India's cotton exports have begun to pick up. For the first time this season ending September, Indian cotton became the cheapest in mid-February. Lower shipping charges to nearby destinations give the country an added advantage. Prices are at least five cents a pound cheaper than US cotton and two or three cents lower than African cotton.
Demand from China is almost nil but there have been enquiries from Bangladesh, Pakistan, Turkey, Indonesia and Vietnam. China has not issued any additional import quota this year. It has been trying to reduce record stocks that have been built up over the last couple of years. China’s ending stock will account for 56 per cent of global inventory despite its efforts to cut it.
Currently ample cotton is available in India, while the US and Brazil have almost sold out their produce. However, exports from India since the beginning of the season ending September have been lower compared with the same period a year ago. Exports are estimated to be 58 per cent lower compared with last year.
Though exports are picking up, there is no danger of the domestic market being starved of supply. The practice of spinning mills in south India buying cotton from West Africa later in the season could also help keep prices on leash.