General Characteristics

• Cottonseed is a by-product of the cotton plant, which is primarily grown for its fibre. Although cotton has been grown for its fiber for several thousand years, the use of cottonseed on a commercial scale is of relatively recent origin. 
• Cottonseed is the second most commonly produced oilseed in the world just slightly ahead of rapeseed averaging one-fourth that of soybeans in the same period.
• 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.
• In the United States, which is the world's second largest cotton producer behind China and just ahead of India, about 15% of the producer's income is from the seed portion of the crop. 
• Oil, linters, hulls and meal are produced in the processing of cottonseed. Cottonseed meal is produced principally by the extraction of oil by solvent methods or mechanical crushing.   

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.

Indian Scenario

• 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. 
• India's cotton output and along with it the cottonseed, meal and oil output varies considerably from year to year in response to the vagaries of weather and pest attacks. 
• India's cottonseed production in 2002-03 and 2003-04 is estimated at 36.3 and 43.4 lakh tons respectively. 
• 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. 

Major Indian Markets

• Indore, Ujjain, Dewas, Mandsore in Madhya Pradesh, Nagpur in Maharashtra, Kota in Rajasthan are major trading centres.

India Cottonseed and Oil Availability

Trade Scenario

• 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 industry is largely un-organised, though several associations have been trying for the upliftment of the industry and scientific processing practices 
• The prices display good volatility, with it falling during the peak arrival period (October - January).
• 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.

Market Influencing Factors

• Variations in cotton production and its effect on cottonseed, meal and oil production in the country. 
• The arrival of cottonseed for crushing from the ginning centres of the country. 
• Comparative price with other oilseeds, oil and meal in the domestic market. 
• The demand from the cattle-feed industry, which is the major consumer of cottonseed meal.