April 19, 2012
Indian cotton exports record 11.5 million bales in 2012
Clearing product left uncertain after it banned fresh overseas sales last month on worries about domestic supplies, India has exported a record 11.5 million bales of cotton this year, a senior government official said on Wednesday (Apr 18).
India has a ban on fresh exports and no further bales awaited clearance. Exports raced ahead of initial government estimates of 8.4 million bales of 170 kilogrammes each on higher buying by China to replenish its stocks.
"We had contemplated that exports would be of 8.4 million bales, now export registration is 11.5 million bales," A B Joshi, India's textile commissioner, told reporters after a Cotton Advisory Board (CAB) meeting.
The CAB marginally raised cotton production estimates to 34.7 million bales for the current year to September from its earlier forecast of 34.5 million bales. Domestic demand is 25.2 million bales.
At 5:26 p.m. (local time) the benchmark May cotton contract on ICE was trading at 1.62% up at US$0.909 per pound while the April cotton on India's Multi Commodity Exchange closed down 0.53% at INR16,770 (US$323) per bale.
Cotton exports had put the commerce and agriculture ministries at loggerheads, with influential coalition ally Farm Minister Sharad Pawar asking Prime Minister Manmohan Singh to lift the ban to help farmers.
India, the world's second-biggest producer and exporter of cotton, supplies about 13% of global exports and its biggest customer is China, which had criticised the initial total ban. The country produced 34.7 million bales in the year starting October 1 and with demand usually at around 25 million bales, there had been room for booming overseas sales.
Analysts said major cotton exporter Australia would gain the most if the ban on overseas sales from India continues. Asked about lower than expected arrivals in spot market Joshi said, "Arrivals are not in tune with what was the arrival pattern noticed all these years".
Cotton arrivals from the new crop have fallen 6.18% in the current season to 27.93 million bales, from 29.77 million bales a year earlier, the CCI said on Monday.
At least 90% or more of cotton expected to be grown used to come to the market for sale, Joshi said, while adding, "This year arrivals have been only 80% of the size of the crop expected as the season started one month late due to natural problems."
The CAB also revised its estimate for carry forward stocks for the current year or the opening stock for the next cotton year beginning on October to 2.5 million bales, which is at seven year low.