High prices may impact India cotton exports
Cotton exports this year may fall short of the 40 lakh bales estimated recently by the Committee on Cotton Production and Consumption, traders said.
According to Rakesh Rathi, former president of Indian Cotton Association (ICAL), Bathinda, export enquiries are poor as Indian cotton is more expensive by 10 cents a pound compared with world cotton prices.
“We started this season with very poor opening stock. Arrivals are not picking up as expected and domestic mills are gradually increasing capacity utilisation,” he said.
Cotton arrivals in November usually surpass 1.5 lakh bales a day. At present, it is at 1.15 lakh to 1.3 lakh bales per day. In several areas, sowing and harvesting have been delayed. Further, farmers were waiting for prices to improve, he said.
President of Cotton Association of India (CAI) Atul S. Ganatra said farmers had sold cotton in the range of ₹10,000 to ₹15,000 per 100 kg in the last season and that the prices now are in the ₹9,000 per 100 kg range. “Prices are down 35% already. So farmers are not selling cotton. But, there are no signs that prices would improve. The ICE Futures prices are ₹50,000 a candy for March delivery whereas Indian cotton prices are ₹66,000 a candy now,” he said.
The CAI expects exports this season (October 2022 to September 2023) to be about 30 lakh bales. Since October 1, only 50,000 lakh bales were exported compared to seven lakh bales last year, he added.
Nishant A. Asher, secretary of Indian Cotton Federation, said another major reason for tepid demand for cotton is the slowdown across the textile supply chain globally. Almost 50% of Indian cotton exports were to Bangladesh. China, Vietnam, Thailand, and Indonesia are the other major importers of Indian cotton. Bangladesh is said to be facing a crisis and there is no demand from that country. Further, a spinner in Bangladesh is able to get west African or U.S. cotton at a relatively lower price. “At this rate, Indian exports (of raw cotton) will probably [only] touch 25 lakh bales this season. It all depends on the global market for textiles,” he said.