Pune: Indian cotton exporters are upbeat due to a spurt in demand for cotton from China, especially at a time when cotton exports to Pakistan have come to a halt due to the tensions between the two neighbours. According to trade estimates, Indian traders have contracted for export 5 lakh bales to China for shipments in the next two months.
“Though there will be no trade now with Pakistan for a few months, there’s good export demand for Indian cotton from many other countries like Bangladesh, China, Vietnam, Indonesia and many more,” said Atul Ganatra, president, Cotton Association of India (CAI).
“During the past couple of weeks, around 4/5 lakh bales (of 170 kg each) of cotton have been sold by Indian exporters to China for March-April shipments. The demand from China is robust even now at 78/79 cent,” he said.
There has been uncertainty in global cotton trade due to the ongoing trade war between the US and China.
CAI had estimated exports for the 2018-19 season to decline by 27 per cent to 50 lakh bales, compared with the estimated exports of 69 lakh bales during last year. India’s total cotton exports shipment is around 32 lakh bales up to February 2019.
The spot market prices of CAI for cotton of staple length 30 mm have dropped to ?42,100 per bale on March 1 from ?43,400 per bale on January 1.
Prices of raw cotton are ruling below the minimum support price levels.
“The decline in the domestic prices has brought export parity,” said a Mumbai-based trader, requesting anonymity.
Ganatra said that India has already exported 6.5 lakh bales of cotton to Pakistan, which accounts for 10 per cent of India’s cotton exports. Traders were expecting to export another 4-5 lakh bales to Pakistan, but things have turned hostile at the border. However, increase in export demand from other countries is likely to compensate for the loss of trade with Pakistan.
The CAI has cut India’s cotton production estimate for January by 1.5 per cent to 330 lakh bales from 335 lakh bales.
Source: economictimes.indiatimes.com