The country is set to see a 40 per cent dip in the cotton shipment this year on the back of global slowdown resulting in a drop in end-use consumption of cotton products.
According to the International Cotton Advisory Committee (ICAC), India - the second largest cotton producer as well as exporter - is likely to ship 8.75 lakh tonnes of cotton this year. The international cotton year is from August to July.
China, which has been the largest importer of Indian cotton, has seen a dramatic decrease in cotton imports from India. During August to December period last year, Chinese imports of Indian cotton is about 270,000 bales (1 bale = 170 kg) whereas imports from the US stood at 2.68 million bales.
This, in turn, has reduced Indian share of cotton to China to a meagre 7 per cent whereas that of the US increased to 69 per cent. Industry experts said that it was due to the higher price of domestic cotton against world’s price which was acting as a deterrent for importers to source their requirement from India.
Meanwhile, the latest Cotton Advisory Board meeting has revised the cotton production estimates keeping it at 29 million bales against the earlier projected 32.2 million bales.
On the global trade front, ICAC, in its report, said that world cotton trade is expected to see a sharp decline of 21 per cent, taking it to the lowest volume since 2001-02. It is stated that compared to the five-year average of 33 per cent, only 28 per cent of the world cotton production will be exported in 2008-09.
China, the world’s largest cotton consumer and importer is forecast to import 1.5 million tonnes of cotton this year. This is 41 per cent less than what it imported in 2007-08. Moreover, other leading importers including Turkey, Pakistan, Indonesia and Thailand, ICAC stated, are also expected to buy smaller quantities this year.