Cotton export rises in October at lesser price than last year

In October 2017, the first month of 2017-18 cotton marketing year, recorded 89 thousand bales (of 170 kg each) of shipment as against 51 thousand bales in October 2016. With 2016-17 marketing season (October-September) closing at 6.74 lakh bale, it implies that exports this year will be significant.

The price realization averaged (FOB) INR119 or US cents 80.8 per pound this month as against the Cotlook Index ‘A’ at 78.7 per pound Shankar-6 spot at US cents 75.4 per pound.

Compared to a year ago, realization this year was US cents 7 lesser than last year but more than the ruling spot values and Cotlook ‘A’ index averages. However, a discerning trend will emerge in November this year since last year the markets were disrupted by the demonetization policy of the central government that banned high currency notes with effect from 9 November. The event had pushed  peak period by almost a month and remained extended until May 2017.

Bangladesh, Vietnam, and Indonesia were the largest importers of cotton with combined volumes at 82 thousand bales amongst the 11 countries that imported cotton from India in October. China was the fourth largest at 2.9 thousand bales. It was also the lowest price paying importer at US cents 62.85 per pound FOB while Bangladesh paid US cents 83 per pound on an average.

The Cotton Association of India released the first estimate of the country’s cotton crop for the current season (October 2017-September 2018) at 375 lakh bales as against 337.25 lakh last year. The increase this year is due to a 19% expansion in acreage compared to last season.

Cotton balance sheet for this new season shows a surplus, with a closing stock of 39 lakh bales. Exports are expected at 63 million bales while domestic demand is pegged at 320 lakh bales.

Source: Fibre to Yarn Export Statistics India Report, October 2017