India's cotton exports to dip 60 per cent this year: USDA

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India's cotton exports to dip 60 per cent this year: USDA (Reuters) India's cotton exports to dip 60 per cent this year: USDA (Reuters)
SummaryIndia's cotton exports are likely to tumble by 60 per cent to 5.7 million bales in the marketing year ending July compared to last year level.

India's cotton exports are likely to tumble by 60 per cent to 5.7 million bales in the marketing year ending July compared to last year level, a USDA report said.

India, the world's second-largest exporter, is estimated to have shipped a record 14.7 million bales in the last marketing year, it said. One bale has 170 kg of cotton.

"The 2012-13 export estimate is unchanged at 5.7 million bales (of 170 kg)," the US Department of Agriculture (USDA) said in the report.

China, the world's biggest cotton consumer, continues to be the major export market for Indian cotton. Indian cotton prices are trading slightly lower to world prices. Exports have also been aided by a weak rupee, it added.

The USDA did not give any specific reasons for a decline in cotton exports. The domestic traders and experts said shipments could slow down due to lower Chinese purchases in the wake of huge inventories.

According to the USDA report, cotton exports in the country have reached an estimated 2 million bales during August-December period of the ongoing marketing year.

"Preliminary data suggest that exports surged during November and December at nearly 1.65 million bales. Cotton exports during December were an estimated 950,000 bales, the highest monthly level since April," the report said.

Other major markets for Indian cotton exports include Bangladesh, Vietnam and Pakistan.

The USDA maintained its estimate on cotton production at 32.5 million bales and domestic consumption at 26.4 million bales for the current year.

Domestic demand for cotton has been weak of late, but is expected to improve over the next few months as mills work off their supplies of imported cotton and the domestic cotton they had in place to cover their pre-harvest needs, it added.

At present, harvesting is underway and the pace of cotton arrival continues to lag from over last year period.

Weak domestic prices have prompted the Cotton Corporation of India to begin procurement under minimum support price (MSP) operations, mainly in Andhra Pradesh where the crop was affected by a cyclone a few weeks ago, the report said.

The government has fixed the MSP at Rs 3,850 per quintal for the long staple shankar 6 variety.

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