By Kavita Desai
MUMBAI – India's cotton exports are expected to touch 6.0 mln bales (1 bale = 170 kg) in the current marketing year 2019-20 (Oct-Sep) due to strong demand and lower domestic prices, which have made foreign sales economically viable, trade officials said.
"Indian cotton is the cheapest in the world and relaxation of lockdown restrictions has led to some pick-up in economic activity. Demand from major importing destinations like Bangladesh, China and Vietnam has improved," said Manish Daga, managing director of CottonGuru Group.
Industry experts say that cotton exports may be in the range of 5.5-6.0 mln bales by the end of September. So far in the season, India has shipped 4.6-4.7 mln bales of cotton.
The Cotton Association of India has pegged the country's exports at 4.2 mln bales in the current marketing year, which is much lower than the industry's current estimate. The association is likely to hold a committee meeting today in which it may scale up its estimate for exports for the season.
Currently, Indian cotton is being offered at 62-63 cents a pound on cost and freight basis, which is 10 cents cheaper than the crop from the US.
Another factor that may boost exports is the availability of premium quality cotton at a discount. The state-owned agency Cotton Corp of India has so far sold around 3.2 mln bales of the fibre from stocks procured in the domestic market.
"Most of the stock was sold in central and south India. Of the total quantity, I believe 400,000-500,000 bales have been purchased for exports deals," Cotton Corp Chairman and Managing Director Pradeep Agarwal said.
The agency's reserve sale price for the 30-mm variety is 37,100 rupees per candy (1 candy = 355 kg) on which discounts will be offered for bulk purchases.
"Spinners, traders and exporters are currently buying cotton offered by CCI (Cotton Corp of India) as the rates are attractive. CCI may sell more 1.5-2.0 mln bales in coming weeks," said Dharmendra Jain, director of the Ahmedabad-based DP Cotton.
Edited by Charumathi Sankaran