Cotton exports seem to be gaining momentum with the new crop arriving in the market. In the months to come, exports are likely to pick up.
At present, industry expects, 2.5 million bales (1 bale=170 kg) would be exported by December.
“It is learnt that an export commitment of 2.5 million bales of cotton has already been made. This has been done at international price of 108-112 cents per pound CIF China port,” said S V Arumugam, chairman, Confederation of Indian Textile Industry (Citi). He estimates 7 million bales as surplus that can be exported. But many traders estimate higher exports due to bumper crop.
“As arrivals increase prices could fall and exporters are likely to be more aggressive to export as mush as possible before competitors enter market. Cotton exporters from India are very active in selling Indian cotton in China, Brazil, Bangladesh and other countries,” said Arun Dalal, an Ahmedabad-based trader.
Another Mumbai-based exporter said that so far export registration with the Directorate General of Foreign Trade (DGFT) is around 600,000 bales. Cotton exports have been under the open general license since October. As arrivals of new cotton increase, prices will come under pressure as mills’ demand may be less this time. Exporters demand may continue even at lower prices.
Arrival calendar is such that October will see 6-7 million bales of arrivals while in November and December arrivals would be 8-9 million bales. Cotton prices are around Rs 39,000 a candy (356 kg) in Gujarat mandis while Rs 38,000 in Maharashtra.
