Pakistan’s move to stop import of products from India or of Indian origin is not expected to have much impact on the Indian textile industry, said Siddhartha Rajagopal, executive director of the Cotton Textiles Export Promotion Council.
Cotton exports to Iran reported a phenomenal jump of 1070 per cent to 1.85 million kg during 2018-19.
Amid slowing raw cotton exports in recent months, India has seen sharp jump in cotton demand from an unexpected buyer, Iran. After many Western nations imposed trade sanctions on it, Iran’s cotton purchases from India has gone up multiple times in recent months.
Going by the DGFT data, India exported 15,877 kg raw cotton (HS Code 52010015 of staple length 28.5 mm and above but below 34.5 mm) during the year 2017-18.
Phenomenal jump
The Cotton Association of India lowered its cotton production forecast for India in the agricultural season 2018/19 by 10.3%. Will the Cotton quotations continue growing?
Export of cotton textiles from the country to China rose over 68 per cent to hit $1.55 billion between April and February during the 2018-19 financial year, according to data available with the Cotton Textile Export Promotion Council.
India’s cotton textile exports to major consuming countries got a boost with the recent government move to reimburse all state and central levies on such shipments.
Cotton Association of India (CAI) has released its March estimate of the cotton crop for the season 2018-9 beginning from 1st October 2018. The CAI has estimated cotton crop for 2018-19 at 321 lakh bales of 170 kgs each which is lower by 7 lakh bales than its previous estimate of 328 lakh bales made during last month.
There is good demand for Indian cotton from overseas markets this season, according to Pradeep Jain, president of the Association. Bangladesh, Pakistan, Vietnam, Indonesia and various other countries are buying cotton from India heavily this season. Around 14 lakh bales have been exported to Bangladesh so far, 9 lakh bales to Pakistan and the remaining to Turkey, Vietnam and Indonesia.
The cancellations of export contracts and higher local prices could cut India's exports to 5 million bales, each of 170kg, in the 2017/18 marketing year started on 1 October—nearly a quarter below an initial estimate, said the president of Cotton Association of India, Atul Ganatra.
Indian cotton traders have cancelled contracts to export some 400,000 bales of the fibre after a rally in domestic prices and the rising rupee made overseas sales unattractive.
As the trade is speculating a big fall in cotton output due to pink bollworm attacks in some states, even though there is little clarity yet on the extent of the damage. Prices have increased by Rs250-300 per quintal last week and it is likely to see jump in cotton prices by 6to7 percent in a week.
Various government and trade bodies have undertaken surveys to reassess the crop. A Maharashtra government official, who did not want to be named, said the fall in yields could be 15-20%.
Cotton Association of India, trade body estimates cotton production of 375 lakh bales of 170 kg each in 2016-17, up by 11 percent over the previous year. Despite higher production, the current cotton prices are ruling lower than previous year but they are still above the minimum support price (MSP) and expect prices to remain above MSP till December.
The current cotton arrivals from kharif crop are at their peak, with mandis across the country getting about 1.60 lakh bales every day.
With India looking at a bumper cotton crop, and presently cotton price of the fair and average quality is ruling above MSP, the government agencies are all prepared to enter the market in case prices touch MSP or fall below minimum support levels, said SK Panigrahi, chief general manager, Cotton Corporation of India (CCI).
