Indian cotton production should reach 24.4 million bales during the 2007/2008 marketing year, up from a previous estimate of 23.9 million bales, a US Agriculture Department attache report said on Wednesday.
Strong international cotton prices also pushed the export forecast for Indian cotton up to a record 5.9 million bales from an earlier prediction of 5.1 million bales for the 2007/2008 marketing year (MY).
The domestic consumption forecast for Indian cotton in 2007/2008 was lowered to 18.1 million bales from 19 million bales due to strong cotton prices and weaker cotton textile demand, the report said. Attache reports are not official USDA data.
Following are highlights of the report.
he post-MY 2007/08 cotton production estimate is raised marginally higher to a record 24.4 million bales, which is 2.6 million bales higher than last year. This revision is based on strong market arrivals, which provides evidence to support a higher than anticipated crop estimate in the central and southern states. Market arrivals through February 23, 2008 reached 18.4 million bales (4.0 million tons) compared with 16.4 million bales (3.6 million tons) for the corresponding period last year. The Cotton Advisory Board is currently estimating the MY 2007/08 crop at 24.2 million bales, while estimates from various industry sources range 22 to 25 million bales (28.0 to 32.0 million Indian bales of 170 kg).
Exports revised higher on strong international prices: Post MY 2007/08 export forecast has been raised to 5.9 million bales due to strong international cotton prices, up one million bales from last year record level. Due to the record crop and weak domestic off take, Indian cotton continues to be very competitively priced vis-a-vis comparable cotton from other origins.
Market sources report that about 4.7 to 5.1 million bales have been contracted for exports for shipment through March 2008. Of this amount about 3.9 to 4.3 million bales have been shipped through the third week of February, mainly for China, Pakistan, Turkey, Bangladesh and South Asian countries. Industry sources report that cotton exporters, including international merchants, are currently holding about 1.1 to 1.2 million bales in stocks for future sales. Although the pace of exports has slowed down since February, export prospects during the remaining season will depend on international cotton prices.
Assuming no change in the current price parity between local and international cotton, India cotton exports are expected to reach 5.9 million bales, over 20 per cent higher than last year.
Source: thenews.com.pk