India’s cotton exports could jump 40% in 2020/21 from a year ago to 7 million bales, the highest in seven years, as depreciation of the rupee and a rally in global prices allow exporters to clinch export contracts.
Higher exports by the world’s biggest cotton producer could weigh on global prices and limit shipments from rivals such as the United States and Brazil to key Asian buyers such as China, Bangladesh and Vietnam.
Indian cotton is the cheapest in the world compared to the US, Brazil and Australia and hence there is a 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.
Indian cotton is being offered at around 74 cents per lb, cost and freight-basis, to buyers in China, Bangladesh and Vietnam for November shipment, versus more than 77 cents from Brazil and the United Sates, dealers with global trading firms said.
India will have ample surplus for exports as the country is set to produce more cotton this year than last year’s 35.45 million bales, Sekhsaria said.
In October traders exported 700,000 bales and contracts for another 1 million bales have signed for November shipment, said a Mumbai-based dealer with a global trading firm.
