As evident from the name cottonseed oil is derived from cotton plant. Cottonseed oil is extracted from cottonseed, which carries around 18% oil content. Cottonseed oil is estimated to contribute nearly a fifth of the global vegetable oil production. Cottonseed is a byproduct derived through process called ginning.

Global Situation

Global cottonseed output is estimated around 35 million tons in the recent past. Major producers of cotton in the world also dominate the oil sector with China, U.S., India, Pakistan and Brazil leading the pack. Out of this nearly 27 million are used for oil. Global trade in cotton oil is estimated around 1 million tons. Australia, U.S. and Mexico are the leading exporters of cottonseed oil while Europe and Japan are main importers.

Indian Situation

India’s cottonseed production is estimated to be around 35% of its cotton output of over 4.5 million tons. Nearly 80% of the cottonseed is crushed for oil while the rest goes for feed. Major producers cotton in the country are Maharashtra, Gujarat, Andhra Pradesh, Punjab, Haryana, Rajasthan, Madhya Pradesh, Tamil Nadu and Karnataka. Nearly 95% of the output and area under cotton belong to these nine states.

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.

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.

Market Situation

Traditionally cottonseed is sold through weekly auctions as well as through active cash market in major producing centres. Cottonseed market stays largely as an unorganized sector with a slew of operators dominating the scene. Prices tend to fall in October-January considered as peak season of arrivals of fresh supply. Fluctuations in cotton output will have a direct bearing on the price of cottonseed oil, meals. The price of other oils would also influence cottonseed oil. Cattle feed sector is the main user of cottonseed meal.