Cotton price rally could lift Indian planting to record high

·2-min read

By Rajendra Jadhav and Sumit Khanna

MUMBAI/ AHMEDABAD, India (Reuters) - Cotton planting in India, the world's biggest producer of the fibre, could jump as much as 15% in 2022 to an all-time high, as strong prices prompt farmers to switch away from other crops, an industry association said.

Higher output could help cool the rally in global and local cotton prices, which is hurting Asian apparel makers.

Area planted to cotton in India could rise as much as 15% from last year because the crop is providing far better returns than alternatives, said Atul Ganatra, president of the Cotton Association of India.

Local prices have more than doubled over the past year, because heavy rainfall during harvesting slashed 2021's crop to the lowest level in a decade.

(Graphic: India cotton prices- https://fingfx.thomsonreuters.com/gfx/ce/znvneoowxpl/IndiaCottonPrices.png)

A 15% rise in India's cotton crop area would lift it to around 13.8 million hectares in 2022 from 12 million hectares last year.

The association expects the largest expansions in cotton area to be in the western states of Gujarat and Maharashtra, which together account for nearly half of the country's production.

"Last year I grew cotton on 21 acres land, and groundnut on my remaining 10 acres. Since cotton prices are high, I will plant only cotton this year on all my land," said Jagdish Magan, a farmer from Morbi, Gujarat.

Most Indian farmers begin planting cotton at the onset of monsoon rains in June, although some with irrigated fields start as early as May.

(Graphic: India cotton area, production and exports- https://fingfx.thomsonreuters.com/gfx/ce/dwvkrnnxgpm/IndiaCottonStats.png)

Oilseeds and pulses compete with the fibre in key cotton-producing states, such as Maharashtra, Gujarat, Telangana and Rajasthan.

Pulses have given farmers relatively poor returns over the past few years, and this could encourage growers to shift towards cotton, said a Mumbai-based dealer with a global trading firm.

"Ideally, with higher area, production should go up. But cotton is a rain-fed crop in many regions, so monsoon rainfall distribution will determine the crop size," he said.

The dealer also expected a rise of up to 15% in area planted to cotton.

India is likely to receive average monsoon rainfall in 2022, while cotton-producing western states could get above-average rains, the weather department said this week.

(Reporting by Rajendra Jadhav and Sumit Khanna; Editing by Bradley Perrett)

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