India's farmers could boost cotton acreage by 15 percent in the 2011/12 season, a trade body said on Monday, raising the possibility that domestic prices could ease from June from current near-record highs. The Cotton Association of India (CAI) said its estimates of increased acreage for the crop in the world's second-biggest producer were based on expectations higher earnings will prompt farmers to plant the fibre in more areas.
Cotton prices in India touched a record high of 60,200 rupees per candy of 356 per kilogramme (kg) on March 22 mainly in line with global gains for the crop. Key New York May cotton futures hit an all-time high of $2.195 per lb on March 7 on supply concerns.
"We are expecting at least a 15 percent increase in all cotton producing states," said Dhiren Sheth, CAI president. "There are nine cotton growing states plus Orissa, and in those areas we expect cotton acreage to increase by around 15 percent as higher prices will prompt farmers to shift to cotton from other crops," he added.
Sheth said farmers could replace rice, groundnut and soybean acreage with cotton. Indian millers said cotton output could be higher in the next crop year on increased productivity even if acreage does not increase. India allowed 5.5 million bales of exports in the current season with this season's output expected to be around 31.2 million bales, up 5.8 percent from a year ago when production was hit by drought.
But it had to extend an initial deadline for exports to February 25 as heavy rains hit harvests. A rush by buyers for product to meet the export deadline lifted domestic prices. But now that quota has been filled, domestic prices could soften.
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