China, Pakistan Look to India for Cotton Supplies
November 19, 2009 Bloomberg
Thomas Kutty Abraham
Cotton exports from India, the second-biggest grower, will more than double this crop season as China and Pakistan seek more fiber to make up for a shortfall in supplies from the U.S., a government official said.
Shipments in the year that started Oct. 1 may top 7 million bales of 170 kilograms each, compared with 3.3 million bales a year earlier, A.B. Joshi, India’s textiles commissioner, said in a telephone interview in Mumbai. Production is forecast to rise 5 percent to 30.5 million bales after farmers planted the crop to a record area this year, he said.
Increased Indian supplies may help cool a rally that has pushed up cotton prices 41 percent this year in New York amid concern demand will outpace supplies. World output will reach 102.7 million bales, down 1 percent from last month’s estimate, and demand will rise to 113.5 million, more than expected last month, the U.S. Department of Agriculture said yesterday.
“India will be in a good position to take advantage of a shortfall from other major producers,” said Dhiren N. Sheth, president of the Cotton Association of India. “There are concerns about crops in the U.S. and China as well.”
In the U.S., the top exporter, output will decline to 12.5 million bales of 218 kilograms each, 3.8 percent less than forecast last month, according to the USDA. Production in China, the world’s largest consumer, may slump by as much as 20 percent this year on poor weather and reduced acreage, the Futures Daily reported Oct. 15, citing its own survey.
“We have the advantage of being a big producer in times of a shortage elsewhere,” Joshi said.
China Shipments
Indian exporters shipped 115,637 bales of cotton last month, according to the textiles ministry. Shipments to China may be as much as 40 percent of India’s sales, Joshi said.
Indian cotton was offered at about 70 cents to 73 cents a pound on cost and freight basis at Chinese ports, Sheth said. Futures for December delivery gained 0.2 percent to 69.20 cents a pound at 9:17 a.m. in after-hours trading in New York. Futures rose 2.1 percent yesterday, the most in four weeks.
“The popularity of Indian cotton has increased in the last couple of years because it is less contaminated and of a better quality,” Sheth said. “We also expect demand from Pakistan and Indonesia.”
Pakistan, the world’s fourth-largest producer, may import as many as 2 million bales this year as production may be little changed at 12 million bales, Anwar Tata, chairman of the All- Pakistan Textile Mills Association, said Oct. 28.
India’s textiles mills may import about 700,000 bales of long-staple cotton, and demand from textile mills and yarn makers was “strong” in the past two quarters because of a revival in demand for clothes, Joshi said.
(Story found in original format here.)
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