ao link

US officials raise doubts over improved India cotton crop hopes

TwitterLinkedineCard

Local US officials raised doubts over increased expectations for India’s cotton harvest, saying that the strong finish to the monsoon may have caused some damage to crops, as some observers have cited for sugar cane.

 

The US Department of Agriculture’s New Delhi bureau – in a report published overnight, but dated October 9 - pegged at 29.3m tonnes its forecast for India’s cotton production in 2019-20.

 

As the briefing highlights, the figure was “200,000 bales lower than the official USDA estimate” at the time.

 

However, the USDA in its Wasde briefing on October 10, hiked its forecast for the crop to 30.5m bales – 500,000 bales from matching the record high set six year ago - rather than lowering it as the bureau had suggested.

 

‘Strong crop vigour’

The USDA itself highlighted the benefits of a late upsurge in monsoon rains, saying that while the weather pattern “was underperforming early in the season, it resumed and progressed to the major cotton areas in central India: Gujarat, Maharashtra and Madhya Pradesh in late July.

 

Satellite-based crop analysis “is showing strong crop vigour in both Gujarat and Maharashtra”, the top two growing states.

 

The bureau acknowledged that a crop tour to Gujarat “revealed that crop conditions in that state were good to excellent, with no major pest and disease incidence, which should lead to higher yields than last year”.

 

However, it cautioned that the prospect of further rains had presented the prospect of excess moisture, “which will likely result in yield and quality loss”, with the setbacks such as “boll shedding and wilting due to waterlogging”.

 

Similar concerns have been voiced in the sugar market, with Maharashtra also a top cane growing state, and analysis Green Pool, for instance, earlier this month blaming crop flooding in a downgrade of 400,000 tonnes to 27.9m tonnes in its forecast for India’s 2019-20 sugar output.

 

‘Prices to fall further’

Nonetheless, the USDA bureau was more upbeat on Indian cotton export prospects, which it pegged at 4.20m bales, than the USDA itself, which sees them at 4.00m bales.

 

“The differential between domestic and international prices has narrowed further in September due to slowdown in demand in global markets,” the bureau said.

 

“As the availability of supplies increases with new arrivals, domestic prices are expected to fall further and may also go below the minimum support price,” which as of the start of this month was raised by 105 rupees per 100 kilogrammes to 5,255 rupees per 100 kilogrammes for medium staple cotton.

 

For long staple crop, the minimum support price (MSP) was lifted by 100 rupees to 5,550 rupees per 100 kilogrammes.

 

‘Plenty around’

However, some other observers are less upbeat on India’s competitiveness, with Plexus Cotton for instance noting that “India’s price level is still considerably above that of its competitors due to the MSP.

 

This played out in a split market for exports, in that “while there may be plenty of higher priced Indian cotton around, there is less of the attractively-priced cotton in other origins available”, given a decrease in world stocks expected in 2019-20 – once India, and China, are excluded.

TwitterLinkedineCard
Related Stories

Evening markets: Grains suffer touch of late-week profit taking

The likes of corn and wheat trade lower in closing deals of a positive week. But the vegetable oil complex, and canola, stay strong

Failed hold-outs may foster dairy price gains at next week's GDT auction

Futures prices suggest modest gains in the offing at Tuesday’s GlobalDairyTrade auction - for whole milk powder, at least

Soybeans vs corn deadlock breaks in battle for acres

There has been some movement at last in the new soybeans-versus-corn price ratio, seen as an influence on sowing area. Cotton stakes its claim too

Microsoft mogul makes a mint out of betting the farm

Prices of US farmland, of which Bill Gates is the biggest owner, are rising at their quickest since 2012
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2021

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of AgriBriefing Ltd
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069