The cotton harvest in India, the world’s second-biggest grower, will probably increase to a record this year as the best monsoon since 2007 improves yields, said the textile commissioner.
Production may total 37.5 million bales of 170 kilograms (375 pounds each) in the year that began Oct. 1 from 36.5 million bales in 2012-2013, Textiles Commissioner A.B. Joshi said after a meeting of the Cotton Advisory Board.
A record crop in India will add to a global glut and extend losses for futures traded in New York, which have plunged 65 percent since an all-time high in March 2011. Global stockpiles will jump to the highest ever by July 31 as the crop improves in India and China cuts imports by 46 percent, the U.S. Department of Agriculture estimates. India is the largest exporter after the U.S., and China is the biggest importer.
“Everybody is looking at anemic demand and a lot of inventory,” Robert Antoshak, managing director at Olah Inc., which advises producers that represent about 40 percent of U.S. exports of upland cotton. “A lot of India’s output is going to be exported to China,” intensifying competition among shippers, he said in an interview in New York.
Cotton futures traded at 77.36 cents a pound on ICE in New York today. Prices capped the 10th straight loss yesterday, the longest decline since March 1979, and tumbled 12 percent in October, the biggest drop among 24 raw materials in the Standard & Poor’s GSCI Spot Index.
“While there has been a reduction in the planted area, productivity will rise on good rains in Maharashtra and Gujarat,” Joshi told reporters in Mumbai today, referring to the biggest growing states. Seeding fell to 11.55 million hectares from 11.98 million hectares a year earlier, he said.
Exports are estimated to decrease 11 percent to 9 million bales from a year earlier, said Joshi. Local demand for cotton from textile mills may climb to 25.8 million bales from 25 million bales, while stockpiles will be 4 million bales by Sept. 30, he said.
The monsoon, which accounts for more than 70 percent of the country’s annual rainfall, delivered the most rain in six years from June to September, according to the India Meteorological Department. The showers eased a drought, which reduced production the previous year.
The harvest may total 38.1 million bales this year from 35.7 million in 2012-2013, Cotton Association of India said Oct. 21. Global reserves will reach 94.7 million bales of 480 pound each as world farmers reap 117.4 million bales outpacing consumption estimated at 109.5 million bales, year, the USDA said in September. China will import 11 million bales, according to the agency.
Futures on the National Commodity & Derivatives Exchange Ltd. in Mumbai traded at 961 rupees ($15.5) per 20 kilograms.