Cotton exports in 2013-14 are estimated to be higher than the Cotton Advisory Board's earlier projection, but in the current year, 2014-15, direct exports of cotton may fall around 15%. Exports at present are also virtually on hold as there is no price parity for exporters. However, at this price, imports are happening.
The International Cotton Advisory Committee (ICAC) said in a note that "the volume of cotton traded internationally is expected to decline by 8% to 8.1 million tons in 2014/15, driven by reduced shipments to China from a record of 5.3 million tons in 2011/12 to an anticipated 2.1 million tons 2014/15."
The Chinese government has a large cotton stock in reserves and wants local users to use more and more domestic cotton. This is happening at a time when the cotton crop, globally, has remained high. ICAC has also projected India's cotton exports to come down by up to 20% due to reducing global trade and increasing local consumption of cotton.
Prerana Desai, head of commodities research at Kotak Commodities said, "Yes, there could be a fall in India's exports in 2014-15 by 15% and exports may settle at around 8.5 million bales compared to previous two years' exports around 10 million bales." In 13-14, the Cotton Advisory Board had estimated cotton exports at 9 million bales but that has already crossed the 10 million figure.
Yarn is exported to China by non-traditional exporters like Indonesia and Thailand. These countries are importing Indian cotton, and hence China's share in India's cotton exports has been falling. It used to be over 80% which has decreased to 65% and still India's exports have remained high, around 10 million bales.
A cotton exporter said, "China's demand will continue as under global trade obligation, China has to import 8.6 lakh tonnes of cotton."
Meanwhile India's cotton production for 2013-14 is estimated to be much higher than earlier. As per the latest estimation by the Cotton Association, India is likely to produce 38 million bales. For 2014-15 also, acreage under cotton is expected to go up by 10%-15% as cotton is a short duration crop and most suitable when the weather is not very certain.
Although India's cotton exports are on hold, its imports are on the rise because India's prices are cheaper than the international market's and the lean season for cotton arrivals has set in. In the next few months, one to 1.5 million bales of cotton is expected to enter India, according to trade circles. The country's total annual import of cotton, thus, will be around two million bales.
Source:- business-standard.com
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