Cotton Seed

Last Updated: 03 February 2018 10:02 AM

Cottonseed is a by-product of cotton after lint recovery. Hence, the basic cultivation aspects are applicable to cotton crop. Cottonseed, similar to other oilseeds, is a good source of oil and protein.

Economic Importance:

Oil: Cottonseed is recovered from lint and crushed for oil. Recovery is about 11-12% of seed.

Meal: Leftover endosperm after oil extraction is a rich source of protein and is used as a feed for animals or fertilizer for plants. Recovery of meal is about 85-86%. It is also known as Kapasia khalli or COC.

Hulls: The outer cover of the cottonseed is called hull and its recovery is about 2%. They are rich source of protein and fiber (cellulose). They are considered cost effective animal feed.

World Scenario

World production in cottonseed has increased moderately during the past decade from about 36 million tons in the early 2000s to about 45 million tons in 2013-14. China is the largest producer contributing for about 29% of total output in the world. Production in India has increased rather steeply during the past 10 years from about 4.5 million tons in 2002-03 to about 12.3 million tons in 2013-14.

Contrary to this, output from the U.S. declined from about 6-7 million tons to less than 5 million tons during the corresponding period. However, the output in other major producing countries Pakistan and Brazil has remained largely at the same level during the past decade. Consumption of cottonseed witnessed more or less the similar pattern as that of production.

Table 1: Global balance sheet of cottonseed (‘000 tons)

Year	Production	Imports	Exports	Consumption	Stocks
2009-10	39508	552	572	39517	905
2010-11	44298	849	1012	43666	1374
2011-12	47776	1099	1129	47158	1962
2012-13	46063	939	1138	46397	1429
2013-14P	44514	819	1041	44395	1326

P: Projection Source: USDA

On the other hand, cottonseed exports are very marginal and confined to only a few countries. Australia and U.S. together account for about 75% of total world exports of cottonseed. Major importers include China, South Korea, Japan, Mexico and U.S. Imports by China have increased only recently.

Domestic Scenario

Domestic production of cottonseed has more than doubled in the past 10 years primarily on account of a sharp rise in yields. Nevertheless, the seed production has increased rather steadily compared to that of lint production.

Almost the cottonseed produced in the country is consumed domestically there are almost no or negligible exports. Domestic consumption has also been increasing constantly. Further, stocks were also built up to a comfortable level over a period.

Table 2: Domestic demand and supply of cottonseed (000 tons)

Year	Production	Consumption	Exports	Ending Stocks
2009-10	10402	10208	4	373
2010-11	11548	11500	8	413
2011-12	12312	12120	8	597
2012-13	12100	12193	8	496
2013-14P	12300	12300	8	488

P: Projection Source: USDA

State-wise production

Among all the major states that produce cotton, Gujarat, Maharashtra and Andhra Pradesh occupy the first three places, accounting for over 70% of total domestic production. Maharashtra has the largest area under cotton cultivation (34%) but it contributes for only 21% of total production, next to Gujarat at 35%. Andhra Pradesh occupies the third place in the country, both in terms of area and production.

Major Markets

Spot markets: Akola, Rajkot, Guntur, Bhatinda, Ganganagar.

Futures: Cottonseed futures are traded on NCDEX

External Trade

Major export destinations: NA

Major import sources: NA

Factors influencing prices

Carryover stocks: Leftover stocks from the previous year’s production after meeting the demand.

Expected demand: Average level of consumption and exports during the past few years

Crop acreage: Extent of area sown under the crop

Output expectations: Estimated output based on the acreage and weather conditions and pest infestation etc.,

Imports and exports: Need to know the details of important sources and destinations of the external trade.

Government policies: Any change in government policy relating to the crops.

Procurement: Direct procurement by the government agencies and storage in warehouses change in tariff and base prices of externally traded goods will have a direct impact on the respective commodity prices.

Derived products (Oil & Meal)

Cottonseed Oil

Main product derived from the seeds is seed oil. Oil recovery is on average about 11-12%. Cottonseed oil produced in the country is completely consumed within the country. Further, India doesn’t import any notable amounts of cottonseed oil.

China is the largest producer as well as consumer of cottonseed oil followed by India and Pakistan and these three countries together account for about 65% of global cottonseed oil production and consumption. World trade in cottonseed oil is negligible and accounts for about 2-3% of world’s production.

Table 3: Trends in demand and supply of oil in the world (‘000 tonnes)

Year	Production	Imports	Exports	Consumption	End Stocks
2008-09	4753	63	161	4743	202
2009-10	4594	67	109	4592	162
2010-11	4961	68	143	4780	268
2011-12	5248	80	175	5160	261
2012-13	5269	83	151	5241	221
2013-14P	5149	65	147	5084	204

P: Projection Source: USDA

Table 4: Trends in demand and supply of oil in India (‘000tonnes)

Year	Production	Imports	Consumption	End Stocks
2008-09	1030	5	1038	60
2009-10	1045	9	1060	54
2010-11	1150	0	1121	83
2011-12	1210	0	1227	66
2012-13	1220	0	1238	48
2013-14P	1275	0	1270	53

P: Projection Source: USDA, SEA and industry sources

Major Markets

Spot markets: Akola, Parbhani, Nagpur, Yawatmal

Futures trading: NA

External trade

Major export destinations: NA

Major import sources: NA

Cake or Meal

Cottonseed oil cake (COC) or kapasia khalli is the by-product of seed after extracting oil. It is used as a feed for livestock and fertilizer. Cottonseed meal produced in India is completely consumed domestically.

Table 5: Trends in demand and supply of meal in the world (‘000 tonnes)

Year	Production	Imports	Exports	Consumption	End Stocks
2008-09	14246	388	394	14276	113
2009-10	13805	372	377	13720	193
2010-11	14828	488	424	14903	182
2011-12	15700	423	509	15582	214
2012-13	15758	390	470	15723	169
2013-14P	15481	380	398	15479	153

P: Projection Source: USDA

Table 6: Trends in demand and supply of meal in India (‘000 tonnes)

Year	Production	Consumption	Exports	End Stocks
2008-09	3380	3379	1	1
2009-10	3429	3425	4	5
2010-11	3750	3694	56	60
2011-12	3940	3927	13	69
2012-13	3990	3960	30	43
2013-14P	4170	4165	5	35

P: Projection Source: USDA, SEA

Major Markets

Spot markets: Akola, Parbhani, Nagpur, Yawatmal

Futures trading: MCX and NCDEX.

External Trade

Major export destinations: NA

Major import sources: NA