Cotton export registration picks up steam with fresh arrivals

Registration for exports of raw cotton is picking up steam with the arrival of the first round of cotton.

Cotton exporters are booking the stock and applications for over 1.8 million bales have been submitted at the office of the textile commissioner of India. Out of these the textile commissioner has registered 250,000 bales so far. This year, 5.5 million bales of cotton can be exported.

Although a large number of applications are not substantiated with documents, these can be revised before the deadline, said an official.

Despite the speedy arrival of cotton in the mandis of Punjab and Haryana (about 13,000 to 14,000 bales per day), Madhya Pradesh (about 5000 bales per day), Gujarat (about 8000 bales per day), Andhra Pradesh and Maharsashtra (between 5,000 to 6,000 bales per day), the millers are pressed hard due to active participation of exporters.

There is scarcity of cotton in the international market and Indian cotton exporters are hoping to get better premium.

Cotton prices have remained rigid between 37,000 to Rs38,000 per candy for all varieties, despite high moisture content of 11-12 per cent for the current crop.

A leading cotton trader told Business Standard that following a bad crop in Pakistan and China, the international market is depending on only two countries, India and the US, for raw cotton.

US cotton is costlier than Indian cotton for buyers in China. So exporters with ready deliveries can certainly book higher margins this year.

“The incentives to exporters of raw cotton make it more lucrative for them to concentrate their energies on the global market. This year may fetch exceptional returns to exporters as the international prices have gone through the roof (cotton price at the benchmark Liverpool Index A was US cent 108.5 per pound on October 1),” said the miller.

The estimated arrivals in the Indian market at 35,000 to 36,000 bales per day during the first week of October, indicates that this season may see the arrival of about 32.5 million bales of cotton.But the enthusiasm shown by exporters for registration and the global demand for cotton from India has put yarn manufacturers in a spot.

Millers in southern states have revised yarn prices by Rs10 a kg due to high input cost. The northern mills may soon follow suit. The millers expect a dip in cotton prices after the activities of exporters come to rest.