Pulwama attack retaliation: India halts cotton exports to Pakistan amid tensions
A temporary slump seems to have emerged in the flow of cotton consignments to Pakistan from India following the Pulwama attack.
Cotton exports to China from India, however, are on the upswing.
About 4 lakh bales have already been shipped to China in the last 10 days and another 10 lakh bales are expected to be shipped from the country soon, traders said.
Atul Ganatra, president, Cotton Association of India (CAI), pointed out that China is building up its inventory since the country would be running out of stock by the year end. A Chinese delegation was recently in India to tap opportunities in various sectors.
Thanks to the unease between India and Pakistan, export contracts have now been put on hold and exporters expect a temporary slump in flow of consignments for a few days.
Pradeep Jain, president, Khandesh Cotton Gin/Press Association said that traders would wait for a while to see how the situation develops. Ganatra said that some 8 lakh bales had been contracted by Pakistan and nearly 6.5 lakh bales have already been shipped which means barely 75,000 bales are remaining.
Pakistan is expected to import around 10 lakh bales of cotton from India in the current financial year. Some exporters believe that the cotton export to Pakistan will continue even in the event of increase in duty as the consignments would be routed via ports in Dubai and Singapore.
So far, some 32 lakh bales have been shipped out of the country and the total exports are expected to touch 50-55 lakh bales, he said. In addition to Pakistan and China, other export destinations include Vietnam, Indonesia and Bangladesh.
Daily arrivals are to the tune of 1.25 lakh bales, of which spinning mills buy 60,000 bales, 20,000 bales are exported and 15 lakh bales are purchased by Cotton Corporation of India ( CCI) on a daily basis since cotton prices are near MSP levels, Ganatra said.
Till date, the total cotton stock in the country is 80 lakh bales, of which 44 lakh bales is with spinning mills, 36 lakh bales with ginners and the remaining with CCI.
CAI, in its January 2019 estimate of the cotton crop for the season 2018-19 beginning from October 1, 2018, has estimated cotton crop for 2018-19 season at 330 lakh bales of 170 kg each which is lower by 5 lakh bales than its previous estimate of 335 lakh bales made last month.
CAI has reduced the crop estimate for Telangana by 2.50 lakh bales, Andhra Pradesh by 50,000 bales and Karnataka by 2 lakh bales. The main reason for lower crop is that in the southern zone, farmers have uprooted their cotton plants due to moisture deficiency as a result of which there is no scope for 3rd and 4th pickings.
Earlier, in the December estimate, CAI had projected 335 lakh bales. The CAI has reduced the crop estimates for Telangana by 2.50 lakh bales to 45 lakh bales, Andhra Pradesh by 50,000 bales to 16 lakh bales and Karnataka by 2 lakh bales to 15 lakh bales.The CAI has estimated domestic consumption of 316 lakh bales, which is lower by 4 lakh bales compared to the consumption figure estimated during the last month.
Erratic rainfall and pest attacks have shrunk the crop size this year. Ganatra said the association would hold a review meet on March 1.
Source :- Financialexpress.com