Pakistan top buyer of Indian cotton this season

By: |
Pune | Published: February 20, 2016 12:08:27 AM

For the first time, demand from Pakistan has been to the tune of some 16 lakh bales

Pakistan has become the top buyer of Indian cotton this season due to a decline in its domestic availability, caused by widespread crop damage from whiteflies. So far, Bangladesh was the top buyer of Indian cotton. For the first time, demand from Pakistan has been to the tune of some 16 lakh bales.

According to top officials from the Central Institute of Cotton Research (CICR), the requirement so far has been the tune of 16 lakh bales from India and there is a potential for more bookings. “Cotton export to Pakistan has been negligible for the last couple of years. However, Pakistan reduced its area to 26 lakh hectares from 31 lakh hectares in the last season. This has been compounded by an outbreak of whitefly infestation. Therefore, the expectation of the usual production of around 120 lakh bales of production has been affected,” K R Kranthi, director, CICR, said.

Moreover, since local prices are better than in Pakistan, the preference is to purchase cotton from India, he said. The shortage is to the tune of 25 lakh bales and the bookings are quite likely to increase, he said. Statistics compiled by the textiles commissioner’s office under the textiles ministry has also shown that Pakistan imported 16.6 lakh bales (1 bale = 170 kg) of cotton from India during the December 2015 quarter. In the same quarter in the previous year, India’s total cotton exports stood at 19.3 lakh bales, with Pakistan’s contribution coming in at 3.8 lakh bales.

The ministry has raised its cotton export forecast of the current season to 70 lakh bales for the full year of 2015-16, an over 21% increase from last year’s level of 57.7 lakh bales. Bangladesh has so far imported some 8.6 lakh bales from India last year. Bangladesh, Vietnam, Indonesia and Pakistan are the main buyers of Indian cotton. Between 2011 to 2013, China imported at least 88 lakh bales of cotton from India and therefore, China began reducing cotton imports from India. Vietnam has purchased 5.5 lakh bales and demand from Bangladesh is around 5 lakh bales.

Meanwhile, the Cotton Corporation of India (CCI) has purchased 8 lakh bales so far in the 2015-16 marketing year and has decided not to buy more, as domestic prices have firmed up slightly after demand from Pakistan. Last year, CCI had procured 87 lakh bales of cotton. The cotton marketing year runs from October to September. This year too, the government’s cotton procurement was expected to be higher at last year’s level due to sluggish demand from China. But an increase in shipments to Pakistan, as well as the announcement of a bonus over and above the MSP to cotton growers in Gujarat, have supported led domestic prices rising.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.