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India sells new season cotton crop to China in rare advance deals


By and Hallie Gu

MUMBAI/BEIJING (Reuters) - India's exporters have signed contracts to ship 500,000 bales (85,000 tonnes) of their new season harvest to as the world's biggest consumer of the fibre looks to raise its imports in the next crop year, industry officials told

Exporters in India, the world's biggest of cotton, usually start selling new season from end-August, after estimating the nation's crop size. But robust demand from and higher prices have prompted Indian exporters to sign deals in advance, the officials said.

"Chinese demand is very robust. They are ready to book Indian cotton," said Atul Ganatra, of the Association of (CAI).

"But Indian traders don't have a clear idea about the upcoming crop size and prices, so they are hesitant to commit to large amounts," he said.

Most Indian farmers sow cotton with the arrival of monsoon rains in June, and the crop is typically ready for harvesting from the end of September.

Indian cotton was sold at around 86 to 92 cents per pound on a cost and freight basis (C&F) to China, for shipments in November and December, said Chirag Patel, at Jaydeep Cotton Fibres Pvt Ltd, a leading exporter.

The country could export more than 2 million bales (340,000 tonnes) to in November and December as Indian cotton is nearly 10 cents a pound cheaper than supplies from other exporters such as the and Brazil, Patel said.

China will import 1.4 million tonnes of cotton in the 2018/19 crop year, its ministry said on Tuesday, raising its forecast from a previous estimate of 1.2 million tonnes due to a poor local crop.

Some traders said China's forecast was too low, with one estimating Chinese imports in the range of 1.5 million to 2.5 million tonnes.

"Everyone thinks prices will go up further, so many deals have been signed," said an Indian trader, who declined to be named.

cotton futures were trading near their highest in more than six years due to worries over dry weather in West Texas, a major producing region in top exporter the

India's cotton exports are likely to jump nearly 30 percent from the previous year to a four-year high of 7.5 million bales (1.3 million tonnes) in the 2017/18 crop year, which ends on Sept. 30.

Amid the robust export demand, cotton sowing in has been delayed by nearly a fortnight in central and due to patchy rainfall, but it is expected to pick up in coming weeks, said Ganatra of CAI.

(1 Indian bale = 170 kg)

(Reporting by in MUMBAI and in BEIJING; Editing by Tom Hogue)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, June 13 2018. 16:39 IST