Fresh monsoon rains in major cotton-growing regions in India, the world's third-largest producer, have brightened crop prospects that were looking grim during last month's dry spell, traders said on Thursday.
Cotton output in the current winter season is likely to cross last year's 16.75 million bales (of 170 kg each), helped by better weather and a rise in the crop acreage, they said.
"Things have worked out well and the crop is progressing normally throughout the country," said Punjab-based Ashore Kaput, president of the Northern India Cotton Association.
The area under cotton cultivation in India has risen to 7.5 million hectares this year from 7.15 million a year ago, but monsoon rains were poor in June and July when sowing takes place.
Rains were 13 percent below normal in the first half of the four-month wet season ending in September, but later picked up. Kaput said northern states such as Punjab, Haryana and Rajasthan received sufficient rains in the two weeks ended in August after a dry spell of about a month. The western states of Gujarat and Maharashtra, major cotton producers, also got good rains during the period, traders said. "It has rained even at the places which were almost dry," said Manage Gala, a cotton trader based in Gujarat's Ahmedabad, a leading textiles and bullion trading centre.
Some parts of the state witnessed floods after recent rains, but those areas were not in the main Cotton Belt, he said.
There was no report of any major attack of pests and diseases in the country, but the crop might be hit if cloudy weather continued for another week or 10 days, traders said.
"The crop now needs sunshine for photosynthesis. But if it remains cloudy, it will be bad for the crop," said a trader with a European firm trading in cotton yarn and textiles.
Traders said the crop could now survive without rains, but some showers at regular intervals would improve the crop outlook.
Cotton picking begins on a limited scale at the end of September, but major arrivals start in October and November, they said.
Domestic cotton prices are expected to remain stable in the coming weeks due to poor demand from mills and limited supply from the old crop, traders said.
"The market for cotton yarn is bad at the moment and the current cotton prices are not viable for many millers," said Gala, adding that expectations of a normal crop had also helped prices to remain steady, despite a drop in international prices.
December futures on the New York Cotton Exchange slipped a quarter of a cent to finish at 45.46 cents a pound on Wednesday.
It was quoted at around 47.30 cents a month ago.
Domestic prices normally follow international trends. Though imports are now cheaper than domestic cotton, millers were avoiding fresh bookings, as the new crop would start coming in the market from the next month, traders said. "We haven't heard about any fresh import deal in the past few weeks," a trader said.
India has so for committed to import about 600,000 bales of cotton in the marketing year to September, traders said.
Last year, the country had imported about 1.77 million bales.