MUMBAI: Major cotton grower India is set to cut exports of the fibre as the coronavirus pandemic roils demand for clothing across the world.
India’s cotton shipments would probably be about 3.5 million bales in 2019-2020, about 700,000 bales of 170kg lower than the industry target, said Vinay Kotak, a director of Kotak Commodity Services Pvt Ltd, one of India’s biggest cotton exporters. Inquiries from buyers including China had dried up, he said.
India’s cotton industry, which was set to become the world’s biggest this year, is among many within the clothing supply chain that have been thwarted into crisis by the virus-led lockdowns from Europe to Asia to the US. Not only have garment factories closed in producers like Bangladesh, but empty streets from New York to Paris have decimated consumption of clothes.
“Cotton exports from India right now have been completely ruled out as there’s no demand right now, ” said Arun Sekhsaria, managing director of DD Cotton. “Most of China’s textile export orders to the US and Europe have been deferred, cancelled or put on hold. Who is going to buy Indian cotton now?”
Spinning mills in China, Indonesia, Vietnam and Bangladesh are working at 30% to 40% of their capacity right now, Sekhsaria said.
Cotton prices in New York, which traded at about 56 cents a pound, could slump to 45 cents as “no one is thinking about clothing right now, ” Sid Love, president of Sid Love Consulting Services in Overland Park, Kansas, said earlier this month.
Still, as prices had also tumbled in India, that may help increase its competitiveness for spinning mills that are still operating, said Atul Ganatra, president of the Cotton Association of India.
Also, as much as 3.1 million bales of the fibre have already been exported out of 3.4 million bales contracted so far in 2019-2020, so Ganatra is optimistic that the 4.2 million-bale export target for the year ending Sept 30 could be achieved. With China starting to reopen its factories, he’s hopeful that India will soon see orders. — Bloomberg