The China National Textile and Apparel Council (CTEI) has expressed concern that global cotton prices are likely to rise in the wake of the Indian Government’s decision yesterday to suspend registration of raw cotton export shipments indefinitely in response to recent steep increases in cotton prices.
The CTEI fears that the removal of a sizable portion of exportable cotton supplies is likely to boost the world price as importers and exporters scramble to shift fibre sourcing, possibly to the US.
So far this marketing year, an estimated 4.4 million 480-lb bales of Indian cotton have been shipped up to the end of March, according to CTEI. With the latest US Department of Agriculture (USDA) forecast anticipating exports were to have reached 6.1 million bales, this implies that roughly 1.6 million bales already registered or shipped in the first three weeks of April may not be shipped this marketing year, it adds. On balance, CTEI estimates roughly one million bales are likely to be subject to this suspension in the remaining three months of the marketing year.
If the estimate is accurate, this will effectively remove about one in eight bales from global exportable supplies in the next three months, CTEI believes.
From October-March, China alone imported 2.3 million bales of cotton from India, accounting for roughly 56% of season-to-date exports of Indian cotton, according to CTEI.