Having succeeded in selling cotton to Bangladesh, India is all set to export the fibre to Thailand. One of the biggest mills in Thailand has shown interest in purchasing cotton from India, officials said.
Samples from India have been approved and the Cotton Corporation of India (CCI) has now set into motion a process to get buyers from Thailand registered on its website for daily e-auction, top officials from CCI told FE.
Thailand consumes 5-6 lakh bales of cotton.
Sales have been meagre for the last couple of days with 30,000 to 40,000 bales being put up for sale. India has sold some 50,000 bales to Bangladesh, the third largest importer of cotton in the world, till date.
Of the total procurement of 86.9 lakh bales, CCI has sold 37 lakh bales, leaving about 50 lakh bales in stock, BK Mishra, CMD, CCI said. As Thailand has shown interest, we are attempting to rope it into the system, he said without disclosing details of how much cotton could be sold to Thailand.
According to Mishra, CCI is also exploring countries like Vietnam for cotton export from the next season. There have been a few enquiries from other countries as well, he said, adding that the domestic requirement in the country is huge at 25 lakh bales.
China, the world’s biggest buyer, has imported less fibre this year which has affected Indian exports. China has been the largest importer of Indian cotton over the last three years.
Domestic textile producers, however, are operating on stock-to-consumption basis in which buyers prefer to buy cotton according to need to avoid unnecessary blockage of working capital in building of inventory. But Mishra says some 50 lakh bales have been sold in the last couple of months. Selling 10 lakh bales a month is not a problem, he said.
Current cotton prices are hovering around R34,500- 36,000 per candy, Mishra said, adding that CCI had never looked at distress sales at any point during the season.
Market sources reveal that CCI has sold cotton at approximately 74 cents per lbs from its stocks.
Taking the current pace at which sales have been happening, Mishra estimates to liquidate almost the entire stock by the end of the season (September) with barely 10-20 lakh bales remaining with the cotton body. Exports could constitute 2-3 lakhs bales.
Meanwhile, cotton sowing operations has crossed 90 lakh hectares across major cotton growing areas of the country. According to Dr KR Kranthi of the Central Institute of Cotton Research at Nagpur, the rains were good in June at the start of the season and although there was a dry spell in July, monsoon has recovered in most parts except parts of Central Maharashtra, Pune and Marathwada.
In Gujarat, monsoon has recovered completely and there has been good rainfall in north India and it has begun raining in Madhya Pradesh from last Sunday. Overall the situation is not bad and the country should see some 120 lakh hectares come under cotton plantation, Kranthi said.
Last year, cotton acreage had touched 129 lakh hectares.
Sowing operations are still continuing in Telanagana and parts of Andhra Pradesh. Most of the cotton growing states like Punjab, Haryana, Rajasthan, Gujarat and parts of Maharashtra and Karnataka have started getting good rainfall. In Maharashtra, the acreage is likely to touch 40 lakh hectares.