Buyer Confidence in Indian Cotton Sagging Due to Export Ban
August 12, 2010 Although India’s cotton crop is expected to be exceptional this season, buyer confidence that their purchases will be delivered has been weakened by the government’s ban on cotton exports from earlier this year.
Previous estimates had put the current Indian cotton crop at as much as 29.5 million bales (170kg each), but more recent forecasts indicate that it could grow to as much as 32.5 million bales. Despite the bumper crop, however, India might have to make concessions after instituting a May-to-September ban on exports due to rising cotton prices and concerns about having a sufficient supply to meet domestic needs.
In an August article on businessweek.com, Joe Nicosia – CEO of Louis Dreyfus Cotton, the world’s largest cotton trader – said that India might need to “buy” its way back into the marketplace via lower prices and fast delivery. He added that the United States, Brazil and West Africa stepped in to fill the gap left when India put the ban on cotton shipments, which hurt the nation’s “credibility” among buyers.
(Story found in original context here.)
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