Cotton exports from India may go down in 2008-09

Cotton exports from India in 2008-09 may go down as compared to last year. Traders in Gujarat see lower cotton exports from the country this year in the wake of beleaguered textile mills across the globe and higher cotton prices in the international market.

Though cotton traders are hopeful that cotton prices would come down once new arrivals pick up, they are also of the view that cotton exports may not rise in terms of quantity.

“In 2007-08 cotton exports from India were estimated at 10 million bales, which may come down to 8.5 million this year,” said Kishor Shah, president, South Gujarat Cotton Dealers Association (SGCDA).

 

China accounts for majority of cotton imports from India. Around 20 per cent textile mills in the dragonland are in bad shape and their margins were squeezed last year due to record cotton prices, say industry sources. Cotton consumption by textile mills is likely to dip in 2008-09.

“Cotton exports from India are expected to decline this year,” said Arun Dalal, owner of Arun Dalal & Co, an Ahmedabad-based cotton trading firm. Dalal put the cotton export estimate in 2007-08 at 8.5 million bales, which may further decline to 5 million bales this year.

Indian cotton prices are ruling higher by around 5 to 7 cents per pound than the international price levels, which are hovering around 62 to 65 cents per pound. “Cotton exports are likely to fall by around 20 to 30 per cent this year,” said Hemal Shah, a local cotton trader in Ahmedabad.

Traders expect cotton prices to come down after the arrivals of fresh stock in the markets. However, cotton exports from the country are viable only if the prices dip to Rs. 23,000 per candy mark.

“At present, I see no reasons for cotton prices to surge. Decline in cotton prices would provide much needed cushion to cotton exporters,” Kishor Shah added.