MUMBAI (Reuters) — Cotton exports from India, the world’s biggest producer and second biggest seller, are expected to fall 41 percent to a five-year low of 7 million bales this crop year ending September as top buyer China curbs purchases, a government official said.
Bulging world stockpiles and waning demand from China — intent on supporting its own growers — are hurting state-run Cotton Corporation of India (CCI), which is set to suffer its steepest loss in at least six years from sales in the current season.
Lower exports from India could support benchmark New York price that fell to a one-week low on Monday.
India’s Textile Commissioner Kiran Soni Gupta on Tuesday revised downward the export forecast of 9 million bales made in October and said the country would have to raise sales to Bangladesh, Pakistan and Vietnam that together account for about 40 percent of the total exports currently.
Lower prices for Indian cotton may help boost shipments to these markets, though demand in China, which used to account for 60 percent of the exports, was not encouraging, Gupta said.
“Currently there is a good chance to enhance exports (to other markets) because Indian cotton is at 65 cents per pound versus international cotton at 75 cents,” said Gupta, chief of the agency that was set up during the Second World War to supply clothes to defence forces as well as civilian population.
CCI, which procures cotton at government-set prices, has been struggling to sell despite having already bought 8.6 million bales from farmers out of its target of 9 million. CCI has sold just 300,000 bales so far, Chairman and Managing Director B.K. Mishra said.
India is expected to produce 39 million bales this crop year, down from the previous forecast of 40 million bales as yields suffered due to poor rains around the planting period late last year, Gupta said.
Domestic cotton demand is expected to rise about 7 percent to 32 million bales this crop year.