With prices softening post December, trade expects shipments to pick up
India''s cotton exports for the first three months of the season (OctoberSeptember 2020) have tumbled to nearly half or by down about 45 per cent
to 10 lakh bales (each of 170 kg) in the October - December 2019 period from
17 lakh bales in the same period last year.
"There were multiple factors responsible for the decline in exports in the first
three months October - December 2019. Our domestic prices were higher
than international prices because we had a very thin crop last year. This
impacted our cotton exports, which fell by nearly half as compared to last
year," Atul Ganatra, President, Cotton Association of India (CAI) told
Businessline.
The cotton trade has seen sharp fluctuations in the crop size and thereby in
the prices over the past one year.
The 2018-19 crop stood at 312 lakh bales, which was a record low as against
365 lakh bales reported in the previous year. However, for the current season
2019-20, the CAI has retained its crop estimate at 354.5 lakh bales.
The prices, which were quoted at around Rs 41,900 a candy (of 356 kg ginned
cotton of 29 mm variety) about a month ago, have fallen to about Rs 39,500
a candy, sharply down by about Rs 2400 a candy.
The fall in domestic prices is primarily due to the brightened prospects of the
crop. "But war concerns and trade tensions has caused lot of uncertainty in
the global cotton market.
And since our prices have fallen recently, we expect exports to pick up from
here onwards," said Ganatra. He added that even as the crop estimate targets
may be achieved this year, there is no clarity about the targeted exports of 42
lakh bales to happen.
Cotton imports, on the other hand, have shown increase during the period
under review October-December 2019. The CAI data revealed that cotton
shipments arrived at Indian ports till December 31, 2019 stood at 6.5 lakh
bales, which was 3.53 lakh bales for the same period last year.
The trade body has estimated total cotton imports during the season at 25
lakh bales, which is about two lakh bales less than what was estimated for
the previous year.
Cotton trade is treading cautiously in the international markets amid
uncertainty over a war situation in West Asia and weakening Indian rupee.
Source: The Hindu Business Line, India Tuesday, 07 January 2020