With Indian cotton prices staying attractive for global buyers, exports of the fibre crop to countries such as Bangladesh, China and Vietnam, have picked up over the past three months. Exports during the first five months of the 2023-24 season starting October were 15 lakh bales (170 kg), at par with 15.5 lakh bales during the entire 2022-23 marketing season.

The surge in shipments has forced the Cotton Association of India (CAI), the apex trade body, to raise its export projections for the 2023-24 season to 22 lakh bales. “Shipments could, possibly, touch 25 lakh bales for the 2023-24 season,” Atul Ganatra, President, CAI, told businessline.

“Indian cotton prices were lower by about  ₹4,000-5,000 a candy (356 kg) compared to international prices during the December-February period, making it attractive for overseas buyers. About 10 lakh bales were shipped during January-February. Though our prices are at par now with the international, we expect another 2.5-3 lakh bales to be shipped out this month,” Ganatra said.

Despite raising output estimate

Based on the latest pressing data received from various stakeholders, CAI has revised upwards production estimates of the fibre crop for the ongoing marketing season of 2023-24 by about 5 per cent at 309.70 lakh bales, up from previous projections of 294.10 lakh bales made during January-end. Despite this upward revision, crop estimates for the 2023-24 season starting October are still lower than the 2022-23 production of 318.9 lakh bales.

The higher crop estimates is on account of the revision in crop size in States such as Rajasthan, Gujarat, Maharashtra, Telangana and Karnataka. In the North Zone, the crop estimate has been increased to 46 lakh bales from the earlier 42 lakh bales, with the increase primarily coming from Rajasthan. Similarly, in the Central Zone, the crop projection has been increased to 185 lakh bales from the earlier estimate of 179 lakh bales. In Gujarat, the crop size has been increased to 87 lakh bales (earlier estimate of 85 lakh bales in January-end), while in Maharashtra it has been pegged higher at 80 lakh bales (76 lakh bales).

In the South, the crop projection has been increased to 73 lakh bales (67.5 lakh bales). In Telangana, the crop is seen up at 34 lakh bales (30 lakh bales), while in Karnataka it is pegged at 20 lakh bales (18.5 lakh bales).

Held up stocks emerge

Per the cotton balance sheet for Oct-Feb in the current 2023-24 season, arrivals till end-Feb were estimated at 226.82 lakh bales. “About 10-12 lakh bales of kapas from the previous season, which was held back anticipating higher prices, found its way to the markets during September-October, leading to the revision in crop estimates,” Ganatra said.

Cotton imports into the country till end-Feb stood at 4 lakh bales and the consumption during this period stood at 137.50 lakh bales. Stock with mills till end-Feb is projected at 42 lakh bales, while those with CCI, Maharashtra Federation, MNCs, ginners, traders and exporters is pegged at 65.22 lakh bales.

With the increase in offtake by the domestic mills, the cotton consumption, which was earlier estimated at 311 lakh bales for the 2023-24 season has now be revised upwards by 6 lakh bales to 317 lakh bales, Ganatra said. The closing stocks for the seaon ending September 2024 are projected at 20 lakh bales, which is indicating a very very tight balance sheet, he said.