India's cotton exports rise due to surge in Chinese demand
India’s cotton exports may touch 7 million bales this marketing year, a rise of 27 per cent over the earlier estimate due to a surge in demand, mainly from China, as Indian cotton is selling at discount, says the Cotton Association of India (CAI). Inquiries started pouring in from the day the news of US taxes on China came, said CAI president Atul Ganatra.
The cotton marketing year started on October 1 Last year. Ganatra said the earlier target was to export 55 lakh bales of cotton, but India had already exported that much till March end.
In the last few days, traders have exported more than 1.5 lakh bales of cotton to China, according to Indian media reports. Traders said there is demand for all qualities of cotton with Indian cotton selling at discounts of 7-10 cents per pound.
China has almost exhausted its cotton inventory and will be in the market to import the fibre. India has a good chance, especially with the new duty on imports from the United States, said Ganatra.
Experts say India is expected to replace Australia as the second largest exporter of cotton after China by the end of the 2017-18 cotton season.
Among other major exporters, US cotton is sold out along with concerns about its production as Texas zone is facing drought like conditions. Pakistan is now buying cotton.
Exporters believe if the increase in the minimum support price (MSP) to be announced by the Indian Government for 2018-19 is substantial, it could adversely affect exports. Ganatra, however, feels MSP increase will not affect trade in any way.
India has had a bad reputation as Indian traders export inferior quality cotton, delay shipments, give false packaging, add moisture and cotton has some trash, industry insiders said. (DS)