production
CAI has increased its cotton crop estimate for the season by 19 lakh bales to 354.50 lakh bales of 170 kg each from its previous estimate of 335.50 lakh bales made during the last month. Compared to its June estimate, the Committee has now increased its production estimate for the North zone by three lakh bales (one lakh bales each in states of Haryana, upper Rajasthan and Lower Rajasthan), Central zone by 13 lakh bales (7.50 lakh bales in Gujarat, 4.50 lakh bales in Maharashtra and 1 lakh bales in Madhya Pradesh), Southern zone by 3.25 lakh bales (one lakh bales in Andhra Pradesh and 2.25 lakh bales in Karnataka). However, Odisha crop estimated now is less by 25,000 bales compared to the previous estimate.

This increase in the production estimate is on account of increased pressing of cotton bales which happened due to the aggressive cotton buying by CCI under MSP post lockdown that prompted farmers to bring their kapas to the market instead of carrying forward the same to the next year.

Imports
CAI has increased its estimate of cotton imports by 1 lakh bales to 16 lakh bales compared to its previous imports estimate of 15 lakh bales. This import estimate of 16 lakh bales is just half of the previous year’s import estimate of 32 lakh bales. This decrease in the imports estimate for the season compared to the last year is mainly on account of easy availability of cheaper cotton in domestic market and relatively costlier imported cotton due to depreciation in the value of Indian Rupee.

Up to July 31, cotton imports are estimated at 15 lakh bales and the remaining 1 lakh bales are estimated to arrive Indian Ports during the months of August and September 2020.

Exports
There is an increase of three lakh bales in the estimate of cotton export for the Season made now compared to the CAI’s previous estimate of 47 lakh bales made during the last month on account of more favourable conditions for exports of cotton from India. This export estimate of 50 lakh bales is higher by 8 lakh bales compared to that estimated for the 2018-19 crop year.

Up to July 31, 43 lakh bales are estimated to have been shipped and shipment of further seven lakh bales is estimated to take place during the months of August and September 2020. Indian cotton arrivals during the months of October 2019 to July 2020 are estimated at 345.40 lakh bales, which are equivalent to approximately 367 lakh running bales of 160 kg each.

Cotton stock held by spinning mills in their godowns as on 31st July 2020 is estimated at 15 lakh bales of 170 kg each (equivalent to about 16 lakh running bales of 160 kg each), which is on an average approximately 25 days’ consumption by mills at their current pace of cotton consumption this season whereas stock with CCI/Maharashtra Federation, MCX, MNCs, ginners, etc. as on July 31, 2020 is estimated at 128.40 lakh bales (equivalent to about 136 lakh running bales of 160 kg each) totalling to 143.40 lakh bales of 170 kg each.

Closing stock at the end of the season i.e. as on September 30, 2020 is estimated at 102.50 lakh of 170 kg each, which is equivalent to about 109 lakh running bales of 160 kg each.