Lower domestic prices made global buyers turn to Indian cotton -
June 03, 2021 Building up on lower domestic cotton prices, Indian exporters have so far shipped over 75 per cent of the 65 lakh bales (each of 170 kg) of cotton exports projected for the whole year 2020-21.
Cotton Association of India’s (CAI) latest data showed shipments as on April 30 at 50 lakh bales. This means, India by April has shipped out what was exported during the whole of last season. The trade body, in its revised export projections, has estimated India’s cotton exports for the year at 65 lakh bales.
“Indian cotton was the cheapest in the world. Therefore, we could take advantage of being competitive in the international market,” said Atul Ganatra, President, CAI. The season 2020-21 had started with lower cotton prices at around ₹40,000 a candy (each of 356 kg of processed ginned cotton) during October-November 2020. The international prices ruled at around 68 cents per pound.With brightened international price prospects, India’s cotton shipments gained momentum, thereby lifting the domestic prices to ₹40,800 on December 10, 2020 and ₹46,200 on May 10, 2021. Meanwhile, international cotton, too, had inched up to 96 cents on February 26, 2021. Global prices softened to 86-87 cents a pound. “However, now the export parity has reduced as the international prices have dropped from 96 cents to 88 cents so it gets less attractive to export with reduced parity. Also, we are facing challenges of availability of containers, higher freight costs and competition from US and Brazil. The export prospects are not as attractive now as it was about three months ago,” also Indian exporters are facing getting good quality for export is a problem , he added. Ganatra noted that of the total estimated production of 360 lakh bales for 2020-21, so far 336.37 lakh bales or over 93 per cent of the crop has arrived in the market. Consumption figures trimmed “The CAI has reduced its consumption estimate for the current crop year by 15 lakh bales to 315 lakh bales of 170 kgs each from its previous estimate of 330 lakh bales . Cotton consumption this year is likely to take a hit because of the ongoing Covid-19 pandemic and lockdown in most of the States. The consumption now estimated for the current crop year is, however, higher by 65 lakh bales compared to the previous year’s consumption estimate of 250 lakh bales,” said Ganatra in a statement after the CAI Crop Committee meeting on May 11.