After shying away from India due to firm cotton prices in the country during 2008-09, overseas cotton buyers have made a beeline to source cotton at the onset of the cotton season this fiscal. As many as 8 to 9 lakh bales of cotton have already been booked in Gujarat for exports.
As per the cotton traders in the state, overseas buyers are aggressively booking cotton at the begining of the season. So far, 8 to 10 lakh bales have already been booked for export, which is quite noticeable after sluggish exports last fiscal. "Multi-national companies and shippers are mainly booking cotton from Gujarat at various prices levels", said cotton traders.
"Cotton futures at New York Cotton Exchange remained firm this week. The cotton future for March delivery at the exchange ruled in the range of 63 to 64 cents. The international buyers are hedging by booking cotton in India", said Kishor Shah of Central Gujarat Cotton Dealers' Association. "This has led to increased booking even at the onset of the season, which is quite remarkable", he added.
In the wake of lower output last fiscal, China, one of the biggest buyers from India, does not have buffer stock this year. "China is one of the major buyer at this point of time", added Arun Dalal, owner of Arun Dalal and Company, an Ahmedabad-based leading cotton trading firm.
According to Dalal, the cotton season in 2008-09 has been delayed by a month world over and the carryforward stock in the international market is also not much. This has spurted buying from overseas players. The market undertone also seems bullish as Shankar variety of cotton is currently being quoted at Rs. 23,000 per bale for November delivery and Rs. 23,200 per bale for December and January delivery in the forward market.
Considering the present market outlook, cotton traders are expecting rise in cotton exports from India this year. "We estimate the cotton exports to surge upto 75 lakh bales in 2009-10 as compared to 35 lakh bales in 2008-09.