| Subject: |
India halts cotton exports to boost domestic supply, cool prices |
|
INDIA, the world’s second-largest cotton grower, confirmed yesterday that it had halted exports to boost domestic supplies and cool prices that jumped 27% in the past year.
Registration of export contracts had been suspended from Monday until “further orders”, Textile Commissioner AB Joshi said yesterday.
Cotton prices advanced in after- hours trading in New York, adding to a 69% rally in the past year, on concern the shipments freeze may exacerbate tight global supplies.
World inventories will decline 19% in the year through July as demand increases 5,7%, the US agriculture department said on April 9.
“It tightens supply because the amount of cotton on the market globally has now been reduced by the decision,” said Tobin Gorey, a commodities strategist at JPMorgan Chase in London. “Buyers will be looking elsewhere.”
Long-staple cotton prices in India have gained 27% to 7958 rupees (179) per 100kg in the past year, according to data on the Cotton Association of India’s website.
Cotton for July delivery added 1,4% to 82,75c/lb on ICE Futures US yesterday.
China, the biggest cotton user, may face a shortage because of falling production and reduced global supplies, according to CNCotton.com.
Consumption may exceed supply by 3,5-million tons in the year to August , and supply will remain tight next year, Mei Yong, a director at the portal owned by China National Cotton Reserves, said on Friday.
“Southeast Asian markets and our main buyer, China, will pass on their enquiries to the other countries where exports are allowed freely,” said Kantilal V Shah, chairman and managing director of exporter Gill & Company in Mumbai. “This could be at the cost of Indian cotton.”
The company was unsure whether it would be able meet its sales commitments for this month and next month, he said.
Indian exporters have sought approval to ship 8,5-million bales of 170kg each in the period October to April 15, according to data on the commissioner’s Web site. Bloomberg
Source : businessday.co.za
|