Rutam Vora Ahmedabad 

Riding high on the cost advantage in the international market, India has already exported about 29 lakh bales (of 170 kg each) of cotton by the end of January 2021, data shared by the Cotton Association of India (CAI) showed.

Nearly 60 per cent of the country’s total projected cotton shipments were executed during the first four months of the 2020-21 season, the data showed.

The apex cotton trade body has projected India’s exports of the fibre to be around 54 lakh bales for the season 2020-21 (October to September). This was higher by about 4 lakh bales from the previous year 2019-20.

“Export shipments of cotton estimated by the CAI up to January 31, 2021 is 29 lakh bales. The CAI has estimated cotton exports for the season at 54 lakh bales,” informed Atul Ganatra, President, CAI, in the trade body’s January crop estimate released on February 8, 2021.

Three-year high

Notably, the data shows that in the initial four months of the season October 2020 to January 2021, cotton exports have touched highest in past three years. During the comparable period in 2018-19, cotton exports were reported at 24 lakh bales and in 2019-20 it was at 20 lakh bales.

Traders attributed the jump in exports to the lower prices and better quality of the initial crop.

The benchmark GUJ ICS-105 (29mm) variety quoted at ₹43,600 a candy (of 356 kg of processed ginned cotton) in the spot markets, which was ₹40,500 on December 5, 2020. The prices hovered between ₹37,500 and ₹40,200 during the early months of the season i.e. October and November 2020.

An exporter from Ahmedabad said that Indian cotton prices continue to be low when compared with the international markets. “The buyers are entering into new contracts even at the current prices,” informed the exporter. Higher supplies driven by rising inventories from the previous season have capped the Indian prices.

ICE Cotton futures quoted at 80.74 cents a pound as against India’s rate of 75-76 cents a pound.

Cotton balance sheet

Meanwhile, in its crop estimate for the month of January, CAI has retained the crop size for the year at 360 lakh bales. However, of the total projected supply of about 499 lakh bales for the season, first four months have reported total supply of 389.25 lakh bales.

Opening stock at the beginning of the cotton season on October 1, 2020 was estimated at 125 lakh bales. Of the 499 lakh bales supply projection, barring 125 lakh bales of opening stock, crop size for the current season is likely to be 360 lakh bales and 14 lakh bales of imports.