USDA: India’s cotton exports may drop 23% in 2014-15 on tight domestic supplies

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USDA: India’s cotton exports may drop 23% in 2014-15 on tight domestic supplies

India's cotton exports are expected to decline 23% to 7.7 million bales in the 2014-15 marketing year starting August due to tight domestic supplies following a likely fall in production, according to a US Department of Agriculture (USDA) report.

India, the world's second biggest cotton grower, is estimated to ship 10 million bales of the natural fiber in the current 2013-14 marketing year. Already 8.8 million bales have been exported, it said. One bale comprises of 170 kg of cotton. "2014-15 exports are forecast at 7.7 million bales... India appears to be headed for a year in which exportable supplies will be constrained by domestic demand and lower production," the USDA said in its report on cotton.

India is expected to again be a regional supplier to Pakistan, Bangladesh and Southeast Asian markets such as Vietnam and Indonesia. "However, China will likely be the key determiner of India's export volumes," it said. The Indian government is likely to monitor the pace of exports and could seek to implement measures to ration exportable supplies to conserve supplies for the domestic textile sector, it added.

According to the USDA, the country's total cotton output is pegged lower at 36 million bales for the 2014-15 marketing year, as against 37.2 million bales in the current year, due to expected lower crop yields. India exports medium-to-long staple cotton (25-32 mm length) to China, Bangladesh and Southeast Asian countries.

However, to augment domestic supplies for processing and re-export as high-end textiles, India will likely continue to import extra long staple and quality long staple cotton (28-34 mm), with occasional imports of medium or short staple cotton (below 22 mm), the USDA said. These imports typically occur from August to November, prior to the onset of the Indian harvest.