New Delhi: India, the world’s second-biggest producer of cotton, is likely to export 7.69 million bales of the fibre this year, down by 35% from last year, due to sluggish demand from China, says the latest USDA report.
With a slump in purchases by top cotton consumer China, Bangladesh and Vietnam are emerging as the leading export destinations for India, it added.
In its latest report, the US Department of Agriculture (USDA) has pegged India’s overall cotton exports at 7.69 million bales for 2014-15 marketing year (August-July), as against 11.75 million bales last year. One bale is equal to 170 kg.
“Export shipments since June have been relatively slow as trade sources report demand from China has been sluggish... cumulative exports in June and July are estimated around 4,85,000 bales," it said.
In August, exports have declined to 68,000 bales, as against 2,60,571 bales in the same month last year, it said, adding that, however, India is expected to remain a strong regional supplier to Pakistan and Bangladesh as well as southeast Asia.
“In general, however, as global demand remains sluggish and Indian ex-gin prices are above the Cotlook A Index, there may be tempered demand for processed cotton out of India and the USDA anticipates flat year-over-year demand given current circumstances," it added.
“China is not showing interest because the country is under pressure to bring down its inventories. It is planning to offload its stocks and provide subsidies directly to farmers," a senior official from the Confederation of Indian Textiles Industry (CITI) said.
Global cotton prices are expected to decline if China plans to offload its stocks, the official said.
According to the USDA, cotton production in India is expected to be 37.8 million bales this year, slightly lower than 39.1 million bales in 2013-14 marketing year. Meanwhile, the country’s overall consumption has been pegged at 30.1 million bales for this year. China is the top cotton export market for India, followed by Bangladesh and Pakistan.