India’s Cotton Exports Gain Pace as Overseas Prices Riseby Amit Singh Import Globals
As per the India Export Data, cotton exports from India have gained impulse due to depreciation in the rupee and as prices have improved in overseas market, there has been demand from various Asian buyers including China, Bangladesh, and Vietnam for Indian cotton, thus initiating a rise in Indian purchases.
Rising exports from India could put pressure on global prices for cotton that are trading near their highest in eight months and hurt shipments from rivals like the United States and Brazil to key Asian buyers.
As per Import Export Data, China has been making purchases for prompt shipment. India has shipped 1 million cotton bales for the past two marketing years started on October 1 and another 700,000 bales have been contracted for shipment in January and February.
As the Government of India has raised the minimum buying price to support farmers, Indian traders had been struggling to sign export contracts as local prices exceeded the global prices. As per, the country has raised the minimum raw cotton buying price by 38% in two years to INR 5,550 per 100kg.
But a bounce in global prices and a fall in the rupee have made Indian cotton competitive in the global market. Bangladesh and China were the active buyers while Vietnam and Indonesia are making small purchases. Pakistan who was a leading buyer of Indian cotton has not been making purchases due to tensions between the nuclear-armed nations over disputed the Kashmir region.
Indian cotton is cheaper for Pakistan buyers but because of restrictions imposed in their country, they cannot make any purchases.
Indian cotton was sold at 75 cents per pound on a cost and freight basis to China and 76 cents to Bangladesh for shipments in January. The cotton production of India is likely to jump 13.6% to 35.5 million bales due to a bigger cultivated area and a boost to yields of above-average monsoon rains.
The export of New Delhi in the year 2019-2020 rose to 19% from the previous year to 5 million bales if the global prices remain firm for the rest of the season.
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Created on Oct 21st 2021 06:35. Viewed 208 times.
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