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Pakistan’s cotton imports suspension to not affect Indian exports

Amidst tensions across the border, Pakistan’s undeclared suspension of cotton imports from India is not likely to affect shipment of the fibre from India. Exporters see cotton shipments to be in the range of 5.5-6 million bales (of 170 kg each) in 2016-17.

Further, as local cotton prices provide parity with international prices, Indian cotton exporters see brighter opportunities in China and other promising markets such as Vietnam, Indonesia and Brazil. Ahmedabad-based cotton expert Arun Dalal maintained that in spite of Pakistan’s suspension of imports of cotton, the exports of this commodity would remain in the range of 5.5-6 million bales this year. There is good demand from other importing countries such as Vietnam, Indonesia and Brazil, besides China. Therefore, we do not see a significant drop in exports, he maintained.

Currently, international prices are been seen hovering in the range of 73-75 cents per pound which works out to about Rs. 38,500 per candy (of 356 kg each). Right now, domestic cotton prices are in the range of Rs. 38,100-39,100 a candy.

Present cotton prices are almost at par with international prices. There was a short-term spike in prices recently but that is coming back to normal and it is expected that there would be a downward trend as supplies increase.

Pakistan, which consumed close to 40 per cent or about 2.7 million bales of India’s total 6.8 million bales of cotton exports last year, was expected to import about 1.5 million bales this year. India’s cotton crop is estimated to come in at 34.5 million bales, a little higher than last year’s 33.7 million bales. Considering the higher crop, prices are likely to be range-bound as arrivals hit the markets.

 
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