Cotton is a vital crop for many farmers in the United States. It’s grown in a number of different regions, and its production has been on the rise in recent years. This article looks at the cotton price – demand and forecast, so you can understand what’s driving this market. We also provide a brief introduction to cotton farming, so you have a better understanding of what goes into producing this crop.
Sowing Period: March-May
Harvesting Period: December-January
Crop Season: Kharif
Key Growing Regions
- Madhya Pradesh
- Uttar Pradesh
- Andhra Pradesh
The cotton price is a topic of interest to many, as it has a significant impact on the economy and the way we live our lives. In this blog post, we’ll take a look at the demand for cotton and the current forecast for the cotton price. We’ll also provide some tips on how to hedge your cotton prices against potential market volatility.
Production Trend And Stock Position
- According to USDA, The overall cotton consumption in India (during the 2021-22 season) is expected to reach almost 25.5 million bales. On the other hand, the overall exported amount is projected at 5.8 million (within the upcoming eight years). USDA thinks that it may indirectly affect the cotton prices in India.
- The cotton stock level in the Indian sub-continent has doubled within the last two years due to two reasons. Firstly, the cotton seed prices in India fell below the MSP (minimum support price). It, in turn, drove the storage and purchase rate in 2020, according to CCI (Cotton Corporation of India). Secondly, the overall production of cotton in India increased by nearly 3.0 million bales while consumption went down by 4.0 million.
- During the season of monsoon (2021-22), cotton production increased by almost four percent, nearly 29.5 million bales. The production area where the said amount of crop was produced is 12.9 million hectares.
- Sowing was still underway during the monsoon season in northwest India. However, it was briefly stalled by the southwest monsoon. During this period, the cotton production rate of Central India emerged quite affluently, which, sequentially, controlled the increase of cotton prices.
- According to Fitch, the overall cotton production in India was supposed to fall by 1% during the monsoon. The organization considered lackluster rain to be responsible for this issue, which turned out to be true.
Pricing and Exporting Trend
- The president of CAI (Cotton Association of India), Atul Ganatra, said that the price range in the cotton market will get steady between INR 62,000 to INR 65,000. Major General OP Gulia also thinks that the cotton seed prices have seen their best in 2021 and will not escalate further.
- The exports in cotton have dipped a little in 2021 as well. The overall exported amount (in 2021) has been around 50 million while the same was 75-80 million bales last season. So, all in all, the exports have gone down by almost 35% this year.
The production of cotton crops will be the same as in the year 2021, according to Gulia. He also thinks that the overall amount should be around 360 lakh bales. However, the sowing area is considered to be responsible for such a dip in production. Last year, the yield per hectare was 500 kg/hectare, which increased to 750 kg/hectare this year. Nonetheless, the overall quality of cotton was excellent this year. In any case, the global supply of this material will decrease due to the decrease in production and may affect cotton prices.