Cotton: Indian cotton demand from abroad
September 16, 2017 at 8:03 AM ,
Rainbow Exports
Indian cotton demand from abroad
The largest exporter of cotton has increased the number of big cotton buyers in the world in India to ensure supply after a severe storm surge in the US. The world's largest cotton buyers are from Asia.
Dealers say that due to the storm in America, the area of the crop and its variety has been affected. The world's second largest cotton exporter, has entered into an agreement with Chinese, Taiwan, Vietnam, Pakistan, Bangladesh and Indonesia firms to sell about 1.0 million bales of cotton last week. These firms are the leading Garment Suppliers of brands like H & M, Zeta and Wal-Mart Stores Inc., an Inditex-owned company. About two weeks ago, even 300,000 bales were contracted.
Dealers hope that similar kind of contracts can be held in the next few months just like in the last week and the country's export can increase by one-fourth in the 2017-18 season beginning in October. Chirag Patel, chief executive officer of a major exporter Jaideep Cotton Fibers Pvt Ltd, says, "This year there is a great opportunity for cotton in the country”. Asian buyers have hoped for Indian cotton rather than America. '
According to dealers, due to the storms that hit 'Harvey and Irma', the crops in large cotton states Texas and Georgia have been largely destroyed. Taxes were greatly influenced by this storm. Risk manager Peter Eggley, in Chicago's Plexus Cotton Ltd, told about the impact of Harvey storm in this state of America, "The cotton crop in Texas has been damaged”. About 500,000 to 600,000 bales were destroyed in the storm.
According to the US Department of Agriculture, in the year 2016, the US exported 86 percent of its cotton, of which 69 percent went to Asia. The advantage of getting less supplies from the US can be to other cotton producing countries such as Brazil and Australia, but the price offered by India will be difficult for these countries because rates are low due to the bumper crop in India is likely to. India's exporters have exported at a lower rate compared to the supply from the US.
India is expecting 4 million bales of cotton in the 2017/18 season beginning from October. In such a situation, the domestic prices will be low and the export rate will be more competitive. According to statistics of the Ministry of Agriculture, farmers have sown 12 million hectares of cotton in the new season, which is 19 percent more than the year before. In India, in the year 2016/17, cotton produced 3.4 million bales. Nayan Mirani, a prominent cotton exporter in Khimji Vishram & Sons, says that due to the seasonal crop, in the new season the country will help to sell 7.5 million bales of cotton in the world market, which is more than 60 lakh bales last year.
Some businessmen believe that if the world's largest cotton consumer country boosts its imports, the country's cotton exports can exceed the level of 80 million bales. China started selling cotton from its reservoir on March 6 and had planned to close the auction daily by the end of August. But it has decided to sell an additional month after local prices have increased between the short supply, indicating that it will need to complete its lower stock.
Mumbai-based dealer of a global trading company says they have received orders in the last few weeks, especially in the December quarter with export orders. The price of rupee increased, the country was struggling for export agreements for a few weeks before global prices were not attractive, but recent sales in foreign markets have become more competitive because of the recent global price movement
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