MUMBAI (Commoditiescontrol) – Cotton exports declined sharply in the first three months of 2016-17 season for two major reasons. One, kapas arrivals were disrupted by the demonetization of high value currency and two, less demand from Pakistan this year. Demonetisation had adversely impact cotton arrivals as farmers were reluctant to sell in otherwise cash transaction. Pakistan had a bad crop last year and hence imported the shortfall from India. This year it sees better crop harvest but still short of requirement.
During the period October to December 2016, cotton export from India totaled 3.70 lakh tons or 21.7 lakh bales, down 37 per cent or 12.5 lakh bales compared to the corresponding period of 2015. The decline is largely due to lesser shipment to Pakistan and Bangladesh.
Eight countries including Bangladesh, Pakistan, China, Vietnam, Indonesia, Taiwan, Thailand and Turkey accounts for almost 98 per cent of cotton export from India. This year, export to Bangladesh, Pakistan and Turkey were down year on year while export to other major markets were up significantly.
Pakistan is unlikely to import similar volume this year as the crop is much better this season but will continue to seek quality lint to keep its spindles running. There were some initial glitches in importing cotton from India, but were solved later.
The decline in export to Bangladesh is more to do with congestion at its major port, than demand related issues. Lesser export to Bangladesh is also attributed to demonetization policy.
Shipments to China surged 47 per cent this year despite the country reporting better cotton crop this year. IT appears that China has preponed its import this year bunching them in the first three months than the usual spread of January-March quarter. The entire 2015-16 season, export to China was at 6.60 lakh bales, of which, 4.40 was shipped in the first three months. This year, 6.40 lakh bales are shipped in the same period. Thus, further increase in cotton export to China can be ruled out.
Export to Thailand has more than doubled this year and more of organic and finer variety of cotton were seen shipped to the destination. Export to Taiwan was also robust, rising by about 70 per cent. Both these destinations saw export total more than 82,000 bales.
Vietnam and Indonesia were also seen buying larger volume of cotton this year as export from India surged by about 20 per cent in the first three months of 2016-17 season to these destinations.
(By Commoditiescontrol Bureau; +91-22-40015522)