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India Could Soon Sell At Lower Prices

• By  Textile Excellence
• September 23, 2017

Farmers are likely to harvest a record 40 million bales of cotton in the 2017/18 season beginning Oct. 1, 2017, bringing domestic prices down and making exports even more competitive, Patel said. For the new 2017/18 season, farmers have planted 12.1 million hectares with cotton, up 19 percent from a year earlier, farm ministry data showed.

India harvested 34.5 million bales in 2016-17 Favourable crop conditions would help India sell 7.5 million bales of cotton on the world market in 2017/18 against 6 million bales in the previous year, said Nayan Mirani, partner at Khimji Visram & Sons, a leading cotton exporter.

Some traders believe that India's exports could surpass 8 million bales if China, the world's biggest cotton consumer, steps up imports in 2017/18.

Beijing, which began selling cotton from its reserves on March 6, had planned to stop the daily auctions at the end of August. But it extended the sales for an additional month after local prices rose amid tighter supply, indicating the need to replenish falling inventories.

A Mumbai-based dealer with a global trading firm company said he had received a flurry of orders in the past few weeks, especially for December quarter shipments. Hobbled by the rising rupee and unattractive global prices, India was struggling to sign export deals until a few weeks ago. But a recent rally in global prices made overseas more sales competitive.

Other than attractive prices, close proximity encouraged most Asian buyers to turn to India. While cargo from the United States take about 50 days to reach Vietnam, Bangladesh and Pakistan, India can ship its cotton in two weeks.

India's new season crop will be available to buyers from October, but supplies from the United States will reach consumers only in January, said Mirani of Khimji Visram, a top exporter.

Current market trends give cotton buyers a chance to look at alternative supplies, said Vu Duc Giang, chairman of Vietnam Textile and Apparel Association. But forecasts of higher global output will ease concerns over cotton supplies, Giang said.

The US Department of Agriculture said that US cotton output is seen at 21.76 million bales for 2017/18 compared to 20.55 million bales projected last month.

Textile Excellence