The area under cotton cultivation in India could fall up to 10 percent in 2012/13 season beginning in October, as lower returns from the fibre in 2011 may prompt farmers to switch to other crops, said the Cotton Association of India (CAI), a trade body.
Farmers are expected to increase area under crops such as soybean, guar, groundnuts and pulses as returns from these were higher than from cotton in 2011, Dhiren N. Sheth, president of the association, told Reuters.
"In northern states such as Punjab, Haryana and Rajasthan, farmers could prefer sowing guar seed while in central and western India other crops such as pulses, soybean and groundnut could eat into the fibre acreage," Sheth said.
Cotton prices globally have fallen more than 50 percent from the record highs of March 2011, on demand concerns due to economic uncertainty in Europe and higher global supplies.
The prices in India touched a record high of 61,700 rupees per candy of 356 kg in March 2011. The prices are hovering around 34,000 rupees now.
The benchmark cotton contract on ICE fell by more than 50 percent in last one year after hitting a record high in March, last year.
Guar seed prices in India in 2011 more than doubled to 7,400 rupees, while pulses prices went up 10 percent.
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