Cotton production in India, the world's top grower, will
recover less rapidly than previously thought, as weak rains limit yield
recovery, US officials say.
Yields will tick up, after a decent monsoon across many
areas, but by barely by enough to outweigh the sharp drop in sowings.
"Despite a generally good monsoon, below normal rains in
some cotton-specific growing areas is expected to lead to yields that are lower
than the USDA official forecast," the USDA's Delhi bureau warned.
A scant recovery
The US Department of Agriculture's bureau in New Delhi saw
the country's cotton crop at 26.50m bales, barely higher than the six-year lows
touched last season.
The USDA's official forecast had the crop recovering to
27.00mb bales, from 26.40m bales in 2015-16.
Cotton plantings in India are forecast to fall to a seven-year
low of 11.00m hectares, down from 11.90m hectares in 2015-16.
Fall in sowings
"Higher input costs and better price realization for
competing crops has prompted farmers to move away from cotton and pushed acreage
downward from a year ago," the bureau said.
The decline is not universal, as lower plantings in Gujrat
and Telagana outweigh higher plantings in Madhya Pradesh and Maharashtra.
"The area in state of Telangana has been lowered as farmers
have opted to plant more area in pulses, maize and paddy," the bureau said.
Last week the International Cotton Advisory Committee
forecast Indian cotton sowings at 11.2m hectares, noting that "better prices
for competing crops, the late arrival of the monsoon and yield losses from pest
pressure last season discouraged farmers".
Bigger ending stocks
The Delhi bureu forecast consumption and imports in line
with the official USDA forecasts, at 24.0m bales and 1.0m bales respectively.
"Interactions with mills in southern India indicates that
cotton consumption is expected to remain relatively flat as mills focus on
manufacturing blended yarns and fabrics with a higher percentage of man-made
fiber to offset cotton price volatility," the bureau said.
But the bureau has a bigger carryover estimate, leading to
larger ending stocks, which are seen at 11.23m bales, compared to the official
USDA number of 10.66m bales.