The Hindu Business Line : Cotton exports may surpass forecast

Mumbai, Sept. 3 Cotton exports are set to increase to 60-65 lakh bales (one bale is 170 kg), against earlier estimates of 55 lakh bales. Exports last year were 45-47 lakh bales. The forecast is based on ginners’ assessment, as those in Punjab, Haryana and Rajasthan are getting enquiries from overseas buyers even before beginning production. Production will start only in mid-September.

“We have marked up prices for cotton farmers by 5-10 per cent this year on the back of good enquiries from Pakistan and China coupled with those from domestic companies. And, initial cotton arrivals have been of better quality at 28 mm-29 mm, against last year’s 25mm-26 mm,” said Mr Yogendra Gupta, a leading ginner from Sirsa in Haryana.

The cotton farmers in the northern belt are also getting better prices for their produce.

“We are procuring cotton at Rs 2,200 per quintal against Rs 1,800 per quintal paid last year. The prices may go up another Rs 100-Rs 150 per quintal once the season begins,” Mr. Gupta said.

Cotton production in the north is estimated at 51.97 lakh bales, about 20,000 bales more than earlier estimates. The area under cultivation has also increased by seven per cent in Punjab and 25 per cent in Rajasthan.

In Gujarat, Maharashtra and Madhya Pradesh, area under cotton cultivation has gone up by 5-8 per cent, NCDEX said. India’s cotton production for 2007-08 has been pegged at 30 million bales, up from 28 million bales in the previous year. Maharashtra is expecting a staggering output of 388 lakh quintals, up from 325 lakh quintalslast year. However, the ginners’ gains may not necessarily translate to profits for textile exporters. The exporters have already reported lower exports due to the rupee appreciation and lower demand in the US.

“China exports to US increased despite WTO restrictions. Indian textile companies have made huge capacity additions using technology upgrading fund, but rising rupee has taken its toll,” said Mr Vijay Trivedi, Asst.Vice-President, Commodity Research.

Adverse weather

The hot weather in China has resulted in early picking. However, growers have been holding out for higher prices. China’s cotton import volumes have increased since June- July, after having sharply declined since late 2006. The prices in China and the average import price for January-April has been comparable and forced Chinese mills to use domestic cotton instead. “However, since June domestic prices (in China) were at a premium to international prices, which resulted in increased imports. In the US, record heat and a poor rainfall were believed to have adversely affected the southeastern crops during August,” a NCDEX report said.

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