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Textile mills to import cotton despite record production

02 Aug 2012 Evaluate

India will witness cotton import in the coming months despite of record production on domestic front. Textile mills have started importing cotton mainly from the US and Africa and in 2011-12 marketing year (October-September) period they are likely to purchase 2 million bales of cotton. This is due to excess export of the crop coupled with less arrival which has ultimately led to shortage of the fibre in the domestic market.

India, the world's second largest cotton grower, has exported about 12.5 million bales (of 170 kg each) in 2011-12 marketing year ending next month.  Till now mills have imported 0.5 million bales of cotton and have contracted for over 1 million bales.

Moreover, to meet the domestic demand mill owners are importing cheaper cotton as prices in the domestic market are ruling 10% higher than the global markets. Also, mills are facing difficulty in sourcing cotton as arrivals have come down plus the exportable surplus has come to negative because of huge exports.

Lower than the Agriculture Ministry's estimate of a record 35.2 million bales in 2011-12 marketing year the total cotton production is seen to be 33.6 million bales whereas the domestic requirement is about 26 million bales. As some parts of the major cotton growing states like Gujarat and Maharashtra are facing drought-like conditions on account of scanty rainfall the situation might get worse in the next marketing year.

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