India’s cotton exports to China may see a five-fold jump to 4 million bales in marketing year 2018-19 beginning October 1, after the latter slapped a 25 per cent additional duty on cotton imports from the United States. Indian traders have reportedly entered into a forward contract with Chinese buyers to deliver 1.2 million bales between November and January.
Though some quantity has also been contracted for exports to Bangladesh and Cambodia, the maximum contracts are for China, according to a report in top Indian financial daily.
Analysts say a likely decline in India’s cotton production in the next season, low closing stocks and higher minimum support prices announced recently may affect India’s export prospects.
Due to declining cotton stocks, China has turned a net importer of cotton to meet its garment demand, according to the Cotton Association of India.
China has an annual output of 35 million bales against consumption of about 50 million bales. The country has been unable to raise cotton production since the focus shifted to food and feed crops and its buffer cotton stocks started depleting in 2015.
India cotton exports in April-July period this fiscal were worth $119 million.
India’s cotton output for the 2017-18 (October-September) season is pegged at 37 million bales, up 7 per cent from the previous year.