Date:05/08/2008 URL: http://www.thehindubusinessline.com/2008/08/05/stories/2008080551212100.htm

Back TN farm varsity study expects cotton prices to firm up

Our Bureau

Coimbatore, Aug. 4 Cotton prices are expected to go up by around 10 per cent in the next few weeks and are expected to remain at higher levels till July 2009, according to a study by the Tamil Nadu Agricultural University (TNAU), Coimbatore.

Farmers have been advised to go for cotton cultivation in the August season in view of the expected firming up of prices. However, the price movement could be impacted by any policy changes by the Union Government.

According to International Cotton Advisory Committee (ICAC), the world cotton production is expected to fall by 3 per cent to 25.5 million tonnes during 2008-09 with major decline in the US and countries like China, Brazil, Egypt, Turkey and Central Asia also experiencing lower production. The world cotton stock is expected to come down by more than one million tonne to 11 million tonnes in 2008-09.

India produced 315 lakh bales of cotton last year and exported 85 lakh bales. The cotton prices spurted by 25 per cent in recent months and higher exports sustained the firm price trend. Due to poor monsoon, the area under cotton has dropped in major producing states like Maharashtra (from 26.20 lakh hectares to 10.50 lakh ha) and Gujarat (from 12.50 lakh ha to 8.5 lakh ha). The cotton production will be hit and the local and export demands would be firm during the coming cotton season.

A study made by Dr N. Raveendran, Project Coordinator and Ms S. Anita, Senior Research Fellow, Domestic and Export Market Intelligence Cell (DEMIC) of TNAU, indicated that the cotton prices would move up in the next three months. The price during Aug-Sept is expected move up to around Rs 3,400-Rs 3,500/quintal of MCU5 variety from around Rs 3,100-Rs 3,200/quintal and the higher price is expected to hold itself till July 2009.