Weak rupee leads Indian trade body to lift cotton export estimate up 12%; could put pressure on global prices
Indian cotton exports could also limit shipments from rivals such as the United States, Brazil and Australia to key Asian buyers such as China, Bangladesh and Vietnam.
Mumbai: Cotton exports could rise to 4.7 million bales in 2019/20, up 12 percent from the previous estimate, as a fall in the value of the rupee to a record low made shipments competitive, a trade body forecast.
Higher exports by the world’s biggest cotton producer could put pressure on global prices, which are trading near their highest level in more than two months.
Indian exports could also limit shipments from rivals such as the United States, Brazil and Australia to key Asian buyers such as China, Bangladesh and Vietnam.
The rupee’s fall has made Indian cotton the cheapest in the world and attractive for Asian buyers, Atul Ganatra, president of the Cotton Association of India (CAI) said.
Indian cotton was sold at around 62 cents per pound on a cost and freight basis (C&F) to Asian buyers such as Bangladesh, while the supplies from the United States were available at around 70 cents, Ganatra said on Monday.
The South Asian country exported 4.2 million bales in 2018/19, the lowest in a decade.
India is expected to produce 33 million bales in the marketing year ending 30 September, down 7 percent from the previous estimate, the CAI said.
“Sowing of winter crop was possible this year due to availability of water. Many farmers did not wait for the last picking of cotton. They uprooted cotton plants to make space for winter crops,” Ganatra said.
Despite lower production and higher exports, India will have ample surplus due to a steep fall in the consumption, which the CAI said could drop to 28 million bales in the current year, down 15 percent from the previous estimate.
The GoM, headed by Finance Minister Pranab Mukherjee, will meet on March 9.
CAI lowers cotton crop estimate for 2018-19 to 330 lakh bales as farmers uproot plants due lack of moisture
Further, the CAI has estimated cotton consumption during October 2018 to January 2019 at 105.34 lakh bales while the export shipment of cotton up to 31 January, 2019 has been estimated at 24 lakh bales.
The government had banned exports of cotton on March 5, but relaxed it partially within a week, following political pressure, both from within the UPA, as well as Gujarat chief minister Narendra Modi