Export of raw cotton from the country may slowdown over the next few days mainly on higher domestic cotton prices supported by absence of fresh buying from overseas thanks to economic slowdown.
In June, actual shipments of raw cotton export have come down from 2.56 lakh bales in May to just 92,070 bales. The total registrations of raw cotton exports have reached to nearly 32 lakh bales between August 2008 and June 2009, while the actual shipments touched 22.88 lakh bales, according to the data complied by the office of the Textile Commissioners.
“Export demand for raw cotton may remain low over next few days. Indian cotton prices are higher than other origins. So far there have been no fresh export deals. The government has also discontinued the benefits of Vishesh Krishi and Gram Udyog Yojana (Vkguy),” Kishor Shah, Srirang Cottons told FE.
Domestic prices may remain higher over the next few days and there is a possibility to import cotton. Besides 4-5 lakh bales of extra long staple cotton in which the country is deficient, about 4-5 lakh bales of medium and long staple are also likely to be imported because of increase in domestic prices, trade sources said.
Nearly five lakh bales of imported cotton are reported to have arrived already.
“All eyes are on China’s requirement of cotton as Chinese crop is estimated to be lower by nearly 11% over last year. China may require nearly 4 lakh tonne of cotton,” a local broker said.
China’s cotton planting area in 2009 has declined by an estimated 11.34% from last year, said a report on the official website of the China Cotton Association (CCA).
As far as Indian crop is concerned, preliminary reports gathered indicate that sowings have made good progress so far. Total area sown under cotton is reported around 18.03 lakh hectare, according to the Directorate of Cotton Development report.
The area under cotton in the north zone comprising Punjab, Haryana and Rajasthan may be above last year’s level of 12.15 lakh hectare. As against last year’s area of 5.4 lakh hectare, the area so far covered in Punjab is placed at 5.5 lakh hectare. Haryana is stated to have set a higher target of 6 lakh hectare for 2009-10 against last year’s coverage of 4.6 lakh hectare. The area so far sown is reported to be 4.9 lakh hectare. In the case of Rajasthan, about 1.75 lakh hectare are said to have been planted so far. Since a sizable area in south Rajasthan is sown in June with the help of monsoon rains, the final plantings may be significantly higher than the area of 2.2 lakh hectare covered last year.