Introduction

Cottonseed is a by-product of the cotton plant, which is primarily grown for its fibre. The cottonseed industry is unique that it adds value to the byproduct of cotton production. Cottonseed was a raw agricultural product, which was once largely wasted. Now it is being converted into food for people; feed for livestock; fertilizer and mulch for plants; fiber for furniture padding; and cellulose for a wide range of products from explosives to computer chip boards.

Economic Importance

Cottonseed is the second most commonly produced oilseed in the world just slightly ahead of rape/Canola. However, in 2003-04 rapeseed/mustard has marginally overtaken this seed. However, cottonseed oil falls to about fourth or fifth in the world production of oils, due to the relatively low amount of oil in the seed (about 18%) and to the great amount of cottonseed, which is fed unprocessed to cattle, especially dairy cattle. The relationship between fibre production and the fortunes of cottonseed are unique in the oilseed world. In the United States, which is the world's second largest cotton producer behind the China and just ahead of India, about 15% of the producer's income is from the seed portion of the crop.

Global Scenario

The global production of cottonseed is around 35 million tons in the recent years. The major producers of cotton are also the major producers of cottonseed. China, USA, India, Pakistan, Uzbekistan and Brazil are the major producers globally.

The trade in cottonseed is very less, when compared to other oilseeds. Of the global production of 35 million tons, 27 million tons is crushed for oil production and around 8 lakh tons is globally traded. India, China and Uzbekistan consume almost all the cottonseed produced, within the country itself. USA consumes around 2.5 million tons of its production of 5.5 million tons. Australia (2-3 lakh tons) and United States (2-3 lakh tons) are the major exporters of cottonseed, Japan (1.5 lakh tons), Mexico (2 lakh tons) and EU (1-1.2 lakh tons) are the major importers.

India has been producing cotton since centuries and it is a very important commercial crop of the country. The country is the world's number one in acreage and third in output of cotton and cottonseed. The crop sustains the country's cotton textile industry, which is perhaps the largest segment of organized industries in the country. Cottonseed, is an important by-product of cotton fiber. It was once mostly fed to cattle. Now, it is an importance source of vegetable oils.

Cottonseed is a traditional oilseed of India. It is estimated that cottonseed production will be around 33% of the cotton production in bales. Around 80% of the seed is marketable surplus and arrives in the market for being crushed to oil. The remaining is used as seed is fed to cattle. The production in the last two years, is estimated as under:

With not more than a third of the cotton cultivation under irrigation, it is not surprising that cotton output and together with it the cottonseed output varies considerably from year to year in response to the vagaries of weather and pest attacks. In the last ten years the country's production has ranged from as low as 146 lakh bales in 2000-01 to 177.90 lakh bales in 1996 - 97.

Although cotton is cultivated in almost all the states in the country, the 9 states of Punjab, Haryana, Rajasthan, Gujarat, Maharashtra, Madhya Pradesh, Andhra Pradesh, Tamil Nadu and Karnataka account for more than 95 percent of the area under and output. These states are also the major producers of cottonseed.

India's Statewise Cottonseed Production (In Lakh Tons)

State	1999-00	2000-01
Maharashtra	10.33	6.01
Andhra Pradesh	5.32	5.54
Haryana	4.36	4.61
Punjab	3.17	4
Gujarat	6.95	3.87
Karnataka	2.53	3.27
Rajasthan	3.28	2.68
Tamil Nadu	0.86	1.08
Madhya Pradesh	1.52	0.79
Others	0.39	0.31
Total	38.81	32.17

India's Seed Production Trends

Imports and Exports

India used to be a major exporter of cottonseed extraction around two decades ago. However, the demand for other oil meals like soymeal, has lowered the cottonseed demand globally. In addition, the low availability of decorticated meal in India has also been a major reason for the fall in exports.

Market Structure

Akola, Parbhani, Nagpur, Yeotmal are the major trading centers where cottonseed from the cotton procured by the Maharashtra State Cooperative Cotton Growers Marketing Federation is auctioned off.

Cottonseed is sold through weekly auctions in Maharashtra. In other states, there is an active cash market in the season. Cottonseed arrives in the market as a by-product of ginning operation carried on cotton. It is sold off immediately. The prices of oil and meal display good volatility, with it falling during the peak arrival period (October - January). The prices of oil is also dependent on the price behaviour of other domestically produced oils, more particularly groundnut oil. The prices of meal are dependent on the prices of other commercially important oils like soymeal.