Cotton exports seen rebounding on lower price
India’s cotton exports are gaining momentum as the prevailing low prices have made the fibre attractive in the global market. Trade expects the shipments to surpass the export target to exceed 50 lakh bales for the 2019-20 crop season ending September.
“The export target of 47 lakh bales will be achieved and going by the current trend, shipments may touch 50 lakh bales this season,” said Atul Ganatra, President, Cotton Association of India (CAI), the apex trade body. Cotton exports in 2018-19 stood at 42 lakh bales.
According to CAI, exports till May-end stood at 37 lakh bales. “We expect the shipments to be around 40-42 lakh bales by end of June,” said Ganatra.
Cotton prices in India are hovering around ?35,000 per candy of 356 kg each, much lower than import price of ?40,000-42,000, Ganatra said. “Indian cotton prices are the cheapest in the world now,” Ganatra added.
Presently, Indian cotton is being shipped to countries such as Bangladesh, China, Indonesia and Vietnam among others. “Factors like local prices, currency exchange rate and the demand in the neighbouing countries are giving good room for exports. Our exports will easily cross 50 lakh bales as there is price advantage for our buyers,” said Arun Sekhsaria from Brijmohan Seksaria & Co in Mumbai.
State-run Cotton Corporation of India (CCI), which recently rationalised its sale price, is also keenly exploring the export option. “We are looking at markets such as Bangladesh. There are many enquiries and may materialise any time,” said PK Agarwal, CMD, CCI.
CCI is currently the largest cotton stockholder in the country with its stocks around 1.10 crore bales. CCI has procured over 1 crore bales in the current cotton season and is still making purchases in various states.
Indian cotton prices, which hovered around global price levels during February, had crashed in the aftermath of the Covid lockdown on decline in demand from the spinning mills. Ginned cotton prices, which touched a low of ?32,000-33,000 range, have recovered a bit to around ?35,000 levels and are expected to stay firm as market arrivals slow down and on anticipated improvement in demand from mills, said Ramanuj Das Boob, a sourcing agent in Raichur.
Srikanta, Vice-President at Raghunath Agrotech Pvt Ltd, Hyderabad said the demand for Indian cotton is yet to pick up from overseas buyers such as Bangladesh and Vietnam, where mills have also suffered due to the lockdown. “At these prices there should have been more exports,” Srikanta added.
CAI’s Ganatra said that the prevailing tensions between India and China were unlikely to hit exports. “We don’t see any impact of the prevailing tensions on cotton exports to China,” Ganatra added.