By Debarati Roy and Elizabeth Campbell
April 21 (Bloomberg) -- U.S. cotton exports may rise as much as 16 percent from the government’s estimate for the year ending July 31 after India halted overseas sales this week, according to Morgan Stanley analyst Hussein Allidina.
U.S. shipments may reach 13.97 million bales to cover the supply gap caused by India’s ban, Allidina said today in a report. The U.S. Department of Agriculture on April 9 forecast exports of 12 million bales. India is the biggest grower of cotton after China.
Registration of export contracts were suspended from April 19 until “further orders,” India’s textile commissioner said yesterday. The nation exported 4.69 million bales as of April 15 from a registration of 6.67 million bales, according to the Morgan Stanley report.
“Historically, both U.S. and Indian exports to China have increased seasonally into the end of the marketing year,” Allidina said. “With India out of the market until further notice, we see upside potential to U.S. cotton exports.”
China is the world’s biggest consumer of cotton. A bale weighs 480 pounds (218 kilograms).