60% Drop in India Cotton Exports Predicted
January 9, 2013 USDA predicts that by July, India will experience a 60% drop in cotton exports compared to last year.
The country, which is the second largest exporter, shipped an estimated 14.7 million bales in the last marketing year and is predicted to export 5.7 million bales this marketing year.
Indian cotton prices are trading lower than world prices, and exports have also been aided by a weak rupee.
Although no specific reason was given by the USDA for the decline in exports, experts believe shipments could slow down due to a decline in Chinese purchases.
Cotton exports in the country reached an estimated 2 million bales during the August to December period of the on-going market year.
Preliminary data suggest that exports surged in November and December to nearly 1.65 million bales. Cotton exports during December were an estimated 950,000 bales, the highest monthly level since April.
Domestic demand may rise once the mills have worked off the supplies they had to cover their pre-harvest needs.
Due to weak domestic prices the Cotton Corporation of India may have to introduce procurement methods under minimum support price (MSP) to manage, mainly in Andhra Pradesh. The MSP price is currently fixed at Rs 38,50 per quintal for the long staple Shankar 6 variety.
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