Indian cotton exports seen dropping by 60%

INDIA: Cotton exports seen dropping by 60%

By Siddique Islam | 10 January 2013

The US Department of Agriculture (USDA) has forecast a 60% drop in Indian cotton exports to 5.7m bales in the current marketing year, compared with 14.1m bales the year before.

However, the figures are 1m bales higher than earlier estimates. One bale contains 170 kg of cotton.

Without mentioning reasons for the possible fall in cotton exports, the US agency said the Indian government recently announced that export registrations through the end of November had reached 450,000 170 kg bales - and it did not plan to impose additional restrictions on exports.

Unofficial trade data also suggests the pace of exports was somewhat higher during October and November.

Preliminary trade estimates suggest that exports during October and November were even higher at nearly 700,000 170 kg bales, according to the USDA update.

"The monthly pace of exports is expected to increase over the next few months as more cotton enters the market and the rupee continues to trade at low levels against the dollar," the USDA update noted.

Currently, China, Bangladesh, Pakistan and Vietnam are purchasing cotton from India.

Meanwhile, the cotton Association of India (CAI) estimates that the country's cotton exports will fall by more than 45% from last year's 12.8m bales to 7.0m bales this year.

It blames sluggish global economies and lower orders from China, which accounts for around 65% of India's cotton exports.

Cotton production estimates in marketing year 2012-13, which ends in July, have been reduced to 32.5m bales, due to storm damage in the state of Andhra Pradesh, India's third-largest cotton producing state.

"Mills in southern India, where 40% of India's cotton is consumed, continue to express concerns about the power supply and some are still feeling the effects of 2010/11 losses," the US agency said.

Sectors: Fibres & fabrics, Sourcing