Organic cotton opportunities buoyed by US and India reports

In the US, the 2010 and Preliminary 2011 U.S. Organic Cotton Production & Marketing Trends report, conducted by the Organic Trade Association (OTA), showed planted acres of organic cotton were up 36%, to reach 11,827 acres, in 2010, while bales harvested were up nearly 24%. US producers harvested 11,262 acres of organic cotton in 2010, representing 95% of their planted acres, and yielding 13,279 bales.

However, while 2011 saw the largest number of acres planted since 1999, harvested acres and bales are expected to be down by 38% and 45%, respectively, following the devastating drought in the Southern Plains area of Texas. In fact, the extremely dry conditions in Texas forced farmers there to abandon more than 65% of their planted crop in 2011.

A modest acreage gain of 2% is forecast for 2012, bringing plantings of U.S. organic cotton to 16,406 acres. Another 2% net gain is in the five-year forecast, bringing the total to 16,716 acres, the report said.

Survey respondents reported their cost per acre to grow organic cotton ranged from US$350/acre to US$650/acre, with an average cost/acre of US$440. Most survey respondents reported receiving US$1.50 per pound for organic cotton, with prices ranging from as high as US$2.40 for organic Pima cotton to a low of US$1.35 for one organic Upland producer.

In India, the Associated Chambers of Commerce and Industry of India (ASSOCHAM) submitted a study “Madhya Pradesh: Inching towards organic farming”, to the state government last week. The report claimed that organic farming can lead to wealth accumulation of a Rs 23,000 crore, generate exports worth Rs 600 crore and create 60 lakh employment opportunities across the region over the next five years.

Madhya Pradesh already accounts for nearly 40% of the total area under certified organic farming in the country. According to the ASSOCHAM study, the adoption of greater organic farming will bring down input costs and the produce, which includes food as well as cotton, will fetch a significant premium over the price farmers usually receive.

The study recommends that the state should increase cultivation through a cluster approach while also helping to market the organic products for farmers.