India plans to sell cotton to Bangladesh to trim its bulging reserves following a slump in demand from textile mills in the top grower.
Huge Stockpiles
Cotton Corp. plans to sell 500,000 bales to 700,000 bales of 170 kilograms each to Trading Corp. of Bangladesh in the marketing year ending on Sept. 30. The rest of the quantity will be shipped in 2020-21, Agarwal said in a phone interview. Bangladesh vies with China as the world’s biggest buyer of cotton.
India is likely to have a record closing stockpile of 10.25 million bales by Sept. 30, according to the Cotton Association of India, as domestic consumption may drop more than 20% from a year earlier to 25 million bales in 2019-20, it said.
Cotton Corp. bought 10.5 million bales this year, the highest-ever procurement. It included 2 million bales purchased during a nationwide lockdown to prevent distress selling by local growers, Agarwal said. The company is carrying about 8.4 million bales at present and its ending reserves may not exceed 3 million bales on Sept. 30, he said.
Cotton Corp. spent about 5,500 rupees ($74) per 100 kilograms to purchase cotton from farmers, compared with the market rate of 4,800 rupees to 5,000 rupees, he said. Indian farmers have planted cotton in 12.55 million hectares (31 million acres) as of Aug. 14, compared with 12.16 million hectares a year earlier, according to the farm ministry. The crop will be harvested from October.
