Agri Business

Cotton exports slow down on big drop in demand from China

Our Bureau Mumbai | Updated on January 23, 2018 Published on May 22, 2015

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Even as the Cotton Council International (CCI) – that works in conjunction with the National Cotton Council to promote US cotton exports – is set to launch its 25-year old flagship brand Cotton USA in India, cotton exports from India are expected to slump 29 per cent to 7 million bales in the current crop year that ends in September.

One bale contains 170 kg of cotton. Market sources indicated that exports have slowed down due to higher world stockpiles, and a sharp decline in demand from China.

Exports to China

Though China has retained its spot as the largest importer of Indian cotton over the last three years, imports have shrunk considerably.

Commerce minister Nirmala Sitharaman had pointed out in the Rajya Sabha recently that China imported cotton worth $696.5 million in the first 11 months of fiscal 2014-15. While India exported cotton worth $1,912.95 million to China in 2013-14, exports to China in the previous year in 2012-13 were $2,237.38 million.

Moreover, though Bangladesh was the second largest importer, purchasing cotton worth $510.26 million in 2014-15 till February, exports from India were considerably lower from 2013-14’s figure of $698.88 million.

The Cotton Association of India (CAI) has pointed out that exports are lagging this year, and there is only a limited demand for Indian cotton.

China, which imported more than 20 million bales of raw cotton in 2012-13, is forecast to import only 7.5 million bales this season, the CAI has noted.

Global cotton trade is also projected lower at 34.3 million bales for 2014-15, down by 16 per cent from 2013-14.

Sources said the decline in exports has also resulted in a surplus in the domestic market.

The Indian textile industry is primarily cotton focused, with cotton accounting for nearly 54 per cent of total fibre consumption in 2014. However, the industry has been battling inherent challenges like cotton price fluctuation and the over dependence on monsoons, according to the CCI.

Market potential

The Indian textile and apparel market is above $100 billion and growing at a healthy rate, with a potential to double its export share from the current 5 per cent to 10 per cent over the next decade. In a statement, David B Collins, Cotton Council International's (CCI) Senior Advisor, said that noticing the huge potential in the Indian market, the CCI had decided to bring “the best quality cotton to Indian consumers”.

CCI has said that in order to meet the rising demand, with official cotton consumption in India projected at a record 24.2 million bales, the potential in the Indian market was huge.

Published on May 22, 2015
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