Oct. 4 (Bloomberg) -- Louis Dreyfus, the largest cotton trader, was among 10 companies that won permits to export 1.75 million bales from India after the second-biggest grower resumed booking cargoes ending a six-month hiatus.
Licenses for 169,282 bales of 170 kilograms (375 pounds) each have been issued and 3.75 million bales are still available for shipment, the textiles ministry said. The government has capped exports at 5.5 million bales in the year started Oct. 1.
Cotton futures reached a 15-year high last week as textile mills sought to rebuild inventories and supplies were disrupted by unusual weather. Pakistan’s crop was damaged by floods, while harvests were delayed by excess rainfall in China and India, the largest growers.
“There are certain concerns about crop damage because of excess rainfall” in India, Veeresh Hiremath, associate chief analyst at Karvy Comtrade Ltd., said in a phone interview from Hyderabad. “That may prompt the government to review the quantity sooner than later.”
India halted exports in April to cool domestic prices and bolster supplies, and then introduced a licensing system for shipments a month later. Mills can begin shipments from Nov. 1 after securing permits from the textiles ministry, Rita Menon, secretary in the textiles ministry, said last week.
Louis Dreyfus Commodities India Pvt., Gill & Co. and Jaydeep Cotton Fibres Pvt. were among traders that were issued permits. The government rejected 11 applications for 58,823 bales, the ministry data show.
China Holidays
Cotton for December delivery fell as much as 0.8 percent to 97.23 cents a pound in after-hours trading on ICE Futures U.S. in New York today. Prices on Oct. 1 slumped the most in a year on speculation that demand will ease while financial markets are closed in China to mark National Day celebrations.
Output in India may be “slightly” higher than the 34.45 million bales, Dhiren Sheth, president of the Cotton Association of India, said in an interview Sept. 29. India’s Cotton Advisory Board has forecast production at 32.55 million bales.
“Arrivals have started in small lots and it’s too early to estimate damages because of excess rains,” D.K. Nair, secretary general of the Confederation of Indian Textiles Industry, said from New Delhi. “I expect some damage, but nothing major.”
Cotton prices in India reached a record last week after an extended rainy season delayed harvesting. The monsoon was the best in three years and withdrew from most parts of the nation about a month later than usual, according to the weather office.