Current cotton exports from India are lagging compared to last year.
According to a recent statement from Mumbai-based Cotton Association of India, the export demand for Indian cotton is limited at this point.
In a telephone conversation this morning (April 28) from Mumbai, a source associated with trading mentioned that for the period covering October 2014-March 2015, India exported 3.7 million bales (170 Kgs). But during the same timeframe in the last season (October 2013-March 2014), India had exported around 8.5 million bales.
Comparing the two years, it is evident that there is a decline of about 50 percent in cotton export. In addition to the China factor, the source said, the Indian cotton prices are not competitive enough in the international market, making Indian exports less attractive.
While the export market is not presenting a pretty picture, the domestic market is picking up with cotton prices having an upward trend. According to Aruppukottai, South India-based cotton spinning mill with 65,000 spindles, the price of cotton is steadily increasing, and it is expected to reach a stable and nominal price soon. In the case of MCU-5 cotton variety – which goes towards spinning medium-to-fine count range yarns – within one week, there has been significant increase of Rs.1,500 (approximately U.S. $23.78) for one candy (356 Kgs).
This source mentioned that it would be beneficial to both farmers and the spinners if the price for this cotton remains stable at Rs.40,000 (approximately U.S. $634.31) per candy.
The current cotton arrivals in India are basically third and fourth picking, and hence they are not high quality as compared to the arrivals in December and January. Globally, there is a huge demand for quality cotton. Compared to the first quarter, yarn demand is picking up due to export demand for weavers and knitters in India. Both the farmers and spinners are expecting the cotton price to firm up soon so as to reach a win-win situation.
The conversion rate used is 1 U.S. Dollar = 63.06 Indian Rupees