India: Cheap Stimulation Of Cotton Exports, Sino Indian Conflict Attracting Attention

Industry experts in India say strong overseas demand and the weakness of India's currency provide an urgent complement to India's cotton exports. Traders expect cotton exports in India to reach 5 million packages in 2019/20, about 300 thousand more than the India Cotton Association estimates.

In April this year, the India rupee exchange rate hit a record low of 76.9 due to fears that the new crown virus could lead to a global recession. India Cotton Association said that the rupee depreciation made domestic cotton attractive to Asian furniture, and cotton exports in the next few months could be supported.

By the end of June, India's cotton exports are expected to exceed 4 million packages, and the export of 47 million 90 thousand packages will be easy to achieve. India industry expects that India cotton has shipped 370-380 bales this year, and 100-120 to three bales of cotton will be exported in the next three to four months.

At present, the price of cotton in India is 61-62 cents per pound, 5-8 cents lower than that in the United States and Brazil. Good monsoon and higher end inventory are expected to put pressure on cotton prices in the short term. At present, the price of cotton in India is 33000-34000 rupees / Kant (355.6 kilograms), and 38000-39000 rupees / kg in March.

Kotak Commodities director Vinay Kotak said India cotton is the cheapest in the world, and Bangladesh, China and Vietnam are all asking prices. Another factor is that India's Cotton Corp recently decided to reduce the sale price of cotton.

Industry experts predict that the price of Cotton Corp will be almost the same as the spot price, and the spinning factories of the micro and small and medium enterprises will purchase more CCI stocks. In addition, due to the high level of cotton in the Cotton Corp of India, CCI kept the base price unchanged for most of the year, resulting in a huge gap between the price of the agency and the price of the spot market.

CCI said that in order to ensure the supply of raw materials to spinning mills at competitive prices, CCI reduced the price of the length of 30 millimeters to 36500 rupees from the previous 46500 rupees. The revised price will last until the end of June, and there will be further discounts for bulk purchases. So far, the state-owned company has acquired about 10 million bales of cotton.

India said that India cotton has challenges in the international market demand. The recent conflict between India and China may be a barrier to bilateral trade. Without China, the growth of India's cotton exports would be impossible. India professionals suggested adopting a "wait and see" policy. China imports about 1 million 500 thousand India cotton annually, accounting for 30% of the total export volume of India cotton.