Poor prognostication skills by Indian agriculture experts could be good news for American cotton farmers.
Earlier this month, cotton prices jumped after India announced plans to ban all cotton exports.
India is believed to have opted for a cotton-export ban because the Asian nation is concerned about a possible supply crunch. According to government officials, India’s cotton exports may have overshot government targets last year, according to Southeast Farm Press.
A few days later, officials with the country’s commerce industry said they would allow cotton cleared by customs before March 4 to be exported, easing the situation somewhat, according to an Indian agriculture blog.
It’s unclear if the price surge will be long-lasting, according to Southeast Farm Press.
“We’ll probably continue to see higher prices in the short-term,” Max Runge, Auburn University Extension economist told the publication. “But I don’t think we can count on any long-term effects.
“The market is so volatile now – we were up to about 97 cents four weeks ago, then back down to 90 cents, and now, with this news from India, we’re back up to 92 cents.”
India is the second-largest cotton exporter in the world, just behind the US. Seventy-five percent of the US crop currently is being exported.
Following the announcement of the ban on March 5, US cotton futures jumped 4.5 percent – the most allowed in a single day of trading – to more than 92 cents per pound.
However, cotton future have since dipped back under 90 cents a pound, according to the National Cotton Council of America, less than half of the all-time high of $2.27 per pound, reached last March due to a global supply crunch.
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