The country is unlikely to achieve export target of 40 lakh bales set by the trade during the current 2008-09 season, thanks to sluggish global demand supported by higher cotton prices.
The data complied by the office of the textile commissioner show that the total registrations have been nearly 29 lakh bales between August 2008 and May 2009 while the actual shipments are expected to be only 18.21 lakh bales.
It can be noted that the cotton advisory board (CAB) has projected that total supply of cotton to reach 290 lakh bales for current season and exports at 50 lakh bales.
?Overall exports of cotton may not increase much over the next few days and it is unlikely to reach 40 lakh bales this season as overall buying is restricted from India due to higher prices,? Dhiren N. Sheth, president, Cotton Association of India (CAI) told FE.
Exports have been affected as major importers like China, Peru, Turkey and Egypt decided to slice their imports. In fact, total registrations of export contracts till May 2009 have increased to 5.54 lakh bales over 3.35 lakh bales in April 2009, up by 65%.
?Exports seem to have slowed down. With exports not gaining any momentum, The actual shipments during the year may be even lower than the projected 40 lakh bales,? he said.
?One of the major reasons for slowdown in export demand is inventive of 5% for export announced by the government that expiring on June 30, 2009. Also, strong rupee against dollar which appreciated by 5% recently that may affect export contracts,? he said.
In February, the government granted incentive of 5% to the cotton exporters by including ?raw cotton? in VKGUY scheme.