India'S Cotton Planting Area Or Record High In 2010/11

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Cotton prices in India have risen sharply this year as China buys huge quantities of cotton from the world's second largest producers to meet the growing demand for textiles.

Prices hit a record high of 33000 rupees per 356 kilograms on Tuesday, up 47% from the 22400 rupees at the start of the current crop year.

A. Ramani, Secretary of the Southern Cotton Association in India, said: "cotton planting area is expected to set a record of 11 million hectares, driven by high prices."

According to the Cotton Advisory Board's estimate, India's cotton acreage is estimated at 10 million 300 thousand hectares in the current market year ending in September 30th.

According to government data,

"The crops are in good condition," said a member of the Cotton Advisory Bureau who did not want to be named.

The output in 2010/11 is likely to be much higher than this year. "

Industry officials expect cotton production in India to be about 32 million bales (170 kg / pack) in 2010/11, up from 29 million 500 thousand bales this year.

But they expect cotton prices to remain strong - even if the output increases - due to strong local and overseas demand.

India said on Tuesday that it will start the market year from October 1st - the abolition of the current mandatory export licence regulations.

The permit system was implemented in May, after a month long ban was lifted to balance the interests of farmers and textile mills.

Chowda Reddy, senior analyst at JRG Wealth management, said the relaxation of export regulations will further support local prices.

India's cotton exports in 2009/10 were estimated to be 8 million 300 thousand packages, boosted by global demand recovery.

In the last market year ended in September 30th, the country's cotton exports fell by 60% to 3 million 500 thousand a year, due to the global economic downturn.