Agri Business

Cotton exports fall to nearly half on higher domestic prices during October-December 2019

Our Bureau Ahmedabad | Updated on January 06, 2020 Published on January 06, 2020

File photo   -  THE HINDU

With prices softening post December, trade expects shipments to pick up

India's cotton exports for the first three months of the season (October-September 2020)  have tumbled to nearly half or by down about 45 per cent to 10 lakh bales (each of 170 kg) in the October - December 2019 period from 17 lakh bales in the same period last year.

"There were multiple factors responsible for the decline in exports in the first three months October - December 2019. Our domestic prices were higher than international prices because we had a very thin crop last year. This impacted our cotton exports, which fell by nearly half as compared to last year," Atul Ganatra, President, Cotton Association of India (CAI) told Businessline.

The cotton trade has seen sharp fluctuations in the crop size and thereby in the prices over the past one year. The 2018-19 crop stood at 312 lakh bales, which was a record low as against 365 lakh bales reported in the previous year. However, for the current season 2019-20, the CAI has retained its crop estimate at 354.5 lakh bales.

The prices, which were quoted at around Rs 41,900 a candy (of 356 kg ginned cotton of 29 mm variety) about a month ago, have fallen to about Rs 39,500 a candy, sharply down by about Rs 2400 a candy.

The fall in domestic prices is primarily due to the brightened prospects of the crop. "But war concerns and trade tensions has caused lot of uncertainty in the global cotton market. And since our prices have fallen recently, we expect exports to pick up from here onwards," said Ganatra. He added that even as the crop estimate targets may be achieved this year, there is no clarity about the targeted exports of 42 lakh bales to happen.

Cotton imports, on the other hand, have shown increase during the period under review October-December 2019. The CAI data revealed that cotton shipments arrived at Indian ports till December 31, 2019 stood at 6.5 lakh bales, which was 3.53 lakh bales for the same period last year. The trade body has estimated total cotton imports during the season at 25 lakh bales, which is about two lakh bales less than what was estimated for the previous year.

Cotton trade is treading cautiously in the international markets amid uncertainty over a war situation in West Asia and weakening Indian rupee.

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Published on January 06, 2020
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