NEW YORK: Indian cotton production for the 2019-20 season is seen at 29 million 480 lb bales, the US Department of Agriculture (USDA) attache in New Delhi said in a report on Wednesday, down 1% from earlier estimates.

The production decline is the result of reduced plantings in central Maharashtra, where farmers are shifting towards soybeans as well as in Karnataka, where farmers are switching to pulses and corn, the attache said.

While overall plantings are expected to fall, they are happening at an accelerated rate this season in part because of the delayed monsoon, the report said. As of July 19, cotton planted area was 5% higher than the five-year average, with plantings especially accelerated in the states of Rajasthan and Odisha.

At 29 million bales, the anticipated 2019-20 output is down only slightly from the 29.3 million bales forecasted earlier this year, but still about 9% larger than the 2018-19 crop.

“While the prospects of a larger crop should result in greater export outflows, Indian cotton prices are currently uncompetitive in the global market compared to other suppliers," the attache said.

Indian cotton prices are up on improving quality, the attache said, and the higher prices help ensure that domestic mills will continue to rely on at least some imported cotton.

Copyright Reuters, 2019