Cotton exports likely to fall in FY15 despite expectations of higher acreage

The International Cotton Advisory Committee says India’s cotton exports could come down by up to 20 per cent in 2014-15, due to less global trade and more local consumption.

It said the volume of cotton traded internationally was expected to decline by eight per cent to 8.1 million tonnes in 2014-15, driven by reduced shipments to China from a record of 5.3 mt in 2011-12 to an anticipated 2.1 mt in this year.

The Chinese government has a huge stock of cotton and wants local users to use more of the home product.

Prerana Desai, head of commodities research at Kotak Commodities, said: “Yes, there could be a fall in India’s exports in 2014-15 by 15 per cent and exports might settle at around 8.5 million bales (a bale is 170 kg) compared to the previous two years’ export of around 10 mn bales (annually).”

The Cotton Association says India is likely to produce 38 mn bales this year. Sowing area is expected to go up by 10-15 per cent, as cotton is a short-duration crop and most suitable when the weather is not certain.

India’s prices being cheaper than the international market and this being the lean season for cotton arrivals, imports are on the rise and in the next few months, 1-1.5 mn bales of cotton are expected to enter India, say trade circles. That would make the yearly import two mn bales.