Agri Business

Cotton exports seen rising on global demand, lower price

Rutam Vora Ahmedabad | Updated on September 25, 2020

Shipments may hit 60-65 lakh bales for 2020-21 season

Indian cotton exports is likely to rise significantly in the 2020-21 season (October-September). From about 50 lakh bales (each of 170 kg) in 2019-20, exports may rise by 30 per cent to about 60-65 lakh bales, say trade sources.

The optimism stems from prospects for a higher demand.



The International Cotton Advisory Committee has estimated global cotton consumption to rise for 2020-21 to about 24.31 million tonnes, from 22.67 million tonnes estimated for 2019-20. Further, the US ban on purchase of products made out of cotton from the Xinjiang region of China will unlock opportunities for . So, at cheaper rates, the prospects for India cotton are bright for next year. Indian cotton prices quote at ₹38,900 per candy (each of 356 kg) now, which works out at 66 cents per lb — among the lowest in comparison to 83.4 cents in Australia, 75.40 in US and 70.4 cents in Brazil.

Export markets

Vinay Kotak, Director, Kotak Commodities, said that one needs to be cautious on how export demand will play out next year. “Exports will depend on multiple factors including the government policy, India-China trade relations and global tensions. That said, even under normal circumstances, India’s cotton exports could reach about 60-65 lakh bales. The driver for demand will be the price – Indian cotton is the cheapest in the world at present,” Kotak said.

The Cotton Association of India (CAI) has estimated the country’s exports for 2019-20 at 50 lakh bales, of which about 47 lakh bales have already been shipped till August 31, while the shipments may rise this month before the cotton marketing year ends on September 30. India had exported 42 lakh bales of the fibre in 2018-19.

Positive outlook

Atul Ganatra, President, CAI, said, “Our opening stock for 2020-21 will be about 100-105 lakh bales. But most of this or about 80-85 lakh bales will be with government agencies, and only the rest with mills. So, as the new crop arrives, prices may go up on demand from makers of masks and medical cotton products both locally and in international markets.”

Ganatra added that if domestic prices remain around the current levels, the exports in 2020-21 will hit 65 lakh bales.

Published on September 25, 2020

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