Cotton export surges despite prices at 15-month high
Cotton export surged in November 2017 with shipments of 6.2 lakh bales (170 kg each) as against 5.1 lakh bales a year ago. Thus, the first two months of 2017-18 cotton marketing year, recorded shipment of 7.11 lakh bales as against 5.6 lakh bales in the corresponding months of previous year. With 2016-17 marketing season (October-September) closing at 67 lakh bales, it seems that exports this year will be equivalent significantly.
The price realization averaged INR128 a kg or US cents 90.68 per pound in November as against the Cotlook Index ‘A’ averaging at 80.73 per pound and spot Shankar-6 at US cents 74.01 per pound. Bangladesh, China, and Vietnam were the largest importers of cotton with combined volumes at 5.37 lakh bales amongst the 15 countries that imported cotton from India in November.
Shipment to Pakistan declined sharply from 14,000 bales last November to just 2,890 bales this month.
As per estimates of the Cotton Advisory Board (CAB), India’s cotton output in the 2017-18 season is likely to increase 9% to 377 lakh bales, despite lower harvest in Maharashtra and Madhya Pradesh. However, the shortfall will be covered by a rose of 28% in the northern region were output is expected at 59 lakh bales on the back of a bumper crop in Rajasthan and Punjab. On the demand side, mill consumption is estimated to be higher at 288 lakh bales while small-scale and non-textile industry will consume 46 lakh bales. This implies a surplus of just 43 lakh bales available for exports from the current crop, not considering stock levels.
The Cotton Corporation of India has procured 3.5 lakh bales of cotton worth INR688 crore at a minimum support price of INR4,320 per quintal. However, the intervention will be curbed as spot prices are expected to stabilise above the MSP.
Source: Fibre to Yarn Export Statistics – India, November 2017
