India’s cotton imports may rise 80% this year; China to sell 800,000 tonnes of cotton from state reserves

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India’s cotton imports are likely to rise by 80 per cent this crop year (October 2018 to September 2019) to 2.7 million bales (one bale equals 170 kg) as compared to 1.5 million the previous year, according to latest data compiled by apex industry body, Cotton Association of India (CAI).

“The major reason is unavailability of the fibre with farmers and stockists. Drought in the major growing states of Maharashtra, Telangana, Gujarat and Andhra Pradesh last year has resulted in lower output this year. Over and above, the quality of late picked crop is poor due to the paucity of moisture in the field. This poor quality cotton cannot be used for spinning mills,” the association said in a statement.

CAI has reduced the cotton crop production estimate for 2018-19 to 32.1 million bales, which is lower by 0.7 million bales than its previous estimate of 32.8 million bales made during last month.

Meanwhile, China, the world’s top cotton consumer, has announced that it will auction 800,000 tonnes from its reserve in 2019. The 25 per cent tariffs placed on US cotton in July 2018 remain in place, however, and that has led to changes in the way fibre flows into China, the International Cotton Advisory Committee (ICAC) said in its latest report.

As China’s imports from the US have declined, other producers are stepping up to feed its mills, with the biggest increases coming from Australia and Brazil.

Australia, which shipped 280,000 tonnes to China in the 2017/18 season, has already exceeded 440,000 tonnes through March 2019. Similarly, Brazil – which shipped 82,000tonnes to China in 2017/18 – has already exported 380,000 tonnes to China through March 2019.

Other countries that have expanded their exports to China include India, Benin, Sudan, Greece, Cameroon, Burkina Faso and Mali. China’s reserve auction is scheduled to commence on 5 May and run through 30 September, with reserves being offered in 10,000-tonne quantities each day. In previous seasons, 30,0000 tonnes have been offered per day.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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