India may double import of cotton as local rates surge.

PUNE: India's cotton imports may double this year following a 30% increase in domestic prices over the past three months and increase in reliance on the commodity from Pakistan, West Africa, Brazil and Australia, industry executives said.

"We expect cotton imports to increase from 1 million tonnes last year to 2 million tonnes this year. The shipments have already started arriving," said Atul Asher, secretary, Indian Cotton Federation. The NCDEX price of 29 mm cotton ex-warehouse in Rajkot increased 32% to Rs 20,727 per bale on July 5 from Rs 15,704 per bale on April 1.

India's cotton production in 2015-16 declined 11% compared to the previous financial year, as per Cotton Association of India. This led to a rise in domestic prices. "Prices may remain firm till November," Asher said. However, supplies may take a little longer to ease.

"The delayed sowing in some parts of India due to delayed onset of monsoon may delay the arrival of fresh kharif crop. Considering that Diwali is in the last week of October, there could be delay in bulk arrivals of kharif cotton," said an executive of a multinational trading house.

The difference in domestic and international prices led to rise in imports. Bulk imports from Australia, expected to be 5-6 lakh bales, have resumed after nearly a decade. After the surge of monsoon rains, kharif sowing of cotton is in full swing in most parts.

"Cotton sowing is in full swing everywhere, including Gujarat and Maharashtra. Weather is favourable for cotton," said Keshav Kranthi, director, Central Institute of Cotton Research, Nagpur.

Source : economictimes.indiatimes.com