India’s cotton exports are likely to jump 40% in 2020/21 from a year ago to 7 million bales, the highest level in seven years, according to an Indian trade body, as a weaker rupee and higher global prices push exports businessmen can conclude export contracts.
Rising exports from India could affect global prices and limit exports from rivals such as the United States and Brazil to major Asian buyers such as China, Bangladesh and Vietnam. The Indian Cotton Association said that the current demand for Indian cotton exports is good because the price is the lowest in the world. A recovery in global prices is likely to boost India’s exports in the new year to 7 million bales from 5 million bales a year ago.
Global cotton prices are currently close to their highest level in 17 months, while the Indian rupee hit a two-month low this week, increasing traders’ profit margins on overseas sales.
Indian cotton will be available to buyers in China, Bangladesh and Vietnam at 74 cents per pound (cost and freight), higher than the price in November, said dealers at global trading houses Brazil and the United States 77 cents. Arun Sekhsaria, managing director of exporter D.D. Cotton, said most of the cargo was destined for China and Bangladesh.
India’s cotton output this year will exceed last year’s 35.45 million bales, and there will be a sufficient surplus for exports. A Mumbai-based dealer of a global trading company said Indian traders exported 700,000 bales in October and another 1 million bales were contracted for November shipment. It is reported that the current supply of export containers in India is limited, delaying exports for several days, and cotton exporters have asked the Ministry of Commerce to provide more containers.
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