India's cotton exports likely to decline 47% in MY2014-15
Neha Dewan | @TheDollarBiz
An overloaded truck carrying cotton crop, Kota, Rajasthan, IndiaThe US Department of Agriculture (USDA) says that cotton exports from India in MY2014-15 may decline to the lowest in three years to around 5 million (480 lb) bales, which is down almost 47% from an estimated 9.4 million (480 lb) bales exported in the previous year. Last month, the USDA Post in New Delhi had said that India’s cotton exports in the marketing year beginning August 2014 may reach around 6 million (480 lb) bales, but the figures have been revised downwards, mainly due to declining demand in China which is expected to lower its cotton purchases from India.
Source - USDAChina’s restrictive import policy and surplus stock, coupled with currency fluctuation, are some of the main reasons for a decline in cotton exports from India. International cotton prices have also declined (US Cotton No. 2 futures on Intercontinental Exchange or ICE are down from over $85 in October 2013 to under $60 now), which discourages exports. This will force India to look for other markets like Bangladesh, the world's second biggest importer, Vietnam and Pakistan. The downslide seen in cotton exports is also expected to hurt the domestic cotton sector. The USDA has so far kept the cotton production in India unchanged at around 31 million (480 lb) bales, but farmers in India are already worried about low prices. The government has increased the MSP of cotton by Rs.50 to Rs.4,050 per quintal for long staple and Rs.3,750 per quintal for medium staple, which is considered low by cotton growers. This week, Santosh Kumar Gangwar, the Minister of State (Independent Charge) Textiles, asked the Cotton Corporation of India (CCI) to ensure the smooth functioning of the procurement process, and directed it to make online payments, open additional purchase points and monitor MSP operations on a daily basis.
This article was published on November 22, 2014.
to success.