By Shrea Paul and Shrikant Kuwalekar
Cogencis, Friday, Feb 23
MUMBAI - After being stagnant for over a month, exports of cotton have shown signs of a revival, as lower domestic prices and a weaker rupee have made Indian cotton competitive in the global market, traders said. "With domestic cotton prices falling to 40,000 rupees per candy (1 candy = 356 kg) and the rupee weakening by over 2.5%, export enquiries have increased in the last couple of weeks," said Atul Ganatra, president of Cotton Association of India. While prices of cotton in major spot markets have fallen 4-5% in the last two-three weeks, the rupee has fallen around 3% since January, after hitting a near 34-month high of 63.24 during that month.
Ganatra said since Oct 1, export orders for over 3.0 mln bales (1 bale = 170 kg) have been signed, of which 2.8 mln have been shipped out so far. "Recent revival in export orders is likely to take overall export orders comfortably above 3.5 mln bales and actual shipments above 3.0 mln bales by the end of this month," Ganatra told Cogencis.
The situation has triggered hope that India will meet its annual export target, which the association scaled down to 5.5 mln bales in December from 6.3 mln bales, a dealer with a multinational cotton and grain trading firm said. An official with textile major Vardhaman Group was more optimistic, saying export contracts so far have already topped 3.5 mln bales, and these would continue at the same pace in the coming months due to a shift in demand by global buyers to India.
Owing to the lean season in the US, and its exportable surplus being almost exhausted, India is the only major player with ample stocks of cotton. This has prompted major consumers such as Pakistan, Bangladesh, Vietnam, and Turkey to turn to India to source cotton. However, overall exports will still be around 5% below last year''s 5.8 mln bales, as estimated by the Cotton Advisory Board, traders said. --- End ---- (Source: Cogencis.com)