India, the second-biggest grower of cotton, will allow shipments starting Nov. 1, said Rita Menon, secretary in the ministry of textiles.
Suppliers can register shipments starting Oct. 1 to export as much as 5.5 million bales of 170 kilograms each, Menon told reporters after a meeting of a group of ministers today in New Delhi, reiterating earlier government decisions. India said Sept. 14 it would start registering contracts from Oct. 1.
A delay in exports from the Asian country, also the second- biggest shipper, may widen a supply deficit that’s made cotton the best performer this year on the Reuters/Jefferies CRB Index of 19 commodities. Global output will increase to 116.97 million bales, short of demand of 119.16 million, Macquarie Group Ltd. forecast last week. A U.S. bale weighs 480 pounds or 218 kilograms.
“The delay will improve availability of cotton in the domestic market” helping textile makers, who expected shipments to start in October, said Shishir Jaipuria, chairman of Confederation of Indian Textile Industry.
Indian textile mills have demanded a halt in registration of contracts in the quarter ending Dec. 31 and sought a duty of 10,000 rupees ($221) a metric ton to deter exporters.
The government will consider imposing a duty on exports in the middle of October, Menon said.
Futures Surge
December-delivery futures surged as much as 2.4 percent to $1.064 per pound on the ICE Futures U.S. and traded at $1.039 at 11:24 a.m. New York time.
Yesterday, the most-active contract rose the exchange limit as the China Cotton Association said demand in the top producer and user of the fiber exceeded output by 3.6 million tons in the year ended August and the U.S., the largest exporter, said local crop conditions deteriorated.
The harvest in India may be less than forecast because of an extended monsoon season, according to the Confederation of Indian Textile Industry. Production in the year from Oct. 1 may be less than the 32.55 million bales estimated by the state-run Cotton Advisory Board last month, Confederation Vice Chairman Prem Malik said in an interview on Sept. 16. Output this year is estimated at 29.5 million bales, according to the board.
The monsoon rains, the main source of irrigation for the nation’s 235 million farmers, were 4 percent above the 50-year average between June 1 and Sept. 22, according to the weather bureau.
India will review the 5.5 million bales limit on exports in the middle of December, Farm Minister Sharad Pawar told reporters in New Delhi today. The nation can export 7.5-8 million bales in the year starting Oct. 1, he said.
“Cotton crop in India is extremely good this year” as are international prices, Pawar said. “This is a golden opportunity for cotton growers to get a better price.”
The government today extended duty free imports of edible oils and rice, and said it would continue the sale of rice and wheat in the open market to keep inflation in check.
