INDIA Cotton and Products Update
Posted : August 19, 2019

USDA Attache Report: Cotton and Products Update India


FAS Post estimates India’s marketing year (MY) 2019/20 cotton production at 29.3 million 480 lb. bales (37.5 million 170-kilogram bales/6.4 MMT) with a planting area of 12.5 million hectares. Planted area for Kharif 2019 season in Northern India is 18 percent higher than last year, prompted by high domestic seed cotton prices. Last week, local markets reacted to the Cotton Advisory Board revisions of its MY 2018/19 estimates. Raw cotton exports remain sluggish due to weak global demand, which is also reflected in limited purchases by mills.

Area and Production

FAS Post estimates India’s marketing year (MY) 2019/20 cotton production at 29.3 million 480 lb. bales (37.5 million 170-kilogram bales/6.4 MMT) with a planted area of 12.5 million hectares. The onset of southwest monsoon was delayed by a week to June 8, 2019. However, the rapid pace of advance of the monsoon towards the rest of the country is expected to lead to favorable rains. Post estimates the nationwide average yield for MY 2019/20 around 510 kilograms per hectare, above average historical yield levels.

According to the planting progress reports for the Kharif 2019 season published by the Ministry of Agriculture and Farmers Welfare (MOAFW), cotton planted area in Northern India is 18 percent higher than the same period last year. The states of Punjab (41 percent), Rajasthan (31 percent) and Haryana (2 percent) have all witnessed increased acreage due to rising average wholesale prices for seed cotton which are currently 16 percent higher than last year. Sowing is underway in Central and Southern India and will likely accelerate as the southwest monsoon advances towards states in these regions. Inaddition, the recent cyclonic storm ‘Vayu’ provided much need rainfall in Western India especially in cotton growing districts of Gujarat. The national government has issued advisories for farmers to continue weeding in farms which are traversing the cotton crop’s early growth stage. Land preparation is underway in Central and Western Maharashtra as farmers are being advised to plant corn, marigold, cowpea and sorghum as perimeter trap crops. Farmers are also advised to procure government approved seed varieties and plant non-Bt cotton around the perimeter as a trap crop for bollworm. In Gujarat, farmers have been advised to adopt various inter-cropping systems such as cotton-sesame, cotton-groundnut and cotton-maize as a risk management technique to address disease and soil fertility issues.

According to MOAFW, the share of area planted under Bt cotton in MY 2019/2020 is 91.2 percent as compared to 91.1 percent in MY 2018/19 and a normal five-year average of 89.5 percent. Farmers continue to plant Bt cotton despite increasing bollworm resistance to the Bt gene, which has occurred in various instances across states in the past few years.

According to local media reports, farmers are planting herbicide tolerant (HT) Bt cotton seeds across certain districts in the central region (Marathwada) in the state of Maharashtra. The herbicide tolerant Bt cotton is an unapproved event, and commercial planting of this hybrid is illegal. Farmers are continuing to plant HT cotton as it helps them avert manual weeding, which otherwise would require farmers to hire laborers to perform the same work leading to additional costs. In MY 2017/18, few incidences of cultivation of non-approved Herbicide Tolerant (HT) cotton were reported in the states of Andhra Pradesh, Gujarat, Telangana and Maharashtra. Since then the state governments have taken appropriate necessary action to curb and control the spread of HT Cotton.


On June 13, 2019, as reported by the Cotton Corporation of India (CCI), MY 2018/19 cotton arrivals reached 23.6 million 480-lb. bales (30.2 million 170-kilogram bales/5.1 MMT). CCI reported arrivals constitute 90 percent of the total production estimate of the Cotton Advisory Board (CAB). The market arrivals reported by the local trade are five percent higher than CCI. The pace of arrivals are expected to remain slow as farmers prepare for cotton planting for the new season, delaying arrivals in the market. Historically, CCI market arrivals from June to September average around 2 million 480 lb. bales (2.6 million 170-kilogram bales) based on a ten-year average, and around 2.4 million 480 lb. bales (3.1 million 170-kilogram bales) based on the five-year average.

Cotton Advisory Board revises MY 2017/18 and 2018/19 estimates

On June 18, 2019, the Cotton Advisory Board (CAB) under the Ministry of Textiles finalized its MY 2017/18 estimates and revised its MY 2018/19 estimates. MY 2018/19 production is estimated at 26.3 million 480 lb. bales (33.7 million 170-kilogram bales/ 5.7 MMT) on an area of 12.6 million hectares. CAB estimates the MY 2018/19 national cotton yield at 454 kilogram per hectare as compared to Post yield estimate of 459 kilogram per hectare. The CAB production estimate is 200,000 480 lb. bales lower than Post estimate, but 300,000 480 lb. bales higher than official USDA estimate. Post has accepted the final MY 2017/18 area and production estimates of CAB in its balance-sheet. Post has also accepted the final MY 2018/19 area estimates and made the revisions accordingly.

Marginal increase in minimum support price (MSP) expected

Trade sources indicate that the minimum support price (MSP) for cotton may be marginally increased (between 1-2 percent) as compared to last year (26-28 percent increase) as significant increases in MSPwould likely overprice Indian cotton in the global markets. The government is also exploring various alternative models to support farmers including an income support scheme and price deficiency payment (which was piloted in the state of Madhya Pradesh in 2017 as Bhavantar Bhugtaan Yojana for soybeans and pulses).


FAS Post estimates MY 2019/20 cotton consumption at 25.3 million 480 lb. bales (32.4 million 170-kilogram bales/5.5 MMT), the same as USDA’s official estimate. Post anticipates cotton and cotton yarn prices will remain affordable as mills will have ample fiber supplies (domestic and imports) to cater to both the domestic and export markets. Average domestic wholesale cotton prices have fallen marginally by 1 percent from last month. However, Indian ex-gin prices are much higher than Cotlook A-Index, prompting mills to augment their requirements with imports. With high and volatile raw cotton prices, mills are reluctant to make larger purchases of domestic cotton for inventory purposes for extended periods.


FAS Post estimates MY 2019/20 exports at 5.0 million 480-lb bales (6.4 million 170-kilogram bales/1.1 MMT). The prospects of a larger crop would allow India to export this large surplus, thus meeting the demand of neighboring countries. FAS Mumbai estimates MY 2018/19 exports at 3.9 million 480-lb bales (5.0 million 170-kilogram bales/849,000 MT), 300,000 480-lb bales lower than the official USDA estimate. Year-to-date MY 2018/19 exports are down 11 percent compared to last year due to India’s elevated cotton prices on the world market. Preliminary data published by the Ministry of Commerce indicates that shipments in the month of April 2019 are 70 percent lower as compared to last year. The weaker demand is reflected in the slower shipments across major export markets which include China, Bangladesh, Pakistan and Vietnam. Similarly, cotton yarn exports have also slowed down due to poor overseas demand especially in China, where cotton consumption has weakened. China, Bangladesh, Egypt and Pakistan are the top export markets for cotton yarn. However, cotton fabric exports are witnessing strong positive growth supporting the cotton sector. Bangladesh, Sri Lanka, South Korea and Senegal are the top export markets for cotton fabrics.

FAS Post estimates MY 2019/20 imports at 1.4 million 480 lb. bales (1.8 million 170-kilogram bales / 305,000 MT), the same as USDA’s official estimate. MY 2018/19 imports are estimated at 1.2 million 480 lb. bales (1.5 million 170-kilogram bales/ 261,000 MT). Shipments from the United States and Egypt continue to drive up bulk import volumes. Imports are expected to continue to remain firm as domestic prices prompt mills to source cotton from foreign origins.


The beginning stock for MY 2019/20 is estimated at 8.2 million 480 lb. bales (10.6 million 170 kg bales/1.8 MMT). This stock level adjusted for the Indian marketing year (Oct/Sep) is roughly equivalent to 4.6 million 480 lb. bales (6 million 170 kg bales/1 MMT).

Latest News
  • For Week Ending 15-08-2019 2019-2020 Net Upland Sales 1,63,900 Upland Shipments 3,44,000 Net P
Rose On Cotton 17-Aug-2019
Jernigan Global Weekly 19-Aug-2019