The Hindu Business Line : Export enquiries bring stability to cotton

BUYING interest from neighbouring countries for India's superior medium/long staple cotton varieties has helped the domestic cotton market to stabilise this week.

Some of the market favoured long-staple fibres such as Shankar-4 of Gujarat and MCU-5, Bunny and Brahma from Andhra Pradesh found enquiry from cotton importers of Bangladesh, Pakistan, Indonesia and, to a limited extent, China.

According to cotton market sources, a quantity of over 3.5 lakh bales of cotton has been lined up for export, which include Shankar-4, Bunny and Brahma varieties of 27/28mm.

The main seller for export market is the Cotton Corporation of India, which is said to have sold 2.5 lakh bales so far of which Shankar-4 variety formed a sizeable quantity.

The firming of international cotton price coupled with the slow arrivals of cotton in the local market has kept up the domestic cotton market interest in the last ten days.

Though the kapas harvest is yet to be fully over and an estimated quantity equivalent to 25 to 30 lakh bales of cotton still remain with the farmers, the market is also worried on the quality aspect at this juncture.

The market perception is that invariably the remaining volume of cotton that may hit the market over the next few weeks will be of second or third pick and, hence, will show deterioration of the fibre quality.

With demand for finer count yarn in international market remaining high, spinners in Pakistan and Bangladesh seek to import from India the 27/28-mm staple cotton to bridge the gap. The importers find that India's current price quote of Rs 16,100 for Shankar-4 will be actually working out cheaper as the international price at 54.75 cents quote for the equivalent variety will be costlier by some 15 per cent.

This is despite incurring an additional Rs 1,800 or so towards overhead cost for export transports, the market sources said.

It is likely that the volume of cotton export from India, going by the current level of interest shown by the importers in neighbourhood, may touch 5 lakh bales (of 170 kg) or even a little more beyond that figure.

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