Prolonged Monsoon Delays India's Cotton Harvest, Slows Exports

By Thomas Kutty Abraham

Oct. 14 (Bloomberg) -- A prolonged rainy season has delayed cotton harvests in India, the world's biggest grower after China, reducing exports, the nation's biggest buyer of the fiber said.

Picking is behind schedule by at least three weeks in the states of Gujarat, Maharashtra and Madhya Pradesh, the biggest producers of the fiber, Subhash Grover, managing director of the Cotton Corp. of India, said in a phone interview in Mumbai today.

A delay in sales to countries including China, the biggest producer and user of cotton, may help support prices that have fallen 35 percent in the past six months in New York. The South Asian country is the biggest exporter of the fiber after the U.S.

``Traders are not signing export contracts as local prices are higher than global rates,'' Grover said. ``Indian cotton is at least 3 cents a pound more expensive'' after the recent slump in prices of commodities worldwide.

Cotton futures for December delivery rose 3 percent to 51.77 cents a pound in after-hours trading on the ICE Futures U.S. in New York. Futures slumped 14 percent last week to a 16-month low.

Prices in India have gained 9 percent in past six months, according to the Cotton Association of India, a trade body.

India's June-September monsoon season, which accounts for four-fifths of the annual rainfall, began retreating from Sept. 29, almost a month later than normal, according to the weather office. Rains were 107 percent of the long-period average in the northwestern region including Gujarat and Maharashtra.

Late harvesting won't lower the size of India's crop that's forecast to exceed last year's record 31.5 million bales, Grover said. Production may total 33 million bales in the year started Oct. 1, compared with an estimated 31.5 million bales last year, Textiles Commissioner A.B. Joshi, said Sept. 25.

India's Cotton Advisory Board will release its first crop estimate on Oct. 16.

China Demand

India, which probably sold 8.5 million bales abroad in the year ended Sept. 30, may have at least 6 million bales available for exports this year, Grover said. An Indian bale weighs 170 kilograms (375 pounds) and 480 pounds in the U.S.

``Exports may pick up again from the end of November as deficit countries like China will turn to India,'' Grover said.

China's cotton imports may decline next year if a slowing global economy weakens demand for the nation's textile products, Ma Zhanping, deputy director of trade and economics at the National Development and Reform Commission, said yesterday.

India boosted planting of genetically modified cotton seeds by a fifth to 17.2 million acres this year, or 76 percent of the total cotton acreage, from 14.4 million acres, or 63 percent, a year earlier, according to Mahyco Monsanto Biotech Ltd.

The nation's average per-hectare yield has almost doubled to 560 kilograms since the nation allowed farmers to use modified seeds for the first time in 2002.

To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net