Pakistan becomes top buyer of Indian cotton

With 47% share in India's overall fibre exports, Pakistan scores over Bangladesh and China - traditional large buyers

Pakistan has replaced Bangladesh to emerge as the largest buyer of Indian cotton in the October-December 2015 quarter on the back of a sharp decline in its domestic availability due to widespread crop damage from whiteflies.

Data compiled by the Textiles Commissioner’s office under the textiles ministry showed Pakistan imported 1.66 million bales (1 bale = 170 kg) of cotton from India during the December 2015 quarter. This works out to 47 per cent of India’s overall fibre exports to the tune of 3.52 million bales in the period under review. In the same quarter last year, India’s total cotton exports stood at 1.93 million bales with Pakistan’s contribution coming in at 0.38 million bales.

Encouraged by a significant jump in exports in the first quarter of the current season, the ministry has raised cotton export forecast of the current season to seven million bales for the full year of 2015-16, over 21 per cent increase from last year’s level of 5.77 million bales.

“The prevailing trend in cotton exports is likely to continue for the rest of the year due to crop damage in Pakistan. India’s cotton exports to other countries are also likely to remain significantly up this year,” said Textiles Commissioner Kavita Gupta on the sidelines of the second Cotton Advisory Board meeting on Tuesday.

With 0.86 million bales, Bangladesh slipped to the second position in India’s cotton export destinations. Bangladesh imported 2.3 million bales of Indian cotton last year.

According to Gupta, a third of crop in Pakistan was damaged, forcing the country’s textiles mills to import cotton from India to meet their consumption demand. Against 2.3 million tonnes (equivalent to 13.53 million bales) of cotton output last year, Pakistan is set to witness 1.54 million tonnes (9.03 million bales) this year. India transports cotton to Pakistan primarily through the Wagah boarder.

Meanwhile, global equation is also changing due to a slowdown in demand from China, which constituted 24 per cent of India’s overall cotton exports in 2014-15. This year, China’s share is likely to decline with an estimated offtake of 1.2 million bales against last year’s 1.68 million bales.

A study by the Washington-based International Cotton Advisory Committee (ICAC) says China’s cotton import might fall 40 per cent this year to 6.35 million bales (1.08 million tonnes) owing to the fall in consumption and lower domestic cotton prices. If the pace of its imports remains steady, Vietnam might overtake China as the largest importer of cotton in 2015-16. Cotton import by Vietnam for the first four months of 2015-16 totalled 327,000 tonnes, while those of China were at 247,000 tonnes.

According to ICAC, Vietnam’s cotton import would rise 17 per cent to 6.47 million bales (1.1 million tonnes) this year. Similarly, imports by Bangladesh are estimated to increase 12 per cent to 6.35 million bales (1.08 million tonnes). Consumption in both Vietnam and Bangladesh is increasing steadily thanks to lower production costs. While both these countries produce cotton, the quantity is very small, making them rely on imports to meet demand.

Meanwhile, the Cotton Advisory Board under the ministry of textiles has forecast India’s cotton output would hit the lowest in three years at 35.2 million bales (1 bale = 170 kg) in 2015-16 on crop damage in major producing states Gujarat, Karnataka and Punjab.

This year’s estimated cotton output shows a decline of 7.39 per cent from the previous year’s 38 million bales and a marginal decline from 35.9 million bales reported in the crop year 2012-13.

The Cotton Advisory Board estimates lower cotton output due to ballworm pest attack on standing crop in Gujarat; lower yield due to drought in Karnataka; and crop damage due to whiteflies in Punjab.