Indian Bt cotton seed sales likely to jump 3-5%

Seed companies expect the sale of Bt cotton seeds to increase 3% to 5% in the kharif season even as 2013-14 is set to be the year of historically high cotton production in India. The seed companies, which have been dealing with over supply from the past two years, expect the increase in sales to come from a shift in crop from soyabean to cotton as well as growing popularity of high density cotton cultivation.

Bt cotton seeds account for the highest share in profit of seed companies in India. In 2013-14 season, except the top popular brands, seed companies had to offer discount to the MRP due to oversupply of cotton seeds in the previous year. Seed companies had reduced seed production by almost 50% in the current year due to huge carry forward stock. Availability of Bt cotton seeds in the past kharif season was almost double the market demand.

Although India is expected to harvest a record cotton crop in 2013-14 season, seed companies expect to get the increase in sales by a shift in crop from soyabean to cotton and also change in the cultivation practices. Farmers are now using more seeds per acre to increase yields. Soyabean farmers have not received good returns compared to cotton farmers.
Cotton prices have, for the benchmark Sankar-6 variety, moved in a narrow range nears 42,000 per candy, while farmers have received about 15% to 20% above the minimum support price (MSP).

"We expect the demand for Bt cotton seeds to increase by about 3% to 5% due to slight increase in area and also due to an increase in area under high-density cotton cultivation," said MG Shembekar, MD of Nagpur-based Ankur Seeds .

In conventional farming, farmers focus on getting more cotton from every plant. In high-density cultivation, farmers get less cotton per plant, but the total yield per acre is high as the number of plants is more. "We expect the area under high-density cotton to increase to about 25% in near future," said Shembekar.