India’s cotton exports are likely to decline by 45% this year (October – September) on falling demand from its perennial importers i.e. China and Bangladesh.

With lower exports estimates, India will remain surplus with cotton leading to steep fall in prices this year.Parth Mehta, Joint Managing Director of Bhadresh Traiding Corporation, India's largest cotton exporter, pegs fibre exports between 6.5-7 million tonnes this year, similar to the estimates by the Cotton Association of India.

Substantiating his views, Sanjay Mittal, director at Sunny Trexim, a large cotton exporter, said, “India’s cotton exports may be to the tune of upto 7 million bales this year.”

Interestingly, India’s largest cotton importer, China, has reduced cotton import from India in recent months. The second largest Bangladesh has also lowered its dependence on India due to higher domestic cotton prices.

China imports around 60% of India's cotton exports and Bangladesh, on an average sees 30-40% of its total cotton imports from India, but this year due to higher prices it is expected to import only 25% from India.

"Indian cotton prices are higher than international prices of cotton. Bangladesh mills will prefer to import from the United States and Pakistan as prices there are lower," said Shafiqul Islam Sarker, director of Bangladesh Textile Mills Association.

Bangladesh's total cotton consumption this year is estimated to be 850,000- 900,000 tonnes compared to 800,000 tonnes last year.

Sarker added that Bangladesh's spinning capacities have not increased due to which the country's cotton consumption won't increase.

D K Nair, secretary general of Confederation of Indian Textile Industry said, "Indian cotton exports will definitely not meet Cotton Advisory Board's estimate of 9 million bales but, it is still too early to estimate."

The benchmark cotton variety Shankar 6 price in spot mandi has fallen 17% in the last three months to Rs 9336 a quintal from Rs 11220 a quintal on September 1 following the trend in the international market.

The apex trade body the Cotton Association of India has forecast India’s cotton output at 40.55 million bales in the season 2014-15 as against overall demand of 30.60 million bales, leaving thereby an exportable surplus of 17.14 million bales. During last season, however, overall output stood at 47.16 million bales against the demand of 30.07 million bales, rendering an overall surplus of 17.09 million bales.

Source:-business-standard.com