Unlike last year, India may not be able to make a significant mark in cotton export market. With Indian cotton prices ruling higher as compared to other countries such as America and Pakistan, Cotton exports from India have slowed down considerably.
As per the market estimates, Indian exporters have bagged cotton export contract to the tune of 2.50 lakh bales, of which only 50,000 to 60,000 bales have been exported mainly to Bangladesh.
Total cotton export during the same period last year stood at around 15 lakh to 16 lakh bales, said Arun Dalal, owner of Arun Dalal & Co, an Ahmedabad-based leading cotton trading firm.
Citing reasons for slow cotton exports from the country, South Gujarat Cotton Dealers Association (SGCDA) president Kishor Shah said despite depreciation in rupee value against dollar, Indian cotton is still expensive as compared to America and Pakistan.
China is the largest buyer of cotton from India. However, landed price of American cotton in China is 58 cent per pound of lint, while the Indian cotton cost works out to be 62 cent per pound.
“There is gap of four to five cent, which means Indian cotton is costlier by Rs. 1,200 to Rs. 1,300 per pound than the cotton imported from America and other countries,” he added.
In addition to sluggish demand of cotton in the global markets, textile companies in Dragon land are in a tight position. Further Chinese government is encouraging consumption of locally grown cotton in the country.
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All this is going to impact offtake of cotton from India. It may be mentioned here that last year India had export commitments of 38 lakh bales from China. "At present, only those export orders are being executed which took place couple of months," Shah said.
Traders are also apprehensive about the prospects of cotton exports. They are of the view that this year exports would be much lower than what was last year.