INDIA, the second largest cotton growing country in the world after China, is estimated to have produced 31 million bales of cotton during  2007-08 (provisional estimate) compared with 28 mn bales in the previous year, according to Cotton Corporation of India. India accounts for little over 26 percent of total global production of cotton and accounts for 28.18 percent of global cotton area. According to the USDA,  in terms of global production. with 21.80 mn bales India ranks second (China topping the list) in cotton production closely followed by US (with  21.58 mn tonne) in cotton year 2006-07.  China's cotton production stood at 35.50 mn bales in 2006-07. Compared with 2005-06, India's cotton area in 2006-07 stands larger at 9.53 mn hectares compared with previous year's 9.14 mn hectares. The yield per hectare works out at 553 kilogram against 521 kg per hectare in 2005-06, according to CCI. India's cotton year is October-September. 

World cotton prices has further strengthened in 2006-07 compared with previous cotton year. The ICAC forecasts a season-average Cotlook A Index of 79 cents per pound in 2008-09, 6 cents higher than the expected 2007-08 average. This projected price increase is due mainly to an expected decline in the stocks-to-mill use ratio in the World-less-China (Mainland).

Among the cotton growing states in India Gujarat takes the lead for 2007-08 with 11.0 mn bales followed by Maharashtra's 6 mn bales, Andhra Pradesh 4.3 mn bales and Punjab 2.4 mn bales.

World Cotton Outlook (2004-05 to 2007-08)
(In 1000 480-Lb bales)

	2004-05	2005-06	2006-07	2007-08
Production	121386	116590	122081	120467
Imports	33434	44372	37281	38405
Consumption	108586	116241	123219	124433
Exports	35012	44594	37257	38397
Beginning Stocks	48242	60634	62380	63007
Source: USDA Report (May, 2008) E: Estimated F: Forecast

India's seven-year cotton balance sheet  (2001-02 to 2007-08)
(In lakh bales*)

Items	2001-02	2002-03	2003-04	2004-05	2005-06	2006-07	2007-08
SUPPLY
Opening stock	40.00	40.00	24.00	21.00	72.00	52.00	47.50
Crop size	136.00	136.00	177.00	232.00	244.00	280.00	310.00
Imports	16.00	17.67	7.21	6.00	4.00	5.53	6.50
Total supply	192.00	193.67	208.21	259.00	320.00	337.53	364.00
DEMAND
Mill consumption	146.00	142.42	150.39	168.00	182.00	194.89	207.00
Small Mill Consumption	11.00	11.63	13.00	17.00	20.00	21.26	23.00
Ex-factory consumption	11.50	14.78	10.57	13.00	15.00	15.88	15.00
Total consumption	168.50	168.83	173.96	198.00	217.00	232.03	245.00
Exports	0.50	0.84	13.25	12.00	47.00	58.00	65.00
TOTAL DISAPPEARANCE	169.00	169.67	187.21	210.00	264.00	290.03	310.00

1996-97	Includes 6 lakh bales of loose cotton not accounted for in statewise production in 1996-97
	Opening stock is based on verification of stock by the office of the Textile Commissioner
	Since 1996-97 crop year changed from Sept.1 to October 1
1997-98	Includes 5.75 lakh bales of loose cotton not accounted for in statewise production in 1997-98
1998-99	Includes 8.25 lakh bales of loose cotton not accounted for in statewise production in 1998-99
1 lakh = 100,000 1 bale =  170 kilogrammes Source: Cotton Corporation of India

India's cotton area, production and yield

Year	Area in lakh hectares	Production in lakh bales  (1 bale : 170 kg)	Avg. Yield in Kg. per hectare	Consumption (In lakh bales)
1950-51	58.80	32.80	95	42.10
1960-61	76.10	56.80	127	61.10
1970-71	76.10	53.50	120	67.70
1980-81	78.20	78.00	170	84.80
1990-91	73.90	117.00	269	115.50
1996-97	91.66	177.90	330	170.16
1997-98	89.04	158.00	302	159.01
1998-99	92.87	165.00	302	165.36
1999-00	87.91	156.00	304	173.36
2000-01	85.76	140.00	278	173.03
2001-02	87.30	158.00	308	171.76
2002-03	74.10	136.00	312	168.83
2003-04	76.30	177.00	394	177.10
2004-05	80.60	232.00	440	195.03
2005-06	86.77	241.00	472	217.10
2006-07	91.42	280.00	521	232.03
2007-08*	95.30	310.00	553	245.50
1 bale : 170 kilograms Source: Cotton Corporation of India * Estimated

India's state wise cotton area, production*

States	2007-08		2006-07		2005-06
	Area in lakh hectares	Production in lakh bales*	Area in lakh hectares	Production in lakh bales*	Area in lakh hectares	Production in lakh bales*
Punjab	6.48	24.00	5.88	26.00	5.57	20.00
Haryana	4.78	16.00	5.33	16.00	5.83	12.00
Rajasthan	3.68	9.00	3.50	8.00	4.71	9.00
Gujarat	25.16	110.00	23.90	101.00	19.06	89.00
Maharashtra	31.91	60.00	31.24	52.00	28.75	35.00
Madhya Pradesh	6.62	21.00	6.30	18.00	6.20	19.00
Andhra Pradesh	10.96	43.00	9.62	35.00	10.33	33.00
Karnataka	3.71	8.00	3.70	6.00	4.13	6.00
Tamil Nadu	1.23	5.00	1.33	5.00	1.40	5.00
*1 bale:  170 kilograms Source:  Cotton Corporation of India * Cotton Advisory Committee's estimate for 2006-07 as on August 9, 2007

Minimum Support Price for Indian farmers
(In Rs. per quintal)

Variety	2001-02	2002-03	2003-04	2004-05	2005-06	2006-07	2007-08
Bengal Desi	1250	1250	1285	1310	1310	1320	1350
V797	1560	1560	1605	1640	1640	1665	1770
J-34	1675	1675	17251725	1760	1760	1770	1850
LRA-5166	1750	1750	1800	1835	1835	1835	1900
H-4	1875	1875	1925	1960	1980	1990	2030
JKHY-1	1800	1800	1850	1885	1885	18951	1935
S-6	1840	1860	1910	1960	1985	2005	2055
DCH-32 South	2075	2075	2130	2170	2200	2430	2700
Suvin	3000	3000	3080	3135	3135	3400	3800
Support prices are for Fair Average quality Kapas Source: Cotton Corporation of India

The International Cotton Advisory Committee (ICAC) projects slight decline in world cotton production in 2008-09 to 25.9 million tons. Declines in production are forecast in the United States, Brazil, and Turkey due to competition from grains and soybeans. These reductions could offset increases projected in Asia, West Africa and Australia.Global cotton mill use is expected to remain stable at 26.7 million tons in 2008-09 due to slower world economic growth and higher prices of cotton relative to polyester.

World consumption is expected to exceed production in 2008-09. As a result, world ending stocks are forecast down by 6 percent to 11.3 million tons.

World imports are expected to increase by 5 percent  to 8.8 million tons in 2008-09 due to projected higher imports by China (Mainland). Imports by the rest of the world are projected down for the second consecutive season.

WORLD COTTON SUPPLY AND DISTRIBUTION (June 2008)

	2006-07	2007-08	2008-09	2006-07	2007-08	2008-09
	(In million tonne)			(In million bales)
Production	26.75	26.1	26.6	122.9	120	122.1
Consumption	26.62	27.5	27.5	122.3	126	126
Exports	8.17	9.1	8.7	37.5	42	40.1
Ending Stocks	12.76	11.4	10.7	58.6	52	48.9
Source:  International Cotton Advisory Committee

Production, Consumption, Imports, Exports, Ending Stocks of world's  major cotton countries (2003-04 to 2007-08 season beginning August 1)
(In million bales)

Countries	2003-04	2004-05	2005-06	2006-07	2007-08 (May)
PRODUCTION
China	22.30	31.00	29.50	35.50	35.80
United States	18.25	23.25	23.89	21.58	19.20
India	14.00	19.00	19.05	21.80	25.30
Pakistan	7.84	11.14	10.16	9.90	9.00
Brazil	6.01	5.90	4.70	7.00	7.17
Turkey	4.10	4.15	3.55	3.90	3.20
Uzbekistan	4.10	5.20	5.55	5.35	5.50
Other	18.74	22.52	21.32	17.04	15.28
Total	95.26	120.31	114.13	122.08	120.46
CONSUMPTION
China	32.00	38.50	45.00	50.00	53.00
India	13.50	14.80	16.50	18.10	18.20
Pakistan	9.60	10.75	11.75	12.50	12.50
United States	6.26	6.69	5.88	4.93	4.60
Turkey	6.00	7.10	6.90	7.30	6.50
Brazil	3.95	4.20	4.05	4.50	4.50
Bangladesh	1.72	1.87	2.20	2.40	2.50
Other	24.99	24.89	17.18	16.84	16.63
Total	98.07	108.89	116.35	123.21	124.43
IMPORTS
China	8.83	6.38	19.28	12.00	12.50
Turkey	2.37	3.40	3.40	4.00	3.40
Indonesia	2.15	2.20	2.20	2.20	2.25
Pakistan	1.80	1.75	1.61	2.29	3.70
Bangladesh	1.70	1.85	2.21	2.40	2.45
Thailand	1.67	2.28	1.89	1.95	1.80
Russian Fed.	1.47	1.45	1.42	1.40	1.42
Other	9.85	9.60	8.37	8.86	8.05
Total	34.01	33.43	44.28	37.28	38.40
EXPORTS
United States	13.75	14.43	18.03	13.01	14.20
Uzbekistan	3.10	3.95	4.80	4.50	4.45
Australia	2.15	2.00	2.88	2.12	1.20
Greece	1.22	1.17	1.35	1.25	1.10
Brazil	0.96	1.55	1.97	1.30	2.30
Burkina	0.95	0.97	1.40	1.35	0.82
India	0.70	`	3.45	4.63	6.10
Other	8.12	8.29	8.61	7.01	5.95
Total	33.22	34.99	44.96	37.25	38.39
ENDING STOCK
China	14.95	15.06	20.31	20.53	17.76
Brazil	4.57	5.03	3.81	5.68	6.40
India	4.18	8.76	8.26	7.53	8.85
United States	3.45	5.49	6.05	9.47	9.90
Pakistan	3.13	4.69	4.41	4.32	4.30
Turkey	1.47	1.79	1.71	2.05	1.95
Other	11.59	15.04	14.14	12.20	11.12
Total	44.30	57.18	59.96	63.00	61.55
1/ Includes Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam. 2/ Includes Benin, Burkina, Cameroon, CAR, Chad, Cote d'lvoire, Mali, Niger, Senegal, and Togo. E : Estimate F : Forecast Source: Cotton Report, FAS/USDA, May 2008

Production, consumption, imports, exports, ending stocks of world's major cotton countries (2003-04 to 2007-08 season beginning August 1)
(In million tonne)

Countries	2003-04	2004-05	2005-06	2006-07	2007-08 (May)
PRODUCTION
China	4.85	6.75	6.42	7.72	7.79
United States	3.97	5.06	5.20	4.70	4.18
India	3.04	4.13	4.14	4.74	5.50
Pakistan	1.70	2.42	2.21	2.15	1.96
Brazil	1.31	1.28	1.02	1.52	1.56
Turkey	0.89	0.90	0.77	0.84	6.97
Uzbekistan	0.89	1.13	1.20	1.16	1.19
Other	4.08	4.90	4.64	3.71	3.32
Total	20.76	26.59	25.63	26.58	26.22
CONSUMPTION
China	6.96	8.38	9.79	10.88	11.54
India	2.93	3.22	3.59	3.94	3.96
Pakistan	2.09	2.34	2.55	2.72	2.72
United States	1.36	1.45	1.27	1.07	1.00
Turkey	1.30	1.54	1.50	1.58	1.41
Brazil	0.87	0.92	0.95	0.98	0.98
Bangladesh	0.37	0.40	0.47	0.52	0.54
Other	4.13	4.04	3.76	3.75	3.62
Total	21.35	23.71	25.33	26.82	27.09
IMPORTS
China	1.92	1.39	4.19	2.30	2.61
Turkey	0.51	0.74	0.74	0.87	0.74
Indonesia	0.46	0.47	0.47	0.47	0.49
Pakistan	0.39	0.38	0.35	0.50	0.80
Bangladesh	0.37	0.40	0.48	0.52	0.53
Thailand	0.36	0.49	0.41	0.42	0.39
Russia	0.32	0.31	0.31	0.30	0.27
Other	4.13	4.04	3.76	1.93	1.75
Total	7.40	7.28	9.64	8.11	8.36
EXPORTS
United States	2.99	3.14	3.92	2.83	3.09
Uzbekistan	0.67	0.86	1.04	0.98	0.95
Australia	0.47	0.43	0.62	0.46	0.26
Greece	0.26	0.25	0.29	0.27	0.23
Brazil	0.21	0.33	0.42	0.28	0.50
Burkina	0.20	0.21	0.30	0.29	0.18
India	0.15	0.14	0.75	1.00	1.32
Other	1.79	1.80	1.87	1.52	1.29
Total	7.23	7.62	9.79	8.11	8.36
ENDING STOCKS
China	3.25	3.28	4.42	4.47	3.86
Brazil	0.99	1.09	0.83	1.23	1.39
India	0.91	`	1.79	1.63	1.92
United States	0.75	1.19	1.31	2.06	2.15
Pakistan	0.68	1.02	0.96	0.94	0.93
Turkey	0.32	0.39	0.37	0.49	0.42
Other	2.52	3.27	3.08	2.65	2.42
Total	9.64	12.45	13.05	13.71	13.40
Source:  Cotton Report, USDA/FAS, May 2008

World cotton area, yield and production
(1980-81 to 2003-04)

MARKETING YEAR	HECTARES ('000)	YIELD (KG/HA)	PRODUCTION ('000 480-Lb bales)
1980-81	32358	426	63334
1981-82	32927	455	68824
1982-83	31392	460	66312
1983-84	30920	467	66273
1984-85	33723	572	88656
1985-86	31582	552	80102
1986-87	29358	522	70338
1987-88	30876	574	81443
1988-89	33766	552	84168
1989-90	31556	522	79704
1990-91	33160	572	87141
1991-92	34784	597	95310
1992-93	32647	549	82325
1993-94	30712	550	77522
1994-95	32222	582	86111
1995-96	35986	567	93668
1996-97	33736	580	89894
1997-98	33743	594	92031
1998-99	32851	566	85358
1999-2000	32346	590	87612
2000-01	32001	604	88850
2001-02	33737	637	98744
2002-03	30447	631	88444
2003-04	32133