Demand from China Boosts India’s Exports
December 29, 2011 From one end to the other, the supply chain is starting to hit its stride in India, with exporters engaged in heavy buying across Gujarat and Maharashtra, demand from local mills increasing, and garment manufacturers increasing their orders from spinners.
Cotton prices have dropped, which was the primary driver of the increase in buying from exporters, but daily volatility in the market still remains fairly high, according to an article in The Economic Times.
“Robust demand from China is expected to ensure cotton export of more than 8.5 million bales (170 kg) and more this year, similar to the 2007/08 figure. Our prices are the lowest in the international market,” said Cotton Association of India President Dhiren N Sheth.
Coimbatore-based cotton broking house JG Pujara and Sons owner Baldev Pujara said major buyers included Bhadresh Trading Corporation, Louis Dreyfus Commodities India, Gill & Co, Jaydeep Cotton Fibres, Olam Agro India and Cargill India. “Contracts of over 4.6 million to 4.8 million bales have been signed, while actual shipments are at 2.9 million bales. By January, we should export 5 million bales,” he said.
Exports have been slow this year because many growers were withholding their fiber while waiting for better prices, but the pace is gradually increasing now. “We will be able to achieve our export targets,” Sheth said, “but we must address the concerns of buyers over the low micronaire value – a measure of fibre fineness and maturity – and the mix of low and high variety cotton this year.”
In the domestic market, ginners are getting orders and queries from Ludhiana, Kolkata, Tirupur and Coimbatore mills. “There is a movement in finished goods like fabrics and garments,” according to Saurashtra Ginners Association President Bharat Vala who added that demand from mills varied from 500 to 1000 bales.
Ludhiana-based Vardhman Textile, a textile conglomerate, expects buoyancy in trade for the next few months. “There is improvement in yarn prices due to the increased offtake in export and domestic markets,” said Vardhman Group Chairman SP Oswal. “Spinning mills have booked good orders and we expect the business to revive.”
Source: The Economic Times, edited by Mike McCue.
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