“Indian cotton is the cheapest in the world compared to the US, Brazil and Australia and hence we see the trend of increased buying from Vietnam, Bangladesh, Indonesia and China. Spinning mills in these countries have started running at full capacity, as retail sale of apparels is picking up,” said Atul Ganatra, president, Cotton Association of India.
Domestic demand has also revived, with most of the spinning mills running at 95% capacity, traders said.
Last week, the price of Indian cotton was about15% lower than the international benchmark rate of Rs 46,287 per candy, said Ganatra. He expects exports in the cotton year 2020-21 beginning from October 1 to be around 65 lakh bales of 170 kg each and this is 30% higher than the previous year. In 2018-19, India had exported 42 lakh bales.
The Cotton Corporation of India (CCI) which currently has 55 lakh bales in its reserves is in advance stages of signing an MoU with Bangladesh. It aims to export 10-15 lakh bales of cotton, said PK Agarwal, chairperson & managing director, CCI. “Indian cotton is cheaper than other global sellers and we have seen interest by bulk buyers for our e-auctions. Apart from Bangladesh, there is renewed interest by buyers in Vietnam and China,” he said.
Agarwal said that in the 2020-21 cotton year, CCI may increase procurement by 15% to 20% over the previous year at 135-140 lakh bales. Cotton production the previous year was 310 lakh bales. “Our aim is to secure cotton for the domestic market and export the surplus. This year we expect exports will be 20% higher at 60 lakh bales,” he said.
Mahesh Sharda, president at Indian Cotton Association said that contracts were being signed by companies and they expected the majority of the deals to be done for the year during October-November. “Apart from Bangladesh and Vietnam major orders this year may come from China which is building its cotton reserves,” he said.
The increased demand from domestic and international markets, may also firm Indian cotton prices and prices can go up from Rs 37,500 to Rs 40,000 per candy, said Sharda.
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